A must-see for startups and SMEs! Requirements for bidding participation have been relaxed

Good news for startups and small businesses.
The relaxed requirements for applying to government tenders have opened up new possibilities for companies to gain business opportunities with public agencies.
In addition, participating in bidding can help improve your credibility and expand your business.
　
In this article, we will go into the details of this amendment.

What are the qualifications to participate in a bid?

The bidding system is a procedure in which the ordering party (ordering government agency, local government, various corporations and organizations) selects the procurement source by inviting contract applicants to bid on the procured items to be ordered.

The amount of orders for procurement items through bidding is said to reach approximately 20 trillion yen annually, forming a large market.

In order to participate in a bid, you must first qualify to participate in the bid.
The Employer determines the qualifications required for those participating in open competitive bidding according to laws and regulations.
Those who wish to participate in bidding must apply for bidding qualification registration examination for each client..

In addition, when a public construction contractor conducts designated competitive bidding, it must determine in advance the qualifications (grades) required for those participating in the designated competitive bidding, and nominate those who fall under that grade. I am.
In other words, in designated competitive bidding, there is no possibility that only large companies can win the bid.There is plenty of room for small and medium-sized enterprises to enter the market.

Related article

Review of bidding eligibility

To participate in the bidding, companies must meet certain criteria.

Regarding these standards, the Ministry of Economy, Trade and Industry revised the "Expanding Opportunities for Technologically-Capable Small and Medium-Sized Enterprises to Participate in Bidding (Decision of the Steering Committee of the Liaison Conference of Ministries and Agencies for Promoting the Electronicization of Government Procurement Procedures (Excluding Public Works))" on October 12, 10, and put the revised standards into effect on March 10, 2024.

Here we will provide a detailed explanation of the latest information regarding the review of the above-mentioned bidding eligibility requirements.
It also provides concrete examples of how companies can meet these criteria and participate in bids competitively.

Revision of qualifications for competitive bidding

National and local governments regularly review the eligibility requirements for companies to participate in competitive bidding.
This is a measure to maintain transparency and fairness in the market.
Recent revisions have created more favorable conditions, particularly for small and medium-sized enterprises.
　
Eligibility to participate in bidding is granted as unified qualifications across all ministries and agencies based on the public announcement regarding the qualifications of competitive participants.
Companies are ranked from A to D based on their business scale and track record, and the higher the rank, the more likely they are to participate in larger-scale tenders.
However, because early stage startups have limited track records, they are usually ranked lower and have had limited access to large-scale tenders.
That's why special measures have been introduced for small and medium-sized enterprises and tech start-ups.
Specifically, regardless of rank (A to D), if a company's technical capabilities are recognized, it will be able to participate in large-scale bidding.

Regarding this point, under the latest amendment, if a bid proposal clearly indicates that the bidder has been selected as a J-Startup or a regional version of J-Startup and that the bidder has the technical skills related to the bid items, etc. and is able to manufacture or provide the bid items, etc., then in principle, no additional attachments are required.

Specific scope of expansion

The scope of eligibility requirements has also been broadened, with revisions focusing on specific industries and geographic areas.

For example, we support small and medium-sized enterprises and startups with technological capabilities through the use of the SBIR system and technology innovation subsidies.
This enables these businesses to maintain high scores in qualification screening and more easily qualify for public procurement.

It is also becoming common for local governments to take measures to relax entry qualifications for locally-based businesses.
In particular, there are many special measures to support emerging markets and local businesses.

In addition, businesses supported by government ministries and agencies such as the Ministry of Economy, Trade and Industry and funded by venture capital firms are also eligible to participate in the bidding.
Such companies have the latest technological capabilities and enjoy a good reputation.

Businesses selected for J-Startup, an intensive public-private program aimed at producing startups that can operate globally, are no exception.
This is providing more opportunities for small and medium-sized enterprises and startups to utilize their technological capabilities to pass qualification screening and participate in bidding.

Finally, there has been a noticeable expansion of qualifications in certain industries, such as construction and IT-related businesses.
Because of these measures, it is important for small business owners and those involved in bidding to plan specific actions to improve their scores in order to gain eligibility to participate.

Financial Condition and Operating Performance

The eligibility to bid will be based on a company's financial condition and business performance as key evaluation factors.
To meet these standards, companies must demonstrate sound financial management and sustainable operating performance.
For example, many companies are focused on improving their profitability and cash flow.
As part of this, it is important to conduct rigorous accounting audits and highly transparent financial reporting.
You will also be required to keep thorough records of past sales performance and provide objective performance data.
　
Scores are calculated based on financial situation, business performance, etc., and startups with no track record generally receive low scores.
These scores are taken into consideration as part of eligibility to participate in bidding, so a company's management stability and market performance are also used as evaluation criteria.
Therefore, a company's financial data, past trading history, current market position, etc. are taken into account when calculating the score.

In addition, actively collecting bidding information provided by the government and various ministries and agencies and making appropriate applications at the appropriate time will help you to increase your competitiveness.
In addition to meeting the necessary requirements for eligibility to participate in bidding, it is important to maximize your company's strengths and build credibility and a track record by participating in public works and national projects.

Specific criteria for eligibility to participate in the bid

The new specific eligibility criteria for bidding consist of the following elements:

Legal requirements
Companies are required to comply with relevant laws and regulations and obtain all necessary licenses and permits.
This reduces the risk of violating the law and ensures credibility.

Financial Soundness
It is necessary to be financially stable, having a certain amount of capital, sales, and profit margin.
This will ensure sustainable operations and provide assurance towards project completion.

Sales performance
They must have a good track record of completing projects in the past and have good reviews from clients.
Concrete success stories and feedback from satisfied customers are key evaluation criteria.

Technical capabilities and expertise
It is necessary to have a team of professional staff with specific qualifications and technical certifications.
For example, companies are evaluated based on the number of people with professional engineering qualifications and the number of patents they hold.
Examples of patents include product technology and manufacturing process patents.
In addition, patents obtained overseas will also be evaluated, serving as proof of international technological capabilities.
The number of people with skills certification is also an important factor. Having a large number of people with skills certification who have demonstrated that they have specific techniques or skills will increase your evaluation in bidding.

Social credibility
They are expected to fulfill their Corporate Social Responsibility (CSR).
For example, efforts toward environmental protection and strict compliance are evaluated.
　
Meeting these criteria qualifies a company to participate in competitive bidding.
By reviewing your own situation and identifying areas for improvement, you can increase your chances of successful bids.

Expanding bidding opportunities for technologically capable small and medium-sized enterprises

Policy History and Revision

Policies aimed at expanding bidding opportunities for small and medium-sized enterprises with technological capabilities have undergone many changes over the years.
Its origins lie in the establishment of laws and regulations to ensure transparency and fairness in public works.

Particularly in the latter half of the Heisei era, specific measures were introduced one after another to recognize the technological capabilities of small and medium-sized enterprises and expand their opportunities for entry into the market.
Since then, the Ministry of Economy, Trade and Industry, the Ministry of Land, Infrastructure, Transport and Tourism and other organizations have taken the lead in periodically reviewing and revising the law, and the latest measures have been introduced.

On October 12, 10, the Council for Promoting the Electronicization of Government Procurement decided to expand opportunities for participation in bidding.

以降、改定の歴史において、平成18年8月16日、平成20年7月31日、平成24年6月5日、平成26年5月1日、平成30年3月30日、令和3年6月24日、令和6年3月28日に、技術力を有する中小企業の参入を支援するための具体的な措置が講じられてきました。

Significance and purpose of the policy

The greatest significance of this policy is that it promotes the participation of small and medium-sized enterprises with highly skilled technical capabilities in public works.
This will enable the provision of high-quality public services, increasing benefits to society as a whole.
In addition, expanding bidding opportunities is expected to intensify competition, leading to cost reductions and technological innovation.

Furthermore, the participation of technologically capable small and medium-sized enterprises in public works projects also contributes to revitalizing the local economy.
Having local companies take on public works projects creates jobs in the region and is expected to lead to sustainable economic development.
To achieve these goals, the government is actively promoting policies.

Specifically, we work with specialized and support organizations of various government ministries and agencies to strengthen the foundations of technologically-advanced small and medium-sized enterprises and improve their competitiveness.
This will lower the barriers to market entry and help ensure a smooth application process for bidding qualifications.
Additionally, in government procurement, we aim to utilize the technological capabilities of small and medium-sized enterprises to promote technological innovation and improve the nation's industrial competitiveness.

This measure will open up greater opportunities for participation to small and medium-sized enterprises and promote technological innovation.
In particular, for small and medium-sized enterprises that are not eligible to participate in bidding, the expansion of new business opportunities will increase opportunities for new entrants.

Examples of standards

There are some specific criteria for eligibility to participate in the bid.
Some of them are introduced below.

Technical Evaluation Criteria
It is a standard for evaluating a company's technological capabilities.
The evaluation will focus on the qualifications held by engineers, past achievements, and technological development results.
Specifically, importance is placed on the number of patents held in a particular technical field and the level of advanced qualifications held by engineers.

Business Stability Standard
It is a standard for evaluating a company's financial condition and management stability.
Companies are evaluated based on their balance sheets, cash flows, and continued profitability.
It also considers whether a company's operating structure is sustainable.
For example, it is necessary to maintain operating results for a certain period of time and a healthy financial position.

Experience and performance criteria
You will be evaluated on the type and scale of projects you have completed in the past.
The key points are the completion rate of large projects and meeting deadlines.
Specific examples include experience in public works construction and a track record of receiving high quality evaluations.

Community-based standards
In order to stimulate the local economy, local businesses may be given preferential treatment.
How you contribute to the local community is also taken into consideration.
For example, evaluations will be conducted on local product and service offerings and participation in local events.

By meeting these standards, small and medium-sized enterprises can actively participate in public works bidding.
It is also important that companies themselves make internal arrangements based on these standards.
As specific examples, measures such as strengthening technical capabilities and improving financial situations are effective.
This enables companies to improve their competitiveness and achieve sustainable growth.

Special bidding measures for J-Startup companies and J-Startup regional companies

Operational guidelines

The operational guidelines for the special measures for J-Startup companies and J-Startup regional companies to participate in bidding aim to promote fair and transparent competition while providing appropriate support.

For example, even if you do not meet the normal bidding qualifications, special evaluation criteria may apply under certain conditions.

First, it must be confirmed that the company is certified by the J-Startup program.
Certified companies will be eligible for relaxed bidding eligibility standards during the period in which the special measures apply.
A specific technical evaluation points system has also been introduced to ensure that specialized technical and manufacturing capabilities are properly recognised.

In addition, strengthening collaboration with government agencies will provide further support to J-Startup companies.
If a J-Startup company clearly indicates in its proposal or other documents that it has expertise in a specific technology field and is capable of manufacturing or providing the bid item, it is not required to submit additional documents in principle.

It is necessary to verify that bidding companies are J-Startup companies, and it is important that this verification is carried out appropriately.
The technical fields and manufacturing capabilities described in the proposals are also required to be properly evaluated.

Scope of the measures

The scope of application of the special bidding measures for J-Startup companies and regional companies may be limited to certain industries or regions.
This is tailored to maximise the opportunities for small businesses in each region to compete on a level playing field.
The main areas of application are:

Advanced Technology Area: A company that provides innovative technologies and services in fields such as AI, IoT, and robotics.
Environmental technology　　:Projects related to renewable energy and environmental improvement technologies.
Regional promotion　　: A company that contributes to revitalizing the local economy and regional revitalization.

Furthermore, these special measures may be limited to companies with a certain amount of capital or number of employees.
Therefore, each company must assess its own scope and take appropriate measures.

The Ministry of Economy, Trade and Industry will provide an up-to-date list of corporate numbers for J-Startup companies and J-Startup regional companies.
This will ensure transparency among target companies and improve fairness in bidding participation.
This information is crucial for small business owners and those involved in bidding.
Companies are urged to keep checking the list for updates to see if their company may be eligible for special measures.

In particular, companies interested in cutting-edge technology, environmental technology, and regional development projects can take advantage of this special measure to gain an advantage over other companies.

Notifications

General Notice

First, notices of the review of bidder eligibility have been issued multiple times, with detailed explanations of specific measures and their scope.
These notifications are intended to help SMEs and start-ups to participate in more bids.
Specifically, these include the criteria and requirements for eligibility to bid, the list and format of documents to be submitted, bidding timelines and deadlines, evaluation criteria and scoring methodologies, and appeal procedures.

A detailed understanding of the General Notice is essential to get a complete picture of the bidding process.
It is especially important to prepare without overlooking the bidding schedule and deadlines.
You will also be required to prepare the required documents accurately and according to the format.

In addition, the general notice also contains special instructions for this tender.
This may include new compliance requirements and unique eligibility conditions.
For example, you may be required to submit certificates to meet environmental standards or to have personnel with specific technical qualifications.

The notice also includes specific details on how to apply future measures to help readers make use of the information.
The book explains the details of the evaluation criteria and preparation methods based on past success stories, so by taking this information into consideration when making preparations, you can be more competitive in the bidding process.

Please read the general rules carefully and if you have any questions, contact the relevant department as soon as possible.
This will help prevent incomplete documentation and delays in processing.
In addition, by preparing based on past bidding data, you can respond efficiently.

Changes in relevant laws and regulations

Securing and reviewing eligibility to participate in bidding is a very important issue for small and medium-sized business managers and bidding personnel.
In response to revisions to relevant laws and regulations, eligibility requirements for bidding will be reviewed and evaluation criteria will be changed.
This will ensure that a fair bidding system is maintained that is in line with the latest technological trends and market conditions.

Specifically, the new legal amendments will regularly review the requirements for bidding eligibility and the evaluation criteria, and establish a mechanism for fairly evaluating companies' technological capabilities and their ability to adapt to the market.
These changes represent a great opportunity for competitive small and medium-sized enterprises, and by taking the right steps you can make the most of your bidding opportunities.

Summary | Why not consider taking this opportunity to apply for bidding qualification registration?

Obtaining qualification to bid is an important step that opens up many business opportunities for small and medium-sized enterprises.
Even companies that have not been active in bidding activities in the past may want to take this opportunity to consider applying for bidding eligibility.

Being eligible to participate in bidding makes it easier for us to take part in various projects ordered by local governments and public institutions, providing a major foothold for business expansion.
You can also get an edge over your competitors by staying up to date on the latest bidding strategies.

It is recommended that you prepare the necessary documents in advance and complete the application process easily and quickly through the online application system.

When it comes to bidding, leave it to Support Administrative Scrivener Corporation!

At Support Administrative Scriveners Corporation, we provide support for start-ups wishing to participate in bidding for the first time, as well as support for companies that have already registered their bidding eligibility with many suppliers and local governments, with the centralized management and submission of various change notifications and renewal registration applications.

We also provide consulting services that include support for obtaining licenses and permits related to the construction industry, etc.
　
We provide legal services related to bid participation qualification registration review applications based on the know-how and track record that we can accumulate because we are administrative scriveners who handle applications and negotiations with administrative agencies on behalf of business operators on a daily basis.
　
Our staff has a track record of applying in all prefectures across the country. Please contact us by all means.

Bidding qualification registration application support