• Jiji


The industry ministry gave what appears to be favorable treatment to the winner of work related to a key coronavirus relief program before the tender for the job was submitted, it was learned Thursday.

Prior to the tender, the ministry held hearings with three entities including the winner, Service Design Engineering Council.

The agency met with the company for a total of three hours, far longer than the time spent with the other two.

The official rules call for providing the same information to all participants in the tender process if the ministry meets with them prior to the bidding process.

The ministry said it spent more time with Service Design Engineering Council as it has greater know-how. The ministry also claimed that it provided the same information to all three, denying any unfair treatment.

At issue is a government coronavirus-relief program that is to provide ¥2 million in cash benefits to small and midsize businesses and others that are struggling because of the pandemic.

The tender to outsource the management of the program was announced April 8. Bids were placed by Service Design Engineering Council and Deloitte Tohmatsu Financial Advisory LLC.

The Service Design Engineering Council won the contract for ¥76.9 billion.

According to documents the ministry showed to opposition parties, officials at the agency held a total of five prior hearings with Service Design Engineering Council, Deloitte Tohmatsu Financial and the remaining party between March 30 and April 6.

The ministry did not disclose the name of the remaining party since it did not join the bidding.

The ministry held a hearing with Deloitte Tohmatsu Financial for one hour, while its hearing with the other entity lasted only 10 minutes.

The hearings with Service Design Engineering Council were joined by advertising giant Dentsu Inc., to which the awarded work was subcontracted out to for ¥74.9 billion. Dentsu then outsourced the work to a group companies.

The series of transactions “suggests that the Service Design Engineering Council is a dummy company,” Renho, a senior member of the main opposition Constitutional Democratic Party of Japan, told a parliamentary meeting Thursday.

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