The Cabinet approved plans Tuesday to allow both private and public entities to bid for public services projects, officials said.
By including private companies in the bidding, the new system aims to improve the quality of public services and make them more efficient.
The step is in line with Prime Minister Junichiro Koizumi’s policy of letting the private sector provide as many services as possible.
The new bidding system will cover nine areas, including collection of public pension premiums, re-employment support and statistical research. The system will kick in before the end of the year so projects can get under way next April, the officials said.
In bidding for the contract to collect public pension premiums, for example, the Social Insurance Agency and private companies will compete by presenting proposals and cost estimates.
Private firms that win bids will be barred from completely subcontracting projects to third parties, the officials said.
The government will monitor the quality of services provided by those who win bids, they said.
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