What is the Act on Optimization of Transactions with Small and Medium-Sized Contractors? | Name Change from the Old Subcontracting Act | New Term in Syllabus Ver. 6.5

What Changed in Syllabus Ver. 6.5

The former "Subcontracting Act" (Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors) has been renamed the "Act on Optimization of Transactions with Small and Medium-Sized Contractors." This revision was made in 2024 and will be enforced in 2025. In the IT Passport exam syllabus Ver. 6.5, the new term has been reflected, and the old name will be phased out.

What is the Act on Optimization of Transactions with Small and Medium-Sized Contractors?

This law prohibits parent businesses from abusing their superior position against contractor businesses (formerly called subcontractors). It is jointly administered by the Fair Trade Commission and the Small and Medium Enterprise Agency. Violations can lead to recommendations, public announcements, and in serious or malicious cases, surcharges.

Main Obligations of Parent Businesses

Parent businesses must issue a purchase order (Article 3 document) and clarify the order details in writing at the time of ordering. The payment deadline must be set within 60 days after receiving the goods. If payment is delayed, the parent business is obligated to pay late payment interest.

Main Prohibited Acts for Parent Businesses (Representative Examples of 11 Items)

There are 11 prohibited acts for parent businesses. Representative examples include: "refusal to receive" goods without reason, "reduction of payment" by unilaterally discounting after a contract, "delayed payment" beyond the payment deadline, "price cutting" by setting a price significantly lower than normal consideration, "return of goods" without reason after receipt, and "forced purchase of goods or use of services" by compelling the purchase of items designated by the parent business.

Scope of Application (Capital-Based Criteria)

For IT services (such as software development outsourcing), the capital-based criteria are as follows. If the parent business has capital exceeding 50 million yen, the contractor business with capital of 50 million yen or less is covered. Additionally, if the parent business has capital exceeding 10 million yen up to 50 million yen, the contractor business with capital of 10 million yen or less is covered. Separate criteria apply to the consignment of goods manufacturing.

Key Points for the IT Passport Exam

The name change (Subcontracting Act → Act on Optimization of Transactions with Small and Medium-Sized Contractors) is especially important and is expected to appear frequently in exams from fiscal year 2026. Among the prohibited acts for parent businesses, refusal to receive, reduction of payment, and delayed payment are commonly tested points. Also, be sure to remember that the payment deadline is within 60 days.

Typical Past Exam Question Patterns

• "Which of the following is a prohibited act under the Subcontracting Act (Act on Optimization of Transactions with Small and Medium-Sized Contractors)?" type
• "What is the maximum period a parent business should set as the payment deadline?" type → 60 days

Related Terms

• Unfair Competition Prevention Act and Trade Secrets (Unauthorized Access Prohibition Act and Unfair Competition Prevention Act)
• Personal Information Protection Act (Basics of the Personal Information Protection Act)
• Overall Syllabus Revision (Summary of Exam Trends Over the Past 5 Years (2021-2025))

Study Tips

Memorize the old name "Subcontracting Act" and the new name "Act on Optimization of Transactions with Small and Medium-Sized Contractors" as a set. For prohibited acts, remember at least these four: "refusal to receive, reduction of payment, delayed payment, and price cutting." Furthermore, the number "within 60 days" for the payment deadline is highly likely to be directly asked on the exam.

Summary

By keeping up with the syllabus revision and mastering the prohibited acts and the 60-day rule, you can reliably score points in this new area. For comprehensive practice on the Strategy domain, see the Strategy Summary. To try your hand at full-format questions, use the Practice Exam.