Infrastructure Project Delivery System

1

• Infrastructure Project Delivery System
• in Japan
• Akihiko HIROTANI
• President, Oriental Consultants Co., Ltd
• President, Japan Association of Japanese
  Consulting Engineers (AJCE)
• President, Japan Civil engineering Consulting
  Association (JCCA)
• Chairman, FIDIC member Association in the Asia
  Pacific Region (ASPAC)

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Presentation Outline

• CBS system in Japan
• QBS system in Japan
• Trend of delivery system in Japan
• Challenges in the near future
• Summary

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Cost-Based Selection (CBS) in Japan

• Public Accounts Act (1889) enforces CBS as a
  rule.
• The cost has been emphasized much more than the
  quality.
• CBS disregards human intellectual product and
  technical know-how.
• As a result, CBS has caused bid-rigging and
  low-price tender problem, even among consultants
  selection.

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Bid-rigging and low-price tender

• In Japan, bid-rigging or low-price tender had
  been considered to be unavoidable.
• In August 1999, it became a social problem that
  many consulting firms including members of Japan
  Civil Engineering Consulting Association (JCCA)
  were involved in bid-rigging.
• CBS may cause lower service quality and betray
  the public interest .

5
Advantages of Quality-Based Selection(QBS)

• Japanese consultants had been promoting among
  JCCA activities QBS as selection method to be
  adopted by clients for a long time.

• QBS
• Promotes technological innovation
• Provides life-cycle savings
• Satisfies public interest
• Encourages competition based on merit
• Promotes communication

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For promoting QBS -ATI framework-

• ATI framework is a target for Japanese consulting
  engineers in the mid/long term proposed by JCCA
  in 1989.
• ATI framework envisages that consulting engineers
  should be technologically spirited.
• JCCA has been insisting on the importance of the
  technology of consulting engineers or the quality
  of their product for a long time.

Consulting engineers should be A Attractive, T
Technologically spirited, I Independent
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For promoting QBS -Nakamura committee-

• After the case of bid-rigging in August 1999,
  so-called the Nakamura committee was established
  in order to study the new roles of consulting
  engineers and to improve the project delivery
  system.
• The report of this committee proposes that
• Consulting engineers should supply the owner with
  the highest quality of consulting service for
  contributing to diversified society.
• Delivery systems that depend on the type of the
  project should be established.

8
Trend of annual number of contracts

• Since the proposal of the Nakamura committee, QBS
  system has been adopted greatly.
• The cases of CBS system is decreasing, and that
  of QBS system is increasing.

9
Trend of annual amount of contracts

• The contract amount of CBS system is decreasing,
  and that of QBS system is increasing.
• The contract amount of QBS system is much more
  than that of CBS system by the central government
  now.

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Quality Assurance Act

• Quality Assurance Act was enacted in 2005 to
  guarantee selection of consulting engineers by
  qualification and technical proposal.
• The rule of the Public Account Act still prevails.

• General evaluation of the cost and the quality
• Adequacy of a bid and a contract
• More use of the private enterprise
• Equality between Owner and Consultant
• Quality Assurance

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Delivery system of MLIT

• Ministry of Land, Infrastructure, Transport, and
  Tourism (MLIT) has several kinds of delivery
  systems that depend on the type of the project.
• QCBS (Quality and Cost Based Selection) is tried
  from 2007.

QBS
QBS
(technical proposal)
QCBS
CBS
QBS
knowledge
(technical proposal)
(cost competition)
Conception and Application
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Problem on CE selection

• CBS
• Too much cost competition (cost cutting) causes
  the design errors (low quality).
• QBS
• -QBS is not applied in some sectors.
• -QBS system is not popular enough among local
  governments.
• -Owners do not have enough professional
  engineers.
• QCBS
• -There is a possibility that the cost may still
  prevail more than the quality.

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Challenges in the near future

• Promote QBS system
• -QBS should be promoted not only in central
  government but also in local government.
• Make much of quality in QCBS system
• -Quality should be emphasized more than the cost
  when QCBS is applied.
• Assist the owners
• -Consultant engineers should assist the owners
  when the number of QBS increases.

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Summary

• CBS caused to lower service quality and betray
  the public interest in Japan.
• JCCA has been promoting QBS system for a long
  time.
• The amount of QBS system is emphasized more than
  that of CBS system in the central government now.
• MLIT has several kinds of delivery systems that
  depend on the type of the project.

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Summary (Cont.)

• QCBS (Quality and Cost Based Selection) is tried
  from 2007.
• We challenge to promote QBS system more and more
  especially in local government.
• Quality should be emphasized more than the cost
  for the highest quality of consulting services
  and for the people.

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• END