Prime Minister Junichiro Koizumi and Defense Agency chief Fukushiro Nukaga agreed Friday to disband the Defense Facilities Administration Agency in a bid to stop further bid-rigging on agency construction projects.

The DFAA, an arm of the Defense Agency, procures land and facilities for the U.S. military here and the Self-Defense Forces.

Nukaga met Koizumi on Friday morning to explain recommendations from an advisory panel, including that the government abolish the DFAA and transfer its work to the Defense Agency.

The panel’s report also recommends creating a department in the Defense Agency to monitor legal compliance in the agency and the SDF. The new inspection department should have “high independence,” the report says.

“We will draw up the outline (of the changes) by the time requests are made for the (next) fiscal budget allocations” in August, Nukaga said, an indication the changes could take place next year.

Koizumi approved the report and gave the green light to the recommendations, Nukaga told reporters.

Friday’s decision comes after the indictment of one current and two former senior officials at the DFAA in late February for allegedly organizing rigged bids for military construction projects, including at the U.S. Marine Corps Iwakuni Air Station and the U.S. Navy’s Sasebo base in Nagasaki Prefecture.

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