In Japan, broadly speaking there are two different types of public procurement systems, one of which is implemented by the national government (the "Government") and the other, by local governments (e.g., prefectures or municipalities). As such, they are each regulated in different ways.

The Accounting Act (the "Accounting Act") and the Cabinet Order on Budgets, the Settlement of Accounts, and Accounting (the "Cabinet Order on Budgets and Accounts") are the main laws and regulations regarding public procurement by the Government. The Accounting Act governs generally the Government's income, expenses and contracts, etc. The Cabinet Order on Budgets and Accounts sets forth detailed regulations under the scope of the Accounting Act.

The procurement systems implemented by local governments are governed under the procedures set up under the Local Autonomy Act and the Order for Enforcement of the Local Autonomy Act (the "Order for Autonomy").

In addition to these laws and regulations, the Government established Special Cabinet Orders for public procurement (the "Special Cabinet Orders for GPA") so as to correspond with the WTO's Agreement on Government Procurement (the "GPA") which took effect in 1996. The Special Cabinet Orders for GPA operate as exceptions to both the Cabinet Order on Budgets and Accounts and the Order for Autonomy.

Aside from these, there are a number of specific laws regarding public procurement, such as the Act on Prevention of Delay in Payment under Government Contract, etc., the Act on Promotion of Procurement of Eco-Friendly Goods and Services by the State and Other Entities, the Act for Promoting Proper Tendering and Contracting for Public Works and the Act on Elimination and Prevention of Involvement in Bid Rigging, etc. and Punishments for Acts by Employees that Harm Fairness of Bidding, etc. (the "Act on Elimination and Prevention of Involvement in Bid Rigging").

As mentioned above, the Special Cabinet Orders for GPA were prepared to correspond with the GPA. For the most part, complying with the Special Cabinet Orders for GPA also entails compliance with the GPA.

However, not all of the provisions of the GPA are expressly covered by Japanese laws and regulations and, where not covered, Government institutions establish independent guidelines in order to address such portions of the GPA.

For public procurement in Japan, the applicable general principles are economic efficiency, competitiveness, fairness and transparency.

• Economic efficiency: To secure, from an economic perspective, the most efficient procurement, emphasizing the benefit to the taxpayers supporting the Government/local government.
• Competitiveness: To promote competition through general competitive bidding (where discretionary contracts are the exception rather than the norm), and build mechanisms to prevent uncompetitive actions.
• Fairness: To comply with any rules necessary to maintain the trust of the citizenry for appropriate accounting processes and to achieve equality opportunity between competitors acting as opposing parties for the purposes of public procurement.
• Transparency: To build systems for the disclosure of information in order to promote external monitoring.

Defence procurement is exempted from the application of the rules mentioned above because it meets the security exemption of the GPA (Article 23). To be more precise, referring to items 2 and 3 of Article 3 of the Special Cabinet Orders for GPA, the GPA can be applied only if the goods are designated by the Government as goods relevant to defence (see also: the GPA, Appendix 1, Annex 4). However, even if the goods are designated as such, procurement would likely be implemented by means of discretionary contracts rather than open bidding because the number of potential participants would be limited due to the special usage of such goods as well as the types of permissions required for such manufacturing involving advanced technology.

Aerospace procurement is regulated under the Space Activity Act and the Satellite Remote Sensing Act, which were enacted in 2016 to promote the pursuit of space businesses by private companies.