Business Condition Evaluation (keishin) and bidding eligibility for public-works tenders

In short: holding a construction-business permit does not by itself let you bid for public works. A construction business that intends to take, directly from the orderer, certain public-works construction ordered by the national or local government and the like must undergo an examination of objective matters concerning its management — the Business Condition Evaluation (keishin) (Construction Business Act, Article 27-23(1)). The evaluation splits into (1) business-condition (the business-condition analysis) and (2) business scale, technical ability and other objective matters (the business-scale-etc. evaluation), and from both a Total Evaluation Value (P) is calculated (Construction Business Act, Articles 27-23(2) and 27-29). To actually bid, you must, on top of the evaluation, apply for the bidding-eligibility examination of each orderer (or the national unified qualification) and be entered on its register. Drafting the evaluation documents and filing/representing the bidding-eligibility application is within an administrative scrivener's scope; preparing financial statements, settling accounts and tax work are for a tax accountant; corporate registration is for a judicial scrivener; and enrolling in labour and social insurance is for a labour and social security attorney (Yotsuba Labor and Social Security Attorney Office is a separate business from our office) — each on the premise that you contract separately as an independent business. Because the criteria and the validity-period practice may be revised or updated, this article is limited to what could be verified and shows where to confirm the latest. This article is general information and does not determine or guarantee an individual score or whether bidding participation will be allowed. Our office receives no referral fee.

What do you need to take part in public-works bidding?

A construction-business permit is the prerequisite permit for undertaking construction work. Winning public works ordered by the national or local government and the like, however, requires another procedure on top of the permit. At its centre are the Business Condition Evaluation (keishin) and the bidding-eligibility examination.

Construction Business Act, Article 27-23(1), provides that a construction business that intends to take, directly from the orderer, public-works construction relating to facilities or structures of a public nature that is prescribed by Cabinet Order must undergo an examination of objective matters concerning its management. The construction prescribed by Cabinet Order is, under Article 45 of the Construction Business Act Enforcement Order, work where the orderer is the national government, a local government, a public corporation listed in Appended Table I of the Corporation Tax Act (excluding local governments) and the like, and the contract price for a single work is 5 million yen or more (15 million yen or more for general construction work).

Preparation to take part in public-works bidding therefore passes roughly through the stages "construction-business permit (already held) → keishin → bidding-eligibility examination (register entry)." The requirements up to obtaining the permit are organised in Requirements for a construction-business permit (management of business, full-time engineer, assets). This article covers the next stage: the keishin and bidding eligibility.

What does the Business Condition Evaluation (keishin) assess?

Under Construction Business Act, Article 27-23(2), the keishin assesses, by numerical evaluation, (1) the business condition and (2) the business scale, technical ability and other objective matters. In practice (1) is the "business-condition analysis" performed by a registered business-condition analysis agency, and (2) is the "business-scale-etc. evaluation" performed by the Minister of Land, Infrastructure, Transport and Tourism or a prefectural governor.

Using both results, the Total Evaluation Value (P) is calculated by the method prescribed in Ministry ordinance. Article 27-29(1) provides that, where a construction business that has applied for the business-scale-etc. evaluation so requests, the Total Evaluation Value must be notified to it. In the calculation formula published by the Ministry of Land, Infrastructure, Transport and Tourism, the Total Evaluation Value is composed as follows (the formula in force from 1 April 2008 (Heisei 20); because items such as the social-aspects evaluation have been revised since, confirm the latest handbook at each application).

Symbol	What is evaluated	Coefficient in the formula
X1	Annual average completed-work value by work type (business scale)	0.25
X2	Own capital and average profit (business scale)	0.15
Y	Business condition (result of the business-condition analysis)	0.20
Z	Number of technical staff and prime-contract completed-work value (technical ability)	0.25
W	Other examination items (social aspects, etc.)	0.15

The Total Evaluation Value is P = 0.25×X1 + 0.15×X2 + 0.20×Y + 0.25×Z + 0.15×W. Among these, social aspects (W) include the state of labour welfare, such as enrolment in health insurance, employees' pension insurance and employment insurance. Arranging enrolment in social insurance is within the field of a labour and social security attorney, and Yotsuba Labor and Social Security Attorney Office — a separate business from our office — is contracted separately as needed. Details such as the rounding of scores may be handled differently by the competent regional development bureau or prefecture.

What is the flow from the evaluation to bidding-eligibility registration?

Undergoing the keishin does not by itself let you bid. On the basis of the keishin result, you apply for the bidding-eligibility examination of each orderer (or the national unified qualification common to national agencies) and can bid only once entered on the register. The proper execution of public-works ordering and contracting is framed by the Act on Promoting Proper Tendering and Contracting for Public Works. Starting from the account settlement, the annual flow is roughly as follows.

Order	Procedure	Example of who handles it
1	Account settlement (end of the fiscal year) and preparation of financial statements	Tax accountant / certified public accountant
2	Filing the account-settlement change notification (fiscal-year-end notification)	Administrative scrivener (drafting and filing agency)
3	Application for the business-condition analysis	Registered business-condition analysis agency (administrative scrivener supports the application)
4	Application for the business-scale-etc. evaluation and request for the Total Evaluation Value	Minister / prefectural governor (administrative scrivener supports the application)
5	Receipt of the result notice	Construction business
6	Application for the bidding-eligibility examination (periodic / ad hoc)	Each orderer / national unified qualification (administrative scrivener supports the application)
7	Entry on the register of eligible parties and ranking	Each orderer

Besides the unified qualification usable in common across national agencies, each prefecture and municipality sets its own eligibility examination, and the application timing (periodic or ad hoc) and required documents differ by orderer. Because the filing destination changes with which orderer's works you aim for, please review Engagement Flow for the flow, Fee Schedule for fees, and Services for the whole range of work handled, and then consult us.

Is the evaluation needed every year (validity period and the account-settlement change notification)?

To keep winning public works, continuing to undergo the keishin every year is the basic approach. The keishin result (result notice) carries a guideline period during which an orderer may use it in the bidding-eligibility examination — in principle one year and seven months from the examination base date. The examination base date is, in principle, the end of the fiscal year immediately preceding the application (the most recent settlement date).

Have a question about your situation?

Tell us about your residency, permit or administrative procedure enquiry.

Chat on LINEContact us

Item	Content
Examination base date	In principle, the end of the fiscal year immediately before (the most recent settlement date)
Guideline period an orderer may use	In principle one year and seven months from the examination base date
Avoiding a gap	Each year, promptly after settlement, file the account-settlement change notification, the business-condition analysis and the keishin, and obtain the next result notice before the previous validity period lapses

This one-year-seven-month practice is set in each orderer's guidelines and may differ by orderer. If a gap arises, you may be unable to take public works directly during it, so scheduling, as an annual plan, everything from the account-settlement change notification through the keishin to the bidding-eligibility examination is important in practice. Confirm the specific acceptance period and required documents in the latest guidelines of the orderer you apply to. On how this differs from the demolition-work registration that accompanies a construction-business permit, The difference between demolition-work registration and a construction-business permit is also a useful reference.

How do the roles divide with the tax accountant and judicial scrivener?

Preparing to bid for public works overlaps work of different natures: filing (administrative procedure), accounting and tax, registration and labour. At Yotsuba we divide and handle these on the premise that you contract with each as an independent business, as follows.

Field	Who handles it (each as an independent business under a separate contract)
Drafting and filing the account-settlement change notification, the business-scale-etc. evaluation and the bidding-eligibility examination	Administrative scrivener
Preparing financial statements, settling accounts and corporate tax work, and arranging the settlement figures used in the business-condition analysis	Tax accountant / certified public accountant
Corporate registration such as capital or director changes	Judicial scrivener
Arranging enrolment in health insurance, employees' pension insurance and employment insurance (also relevant to social aspects W)	Labour and social security attorney (Yotsuba Labor and Social Security Attorney Office is a separate business)
Negotiation and litigation over bidding and contract disputes	Lawyer

What the administrative scrivener handles is drafting the keishin and bidding-eligibility examination documents and filing them with public offices. Preparing the financial statements that underlie the business-condition analysis (Y) and tax filing are the work of a tax accountant or certified public accountant; registration is for a judicial scrivener; labour and social-insurance enrolment is for a labour and social security attorney; and representation in disputes is for a lawyer. Yotsuba Labor and Social Security Attorney Office and Yotsuba Real Estate Co., Ltd. are each a separate business from our office, and each professional is contracted independently. Our office receives no referral fee.

FAQ

Q. If I obtain a construction-business permit, can I bid for public works as I am?
A. The permit alone is not enough. To take, directly, certain public works ordered by the national or local government and the like, you must undergo the Business Condition Evaluation (keishin) (Construction Business Act, Article 27-23(1)) and further apply for the bidding-eligibility examination of each orderer (or the national unified qualification) and be entered on its register.

Q. How is the keishin Total Evaluation Value (P) decided?
A. It is calculated from the business-condition analysis result (Y) and the business-scale-etc. evaluation results (X1, X2, Z, W) by the method prescribed in Ministry ordinance. The published formula is P = 0.25×X1 + 0.15×X2 + 0.20×Y + 0.25×Z + 0.15×W. Because items such as social aspects (W) may be revised, confirm the latest handbook at each application.

Q. Must the keishin be undergone every year?
A. To keep winning public works, undergoing it every year is the basic approach. The guideline period an orderer uses in the bidding-eligibility examination is one year and seven months from the examination base date (in principle the most recent settlement date), so, to avoid a gap, building the account-settlement change notification, the business-condition analysis and the keishin into the annual schedule is the practice. Because the period practice differs by orderer, confirm the latest guidelines.

Q. Can an administrative scrivener handle the keishin application? How is it split with the tax accountant?
A. Drafting and filing the account-settlement change notification, the business-scale-etc. evaluation and the bidding-eligibility examination are within an administrative scrivener's scope. Preparing financial statements, settling accounts and tax filing are for a tax accountant or certified public accountant; registration is for a judicial scrivener; and arranging social-insurance enrolment is for a labour and social security attorney. You contract with each as an independent business separately.

Sources (Primary Information)

• e-Gov Law Search, "Construction Business Act" (Act No. 100 of 1949), Article 27-23 (Business Condition Evaluation; paragraph 1 = a construction business that intends to take, directly from the orderer, public-works construction relating to facilities or structures of a public nature prescribed by Cabinet Order must undergo an examination of objective matters concerning its management; paragraph 2, item 1 = business condition, item 2 = business scale, technical ability and other objective matters), Article 27-29 (notification of the Total Evaluation Value) (accessed 2026-10-15)
• e-Gov Law Search, "Construction Business Act Enforcement Order" (Cabinet Order No. 273 of 1956), Article 45 (the construction prescribed by Cabinet Order under Act Article 27-23(1) = work where the orderer is the national government, a local government, a public corporation in Appended Table I of the Corporation Tax Act, etc., and the contract price is 5 million yen (15 million yen for general construction) or more) (accessed 2026-10-15)
• Ministry of Land, Infrastructure, Transport and Tourism, "On the revision of the construction Business Condition Evaluation" (Total Evaluation Value P = 0.25X1 + 0.15X2 + 0.2Y + 0.25Z + 0.15W, in force 1 April 2008) (accessed 2026-10-15)
• The Act on Promoting Proper Tendering and Contracting for Public Works, and each orderer's bidding-eligibility examination guidelines (unified and individual qualifications), and orderers' practice on the period during which the keishin result is used (in principle one year and seven months from the examination base date) (accessed 2026-10-15)
• Ministry of Land, Infrastructure, Transport and Tourism, regional development bureaus and prefectures, "Handbook of the Business Condition Evaluation" (score calculation, rounding, and the social-aspects (W) evaluation items differ by edition) (accessed 2026-10-15)

This article is general information and does not determine or guarantee an expected score, whether bidding participation will be allowed, or the result of each orderer's eligibility examination. Drafting and filing the keishin and bidding-eligibility examination documents are for an administrative scrivener; preparing financial statements, settling accounts and tax work are for a tax accountant or certified public accountant; corporate registration is for a judicial scrivener; arranging labour and social-insurance enrolment is for a labour and social security attorney (Yotsuba Labor and Social Security Attorney Office is a separate business); and bidding and contract disputes are for a lawyer — each as an independent business under a separate contract. Each professional is contracted independently, and our office receives no referral fee. For the latest information on validity period, criteria and acceptance periods, confirm at each application the official materials of the Ministry of Land, Infrastructure, Transport and Tourism, the competent regional development bureau, the prefecture and each orderer. Written by Joji Uramatsu, administrative scrivener and licensed real estate broker.