The Impact of JAXA's Procurement System Transition on New Entry

Abstract

This article attempts to show how the procurement methods employed by Japan Aerospace Exploration Agency (JAXA) affect new entries in procurements in Japan. The authors analyzed and aggregated data associated with the transition of the procurement system at the aerospace agency and studied how the transition stimulated new entrants to participate in JAXA's research and development (R&D) procurements. Before fiscal year 2008, JAXA depended mostly on noncompetitive contracts and conducted only a few bids. After the government's recommendation in 2008, JAXA introduced more “competition” in its procurement system. Opportunities for new entrants seem to have increased since this event. However, the actual data show that additional competition for R&D procurements has not had a significant impact on new entries. To promote new entries in R&D procurements at the aerospace agency, the procurement system needs to be reformed.