The Defense Agency compiled a plan Friday for disbanding the Defense Facilities Administration Agency, whose senior officials were embroiled in bid-rigging.

The plan to be reflected in the government’s budget compilation process for fiscal 2007 is designed not only to prevent further rigged bids but also to streamline defense administration in line with Prime Minister Junichiro Koizumi’s administrative reform initiative.

The functions of the facilities agency will be split into three and be taken over by the Defense Agency’s two departments, including one to be newly set up, and its outside arm, according to the plan compiled by a task force headed by Defense Agency Director General Fukushiro Nukaga.

The envisaged new segment is tentatively called an infrastructure development department. The outside body will be renamed to acquisition office from the so-called equipment office, which is to take over the Central Contract Office under the revised Defense Agency Act enacted in May, agency officials said.

An inspection headquarters will be set up directly under the Defense Agency director general, with its head given the status equivalent to that of the vice defense minister.

Three former facilities agency officials are standing trial for allegedly rigging bids for tenders in air-conditioning projects at the Defense Agency’s headquarters and the Self-Defense Forces hospital, and in construction projects at the U.S. Marine Corps Air Station Iwakuni in Yamaguchi Prefecture, from 2004 to March 2005.

Following revelations of the scams, Nukaga called for disbanding the facilities agency by March 2008.

Measures the Defense Agency compiled last month to prevent further bid-rigging said the agency will work on a reorganization plan by this summer, when government bodies are to complete their budget requests for fiscal 2007.

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