CONSTRUCTION MANAGEMENT I

1.0 CONSTRUCTION INDUSTRY.

The trainee should have the ability to,

1.1 outline scope of construction industry

1.2 Describe various types of contractors.
1.3 Explain role of various stakeholders.

1.1 SCOPE OF CONSTRUCTION INDUSTRY

The Scope of Work (SOW) is the area in an agreement where the work to be

performed is described. The SOW should contain any milestones, reports, deliverables,
and end products that are expected to be provided by the performing party. The SOW
should also contain a timeline for all deliverables.

1.1.1 What is the nature of construction industry?

The construction industry is divided into three major segments. 

1. Construction of buildings contractors, or general contractors, residential

building. 

2. Industrial, commercial, and other buildings.

3. Heavy and civil engineering construction, contractors build sewers, roads,

highways, bridges, tunnels, and other projects.

1.1.2 In Kenya scope or nature of constructions is divided into two major

categories,

1. Building Works means erection or re-erection/modification including complete or

partial demolition of a building including full or partial thereof or making additions
and alterations to an existing building.

2. Civil engineering works is a professional engineering discipline that deals with

the design, construction, and maintenance of the physical and naturally built
environment, including public works such as roads, bridges, canals, dams,
airports, sewerage systems, pipelines, structural components of buildings, and
railways.
1.1.3 The following are Common construction trades in building and civil
engineering works in Kenya,

(i) Carpentry/joiners/cabinet fabrication and fixing,

(ii) Masonry/Brick laying/Block laying,
(iii) Plumbing/distribution/ accessories for use of water and disposal,
(iv) Water works and wastewater management,
(v) Electrical installation and servicing,
(vi) Mechanical works in construction,

1.1.4 Emerging specialized trades within the construction industry

. ICT, security surveillance,

 Cement, Concrete Finisher and Plasterer

 Plant Operators/Equipment Operators

 Elevator Mechanic

 Flooring Installer

 Air conditioning/Insulation Worker/specialists

 Landscaper

 Painter

 Pipefitter/boiler/Steamfitter

 Safety Manager

 Construction Manager/site manager

 Roofing Foreman/worker/experts

 Welder/Fabricators/sheet metal worker

Construction trade is an umbrella term that covers a wide variety of hands-on, service-
based jobs. There are many other job titles included in the construction trades as
listed above, and they all share one thing in common: hands-on work.

Job requiring manual skills and special training -TRADE.

 1.2.1 CATEGORIES AND TYPES OF CONTRACTORS IN KENYA

1.2.2 The National Construction Authority (NCA) is a government

organization which regulates, streamlines, and builds capacity in the
construction industry in Kenya.

1.2.3 National Construction Authority Project Registration Guidelines.

Contractors operating or willing to undertake construction operations in

Kenya are required by law to register through the National Construction
Authority (NCA), which is constituted under Act No. 41 of 2011 Laws of
Kenya.

1.2.4 National Construction Authority (NCA) is mandated to clear builders

and contractors as a way of eliminating rogue contractors in Kenya and
malpractices in building and construction. The authority, which has
recently started inspecting construction and building projects around the
country to ensure high quality of work and close projects posing health
risks and collapse hazards, is expected to provide the regulatory
framework for registration and renewal of contractors.

1.2.5 Qualification as a contractor in Kenya

1. Register with Registrar of Companies: Each contractor is required to hold a

certificate of incorporation from the Registrar of Companies in Kenya. This will mean
they register as a legal company in the country as a limited liability, sole proprietorship
or as a partnership company.

2. In this respect, the National Construction Authority will also require that one of the
technical directors of the registered company have minimal technical
qualification, have skills or possess experience in a field related to construction. All the
directors must also forward their CVs to the National Construction Authority.

3. Valid PIN, VAT and Income Tax compliance certificates, and Bank Account:

The contractor applying to operate in Kenya must also prove tax compliance by means
of submitting these documents to National Construction Authority (NCA).
The bank account should be opened under name of the contractor company and
evidence for the bank account is required. Foreign contractors are issued with
permission to operate for a specific period of time and will be required to prove that they
are in the country for that given time to undertake a project. They should not undertake
another project after the one specified or targeted is completed and they will be required
to launch an affidavit with the authority that this will not happen. Foreign contractors
willing to operate in Kenya are also required to submit a commitment to transfer skills
not with locals and as can be determined by National Construction Authority from time
to time.

4. A Certificate of Registration is issued on registration as a contractor in Kenya.

Contractor classification/grades NCA regulations allow a contractor to register in one or

more categories according to class of construction works to be undertaken.

1.2.4 NCA CATEGORIES IN KENYA.

NCA1: Unlimited contract value: which has various classes:

Unlimited contract value [Contractors – Building] Unlimited contract value [Specialist

Contractors] Unlimited contract value [Roads and other Civil Works]

NCA2: Up to 500, 000, 000 [Contractors – Building], Up to 250, 000, 000 [Specialist
Contractors], Up to 750, 000, 000 [Roads and other Civil Works].

NCA3: Up to 300, 000, 000 [Contractors – Building] Up to 150, 000, 000 [Specialist
Contractors] Up to 500, 000, 000 [Roads and other Civil Works]

NCA4: Up to 200, 000, 000 [Contractors – Building] Up to 100, 000, 000 [Specialist
Contractors] Up to 300, 000, 000 [Roads and other Civil Works]

NCA5: Up to 100, 000, 000 [Contractors – Building] Up to 50, 000, 000 [Specialist
Contractors] Up to 200, 000, 000 [Roads and other Civil Works]

NCA6: Up to 50, 000, 000 [Contractors – Building] Up to 20, 000, 000 [Specialist
Contractors] Up to 100, 000, 000 [Roads and other Civil Works]

NCA7: Up to 20, 000, 000 [Contractors – Building] Up to 10, 000, 000 [Specialist
Contractors] Up to 50, 000, 000 [Roads and other Civil Works]

NCA8: Getting Started Contractor, up to 10,000,000 This is the lowest class or

category in National Construction Authority (NCA) application. Essentially it’s the entry
level contractor position, that require minimal startup costs and education requirement,
a Certificate or Diploma in related construction and building majors.  For building
Contractors, the project limit in terms of cost is 10 million shillings. 
ASSIGNMENT: Search and make brief notes on NCA before our next session.

1.2.5 Registration fees

Registration fees Local contractors in Kenya will be required to pay a fee of Ksh. 10,
000 – 50, 000 depending on category to register.

License renewal costs are valued at between Ksh. 5, 000 and Ksh. 10, 000. Between
Ksh. 5, 000 and 10, 000 will be required for annual renewal of license.

Foreign contractors willing to register with National Construction Authority to

operate in Kenya are required to pay a registration fee of Ksh. 100, 000 and must
undertake only tenders they win.

Those registering under a temporary registration will need to commit to sub-

contracting “not less than 30% of the value” of contract to local contractors.

Foreign contractors are not cleared for the NCA1 category, to protect local
contractors from foreign companies. The application documents are available from NCA
website-www.nca.go.ke.

1.2.6 TYPES OF CONTRACTORS

Kenyan contractors can also be categorized as small, medium, large, sub-

contractors, and speculative builders

(i)small contractors

Small Contractor or Supplier or “(SCS)” means that a business and the person or
persons who own and control it are in a financial condition, which puts the business at a
substantial disadvantage in attempting to compete for big public contracts.

Category 8,7, and 6 of NCA, range ksh10,000,000/= to ksh20,000,000/=

 Manager may be the director,

 They have low risk management,
 They are unable to handle more than 3 projects,
 They have better monetary controls,
 They hire Plant and equipment.
(ii) medium contractors

These are in categories of above ksh50,000,000 contracts to Ksh200,000,000/=, mainly

categories 5, and 4 of NCA.

They have staff member of more than 50 and normally less than 250 have a well-
structured management system with directors, managers, site agents, supervisors e.t.c
who are specialized. They undertake relatively middle level projects with fairly
challenging planning and project estimating.

 They have line and project manager,

 Have better resources,
 Manager may be employed by the directors,
 They have better risk management as they handle more than 3 projects,
 They have better monetary controls,
 Have adequate Plant and equipment but can hire specialized equipments.

(iii) LARGE CONTRACTORS

These are NCA 3, 2, and 1 category, they handle expensive, may have unlimited project
value, they do lengthy projects that will not happen overnight. They may employ over
250 staff. They are characterized by,

 High risk management is one of the most important elements of big

construction. It helps protect clients from serious financial harm if there is an
 accident, injury, or lawsuit. The construction company can be able to handle it
through strong risk management.
 They have a proven track record of success and a depth of industry-related
experience. They handle all types of construction projects and experience is a
strong indicator.

 Successful large construction contractors have a remarkably diverse team of

highly skilled professionals. For example, most projects will call for project
managers, estimators, surveyors, safety inspectors, crew foremen,
administrative assistants, mechanics, machinery operators, truck drivers, and
even architects/QS/Engineers.
 Another important quality for large construction company possess is modern
equipment and technology. This could include everything from state-of-the-art
equipment and machinery to advanced modeling software and other tech
innovations. By embracing modern technology, the construction company
shows that it is ready to help clients move into the future with their new
projects.
 Finally, and most importantly a large good construction company should
possess an unwavering commitment to safety. All construction projects
involve the use of extremely heavy machinery and materials and construction
jobs are consistently ranked among the most dangerous. This makes a
commitment to safety a fundamental quality for any construction company.

(iv) Sub-contractors

A subcontractor is a company or person providing labor or services that does not have
a direct contract with the owner. They are often simply called “subs” in construction.
On a residential construction project, common subcontractors are carpenters,
plumbers, or electricians.

They do part of the work that would have been done by the main contractor.
(v) speculative builder

This is a person or company that buys land and builds property in areas where they

think people will want to buy it, but without having any definite orders before they start
work e. g. building of a new housing estate by a local speculative builder, flats,
housing ventures,

1.3 STAKEHOLDERS IN CONSTRUCTION INDUSTRY

stakeholders are “individuals and organizations who are actively involved in the

project, or whose interests may be positively or negatively affected as a result of project
success or failure.”

1.3.1 STATUTORY BOARDS AND INDUSTRY ASSOCIATIONS.

statutory board means a body corporate established

1.3 STAKEHOLDERS IN CONSTRUCTION INDUSTRY

stakeholders are “individuals and organizations who are actively involved in the

project, or whose interests may be positively or negatively affected as a result of project
success or failure.”

1.3.1 STATUTORY BOARDS AND INDUSTRY ASSOCIATIONS.

statutory board means a body corporate established These are of categories of up to

ksh20,000,000 contracts, mainly categories 8, 7, and 6 of NCA.

In small companies, it is easier to evaluate each staff member as they less than 50 and
normally less than 10 are on permanent terms. Its also easy to undertake planning and
project estimating in a small company:

 the manager has to wear multiple hats, and may have to work as line and
project manager at the same time,
 the manager is usually the owner and handles 1 to 3 projects at the same
time, each with a different priority,
  resources are limited and constrained,
 the manager must have a better understanding of interpersonal skills than in
a large company,
 there may be a much greater risk to the company with the failure of only one
project fails,
 there are tighter monetary controls but less sophisticated control techniques.
 Plant and equipment is limited and is usually hired.

(I)THE BOARD OF REGISTRATION FOR ARCHITECTS AND QUANTITY

SURVEYORS.

The Board was established in 1934 under Cap 525 Laws of Kenya. The Boards
mandate is to regulate the professions of Architecture and Quantity Surveying through
training, registration, and enhancement of ethical practice. It is established to execute
the scheme and curriculum for professional education and other activities of matters of
continuous training for the registered persons and examinations for those wishing to be
registered as provided for in laws and their regulations.

The main Roles and Functions of the Board include: -

(II) ENGINEERS REGISTRATION BOARD OF KENYA.

The Board’s mission is “To ensure production of competent engineers and quality
engineering services through regulation, capacity building and enforcing compliance
with set engineering standards for improved socio-economic development”.

 Training and licensing to ensures continuous professional development,

 Enhancement of ethical practice,
 Upholding scale of professional fee for registration,
 Ensure observation of contract conditions.

The Mandate of the Board is derived from the core functions as set out in the Engineers
Act, 2011. The Mandate of EBK is:

 Registration of engineers and engineering consulting firms

 Regulation of engineering professional service,

(III) ARCHITECTURAL ASSOCIATION OF KENYA (AAK)

The Association is registered under the Societies Act and brings together professionals
from the Private Sector, Public Sector and Academia. It is Kenya’s leading Association
for professionals in the built and natural environment in Kenya incorporating Architects,
Setting of engineering standards,

 Development of the general practice of engineering,

 Training and capacity development.

Quantity Surveyors, Town Planners, Landscape Architects and Environmental Design

Consultants and Construction Project Managers.

 The Association also acts as a link between professionals and stakeholders in the
construction industry: Including policy makers, manufacturers, real estate developers,
financial institutions, e.tc..

 The Architects and Quantity Surveyor’s Act Cap 525 of the laws of Kenya. The act
clearly outlines that, one must undergo through a degree of not less than five years.
Thereafter, work under a registered architect for a minimum period of eighteen (18)
months and sit for a professional exam administered by the Board of Registration for
Architects and Quantity Surveyors. Passing the exam entitles one to a practice
certificate and a registration number. The board also regulates the practice by
disciplining errant professionals.

(IV) INSTITUTE OF QUANTITY SURVEYORS OF KENYA (IQSK)

The Institute of Quantity Surveyors of Kenya (IQSK) is an organization specifically

charged with promoting and safeguarding the interests of the Kenyan Quantity
Surveyor. The primary objective of IQSK is to promote the advancement of the practice
of Quantity Surveying and its application in Kenya.

The Institute of Quantity Surveyors of Kenya (IQSK) was founded in 1994 as a non-
political and non-profit making organization whose primary objective is to promote the

general advancement of the practice of Quantity Surveying and its application in Kenya
including facilitating the exchange of information of the Institute and otherwise.
(V) COUNTY GOVERNMENTS / LOCAL AUTHORITIES

Established under chapter 11 of the constitution of Kenya, county governments are in

charge of land survey and mapping as well as county public works and drainage in
urban centers. The Building standards and regulations in Kenya are in five documents
namely.

the Public Health Act (1972),

 Physical Planning Act (1996),

 the Building Codes (1968),
 Local Government Act (1977) and

the Revised Building By-laws (1995). The local authorities are supposed to enforce
these by-laws, major concern is that the National Government and county governments
constantly pass laws and issue regulations touching on health, safety, environmental
concerns, and other issues, which may raise construction costs while at the same time
curtailing the level of competition in the sector.

The revised by-laws are also known as Code 95 and are an improvement on the others
which were found to be out of touch with local realities as they favored imported
materials and technologies which pushed up the cost of housing.

(VI) KENYA BUREAU OF STANDARDS (KEBS)

Established in 1974 by an Act of Parliament as

o The Standards Act Laws, of Kenya.

o The Standards Act always prevail if in conflict with any other Act,
o National Authority in standardization
o Operates under the Ministry of Trade and Industry,
o Governed by National Standards Council (NSC) as the policy making
organ,

The functions of KEBS,

 Ensuring implementation of Standards and technical regulations in the industry,

 use inspectors and quality assurance officers for inspection and enforcement,
 Promoting standardization in Kenya,
 Notifying the public on existence of new standards and technical regulations by
publishing them in the Kenya Gazette