Local City Gets Shock Good Deal From Construction Company

[Mulboyne]

[floatr][/floatr]A construction company submitted a bid for some public works in Ako City, Hyogo prefecture but made an error in their application Instead of offering to do the job for 3,500,000 yen (三百五十万円), they omitted the "man" character and ended up offering to work for only 350 yen (三百五十円). The job is to clear a large area of roadside weeds which is expected to take several months. The company president told his agent to "bid 350" which he meant as a shorthand way of saying "350 man". The agent, however, thought that the bid was to be expressed as a price per square metre of roadside and so submitted 350 yen. Bids from rival construction companies covered a mysteriously narrow range from 3.5 million to 3.65 million so 350 yen was inevitably the best deal and the city took it. The construction company could have refused to honour the deal but they would have been excluded from taking part in any other municipal work and so have agreed to the bargain price.

(Japanese story here)

[Captain Japan]

So one number was submitted? No breakdown? If I were paying Hyogo prefecture taxes I wouldn't be too happy if this is the standard bidding process.

[Visitor K]

i was under the impression that that is basically how all of public construction bids go down in japan.

[Charles]

Yeah, I've heard stories like this before. I recall hearing how a US construction company put in a bid on a state construction project, they made an error in the spreadsheet and the bid was two decimal places off, they bid 1% of what they intended. The state awarded them the contract, and there was a no-back out, performance penalty clause, they had to deliver at the wrong price at a huge loss. The construction company lost like $20million on the project, so they sued Lotus for alleged errors in their 1-2-3 spreadsheet software. Of course they got laughed out of court, Lotus wasn't at fault.

[TennoChinko]

I knew an American guy whose first paycheck from his US employer ended up depositing $1,000,000 in his account instead of Y1,000,000.

[Captain Japan]

i was under the impression that that is basically how all of public construction bids go down in japan.

Right. That is correct. Yet it is still a bit surprising that the government would make that fact crystal clear through this kind of story. But then if everyone is completely desensitized to this kind of thing it doesn't matter. It just seems to me that the fair trade commission, or whatever it is called in Japan, would use this blatant collusion as a chance to expose this silly process. I mean, the explanation for the mix-up is a total farce.