Japan has been implementing grant aid projects for developing countries for many years, but in recent years, many projects have experienced unsuccessful bidding (i.e., all bid prices are higher than the target price), due to a gap between the project target price and the bid price. For public works contracts in Japan, contracts may not be signed for more than the target price under any circumstances. Therefore, if the bid price exceeds the target price, a tender cannot be completed. The estimation method used for Japanese grant aid projects uses estimation standards developed for domestic construction projects in Japan with some modifications for overseas projects, but it is not possible to fully include the cost of the following risks in the target price; therefore, the difference between the target price and the bid price is assumed to occur. The target price is used as the reference price so that the final contract price may exceed the target price; instead, the price, including the upfront cost, is used as the maximum price for the project. In this way, the rate of unsuccessful bids for Japanese grant aid projects in bilateral contracts may decrease and the discrepancy between the target price and the bid price may disappear.