Increasing Performance in the Japanese Construction Industry

Increasing Performance in the Japanese Construction Industry

By Tsunemi Watanabe, Kazumasa Ozawa, Nozomu Mori, Kenji Kinoshita

December 2012

The performance of the construction industry in Japan has been high due to a lack of emphasis of price. Due to rapid change in the industry environment such as social requirement of fair implementation process of public works; however, there is a deep concern that the performance of the industry is being lowered due to more emphasis on the public works getting the low price contractor. Many efforts are being made to keep its high performance in a more cost competitive environment. A comparison between the essence of public bidding reforms in Japan and principles of the Best Value Approach shows some ideas on the future of the public bidding scheme. The critical areas needing to be addressed are the importance of various levels of feedback loops in social capital management and clarification of the position of supervision for appropriate risk sharing between the public client and the vendor. Additionally, in order for local governments with insufficient engineering resources to be truly accountable, it is worthwhile studying an alternative evaluation method of proposal and performance including non-technical one.

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