U.S. sues Japan, charges construction bid-rigging

September 17, 1994|By New York Times News Service

TOKYO -- The U.S. government, which has long complained about the unfairness of bidding procedures for construction projects in Japan, struck back yesterday by filing a lawsuit against 53 Japanese companies, charging them with colluding on bids for work at a U.S. military base in Japan.

Washington is demanding compensation of 544 million yen, or about $5.4 million, saying that the bid-rigging inflated the prices the United States had to pay for work at the naval base in Atsugi, southwest of Tokyo. The lawsuit, filed in Tokyo District Court, cites 77 specific contracts awarded between early 1984 and early 1990.

The companies have generally denied colluding on bids.

In the last couple of years, disclosures of bid-rigging and bribery of public officials by construction companies in Japan have led to arrests and resignations and have given cre dence to U.S. complaints that Japan's construction market is not open to foreigners and that bidding procedures are not fair. Japan and the United States reached a trade agreement earlier this year aimed at reforming bidding procedures and opening the market.

In its petition, the United States said the construction companies had formed a group to discuss issues re lated to projects at the Atsugi base but in fact decided which companies would win bids for work. The bid-rigging continued until 1990, the United States contends.

In March, the United States sent letters to 73 companies demanding compensation. Twenty of the companies apparently settled or are negotiating a settlement and are not named in the suit.

The United States previously reached settlements in two cases involving construction work at other military bases in Japan and one case involving a telecommunications contract.

In one construction case, involving the Yokosuka naval base south of Tokyo, Washington settled with Japanese companies for about $35 million in 1989 and 1990, after Japan's Fair Trade Commission ruled that the companies had engaged in bid-rigging.

In the telecommunications case, NEC and 10 other companies agreed to pay the United States about $35 million in 1991 and 1992.

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