Osaka Prefecture: Review of Advance Payment System/Allowing Partial Payments to Carry Over to the Next Fiscal Year
April 18, 2025
Osaka Prefecture has revised its construction contract system so that contractors who choose to make provisional advance payments can make partial payments based on the amount of work completed, even if the work inevitably extends beyond the fiscal year. In addition, it is no longer necessary to attach a notice of construction commencement as before when making advance payments. Related documents such as construction contracts have been revised, and new regulations have begun to apply to cases announced after the 1st.
This regulation applies to all construction projects directed by the prefecture. For advance payments, for construction projects with arrears (multi-year construction contract projects) where progress is not achieved within the fiscal year and is carried over to the next year, partial progress payments may be made when the portion is completed. In such cases, partial payments are not normally allowed for projects that are eligible for advance payments, but this has been amended to ensure reasonable budget execution and improve the contractor's cash flow. When making partial payments, an amended contract must be signed to add a partial payment.
The department in charge said, "We will allow partial payments if requested, even for contracts executed before the previous day."
Meanwhile, until now, advance payment notification for construction works has been handled by each ordering department and is not required only for civil engineering works ordered by the Department of Urban Development, but this review has expanded the scope to all departments and works.
The province has followed the national example and made efforts to promote the use of advance payments for public works projects and to simplify and speed up procedures. A system has been introduced that eliminates the unnecessary "progress report" for advance payments and allows for certification by simply submitting a "construction performance report". In cases where partial payments have been completed, efforts are being made to reduce the burden on construction sites and make inspection procedures more efficient, such as treating intermediate technical inspections as partially completed inspections, and this revision is part of this trend.
