This is a move aimed at weeding out rogue contractors and reduce the amount of malpractices that have seen buildings collapsing and many key state projects being delayed.
NCA Kenya provides the legal and regulatory requirements for registration as a contractor. These include:
1.) Qualification – To be eligible for registration as a contractor, a firm must hold a certificate of incorporation from the Registrar of Companies either as a limited liability company, partnership or sole proprietorship.
The applicant must show tax compliance by providing the Authority with a valid PIN, VAT and Income Tax compliance certificates. They must also produce evidence of an existing bank account bearing the name of the construction firm.
Foreign contractors are issued with a clearance certificate that remains valid for only a specific period. They are required to satisfy the NCA that they are in Kenya for only that specific project. The firms are required to lodge an affidavit with the Authority that they shall not carry out any other construction project in Kenya once they complete the project for which they have been cleared.
Foreign firms should also submit a commitment to transfer technical skills not available locally to locals as the NCA may determine from time to time.
Upon successful application, the contractor is issued with a ‘Certificate of Registration’
2.) Classification of Contractors – According to the NCA rules and regulations, a contractor may be registered for more that one class of construction works but may hold only one category of registration in relation to a particular class of construction works at any one given time.
These classes include:
NCA1 – 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].
Local contractors are required to pay registration fees of between Sh10,000 and Sh50,000 depending on their category, while annual practice license renewal costs between Sh5,000 and Sh10,000.
On the other hand, foreign contractors pay a registration fee of Sh100,000 and are restricted to categories of tenders they win. Foreign contractors applying for temporary registration are required to commit to sub-contract “not less than 30 per cent of the value” to local contractors.
Under new regulations that seek to protect local contractors from being driven out of business by global firms, foreign contractors will not be cleared to carry out work below NCA1 category.