Public procurement practices and development of MSEs in Kenya: case of roads sector

Abstract

predominant buyer of road construction services and hence its buying behavior affects the road construction industry. Although there are Government policies and programmes in place to promote local contractors, the capacity of the local contracting industry has remained low. The main aim of this study was to determine the impact procurement practices in the road sector in Kenya have on Micro and Small Enterprise (MSEs) contractor development and growth. The research methodology involved a review of the economic, legal and political environments in which contractors in Kenya operate; conducting in-depth interviews with ten Senior Managers in the three Road Authorities. In addition, questionnaires were distributed to 105 MSEs carrying out maintenance works in the regions sampled in the study, namely Nairobi, Kajiado and Nyeri. This study reveals that some of the Road Authorities’ procurement practices are constraining the growth and development of MSEs. Among the challenges MSEs face is high competition among themselves and from large firms, large contract sizes, unclear contractor registration criteria and inadequate inter-firm cooperation. This paper recommends that roadworks contracts are packaged into smaller lots to increase the workload available for MSEs, contractor registration is reviewed and interfirm co-operation is promoted through sub-contracting, joint ventures and formation of a strong MSE contractor association.