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National Construction Authority Act

The National Construction Authority Act No 41 Of 2011 As Revised In 2012 ( NCA Act)  Came Into Being With The Main Aim  Of Improving And Regulating The Condition  And Behavior Of The Main Players In The Construction Sector  In Kenya. This Was So Mostly Due To The Fact That The Construction Is The Main Aspect In Building And Development Which Sector Attract A Lot Of Investors Attracted To The High Returns In Investments In Real Estate Development. The Authority Regulates Contractors, By Registration And Licensing. It Also Provides For Offences And Punishment For Breach. 

 

  1. Oversee the construction industry and its development;
  2. Promote and stimulate the development, improvement and expansion of the construction industry;         
  3. Advise and make recommendations to the Minister on matters affecting or connected with the construction industry;
  4. Undertake or commission research into any matter relating to the construction industry;
  5. Prescribe the qualifications or other attributes required for registration as a contractor under this Act;
  6. Assist in the exportation of construction services connected to the construction industry;
  7. Provide consultancy and advisory services with respect to the construction industry;
  8. Promote and ensure quality assurance in the construction industry;
  9. Encourage the standardisation and improvement of construction techniques and materials;
  10. Initiate and maintain a construction industry information system;
  11. Provide, promote, review and co-ordinate training programmes organized by public and private accredited training centers for skilled construction workers and construction site supervisors;
  12. Accredit and register contractors and regulate their professional undertakings;
  13. Accredit and certify skilled construction workers and construction site supervisors;
  14. Develop and publish a code of conduct for the construction industry.
  1. To award certificates of proficiency to contractors, skilled construction workers and construction site supervisors;
  2. With the approval of the Minister, to impose fees or any other charges as it deems fit in respect of any of its functions or powers;
  3. With the approval of the Minister, to facilitate, or promote the establishment or expansion of, companies, corporations or other bodies to carry on any activities related to construction either under the control or partial control of the Authority or independently;
  4. To receive, in consideration of any services that may be rendered by it, such commission or payments as may be agreed upon with any person.
  • To regulate the contractors,  Section 19 requires the NCA to maintain a register showing the different names of the registered contractors for the different classes of works. This register should contain details on each contractor pertaining to their:
    • date of registration, physical and postal addresses,
    • registration number,
    • the class of work for which they are registered,
    • their available capital and resources, tools, equipment, plants,
    • qualifications of their personnel,
    • details of qualification for the  individuals, directors  or partners of firms including skills held,
    • the annual turnover of their construction activities,
    • the duration of registration and the type of registration.
  • The Registrar of Contractors is required to publish in the Kenya Gazette at least twice a year that is  1st January and 1st June the names  and details of the registered contractors and to maintain an updated register (section 20).  
  • The appearing of a name of a contractor in the  Kenya Gazette shall be conclusive evidence of their being registered  (section 21).

The NCA Act requires that the following persons comply by registering with the NCA

  1. Contractors
  2. The owner of works
  3. Skilled construction workers and construction site supervisors

Section 16 of the NCA Act defines a contractor as a person who carries out some construction activities for another person in exchange for payment. These activities include:

  1. Building/ putting up a structure either underground, on the surface or above the ground or carrying out activities related to the putting up of a structure,
  2. Modifying, altering,  renovating, refurbishing any structure and any activities related to the same

The person carrying out the above activities has to further accept to supply materials for the work or have control over the type, quality or nature of the materials supplied and either supplies the laborers or has control of the labourers carrying out the task. 

A person carrying out the construction work for another does not qualify or need to be registered as a contractor where the costs of the work does not exceed the sum determined by the National Construction Authority (currently at KSHS 5 million) or where the work involves the putting up of a residential house for private use  that does not require a structural design.

 

Who Can Apply for Registration?

  1. A single person who must meet the set criteria
  2. Partnership or company forming a firm where atleast one principal must meet the set criteria
  3. joint ventures – between a foreign contractor and a local contractor or between local contractors.

Joint ventures must under regulation 15 & 16 of the NCA Regulations 2014 outline the annual turnover of all the members, the total available capital of all members, the total number of qualified full time employees, the category they wish the joint venture to be registered in, the composition of the plant equipment and machines owned.

Where the joint venture is between a local and a foreign contractor for construction works, the local firm must have at-least 30% of the total value of the project and the profits thereon. The employees must also be from the local market except where skilled labour is required from foreign technicians where an approval that such skills are not available locally must be sought from the NCA.

Requirements for Registration

At least one director or partner in the Firm applying for registration must:

  1. Be the holder of the minimum technical qualifications and skills prescribed by the Board for the class of contract works in respect of which registration is sought;
  2. Have the necessary experience prescribed by the Board in works involving construction, erection, installation, alteration or any other activity connected therewith;
  3. Have professional and general conduct which in the opinion of the Board, makes the person suitable to be registered under this Act; and
  4. Have the necessary plant and equipment for the category of works for which the registration is sought.

 

Registration Process

  1. The applicant is required to fill the forms availed by the NCA (the forms can be collected from their offices or downloaded from their website: www.nca.go.ke.
  2. The applicant then submits the form at any of the NCA offices. The following must be attached to the application:
    1. Certified of identity documents for the applicant where a person and incorporation and/ or registration documents and identity documents of the principal(s) and/or directors where the applicant is a firm.
    2. Where the firm is composed of more the 20 principals, only identity documents for 20 principals are required.
    3. Copies of shareholders’ certificates, trust deed in case of a trust and other such documents must be included.
    4. Financial statements for the application for the financial period immediately before the application which should also include proof of existence of  a bank account.
    5. Certified copies of certificates and other relevant documents showing that the applicant or in case of a firm, at least one director or partner has the minimum technical qualifications and skills required for that class of contract works  (classes of contract works are as set out in the third schedule to the NCA Act);
    6. Certified copies of certificates and other relevant documents showing that the applicant or in case of a firm, at least one director or partner has the minimum necessary experience in works involving  such works as construction, erection, installation (proof of previous works done),
    7. Proof  enough to  convince the NCA Board that the applicant has the professional and conduct suitable for registration and proof that the applicant has the necessary plant and equipment for the category of work they seek to be registered.
    8. Proof of registration with an association of contractors.
    9. Proof of having employed qualified persons.
  3. Where the application is for registration under specialized works, certified copy of the current license issued by the regulatory authority is required. (Part III of the First Schedule to the NCA regulations 2014 lists specialist contractors and the requisite requirements. These contractors include specialists in: electrical installations; generating plants, lifts and escalators; radio communication; structural cabling; telecommunication - PABX, Intercoms and Telephone wiring; Plumbing and Drainage and boilers, incinerators and pressure vessels).
  4. The Evaluation Committee (formed in accordance with section 11of the NCA Act) assesses the application and if they deem it correct, the application is submitted it to the Registration Committee (also formed in accordance with section 11 on the powers of the NCA Board to delegate its duties to committees or members).
  5. Where data provided is incorrect or is deemed insufficient the application is rejected.
  6. If correct, the application is approved it is presented to the NCA Board of Directors for the final approval.
  7. The NCA Board where satisfied that all criteria have been met then approves the registration of the applicant.  However, the application is rejected, the applicant is notified within 14 days (Section 17 (4).
  8. The Registrar of Contractors  then writes to the applicant informing them of category to which the application has been  awarded  (categories NCA1- NCA8). 
  9. The applicant then makes payments  for the registration (local contractors pay between Kshs 10,000-50,000/- while foreign contractors pay Kshs 100,000/-.
  10. The certificate of registration showing the registration number, class of works registered in date of registration and duration of the registration is then issued and the name of the contractor is entered in the register of contractors (section 17 (5).
  11. The contractor categories are currently based on the value of the contract work. A contractor can however register for more than one category.

 

  • Contractors must pay the construction levy imposed by section 31 of the Act which levy is calculated at 0.5% of every construction work carried out for an work whose value exceeds 5 Million. Where there are subcontractors or more than one contractor regulation 26 (6) & (7) state that it shall be sufficient for the main contractor to pay the construction levy.
  • Contractor must renew their registration each year. Where the contractor does not pay the registration renewal fee for a period of 2 consecutive years, their names may be deleted from the register of contractors in accordance with section 25. Currently, local contractors pay between Kshs 5,000-10,000 as annual registration renewal fee depending on category they are registered in.
  • The contractor or in case of a firm the principal or director who has technical skills must attend at least one continuous professional development event recognized by the NCA  which attendance shall be considered in renewal  of the licence and/or up of the contractor from one category to another as per regulation 14 of the NCA Regulations 2014 .
  • Registration is only valid for the period of the construction work or project
  • Where the period is more than a year, registration must be renewed each year failure to which the registration is cancelled. Application for renewal must be submitted at least 30 days before expiry of the current license.
  • The contractor must to return the certificate of registration  to the NCA Board on expiry of the registered period

Section 18 and regulation 3 (c) & 12 of the NCA regulations 2014 gives further requirements for the registration of foreign contractors;

  1. The contractor must provide proof of registration in their country of origin or domicile
  2. Show sufficient proof of their financial capabilities by attaching their financial statements
  3. must specify the specific project which they have been contracted to carry out in Kenya whose value currently must be fit for category NCA1 and swear an affidavit clearly stating that once the contracted works are completed and the maintenance period lapses, it shall not carry out any other business in Kenya
  4. They must they provide proof by giving a certificate of  compliance from the registrar of companies indicating that the applicant is or was  immediately before entering Kenya trading as a contractor.
  5. Show proof of holding  plants, equipment and machines
  6. Give a written undertaking that they shall subcontract or enter into joint venture with a local firm or person for not less than 30% of the value of the contract work and that they shall transfer technical skills not available locally to a  local firm or person as the NCA Authority may determine.

 

  • In determining which category to place an applicant, the NCA evaluates an applicant’s application using the criteria shown in the second schedule to the National Construction Authority regulations 2014 and award points earned by the applicant in each section.
  • The third schedule to the regulations then shown the category to which the applicant is place based on the points earned.
  • These categories limit the value of the works which a contractor can take up. Currently, the values are as set out below:

CATEGORY

VALUE LIMIT - BUIDING WORKS

VALUE LIMIT - SPECIALIST CONTRACTORS

VALUE LIMIT- ROADS AND OTHER CIVIL WORKS

NCA1

UNLIMITED

UNLIMITED

UNLIMITED

NCA2

500MILLION

250 MILLION

750 MILLION

NCA3

300 MILLION

150 MILLION

500 MILLION

NCA4

200 MILLION

100 MILLION

300 MILLION

NCA5

100MILLION

50 MILLION

200 MILLION

NCA6

50 MILLION

20 MILLION

100 MILLION

NCA7

20 MILLION

10 MILLION

50 MILLION

NCA8

LOWER LIMIT IS CURRENTLY 5 MILLION

The owner of works is the person who engages a contractor to carry out construction works for them. The owner of works has the following obligations:

  1. Registration of a construction work: Regulation 17 of the NCA regulations 2014,  requires the owner of a construction work, project or contract either in the public or private sector to register the construction work with the authority in writing within 30 days from the date when a construction work, project or contract is awarded to a registered contractor and before the work begins.
    1. The process involves filling the application form  available at the NCA offices or on their website. The completed form together with a copy of the signed contract document is lodged with the NCA.
    2. The application form filled must disclose whether the contract consists of a series of contracts or joint ventures, whether and by whom the project is funded, the program if any to which the project relates, whether there is a public-private partnership in the project as well as the details of the owner’s representative.
    3. The NCA then assesses the value of the work and issues an invoice. The owner then pays the amount invoiced. This amount as per regulation 25 of the NCA regulations 2014 is levied at 0.5% of the value of the construction works where the value of the works ids more than 5 Million. Where the amount remains unpaid for 3 months, the same shall be collected from the owner of the project as if it were a debt owed to the authority regulation 26 (5).
    4. The Authority then registers the construction works within 30 days of receipt of the application and payment of the invoice amount and issues the owner with a compliance certificate which serves as mandate to commence the construction works.
  2. Ensuring that a contract is issued to a contractor registered under the Act.
  3. Notify the authority of any arbitration (out of court dispute settlement) or any matters brought before court of law in relation to a construction work registered under the Act within 30 days from the day such court or arbitration proceedings begin.
  4. Notify the Authority of any change in representatives.
  5. Notify the authority of any construction works awarded to a registered contractor whose value is more than Kshs 5 million (regulation 26 (1).
  1. The authority has a duty to accredit and certify all construction workers and construction site supervisors.
  2. The skilled construction workers are to be registered in accordance to their skills  as per the classes of work laid out in the Third Schedule to the Act.
  3. A registered construction worker shall be required to undertake construction work for or on behalf of another person at an agreed cost.
  4. A worker shall qualify for registration or renewal of registration of showing proof of possessing the qualification, passing the bridging course or assessment conducted by the authority.
  5. On the other hand, a construction site supervisor shall be accredited as fit to oversee the work of the construction workers in one or several of the classes listed in the Third Schedule to the Act after proving to the authority that the posses the required skills and after undergoing the skills assessment.
  6. The construction worker and site supervisor’s accreditation shall be valid for a period of three (3) years.
  7. The Authority may reject an application where  it is proved that the applicant; presented false documents or impersonates another person.
  8. Where one presents false documents, there are liable on being found guilty to a fine of Kshs 50,000/- or imprisonment for 2 months or both.
  9. The board may further cancel, suspend or reject an application where he applicant has knowingly allowed details of such accreditation to be used in more than 1 construction manpower program for one construction works, where the applicant is convicted of an offence under the NCA Act, where it is in public interest to deny, suspend or cancel such an accreditation or for other reasons determined by the Board but only after giving  the applicant  an opportunity to be heard.
  10. The applicant must be notified of such a decision within 14 days.
  1. Recourse available to an aggrieved person are provided for under Sections 22 -25 and Regulations 28 & 29  of the NCA Regulations 2014.
  2. Under section 22, the Board may institute an inquiry into the conduct of a contractor either on its own or after the receipt of a complaint.
  3. The Board first informs the contractor of such a complaint and give explanation on the same by sending a written notice to the contractor’s address.
  4. The Board may then calls upon  the contractor to file  an explanation in regard to the complaint within a specified period by a verifying affidavit (a sworn  affidavit made before a Commissioner for Oaths  narrating the occurrences step by step).
  5. The Board may further summon the contractor before it to produce documents in writing in regard to the complaint and may hear evidence.
  6. Where a contractor fails to appear for the summon without sufficient reasons, they commit an offence which if found guilty are liable for a fine not more than 1 million or to imprisonment for a term not more than 3 years or both.
  7. The contractor can either appear in person or represented by an advocate. Evidence presented before the Board shall be presented in the same manner as though it was being given before a court.
  8. Based on the outcome, the Board may either give a warning to the contractor (caution), given directions to be followed by the contractor, suspend the registration of the contractor or remove the name of the contractor from the register.
  9. Where the licence of a contractor is suspended, they shall not enter into a new contract until the suspension is lifted [(regulation 28(7)] and the regulation is required to inform the owner of works of any such suspension [(regulation 28(8)].  
  10. Further, in their decision to carry out an inquire into the contractor, the board may appoint investigating officers as per section 23 who may enter the constructor’s site for purpose of enquiry, by notice order suspension of the works of the contractor, require the contractor to produce records or ask questions in regard to the enquiry.
  11. The investigating officer is required to identify themselves as such to the contractor and on completion of the investigation where an offence under the act is seen to be committed give information in regard to the offence to a police office who by warrant arrests the contractor.

 

  • Under section 24 the contractor’s license may be suspended in case they are convicted of any offence under the Act, they are found guilty of doing or failing to do something which act or failure  when inquired into is said to amount to improper, disgraceful conduct or professional misconduct or where the contractor has breached the Authority’s by laws.
  • Further, the Board may make any of the following decisions which decision must be communicated to the contractor within 14 days;
    • Give a warning (caution ) to the contractor
    • Suspend the registration of the contractor for a specified period
    • Delete the contractor’s name from the register
    • Institute a case in court against the contractor
  • Where the contractor fails to notify  the registrar of his current address 6 months after the date which an inquiry is sent by the registrar to the contractor’s address provided as per the register
  • Where the contractor by an application to the registrar request that their name be deleted which application must be accompanied by an affidavit stating that there are no criminal proceedings under the Act likely to be made
  • Where the contractor fails to pay the annual registration renewal fee for 2 consecutive years.
  • Where the contractor fails to meet the registration criteria
  • Where the contractor fails to perform the duties, obligations and responsibilities of a contractor.
  •  Where the contractor is deregistered.

Except in the case where the contractor’s address is unknown or where the contractor is deregistered, the registrar is required to give notice to their contractor of the intended deletion of their names from the register before the deletion is done.

Where a contractor’s name is deleted, they are required to surrender their certificate to the board and are not allowed to be registered afresh under a different name.

  • Under section 26 the board has powers in regard to the register of contractors to:
    • Restore the name of a contractor that had been deleted.
    • In case of the deletion of a contractor’s name from the register as a result of an inquiry into the contractor under section 22, the Board may either on its own will or on application by the contractor deliberate and either  confirm the deletion, restore the name on the register or lift the suspension on the contractor. 
      • Such a decision must include the date as at which the suspension, deletion or restoration should be done as well as the fine which the contractor should pay, which fine should not more than the registration fee payable.
    • Where a contractor is aggrieved by the board’s decision, they may within 30 days  from the date of the decision  appeal to the appeals board as established under section 27 .
    • Where the contractor is not satisfied with the decision of the Appeals Board,  they may within 30 days make an appeal to the High Court.

These are a list of services, fees and timelines that the NCA is committed to providing. They are available here. The NCA's contacts is as follows:

9th Floor KCB Plaza,

Kenya Road, Upper Hill, 

P. O. Box 21046 - 00100

Nairobi, Kenya

Telephone: +254700021222

Email: [email protected]

Website: www.nca.go.ke

 

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