Air Self-Defense Force brass rigged bids for all 311 contracts struck by one of its four supply depots to procure office equipment and supplies during the four years to March 2009, a Defense Ministry panel alleged.
The Defense Ministry decided to replace ASDF Chief of Staff Kenichiro Hokazono, who was admonished over the case because of his supervisory responsibility, with Air Defense Commander Shigeru Iwasaki.
The First ASDF Depot in Kisarazu, Chiba Prefecture, also diverted about ¥6 billion from separate budget items, including aircraft repair expenses, for 216 of the contracts worth a total of ¥7.56 billion that it concluded between fiscal 2005 and fiscal 2008.
The ministry took disciplinary action against 49 other ASDF officers, including the former head of the depot — a lieutenant general — who was suspended for 30 days.
Because the bid-rigging was arranged to give favors to companies that have accepted retired employees of the ministry and members of the Self-Defense Forces, the ministry will ban those retirees from landing jobs at the firms for the next 10 years, as part of measures to prevent similar practices.
It will also unify the procurement information of its more than 400 contracting offices and review the ASDF’s supply units.
The First ASDF Depot took the initiative in rigging office equipment suppliers’ bids through talks with them. It had drawn up a list of contract allocations to each firm on the basis of its past records of procurement plus the number of retirees they accepted.
The depot diverted funds for aircraft repairs, communications expenses and logistics maintenance to finance most of the contracts, without approval by the finance minister.
The Defense Ministry panel also pointed out that the depot procured computers and copy machines in an inappropriate manner because it sometimes gave lucrative contracts to specific companies that hired retirees.
“We apologize to the public as we have significantly discredited the Ministry of Defense and the Self-Defense Forces,” Hajime Hirota, a parliamentary secretary of defense in charge of examining the case, said Tuesday.
In March, the Fair Trade Commission found that 10 ASDF officials were involved in the bid-rigging and urged the Defense Ministry to improve its procurement practices, while ordering five major office equipment companies to stop the practice and pay a total of ¥375 million in penalties over the case.