Abstract
When Japan was hit by the Great East Japan Earthquake, local construction firms quickly provided their communities with skilled operators and heavy equipment, assisting with rescue and recovery by moving debris and helping to lift collapsed structures. However, if big earthquakes occur directly beneath the Tokyo Metropolitan area, or if a massive quake occurs along the Nankai Trough as expected, construction firms can no longer be expected to operate in a similar way.
Due to shrinking of the construction market as well as sagging profits with tightening competition quality companies are having difficulty in surviving. Especially local small and medium-sized construction firms have been exhausted and the industry's disaster response capabilities have been seriously deteriorated. The serious weakening of the construction industry is possibly caused primarily by Japan's unique public procurement rules and contract pricing mechanisms.
This study first traces the history of Japan's public procurement rules after identifying key factors weakening the construction industry, and then conducts a comparative review of public procurement procedures in major countries which have taken on new dimensions. Based on these considerations it points out the need to reform the Japanese public procurement rules by revising the government-imposed price control system and introducing negotiated procedures as well as to restructure the social system itself with the objective of developing and maintaining quality infrastructure at a reasonable price in a timely manner in a fair competitive environment.
