The government's antitrust watchdog on Tuesday conducted on-site inspections of major textile and clothing makers Kuraray Co. and Unitika Ltd. following allegations the companies rigged bids to produce combat fatigues and other uniforms for the Self-Defense Forces.
The Japan Fair Trade Commission is also believed to have inspected the offices of several other companies, including Marubeni Corp., in connection with the allegations.
It suspects that Kuraray and Unitika repeatedly arranged which company would win bids before submitting tenders, in violation of the antimonopoly law.
According to sources close to the matter, the market for SDF uniforms has been monopolized by a small number of producers for years, as there are not many companies that can manufacture specialized chemical textiles, such as those with fire-retardant properties.
The Acquisition, Technology & Logistics Agency, launched last October with the aim of cutting procurement costs, manages equipment for the SDF, from development and purchase to disposal.
Kuraray and Unitika are suspected of having rigged bids for at least the past few years, even before the launch of the agency, the sources said.
According to records of the agency's general competitive bidding, Kuraray won a contract to make 10,000 combat uniforms for the SDF, such as for cold weather, for about ¥390 million ($3.4 million) in fiscal 2014, while a tender by Unitika's for around 60,000 sets of military clothing was accepted for around ¥1 billion.
Both Kuraray and Unitika confirmed the watchdog had conducted on-site investigations at their premises.