Japan’s government procurement has a grading system. The system ranks firms according to their size and technical level and limits their opportunities to participate in auctions. We theoretically and empirically verified whether the grading system affects firms’ participation in auctions, using the case of the Chugoku Regional Development Bureau, where grade classifications were integrated in FY2013. As a result, we have shown that the upper-grade firms participate more in auctions, the lower-grade firms participate less in auctions, and in total firms participate more in auctions when grade classifications were integrated than when grade classifications were not integrated.

The advancements in digitalization through the latest technologies, such as 5G, will reduce the dis-tance resistance. Residents will be able to enjoy services from their homes, and coordination between hospitals will be smoother. A simple linear model was constructed in order to analyze how digitaliza-tion changes the theory of facility layout. By comparing the three types of facility layout in terms of both overall optimization and referendum, the following findings were made. First, the discrepancy between optimal and voting outcomes. Second, we showed that Digitalization between home and hospital reduces these discrepancies, and Digitalization between the two hospitals expands them, showing the difficulty of building consensus on facility layout under the digital age.