Curious about where you can find the best building contractors in Kenya to take on your construction project? Or perhaps wondering how you should legally engage construction companies in Kenya?
Well, selecting a building contractor is not just about getting recommendations and then choosing the lowest bidder. Developers who’ve done it before can attest that it’s a wild jungle out there, and that such rushed preliminaries always lead to increased inconveniences and risks during construction.
For instance – you’ve probably heard of insincere fundis or “contractors” who quote comparatively low rates on labour but then accompany them with highly overpriced construction materials. Or, in other cases, they’d state reasonable prices for the building materials but then cunningly exaggerate the corresponding quantities.
That’s just a sample of the many elaborate schemes through which building developers end up losing millions of shillings per project. And the common thing with all of them is, it almost always begins with an unstructured hiring process.
Now, to protect yourself and the project, we’d advise you to follow this recommended formula for hiring contractors in Kenya.
Otherwise, if you happen to be a building or roads contractor, here are success tips you could borrow from the best construction companies in Kenya.
6 Steps To Selecting The Best Contractors In Kenya For Your Building Project
#1. Agree On The Contractor Evaluation Criteria
At first, you need to have a sit-down with your project manager and then agree on the criteria that you’ll be using to choose the most qualified building contractor for the job. (Here’s a guide into the roles of construction project managers in Kenya.)
Generally, there are three stages of evaluating building contractors who bid for a job. Your project manager will guide you on the most appropriate criteria across each one of them – based on your project’s needs, legal requirements, and market parameters.
- Pre-qualification criteria – On prequalification, you agree on the type of contractors and subcontractors that you’ll be targeting for the job. Do you need a general building contractor or a specialized one? Is the contractor duly registered with NCA? Do they have a practicing license? Which NCA category and class would be ideal for the job?
- Technical criteria – On the technical part, you should establish the criteria that you’ll be using to assess how various candidates are fit for the job. For instance, what type of experience are you looking for? How recent should the contractor have handled projects of similar nature, complexity, and magnitude? What type of expertise should the contractor have in their team? What type of equipment should they provide? What other resources should the contractor have for the job?
- Financial criteria – On the financial bit, you should set the formula and procedure that you’ll be using to compare the bids submitted by the candidates. Make no mistake about it, though – cheaper doesn’t always mean better. We recommend that you, instead, compare the rates based on their respective logarithmic deviation from the average of all the sums. The closer a bid is to the average, the higher the points given to the candidate.
#2. Prepare Tender and Contract Documents
By the time you start searching for qualified contractors in Kenya, your architectural and structural plans have probably been approved by the county government that has jurisdiction over your site.
Now, that’s a good start. But, a word of caution – don’t rush into engaging construction companies with just the approved set of drawings. They don’t provide sufficient details on the scope of building works and their accompanying quality requirements.
Take the approved architectural drawings, for instance. All you’ll have is a schematic design of the upcoming development – which is great for filing but not building.
For contractors and subcontractors to fully interpret what is required of them, they’ll need the following from the moment they start bidding on the project:
- Working/Production drawings
- Construction details.
- Building specifications.
- Window schedules.
- Door schedule.
Here is a sample for your consideration. Whereas an architectural scheme design would present a dimensioned layout, this shows the precise construction details to a much finer scale.
Your project manager will collate such drawings and specifications from the architect, structural engineer, mechanical engineer, and electrical engineer.
In the meantime, you also need to work out the terms of engagement for the project. Your project manager should prepare contract documents that lay out not only the contract agreement, but also the accompanying conditions of the contract.
The conditions themselves ought to include provisions for managing:
- The roles of all the stakeholders that’ll be involved in the project – including the architect, the project manager, the quantity surveyor, the main contractor, etc.
- The scope of works.
- The payments to contractors.
- Any arising variations.
- Nomination of subcontractors and suppliers.
- Suspension of the works.
- Dispute settlement.
- Contract termination.
- Patent and latent defects
All these should form the tender documents that you’ll be sharing with interested candidates. At least then, prospective contractors will bid on the project when they fully understand the works at hand plus the terms of engagement.
#3. Develop Pre-Tender Estimates
In construction, pre-tender estimates (PTE) provide a breakdown of the approximate costs that you should expect to incur from the works that have been detailed in the tender documents.
The objective here is to give you a rough idea of the type of rates that you’ll be receiving once interested building contractors start bidding on the job. You could then use it for project budgeting and planning, as well as the basis for comparing the pricing quotes from different construction companies in Kenya.
Now, in most instances, the PTE comes in the form of a priced bill of quantities (otherwise known as BQ or BoQ). The document explicitly lays down the quantities of the construction works stipulated by the project drawings (architectural, structural, MEP, etc), plus the accompanying building specifications in the tender documents.
All this information is usually prepared by a quantity surveyor. The developer gets a priced bill of quantities, while the unpriced version is attached to the tender documents to act as a bidding template.
Yes, that’s right. Ask any registered Kenyan building contractor, and they’ll tell you that they typically bid for jobs by quoting their rates on the unpriced bill of quantities.
Here’s an example for your perusal. This is a page excerpt from an unpriced bill of quantities document.
The contractors you reach out to should propose their rates for each of the listed items – covering not just the labour but also the construction materials, taxes, equipment costs, plus profits.
Otherwise, if you prefer to separate the labour and materials, our project managers will prepare a schedule of materials that you could use to procure the materials. This would leave the contractors to bid for labour alone.
#4. Seek Out Referrals And Conduct Due Diligence
This is the part where you identify the prospective candidates who’ll be participating in the tender.
Normally, the practice in public institutions is to publicly advertise the tender, inviting interested building contractors in Kenya to submit their bids. In private development projects, however, you might want to make the process much easier by privately zeroing in on the tried and tested construction companies.
You could start by asking your peers for recommendations. Or, even better, request your project manager to reach out to their networks. It shouldn’t take them long to identify known contractors who have a solid track record of handling projects of a similar scope to yours.
While you’re at it, remember to conduct due diligence on every single referral that comes up. You can visit their recent projects with your project manager and then try to find out:
- If they completed the projects on time and on budget.
- If they remained committed throughout the building period.
- The quality of their workmanship.
- Any major challenges or difficulties that arose during and after construction
- How they handled any arising building defects and variations.
- How they corresponded with the project developers, architects, engineers, and quantity surveyors.
- How they collaborated with nominated suppliers and contractors.
- If they complied with the health and safety standards for construction sites in Kenya.
- How they mitigated negative environmental impacts during construction.
This whole exercise should take about 1-2 weeks, during which your project manager will help you narrow down the list of prospects to about 5-10 solid leads.
#5. Invite Interested Building Contractors To Place Their Bids
Once you’ve identified the construction companies with the most suitable credentials, you can go ahead and officially invite them to bid on the project.
Your project manager will send each candidate a letter of invitation to tender, which should be accompanied by the following tender documents:
- The architectural, structural, and MEP drawings of the proposed facility.
- The building and works specifications.
- Unpriced bills of quantities (BQs).
- Instructions to tenderers (ITT).
- Tender data sheets (TDS).
- Contract forms
- Conditions of the proposed contract.
- A questionnaire for collecting relevant company details.
These are documents that every bonafide contractor in Kenya is adequately familiar with. So, you won’t be facing any difficulty getting them on board.
They’ll refer to the drawings and specifications to understand the scope of the building project, after which they’ll proceed to fill out the unpriced BQs with their proposed construction rates, while their company details will go into the questionnaire.
The attached contract conditions, on the other hand, are supposed to guide them through the obligations that come with the project.
Keep in mind, however, that while you’re free to draft your own building contract terms, the common practice is adopting the JBCC Form of Contract. Here you’ll find the standard terms and conditions that are accepted by building professionals and contractors in Kenya.
The international equivalent of that is the FIDIC Form of Contract. This is what you might consider if you intend to engage foreign construction companies in domestic projects.
Consult your project manager and they’ll advise you on the best form of contract for your building project, after which they’ll tweak the terms to align them with your needs.
#6. Identify The Best Qualified Contractor Based On Weighted Assessments
When you finally receive all the bids, you can evaluate them all together to identify the best contractor for the job.
Remember, however, that it’s not just about the prices quoted in the BQs. The right contractor for your project is not exactly the cheapest one.
You should, instead, compare the tenders based on the evaluation criteria that you earlier agreed on with your project manager. And to minimize the risk of errors due to subjective judgment, you might want to perform weighted assessments on all the candidates.
Now, for the sake of clarity, “weighted assessment” here refers to a point-based system. The candidates are awarded marks according to how they perform on each parameter, and then the final scores are compared to determine the best-qualified contractor.
- On Technical Evaluation, for instance, your project manager could set up a scoring plan that looks something like this:
- Then when it comes to Financial Evaluation, your project manager ought to check each of the submitted bills of quantities for arithmetic errors before comparing the bid sums. This is meant to confirm that all the candidates have done their math right. Otherwise, in case of any discrepancies, you can contact the affected contractors for rectification.
- With the arithmetic errors sorted out, you can go ahead and compare the tendered BQs by their total sums. This too should be based on a scoring system, whose points depend on the margin of deviation from the mean.
- The mean is established by working out the average of all the BQ sums, including the pretender estimates that were prepared by your quantity surveyor. Then with that as the basis, your project manager should review each contractor’s bid sum and award points accordingly as follows. What you get for each individual is their Tender Sum Comparison Score.
- The bid assessment doesn’t stop at the Tender Sum Comparison level. For additional accuracy, you should still calculate what we call the Financial Score for each candidate. This is where you divide each of the contractors’ total bid amount by the lowest received bid, and then multiply the answer by a constant (of say, 20 or so). i.e:
In the end, you can work out the FINAL SCORE for each biding company by combing their Technical Evaluation Score with the corresponding Tender Sums Comparison Score plus the Financial Score. I.e:
FINAL SCORE = Technical Evaluation Score + Tender Sums Comparison Score + Financial Score
The candidate with the highest final score is the one you ultimately choose as the contractor for your construction project.
Over To You: How To Manage Your Tenders For Contractors In Kenya
That’s how systematic the whole process of choosing contractors in Kenya should be. You ought to agree on the evaluation criteria, come up with your tender and contract documents, establish the pretender estimates, seek out recommendations, conduct due diligence, invite pre-qualified construction companies to place their bids, and then finally compare their rates using weighted assessments.
Also, keep in mind that when you eventually identify the best-qualified construction company, you’re supposed to negotiate the contract to iron out everything before the actual signing of the contract agreement. This is the stage where the contractor even submits their Performance Bond as an assurance of their commitment to the project.
Don’t sweat the details, though. INTEGRUM’s team of seasoned project managers has got you covered. We’re experts in tender management, procurement handling, and contract administration. Plus, we’ve worked with enough contractors in Kenya to properly understand the selection parameters that you should prioritize for different types and scales of projects.
Other than that, INTEGRUM is open to working with contractors who are looking to bid for both building and road construction tenders in Kenya. Our professional assistance is key in interpreting project needs, working out highly competitive tendering rates, plus drafting well-detailed procurement schedules and work plans.