Yamada Corp. has won defense contracts at 99.9 % upper limit for spending

   The average ratio of bidding prices for Defense Ministry (formerly the Defense Agency) projects awarded to military equipment trader Yamada Corporation has been 99.9 percent of the upper limits offered by the ministry.

   The ministry disclosed this extraordinary fact in answer to a question by Japanese Communist Party representative Inoue Satoshi at the House of Councilors Committee on Foreign Affairs and Defense meeting on November 29. This reveals how five trillion yen a year in military expenditure is fraudulently used up.  

   Inoue requested the Defense Ministry to disclose details of all the defense contracts awarded to Yamada Corp. in discretionary or competitive bids between January 2002 (when former Vice Defense Agency Director General Moriya Takemasa assumed the post of the agency’s Defense Policy Bureau director general) and October 2007.

   Vice Defense Minister Eto Akinori in answer to Inoue said, “The average ratio of Yamada Corp’s bidding estimates on 142 contracts is 99.9 percent. This ratio is pretty high.” He also stated that there are very few data available other than the estimates by Yamada Corp. for calculating the upper limits of bids and admitted that the Defense Agency (later Defense Ministry) has offered its estimates based on figures given by Yamada Corp.

   Defense Minister Ishiba Shigeru stated that the current method of awarding contracts is based on the will of firms with ill-intentions.

   Showing a document on how bidding costs have been decided, Inoue pointed out that if in discretionary contract negotiations Yamada Corp. offers an estimated cost higher than the upper limit set by the Defense Ministry, the bid would be reduced to the level of the ministry’s estimate through negotiations.

   Of Yamada Corp.’s 46 contracts related to dispatching Ground Self-Defense Force units to Iraq, 43 were awarded at bidding prices that were exactly the same as the upper limits set by the ministry (formerly agency). In 30 of these bids, Yamada Corp. didn’t even present its own estimate, Inoue pointed out.

   “The ministry has actually allowed bidding prices to be determined according to just what arms traders wanted,” Inoue stated. He said, “The government must stop considering defense expenditure as something untouchable, while cutting expenditures on measures to improve living conditions.”

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   The Tokyo District Public Prosecutors Office on November 29 searched the Defense Ministry headquarters, including the vice defense minister’s office, for about ten hours, for evidence that would support the allegation of former Vice Defense Minister Moriya’s bribe taking in the corruption involving procurement of military equipment.
- Akahata, November 30, 2007