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Sixth Meeting of the Digital Agency Information Systems Acquisition Reform Study Panel

Last Updated:

Outline

  • Date and Time: December 20, 2022 (Tue) 13:00 to 14:30
  • Location: online
  • Agenda:
    • 1. Opening
    • 2. Proceedings
      • 1. Procedures of the 6th Investigative Commission
      • 2. Recommendations on the Digital Marketplace and the direction of Digital Agency's consideration
      • 3. Review of Policies for Addressing Remaining Issues
      • 4. Free Discussion
    • 3) Closing

Data

Relevant policy

Summary of the proceedings

Date and time

  • Tuesday, December 20, 2022 from 1:00 p.m. to 2:30 p.m.

Place

  • On-line

Attending committee member

Member Kajikawa, Member Arikawa, Member Kawasawa, Member Kimura, Member Sakashita, Member Sumiya

Summary of the proceedings

After a presentation by Committee Member Sumiya on the recommendations on Digital Marketplaces (DMPs) examined at the "DMP Open Task Force" hosted by the Japan Center of the World Economic Forum regarding Issue B-2 "Development of a System Procurement Platform," Digital Agency explained the direction of the DMP examination, and the discussion moved to free discussion by each committee member.
In the latter half of the session, the Secretariat gave explanations on "Measures for Single Tendering in Digital Agency" and "Open Sourcing." After the explanations on the points at issue, free discussions were held. The main opinions expressed by each member are as follows.

"Recommendations on the Digital Marketplace and the Direction of Efforts by Digital Agency"

  • Introducing and realizing DMP is to create a market and increase choices, and it is to create competition, so I basically agree. I also agree that we should proceed with the study as we introduce it in Digital Agency, but in the future, I think it will be expanded to local governments. When implementing it at local governments, I think the biggest overhead will be the explanation to the accounting authorities. I would like you to think about how you can do that smoothly.
  • Since application software will be introduced, BPR will be involved. I think it will be difficult to implement it in society unless BPR is properly implemented and the introduction of applications is shown in guidelines, etc.
  • Since it is SaaS, it is necessary to consider whether data governance, such as security and data location, works properly as an option. In particular, data location should be included in the rules.
  • I agree with the introduction and enforcement. Regarding the outcome, it is said that the procurement price decreased. Even if it is possible to grasp it from the examples, how do you grasp it as a whole? I think it is possible if you compare the agreed price under the Framework Agreement (FA) with the conventional unit price. However, even if the effect in the first year is obtained, how do you find out the continuous effect? After all, the effect at the time of introduction in the first year is the price, but from the second year onward, I think it is better to consider the focus of the effect a little, such as an increase in the number of participating organizations and a decrease in unit price accompanying it.
  • I think it is realistic that SaaS and cloud support are included in the procurement target this time. On the other hand, the effects in the United Kingdom are effects targeting the whole, so I think it is better to show how much effect is expected by targeting these two this time. It would be a waste if it is said that there is an effect but actually there is no effect, so it may be better to consider how much effect to use as a guideline in advance.
  • Regarding the issue of exempting LGWAN connections from DMP posting, I support the idea of making Internet environments the default, but I have the impression that making it "exempt" is too strict. I also think there is a risk of complaints due to exclusion, so I think it is a desirable process that SaaS that relies on such connections is no longer used and is eliminated from the market.
  • However, since a wide range of administrative organizations are likely to use the FA system, it would be beneficial for users to participate in the FA system if Digital Agency conducts background checks and rules / regulations checks. Since it is important to increase the number of participating organizations, it would be helpful to reduce the administrative burden on user organizations.
  • Regarding registering and changing the price, I think we may raise or lower the price for a certain period of time as a campaign. We may be able to flexibly respond by raising or lowering the price with the price at the time of concluding the FA as the upper limit.
  • It is stated that all prices are disclosed to administrative organizations and are not disclosed to other business operators, but is it correct to understand that they are disclosed as contract information? If contract information is not disclosed, there will be a problem of transparency of public procurement information, so I think it is necessary to disclose it.
  • It says that the competitiveness is secured by the fact that the search comparison is conducted, but I think it is one of the issues how to secure the fact that the search comparison is conducted in such a way as to deserve substantial competition.
  • With regard to Digital Agency, Committee Member Sumiya also mentioned in his explanation of the systems that the procurement procedures should be streamlined. I think it would be better for you to promptly address the matters that should be horizontally standardized, such as the unification of FA and documents. If the DMP mechanism is a discretionary contract based on matching estimates, it may be possible to operate it at the demonstration stage without further elaboration. I think it is worth considering what can be operated without such elaboration.
  • I support DMP as a system. I think it is good to start with SaaS as a target of DMP, but looking at examples in foreign countries, there are some that are targeting a slightly wider range (such as construction services). In fact, I think there is an affinity with agile and government cloud, so I would like to see progress being made so that they are also targeted in the long term.
  • On page 11 of the handout, I think that it is necessary to examine the extent to which the scope of the administrative organ that starts this DMP can be expanded in relation to the Local Autonomy Act, etc., while comparing it with laws and regulations.
  • Regarding qualifications (due diligence check), it is only to make business operators swear, but regarding anti-company checks, there are some that are internally checked even at the stage of registration examination for ranking, so I think it is better to implement that much.
  • As for checking the terms of use, if Digital Agency does not check them at all, and if local governments also get involved, I think it will be difficult to use it. I think it is a good idea to extract at least the important points and have the business operator present them. For example, a manual should be created to uniformly present the scope of responsibility, scope of immunity, and handling of personal information. It should be operated so that such information is presented at the registration stage.
  • There are some concerns about the prototype that has been created. Looking at the prototype itself, it is emphasized that it is easy for registered business operators to use. However, DMPs are strictly for the convenience of the procuring side, and as pointed out at the beginning, they are for transparent and rapid procurement, and I would like the Government to place importance on ensuring transparency. In particular, if tagging, etc., is carried as a function, those who seriously described it may suffer a loss, and manuals and consultations on measures to deal with that will be distributed, and competition will work in unnecessary areas. Therefore, I think it is better to design the system so that it is more fair and that new entrants can feel a sense of fairness. There may be various discussions, but for example, at the final search stage, it may be an idea to conduct a search while the business operator is not visible.
  • There is a problem that specifications are made for a specific service, which is often the case when procuring after making a catalog, etc. I thought that such a problem was likely to occur even in DMP. However, such a problem is also a story of actual procurement so far, and only organizations that are easy to access administrative agencies are prioritized, and specifications are made for them, and they may procure without knowing it. At first glance, it seems to be a problem of DMP, but I think there are actually problems with the entire procurement so far, so I want you to carefully analyze and proceed so that the introduction of this system does not stop due to criticism at that point.
  • I am basically in favor of the introduction and implementation of DMP. In order to obtain the support of each administrative agency for the introduction, I think it is important to closely examine the outcomes. Therefore, I think it is necessary to closely examine the outcomes at the implementation stage after the introduction.
    One point I would like to emphasize is that the purpose of the introduction of DMP is to increase the number of participating companies, mainly start-up companies, as much as possible, as well as to reduce the burden on government agencies and contractors. It is said that this system is being considered with such a purpose. However, I think that various devices can be made for catalog sites in line with the purpose of developing new participating companies. However, if it is possible to choose a company listed on a catalog site by conducting interviews and searching, it means that what the current bidding system itself has done, so there is a possibility that it will not proceed so easily. Although it was pointed out by each committee member, in order to ensure transparency and fairness in the selection of contractors, we should not insist too much on cost reduction and should design a system that ensures transparency and fairness. When we design and implement the system in the future, the most important point to pay attention to is how to ensure transparency and fairness in the selection process of contractors registered on the catalog site. I think the most important point is how to ensure transparency and fairness in the selection process. I would like you to take your time and tackle this.
  • It is important to consider how to position DMP in light of its consistency and relationship with other procurement systems and security-related systems in the context of the overall procurement mechanism, and how to cooperate with various systems, rather than considering what kind of system should be adopted within the digital marketplace alone. Although it was outside the scope of the "DMP Open Task Force", we would like you to continue to consider this point toward its introduction.

On "Measures for Unilateral Tendering in Digital Agency" and "Open Sourcing"

  • The problem of single-party bidding emerged in the course of the major revision of single tendering in 2006, and the term single-party bidding came to the fore. The necessity of eliminating single-party bidding is a problem linked to the fundamental problem of how to ensure the fairness, economy, and transparency, which are the fundamentals of public contracts. For this reason, each ministry and agency has been working with the Administrative Reform Secretariat to improve the single-party bidding problem intensively since 2008. Over the past five or six years, in order to develop more efficient improvement measures, we have conducted detailed analyses of the causes of single-party bidding by contract type, proposed improvement measures based on the cause analysis, and established liaison meetings and study groups to share information among the ministries and agencies. Unfortunately, among the contract types, only the procurement of information systems is fraught with problems such as vender lock-in, so the reform has been the slowest. Under such circumstances, in February 2022 this year, Japan Fair Trade Commission conducted cause analyses based on a fact-finding survey and cause analyses focusing on vender lock-in to some extent, and made specific recommendations based on them. I think that the most required approach to the single-party bidding vender lock-in is for Japan Fair Trade Commission to investigate the actual situation regarding the issue of single-party bidding for information systems, which has been lagging the most, to quickly accept the proposals submitted, and to start analyzing and preparing specific proposals so as to create guidelines that can be used as a reference not only for Digital Agency but also for government offices.
  • When analyzing single-party tenders, it is common to hold hearings with the project proponent. However, if the procurement manager were to hold hearings with them, the situation would often be different. Therefore, it is recommended that this point be carefully confirmed with the procurement manager and appropriate measures be considered.
  • I am in favor of proceeding with open source in a step-by-step manner. Since there are issues such as the scope of confidential information and security, I think there is a level at which each can be disclosed. However, in order to expand the image of open source as desired as much as possible, I think it is better to expand the scope of disclosure to at least local governments. In addition to local governments, if possible, it is also an idea to set certain rules, for example, to create a community in which only those who have agreed to maintain confidentiality and those who have been able to prove their identity as the recipient of information can participate, and then disclose it there.
  • For systems that are not secret agreements, I think it would be good to create something that can be shared with each other. For example, when making an open source system between specific ministries and agencies, there is a possibility that we will only target the systems we want to open source. Instead, we will have each ministry and agency present a list of systems they have developed themselves, and we will point out the contents of these systems to each other, and if possible, we will want this system to be open. If we can create a shared system like this, I think that open sourcing will spread even within the ministries and agencies, and it will probably be widely utilized.
  • This time, I think that analyzing and reviewing the specifications is a major subject of consideration. As measures to prevent one party bidding, not only reviewing the specifications but also taking measures to prevent one party bidding, such as additional calls to bidders or RFI if the number of bidders who have obtained the tender documentation is small, I think that there are measures other than reviewing the specifications. I think it goes without saying, but with the contents of the current description, it can be read as enforcement only by organizing the matters to be checked in the specifications. Therefore, I think that it is better to consider enforcement after organizing the matters to be checked and the process.
  • There is a plan to request contractors to utilize open source. However, from the contractor's point of view, they are concerned about whether they can provide it properly when it is requested while they do not know how it will be utilized. Therefore, I think careful dialogue is necessary. I think it would be a waste if that reduces the motivation to participate.
  • Unilateral bidding is not a bad thing. The problem is whether or not the environment is such that only one party can bid when the specifications are submitted. Not only the analysis of the specifications but also the analysis of the process should be thoroughly implemented. There is also an example in which unilateral bidding was conducted by rewriting it at the request of the procurement department.
  • President Biden signed an executive order on the management of open source, and the U.S. has adopted a method called SBOM (software bill of materials). It is better for Japan to carry out this examination firmly and to capture the quality of open source.
  • Regarding unilateral bidding, it is important to analyze not only the specifications but also whether the structure is such that only one party can participate from the viewpoint of the Architecture. For example, in the Japan Fair Trade Commission report this time, when you look at the network layer, if there are only a few companies that have proposed this network, I think there is a structural situation where specifications must be tailored to that company in the procurement of IT systems. I think it is very important to develop human resources who can analyze such a point and share the viewpoint.
  • I am in favor of proceeding with open source in a step-by-step manner. However, when it comes to how to share source code, for example, what kind of platform or mechanism to use, or how to allow pull requests like GitHub so that both sides can improve each other. I think there is room for ingenuity in how to share source code and promote collaboration between administrations. Also, from the perspective of UI/UX, I think it is difficult for the government to create a shared platform by itself, so I think it would be good to actively use private sector services.
  • Open source software is not simply about sharing open source software with each other. I think it is a field that is very closely related to the community that grows up in it, knowledge exchange, and innovation. Not only the United States but also China is putting a lot of effort into creating an open source community and rules. I think that the public procurement of open source software is very closely intertwined with how to position open source in Japan, both in terms of future competitiveness and industrial policy. The very fact that there are a certain number of people in the government who know the culture of the open source community and how to collaborate will lead to the updating of the central government ministries and agencies and local administrations in Japan. I think it would be a good idea to consider introducing a work environment and incentives in the government ministries and agencies to encourage people to actively participate in the open source community, which has already been implemented in the private sector.

Other general comments and additional opinions

  • Open source is sometimes discussed on the premise that there may be problems with rights if it is disclosed between ministries and agencies. In the first place, government procurement is conducted at the national level, and the contracting party is the government regardless of which ministry or agency procures it. Therefore, strictly speaking, the point at issue is different. In theory, making sources open between ministries and agencies is an internal matter, and should have nothing to do with rights. This is where the actual situation is different from the understanding of the business operator. Therefore, it is important to make an appeal to resolve this point in order to make it open source.

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