i

GROUP 10

Question

Despite Jubilee government promise to engage youth in development, their entry into Civil

Engineering Contracting has been slow. Write a report outlining the barriers and possible

mitigations.

Members include:

1. F16/1374/2011 OWINO ELIJAH OCHIENG'

2. F16/1380/2011 ODHIAMBO VINCENT ODHIAMBO

3. F16/39396/2011 OTIENO LORNA ATIENO

4. F16/1358/2011 KISUI GEORGE KYALO

5. F16/1373/2011 NYALUOGO KEVIN ODHIAMBO

6. F16/1357/2011 KIAMBA DENNIS MAILU

7. F16/40021/2011 KABUBI MATHEW MURITU

8. F16/1389/2011 KOMENDAH ESTHER KEMUNTO

This report is submitted in partial fulfillment of the requirements for the completion of FCE 571,

Engineering Management course.

October 2015

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ACKNOWLEDGEMENT

Special thanks to all the youths, and Procurement officers who participated in the interviews and

filling in of questionnaires. Your response was of great help.

Thanks to all the group members, your cooperation, spirited effort and hard work made the

compilation of this report possible.

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EXECUTIVE SUMMARY (Author: F16/1374/2011).

The aim of this report was to investigate the various challenges that hinder youth in Kenya from

getting involved in civil engineering contracting, despite the current (Jubilee) government‟s

promise to engage them. This report follows on from the assignment (group project) by the FCE

571: Engineering Management lecturer as part of fulfillment of the course.

It is clearly evident in the country that the Jubilee government (and previous government to

some extent) has put a considerable attempt towards youth empowerment, all with the objective

of getting the youths involved in national development. The government has formed various

parastatals and financial agencies which mandated to manage and avail funds to youths, among

others.

Some of these are the Youth Enterprise and Development Fund (YEDF), UWEZO fund, and the

latest was formation of the Access To Government Procurement Opportunities (AGPO) which

oversees and ensures that at least 30% of the government tenders are allocated to youth-run

enterprises (special groups). Several presidential and executive orders have also been issued by

His Excellency President Uhuru Kenyatta towards youth development and empowerment.

Despite all these attempt, the Kenyan youth still face many barriers, especially those who would

want to venture in the field of civil engineering contracting which is a little more technical and

involving. Among these challenges are: inadequate access to tendering and procurement

information, high initial capital requirement, inadequate access to financial assist and corruption.

The report will outline all these barriers in length, each with its corresponding mitigation

measures. The study was conducted mainly in Nairobi between 16th

September and 14th

October

2015.

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Table of Contents ACKNOWLEDGEMENT ............................................................................................................................ ii

EXECUTIVE SUMMARY (Author: F16/1374/2011). ............................................................................... iii

LIST OF ABBREVIATIONS ...................................................................................................................... vi

1.0 INTRODUCTION (Author: F16/1380/2011) ......................................................................................... 1

1.1 Public Procurement Preference Policy in Kenya ................................................................................ 1

1.2 AGPO – Access to Government Procurement Opportunities ............................................................. 1

1.2.1 Aim of the Access to Government Procurement Opportunities (AGPO) Program ..................... 2

1.2.2 How to join access to Access to Government Procurement Opportunities ........................... 2

1.2.3 Requirements for registering for AGPO ............................................................................... 3

1.2.4 How to apply online for AGPO Certificate ........................................................................... 3

1.2.5 Benefits of registering for AGPO ......................................................................................... 4

1.3 Youth in Public Procurement ........................................................................................................ 5

1.4 Youth and Civil Engineering Contracts ........................................................................................ 5

1.5 Methodology ................................................................................................................................. 6

2.0 BARRIERS HINDERING ENTRY OF YOUTHS INTO CIVIL ENGINEERING

CONTRACTING AND POSSIBLE MITIGATIONS ............................................................................. 7

2.1 Inadequate access to tendering and procurement information (Author: F16/1384/2011)................... 7

2.2 Long and tedious company registration process and procurement procedure .................................... 9

(Author: F16/1374/2011) .......................................................................................................................... 9

2.3 High initial capital requirement. (Author: F16/1373/2011) .............................................................. 11

2.4 Corruption (Author: F16/1389/2011) ................................................................................................ 13

2.5 Inadequate access to financial assistance. (Author: F16/1389/2011) ............................................... 14

2.6 Lack/ inadequate experience/ lack of trust ........................................................................................ 15

2.7 Nature of the Risks involved in Civil Engineering works (Author: F16/39396/2011) ..................... 15

2.8 Lack of Commitment on the part of Youths (Author: F16/39396/2011) .......................................... 16

2.9 Inadequate Training amongst the Youth to take on such contracts (Author: F16/1357/2011) ......... 17

2.10 Most youth run enterprises are informal. (Author: F16/1358/2011) ............................................... 18

2.11 Marginalization of youth (Author: F16/1358/2011) ....................................................................... 21

3.0 SUMMARRY, CONCLUSION AND RECOMMENDATIONS (Author: F16/1380/2011) ........... 23

4.0 LIST OF REFERENCES (Author: F16/1374/2011) ................................................................................... 25

5.0 APPENDIX I: QUESTIONNAIRE FOR YOUTHS (Author: F16/1357/2011)......................... 26

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6.0 APPENDIX II: QUESTIONNAIRE FOR PROCUREMENT OFFICERS (Author:

F16/1373/2011) ........................................................................................................................................... 27

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LIST OF ABBREVIATIONS

AGPO - Access to Government Procurement Opportunities

YEDF - Youth Enterprise and Development Fund

FCE – Faculty of Civil Engineering

PPOA - Public Procurement Oversight Authority

LSK – Law Society of Kenya

NEMA – National Environment Management Authority

PIN – Personal Identification Number

YRE – Youth Run Enterprises

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1.0 INTRODUCTION (Author: F16/1380/2011)

1.1 Public Procurement Preference Policy in Kenya

The Public Procurement and Disposal (Preference and Reservations) Regulations 2011 was

gazetted in the legal notice number 58. These regulations provide a framework for the

implementation of preferential procurements in Kenya‟s public procurement. The preference

regulations allow government entities conducting procurement processes to allocate procurement

opportunities to special groups i.e. youth, women and persons with disability. The public entities

are supposed to institutionalize procurement plans which should have a total reservation of at

least 30% of the procurement budget to the special groups.

The regulations also give guidance to government entities on how to advertise and evaluate the

bids submitted by the special groups. Public entities will also be required to submit quarterly

reports to the Public Procurement Oversight Authority (PPOA) for compliance audits.

To participate in the new preferred and reserved public procurement scheme, the youth, women,

and persons with disability are required to register their enterprises with the relevant government

body. The public entities will also be required to authenticate tender awards and purchase orders

and enter into agreements with relevant financing institutions with an undertaking that the

contracted enterprise will be paid through the account opened with the financier.

The government has further refined the procurement laws to ensure the special groups, i.e.

persons with disabilities, women and youth meet the threshold required so as to utilize the 30%

of the government tenders in a bid to even the playing field and provide equal opportunities to

these groups. Categories of goods and services that will be procured on preferential basis to

persons who have been previously discriminated or disadvantaged by unfair competition will be

required to be put in the procurement plans of the public institutions.

1.2 AGPO – Access to Government Procurement Opportunities

The Presidential Directive on the women, the youth and persons with disabilities access to 30%

of government procurement opportunities has been implemented within the context of a program

called AGPO (Access to Government Procurement Opportunities) which was officially launched

by His Excellency the President, Uhuru Kenyatta, on October 16th, 2013 in Nairobi County.

The Access to Government Procurement Opportunities (AGPO) program is founded on the

Presidential Directive discussed earlier, the Preference and Reservations Regulations 2011, the

Public Procurement And Disposal (Preference And Reservations) (Amendment) Regulations,

2013, the Constitution of Kenya 2010 Article 227 on the fair equitable, transparent and cost-

effective public procurement of goods and services, the Constitution of Kenya 2010 Article 55

on affirmative action, the Public Procurement and Disposal Act, 2005, and the Public

Procurement and Disposal Regulations, 2006.

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1.2.1 Aim of the Access to Government Procurement Opportunities (AGPO) Program

The aim of the AGPO Program is to facilitate the enterprises owned by women, youth and

persons with disability to be able to participate in government procurement. This will be made

possible through the implementation of the Presidential Directive that 30% of government

procurement opportunities be set aside specifically for enterprises owned by women, youth and

persons with disability. It is an affirmative action program aimed at empowering women, youth

and persons with disability by giving them more opportunities to do business with Government.

1.2.2 How to join access to Access to Government Procurement Opportunities

Register a business enterprise at the Attorney General‟s Office in the form of a sole

proprietorship business, partnership business, limited company or a co-operative. The

enterprise owned by youth, women or persons with disabilities shall be a legal entity that-

(a) is registered with the relevant government body;

(b) has at least seventy percent membership of youth, women or persons with disabilities

and the leadership shall be one hundred percent youth, women and persons with

disability, respectively.

If business is a partnership, get a partnership deed from a lawyer, if it is a limited

company a CR12 from the registrar of business names and for a co-operative, its

constitution and membership.

Acquire a PIN and tax compliance/ tax exemption certificate from the Kenya Revenue

Authority website or offices.

Acquire all required certifications from professional bodies and authorities such as

National Construction Authority, Insurance Regulatory Authority, ICPAK, LSK,

National Council for Persons with Disability, NEMA, ERC and all other authorized

bodies.

Open a bank account for the business and acquire a bank reference from the bank.

Access the website www.agpo.go.ke and register online or visit your county government

headquarters and register there.

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1.2.3 Requirements for registering for AGPO

Requirements for YOUTH

National Identity Card/ Passport – youth are from ages 18 years to 34 years old

Business Registration Certificate/ Certificate of Incorporation

CR12 for Limited Company from registrar of business names

Partnership Deed for partnership business

Tax compliance certificate

National Construction Authority Letter/ Certificate for construction category

Requirements for WOMEN

National Identity Card/ Passport

Business Registration Certificate/ Certificate of Incorporation

CR12 for Limited Company from Registrar of Business Names

Partnership Deed for partnership business

Tax compliance certificate

National Construction Authority Letter/ Certificate for construction category

Requirements for Persons with DISABILITIES

National Identity Card/ Passport

Registration Document from the National Council for persons with disability

Business Registration Certificate/ Certificate of Incorporation

CR12 for Limited Company from registrar of business names

Partnership Deed for partnership business

Tax compliance certificate

National Construction Authority Letter/ Certificate for construction category

1.2.4 How to apply online for AGPO Certificate

I. Log into www.agpo.go.ke and click on register.

II. Create account by filling in personal details, email address and by setting password. Once

this is complete, an activation link is sent to your email account.

III. Open your email and check for the activation email in the inbox or spam .Activate your

AGPO account by clicking on the link sent to your email address.

IV. Log into the AGPO system under returning user Page using email address and the

password you had set in step 2 above.

V. Register business by providing information in the required fields and attach the required

scanned documents.

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1.2.5 Benefits of registering for AGPO

1. One will be able to participate in the 30 percent of government tenders that have been set

aside for youth, women and persons with disability.

2. Accessibility to credit/loan facilities namely LPO/LSO financing from the Youth

Enterprise Development fund.

3. A participant in a tender will be excluded from the requirement to get a bid bond and will

instead fill in and sign a tender securing declaration form.

4. Where delay of payments for works performed are likely to happen, a procuring entity

may facilitate invoice discounting arrangements with a financial institution for the

purpose of advancing credit to the affected enterprises.

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1.3 Youth in Public Procurement

The Constitution of Kenya, in chapter seventeen, General Provisions, article 160 defines a Youth

as the collectivity of all individuals in the Republic who:

a) Have attained the age of eighteen years; but

b) Have not attained the age of thirty-five years.

Various attempts have been made by government to bring youth on board, pertaining to Public

Procurements. The presidency decreed that 10% of all government procurement opportunities be

allocated to the youth so as to empower them and accelerate the growth of Youth owned

enterprises. This has however not achieved the intended goal as most youths have shied away

from these opportunities, for one reason or the other, which will be discussed in the next

chapters.

According to the directive, the following were to be reserved for youths:

Supply and delivery of flowers

Provision of cleaning services

Provision of garbage collection services

Supply and delivery of journals, magazines and newspapers

Supply and delivery of mobile phone air time

Provision of printing services

Supply and delivery of office common user items

Provision of labour contracts

Bush clearing

Provision of motor vehicle repair

Event organizing

Photocopying and videography

Design and branding of promotional materials, such as T-shirts, posters, banners etc.

Provision of repair services of office equipment and machines

1.4 Youth and Civil Engineering Contracts

As earlier seen, youths are generally not taking up procurement opportunities set aside for them,

and Civil Engineering contracting is no exception. In fact, there are fewer youths taking up these

Civil engineering contracts compared to other fields. This can be attributed to various reasons

among them, high capital investment required for civil engineering contractual works, most

youth owned enterprises are informal and therefore not legible to participate in these contracts,

lack of adequate capacity by youths to take up these projects due to the nature of the risks

involved in civil works.

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Ignorance of the existence of these opportunities among the youth has also played a major role in

barring them from taking up these contracts. Inadequate access to financial services, this in turn

limits the ability of youths to take up these contracts.

These are just a few of the possible reasons why the entry of youth into Civil Engineering

Contracting has been slow. Others are discussed broadly with possible mitigations in the next

chapters.

1.5 Methodology

The following methodologies were used in the research:

I. Reading other Research papers on similar topics

II. Reading government reports pertaining to public procurement

III. Administering questionnaires

IV. General Oral interviews

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2.0 BARRIERS HINDERING ENTRY OF YOUTHS INTO CIVIL

ENGINEERING CONTRACTING AND POSSIBLE MITIGATIONS

2.1 Inadequate access to tendering and procurement information (Author: F16/1384/2011)

Information and Communication Technology (ICT) may arguably be the most powerful tool for

social and economic change. Rapid and continuing growth and development in ICT is

transforming the ways in which youth live and work. Using internet for example, youth can get

access to both domestic and international opportunities online, be it jobs or tenders/contracts.

They can also advertise their products and get market information on any business of their

choice. However, this is not the case when it comes to locally available and advertised

tenders/contracts.

The main aim of AGPO (Access to Government Procurement Opportunities) Program is to

facilitate the youth, women and persons with disability-owned enterprises to participate in

government procurement. This was made possible through the implementation of the

Presidential Directive (2013) that 30% of government procurement opportunities be set aside

specifically for these enterprises without competition from established firms. It is affirmative

action aimed at empowering youth, women and persons with disability-owned enterprises. All

these are efforts by the Jubilee Government to ensure that the youths are involved in

development and promotion of the general welfare of the youth.

For the last one year the government has been registering and pre-qualifying Youth, Women

and Persons with Disability owned enterprises so that they can access government

tenders and contracts. Government tenders amount to billions each year; it is a great opening

for the Youth, Women and Persons with Disability, but it so unfortunate that most of these

tenders are not taken up by the youths although there is a reservation of the 30%, with the major

contributing factor being attributed to inadequate access of the information regarding this and

general ignorance among the youths.

Among the Enterprises registered with AGPO, less than 5% are civil engineering related. The

too many youths are uninformed about the various tenders that are available and are advertised

almost on a daily basis on various platforms, for example, print and online media. Majority of

the youths are also unaware of the various ways and means of procuring any contract/tender, not

mentioning specifically the civil engineering contracting which always requires long and

rigorous procurement procedure. This is a major problem in rural areas, peri-urban and small

upcoming urban centers in the country. Most (if not all) of the tenders are advertised in print

media (newspapers) which are mostly distributed in the major urban centers and cities, with a

few circulated to the rural areas. The same tenders/contracts are also posted on the PPOA‟s

website which is not quite accessible to the youths in the rural areas with little or no network

connections.

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This has resulted to an increase in unawareness among the youth who cannot afford to purchase

the newspapers that are sold at between Kshs. 50 to kshs. 70. The situation is even worse in

rural areas internet and the use of social media is not as widespread as in urban areas.

The rural youth mainly relies on local vernacular radio station for their information, a platform

on which a few or no civil engineering contracts/tenders are advertised as opposed to some

other tenders at county level. Many youths in the rural areas, are therefore, disadvantaged as

compared to their counterparts in urban centers who can access the same information on online

platforms including the PPOA‟s website, an advantage which the urban youths have not taken

due to the obstruction by some other online social activities they are involved in, just to

mention, Facebook. An interview conducted in Nairobi showed that a good number of youths

have not heard of the existence of AGPO, while some good percentage said that they have heard

of it but have no idea of what it is all about.

Possible Mitigation Measures

Improved information techniques mostly through the internet for buying tender notices using

modern quality standards and business practices in the government can help improve the

accessibility of the information by the various special group‟s as they compete for government

contracts with big players. This can be ensured by using other means of advertisement that are

frequently accessed by youth, as opposed to the dailies only. These platforms may include:

advertising the tender notices in the local television channels, local/regional radio stations.

Road show campaigns by the relevant bodies such as AGPO especially in the remote rural

areas may be effective in increasing the general youth awareness about the existence of AGPO

and what it stand for concerning the youth and government tenders. Social media such as

Facebook may also proof effective in informing the youth. The various county governments in

the country have also increased speed of construction and installation of infrastructural

facilities that enhance access of tenders through e-procurement portal. This followed a

President Uhuru Kenyatta‟s Directive Order (6th

March, 2015) requiring that all the

government procurement to be carried out online. This will level the playground for the rural

youth and consequently increased access to the tenders and the tendering information.

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2.2 Long and tedious company registration process and procurement procedure

(Author: F16/1374/2011)

Information on starting a business is not easily accessible for most people in Nairobi, while at

the same time entrepreneurial ventures are susceptible to a fair amount of regulation. In fact,

Nairobi ranked last out of 13 cities measured for “ease of doing business” in Kenya by the

International Finance Corporation/World Bank‟s “Doing Business 2012. Fortunately, it ranked

fifth when it comes to starting a business.

While a few companies (especially NGOs) offer training on establishing and registering one‟s

own business, individuals with the capacity to hire an attorney tend to do so for the guidance

needed to navigate the process of registering a business. There are various attempts by the

Jubilee Government such the presidential directives and executive orders from President Uhuru

Kenyatta, all with the aim of getting youth engaged in development agenda of this country.

Despite all these attempts, the youths still face many drawbacks, another one of them being the

company or business registration process.

The contracting business requires that participating companies be at least registered (if not well

established) with the registrar of companies. For civil engineering contracts, the companies must

also be registered with the National Construction Authority (NCA). The process of registering a

company in Kenya has never been an easy task. Many procedures and steps are followed, each

of which requires a significant amount of money and travel expenses when moving from one

office to another.

In summary, highlighting the key registration processes: - to register a limited company

(whether sole proprietorship, partnership or branch office of an existing company), one must go

through the following process: Name search, which usually takes an average of three days at a

fee of Kshs. 1000. After the name reservation, the individuals the go the registrar of companies

where they are required to state their memoranda and articles of associations. The registrar of

companies then declares the directors of the new company. Before this, the individuals must

have enough start-up capital.

They must state their company‟s objectives and rules. For the individuals are then issued with a

certificate of incorporation in the presence of a lawyer (at a fee). A stamp duty charged at about

Kshs. 2200 is also required with an accompanying form from KRA at kshs. 20000. The

individuals then declare their compliance, signed in the presence of a commissioner for oaths.

The registration with NCA is also a long process that takes month. This long processes and the

accompanying fees and charges required at different stages tend to discourage youths from

registering their enterprises and also lack of or inadequate financial muscles and patience to go

through these successfully.

The procurement procedure is also sometimes a very long process that may take months,

starting the date of tender advertisement. The bidders or interested contractors then submit their

bid documents as per the tender requirements. This is followed by bidding, mainly competitive,

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where the least evaluated bidder is picked and then awarded the contract. Many youths do not

know much about these and the few who have ventured into it recommended a high of patience

and tolerance. Experience, which most of the youth-run enterprise lack, is therefore plays an

important role.

There are also internal problems, which the problems within the clients who wish to procure

goods or services, as a result of misinterpretation of the procurement law and regulations. To

mention, the Public Procurement Oversight Authority (PPOA 2005) review team identified that

the National Social Security Fund (NSSF) in respect of the implementation of the procurement

law and regulations: Inability to translate procurement law and regulations into everyday

language, so that management sees and understands the impact to their compliance; inadequate

records management and filing systems, Musa et al, (2011).

Retrieving records for review purposes was slow, time consuming and even for the files made

available, some records pertaining to fulfillment of the procurement process were incomplete,

limiting the review scope; Lack of operating ICT systems and applications covering all aspects

of procurement; Insufficient training in procurement law for the persons involved in the

procurement related functions

Inadequate contract management and insufficient communication and coordination between user

departments and Procurement Unit on procurement planning and implementation. This therefore

resulted into most their tenders being awarded wrongfully, and probably some of which were to

be awarded to the youths might have gone the wrong way.

Possible Mitigation Measures

One way of encouraging many youths and the public at large to establish, formalize and register

their business enterprises is by making the registration process as short as possible. The

minimum number of days it take to register a company should be reduced and the various

charges incurred in each step be reduced. The process can be made simpler by locating offices of

the required persons in one place or within a locality to minimize several journeys and

movements.

If the possible, the registrar of company should be devolved to so that there are regional offices

other urban towns in the country. This will save the rural youths and youths not in the

headquarters time and money. The registration process can also be digitized, where all the

applications for new companies in done online irrespective of where you are in the country.

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2.3 High initial capital requirement. (Author: F16/1373/2011)

By the nature, civil engineering contracts are always multimillion project requiring large sums of

money. The Jubilee Government and the previous government had made several steps in

ensuring the availability and increasing the accessibility of funds to youth for their development

needs and empowerment. The government has introduced Parastatals and bodies that concerned

with management and disbursing funds to various youth-run enterprises. Some of these are

UWEZO fund, Youth Enterprise Development Fund (YEDF), Women Empowerment Fund.

Millions of Kenya shillings have been allocated to these bodies we are charged with the

responsibility of managing the youth funds in liaison with the various selected micro-finance

banks in the country.

These funds have mainly been helpful and fully accessible to non-civil engineering enterprises

which do not require large sums of money. The finance services offered by the government

cannot meet the total sum of money required to successfully take and complete a civil

engineering project. The youth-run enterprises which are civil engineering related therefore face

the challenge of inadequate capital, especially the money required for the start-up including

machinery (for hire or purchase) skilled and unskilled laborers required to the job in the field,

material purchase and for administrative services.

A part from inadequacy of the funds, their accessibility and the general procedure of getting the

funds always tend to thwart the efforts of the applicants. Linda Jerotich, (Graduate Engineer,

CAS Consultants) co-founder of the Orchid East Africa Ltd, when asked about the accessibility

and the adequacy of UWEZO, responded that it takes an average of 21 working days for the

funds to be fully processed and the amount one qualifies to be awarded is sometimes so little that

cannot even meet one-eighth of what is required for a typical civil engineering project. She also

attributed the inadequacy to misuse and misappropriation of funds in fraudulent claims. The

financial audit conducted un April 2012 on the YEDF also indicated that millions of shillings

lost in a period less than two months, in impropriation and corruption claims.

Possible Mitigation Measures

There are various possible measures that the government should put in place to ensure adequacy,

efficiency and effectiveness in accessing the youth funds and other special groups‟ development

funds. To ensure adequacy, the government should minimize the number of parastatals handling

these funds. It is through these many bodies where large sums of money disappear in “ghost”

projects run by the “youths” who are either indirectly or directly related to the officials. For

example, YEDF and WEF should be merged into one and then put together under UWEZO

(suitable agency name) fund because both are the same thing with different names. They all

stand for youth and or women empowerment.

Accessibility and efficiency of the funds will be increased if the bodies in charge would adopt

the e-banking services where all the applications and transaction are done online under one

organization not as many as they are right now. This will be in with the government plan to

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migrate all financial transactions of all ministries, departments and agencies to the Treasury‟s

Integrated Financial management Information System. To motivate youths, the closed/special

tenders, especially the civil engineering ones not require bid bonds as a requirement for

prequalification, as this is an addition to the initial capital required.

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2.4 Corruption (Author: F16/1389/2011)

Corruption is the abuse of entrusted power for private gain. It is the dishonest conduct by those

in power, mostly involving bribery. The civil engineering sector by its nature, especially in

procurement is exposed to bribery and corruption. In Kenya, the regulation in civil engineering

sector is less rigorous therefore the temptation for parties to engage in corruption is greater

because there is a perception that the risk of getting caught and penalized is low.

While there are many tenders awarded on merit, many more are awarded under unclear

circumstances. Those in charge of awarding tenders can use their position to give out tenders

through an unacceptable procedure. The corrupt procurement officers only aim to benefit and

enrich themselves other than the people of Kenya so they give contracts to those contractors

from whom they can gain something.

Those contractors with the capacity to carry out and complete the larger and more complicated

projects are few so over time they develop relationship with procurement officers hence

increasing the prevalence of getting involved in bribery and corruption. This causes the new

young contractors not to be well recognized by the procurement officers hence blocked out and

their applications dismissed and therefore wrongly not awarded contracts.

Powerful contractors can always bribe their way into tenders even when they have not fully

satisfied the requirements to apply for the tenders while young youths who have potential but do

not have the financial muscle to do the same miss out. Due to corruption, the youth in civil

engineering hardly have a chance to grow in their professions since they are not given an

opportunity to practice in their fields.

Due to corruption, tenders are awarded to unqualified engineers who do their work shoddily

leading to damages like potholes on tarmac roads and cracks in buildings hence wastage of

government money.

Possible Mitigations

Multi-level approach to fighting corruption in the awarding of tenders. Action here is needed

from the government, professional bodies such as the Engineering Board of Kenya, and the

wider public. These groups should come together and develop standards, laws and procedures

they all support and make sure that they are implemented. They should also take the initiative to

stop corruption by not practicing it and warning their fellow citizens against practicing it.

The government should also be serious about putting up effective law maintaining officers to

ensure corruption is not practiced and arrest and punish those who engage in it. The government

should also monitor and review the anti-bribery procedures and improve them where necessary.

Those in charge of awarding contracts should also be carefully monitored to ensure that they

award contracts based entirely on merit.

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Those who award contracts should report on the considerations they used for awarding contracts

and why they awarded a contract to a specific contractor and dismissed others. It should be

ensured that those who do the monitoring are not the same people who award contracts.

2.5 Inadequate access to financial assistance. (Author: F16/1389/2011)

Financial stability is a very crucial thing in capability of a civil engineering contractor since it

enables him/her to do the required work effectively and in time. However, many young civil

engineers do not have access to enough financial support hence do not have enough resources to

be able to put up a case for tenders. Most of these young civil engineering entrepreneurs do not

even have enough money required for the whole process of registration of their companies. They

lack offices since they don‟t have the money to be able to pay rent.

Due to limited financial capability, there is limited access to equipment which makes the youth

not eligible to apply for tenders or win the contracts. This also makes them to be degraded by

procurement officers who think they do not have the financial capacity to sustain a project so that

the construction process does not stall. Besides, very few people are willing to support them

financially for fear of not getting their money back since most of these young civil engineering

entrepreneurs are just starting up in the construction business and have not gained enough

stability.

Possible Mitigations

Financial institutions such as banks should be able to loosen up their restrictions and support

more upcoming but organized young civil engineering entrepreneurs so that they can have more

bargaining power in tendering for these government contracts. The government could also form

organizations that give loans to the promising young entrepreneurs in the civil engineering sector

so that they can be able to get equipment and labour required for construction. These

organizations could also lease or hire out some equipment to the young entrepreneurs who are

not able to buy the equipment due to financial constraints.

Young civil engineers could also team up and marshal resources then create companies that

could collectively bid for major contracts as they could fairly compete with established

contractors since they could meet the financial requirements.

15

2.6 Lack/ inadequate experience/ lack of trust (Author: F16/1373/2011)

Many young civil engineers are fresh graduates who do not have enough experience when it

comes to working in the field since most of what they have learnt is theoretical. This makes the

procurement offices to lack enough trust in the fresh graduates since they think they don‟t have

enough knowledge on how work should be done effectively and efficiently while being

economical. Therefore established contractors who are viewed as more experienced are much

more likely to be awarded the contracts.

There is also a perception that nowadays most graduates in civil engineering are „half baked‟ and

do not study as hard as their predecessors hence are not fully prepared to take up construction

projects.

These young civil engineers who have the potential to succeed in the construction industry end

up losing their morale and not believing in themselves since those who are supposed to empower

them by giving them the chance to take up contracts do not trust them enough.

Possible Mitigations

Enough training should be given to young civil engineering students while still in schools i.e.

they could visit major project sites so they could gain more knowledge on what exactly happens

in the site. Internships are also necessary since they help young civil engineers learn from those

experienced in the field. The government should also come up with training programs where the

experienced civil engineers train young civil engineers.

The government should also empower the young civil engineering entrepreneurs by entrusting

them with some construction projects through which they can learn further and sharpen their

skills and therefore believe in themselves and their capability to deliver work that is up to the

required standards.

2.7 Nature of the Risks involved in Civil Engineering works (Author: F16/39396/2011)

Statistics show that construction projects are often exposed to risks and hazards, arising either

from purely contractual and legal problems or unforeseen circumstances or natural hazards.

Often, contractors are faced with unexpected events, which were not calculated in the offer and

the programme of works, leaving the contractor with unforeseen costs and losses.

Risks may be defined as an event or a situation which probably occurs during the lifetime of a

project or contract that has potential consequences of damage to property or environment, or

personal injury, and/or financial loss or loss of time.

In construction the risks which the contractor should bear include:

the risks which the contractor can control by good management and planning, or

16

risks which the contractor may insure and calculate the costs in his offer, such as risks of

personal injury, damage to equipment, and even political risks arising from acts of

government, and

risks which the contractor may pass to others, such as manufacturers and suppliers, for

example design, workmanship and maintenance risks

With kind of risks, most youths are reluctant to get involved in engineering contracts.

Possible mitigations

The youths should have good courage and the right attitude and not be afraid of the risks. The

youth should just get involved in the civil engineering works. The youths should have adequate

consultations with the client, engineer and everybody involved in the contract. They should have

proper organisation, definition, allocation of responsibility in case they get a contract. The youths

should have appropriate/clear contractual assignment of risk.

The youths should carry out investigations of the predicable problems that may arise so that in

case of any risk they know how to handle it.

2.8 Lack of Commitment on the part of Youths (Author: F16/39396/2011)

In this current generation of “pesa pap!” (Instant money), most youths are impatient and lack

commitment to follow the right channel of applying for the civil engineering tenders offered by

the government.

From our survey that we did to determine wether the youths are aware of Youth Access to

Government Procurement Opportunity (YAGPO), quite a number of the youths are aware that

there are tenders allocated to them. The reason why they don‟t apply for them is because they are

lazy.

They claim that the process is involving which is somehow true though that is not a reason

enough for them not to apply for the tenders.

Most of the youths are still schools/collages/universities which is demanding their time thus they

are unable to commit to applying and following up the procedures involved in civil engineering

works. They tend to divert their efforts to studies so they do not get involved in civil contracting

works.

Possible Mitigations

Youths should stop being lazy and commit themselves to applying for the civil engineering

tenders allocated to them by the government.

17

2.9 Inadequate Training amongst the Youth to take on such contracts (Author: F16/1357/2011)

A majority of Kenyan youths are not taking up on civil engineering contracts despite Jubilee

government promise to engage them because they lack of adequate training in the field of civil

engineering. Statistics shows that the number of registered civil engineers in Kenya is quite low

compared to the number of civil engineering students who graduate annually. This is because

there is mismatch between educational system skills and the skills required to do the actual civil

engineering project. Most of the youths are therefore incompetent.

Free education in Kenya has caused many people to get primary education however the increase

in primary education enrolment has not necessarily been followed by an equivalent increase in

secondary and tertiary education especially in women and girls. This has therefore made youths

not take up on civil engineering projects because they have the knowledge.

Most youths are financially illiterate since there a few opportunities for them to be trained on

how to handle money. Quite a number are unable to do proper quotations hence they don‟t get

the civil engineering contracts.

There are also not many seminars/ conferences where youths can be trained on modern

technologies used in civil engineering contracts currently e.g. AutoCAD civil 3D. And suppose

such seminars or conferences are organised, they are often expensive for the youths to afford.

Possible Mitigations

KeNHA, KURA, KeRRA and NCA should offer more civil engineering training to the youths at

affordable costs or even for fee so that youths can be well equipped for civil and engineering

contracts.

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2.10 Most youth run enterprises are informal. (Author: F16/1358/2011)

Youth run enterprises are businesses owned and run by people aged thirty five years and below.

Official data (Economic Survey, 2010) indicates that Kenya‟s informal sector currently employs

around 8.3 million people. Over 60 percent of those working in the informal sector are youth

aged between 15-35 years with 50 percent being women. Approximately twenty four percent of

youth in the country own businesses which have a number of benefits. Among them are: creation

of employment, promoting resilience as it enables young people to find new solutions and ideas.

Youth run enterprises (YRE) also provide valuable goods and services to the society.

The informal YREs are associated with entrepreneurs who do not pay taxes, operate on the

roadsides and some of them engage in running battles with the authorities. There are a number of

drivers for the informal sector growth. Among them are: youth see the sector as a last option for

survival, peer influence to join the sector, inheritance from parents and family members, personal

interest for those aspiring to venture into entrepreneurship, ease of entry as opposed to formal

business (which requires business registration, taxation and other regulatory requirements) and

lastly the informal sector is flexible and can accommodate educated and uneducated youth.

The Kenyan government has been in the process of registering and prequalifying the YREs under

the Access to Government Procurement Opportunities (AGPO) programme. With this year‟s Sh

2.1 trillion budget, public procurement will take up more than Sh 1 trillion. Special interest

groups and YREs therefore stand to benefit from over Sh 500 billion. According to the Public

Procurement and Disposal Preference and Reservation Amendment Regulations, 2013, a

procuring entity should allocate at least 30 percent of its procurement spend for the purposes of

procuring goods, works and services from YREs, women and persons with disability. All public

enterprises are required to implement this requirement in their budgets, procurement plans,

tender notices and contract awards. A report is then to be sent out quarterly to the Public

Procurement Oversight Authority to show compliance.

To qualify for government tenders, YREs, people with disabilities or women need a business

registration certificate or certificate of incorporation, a PIN certificate, tax compliance certificate,

partnership deed for partnership business, memorandum/ articles of association and a CR12,

which is received after filling statutory returns. Few YREs are run with such strict adherence to

the law. This therefore forms a major barring, preventing youths from engaging in the

government procurements. However, the government has waived several requirements to

encourage special interest groups to participate in procurement, including scrapping capital

minimums and tender fees.

Membership into business associations, fear of failure, self-efficacy and perception of

opportunities are negatively and statistically associated with the performance of YREs. Moderate

risk taking and family income level are positively associated with the performance of YREs.

Majority of YREs are marginal and only offer the youth a modest means of livelihood since the

19

youth lack requisite experience and they therefore concentrate on highly competitive sectors

where probability of failure is high. Environmental influences for example family income levels

and networks also affect the performance of YREs and therefore resources like information,

finances and role models should be availed to help out the youth.

Bureaucratic licensing procedures: - Dedicated entrepreneurs who want to register and operate

formal businesses often get discouraged by administrative barriers. Among them are:

Bureaucratic registration procedures and costly and time-consuming taxation procedures.

Delays and unnecessary requirements in obtaining business licenses arise from inefficient

coordination among the different government agencies.

The sector operators producing quality products or with potential to enter into legal

contracts with the government or private sector for supply of goods choose to operate

informally.

Mistrust and weak structural dialogue between informal sector and government: There is lack of

structured dialogue between the informal sector and the government and other law enforcing

authorities. This has led to mistrust and prevents the sector from engaging constructively with

the government in reform processes.

Lack of access to accurate information: - Most of prospective entrepreneurs are not aware of

business start-up regulations and taxation procedures mainly due to lack of effective information

dissemination strategies on government policies. This prevents the sector operators to enter into

formal economy.

Tax evasion and corruption as normal way of doing business: - The informal sector operators

who opt not to pay taxes and do business without licenses operate incognito in back alleys and

roadsides. They are often mobile and in most cases engage in running battles with law

enforcement and council authorities. In the process of evading to pay taxes directly, they find

themselves in the middle of corruption as they end up paying more without realizing in terms of

bribes to tax collectors.

Lack of opportunity to grow and adapt good culture of corporate governance: - The informal

sector has limited access to training and professional services that would enable them adapt

better culture of corporate governance. Majority of the sector operators receive cash on daily

basis and do not keep records for their transactions. Without business records and legal structure,

they cannot enter into legal contracts with government and formal private sector including access

to financial and other professional services necessary for their growth.

20

The informal sector has limited knowledge on how their taxes are being utilized. They lack of

information regarding planning, selection, funds allocation, and monitoring and evaluation of

various projects funded by public money. This apparent lack of information prevents the

informal sector operators and their associations an opportunity to hold those responsible

accountable for public funds meant for national development.

Poor coordination and weak advocacy capacity: - Grassroots informal sector associations have

weak advocacy capacities and poorly networked and linked. This prevents them from advocating

for policies that affect their membership. Further, lack of strong networks prevents the informal

sector from doing business with the government and formal private sector.

The discussion above on the problem mentioned has made it hard for the youth to get

government tenders particularly in the field of civil engineering. The following paragraphs

outline some mitigation that can be applied to help the youth take advantage of the opportunities

set aside for them.

Mitigation measures

Majority of the YREs need to be formalized if they are to be pillars of wealth and employment

creation. This can be done in a number of ways, among them are: linking young entrepreneurs

into business associations, formulation of policies geared towards youth in businesses, coming

up with initiatives that focus on improving income levels at the household level and lastly the

creation of programs geared at improving perceptions of younger entrepreneurs.

Other mitigations are:

Increase information access on business activities/in the informal sector: Information on business

activities (business owners/managers; third parties such as banks, buyers of products/services,

supplies of inputs, external accountants/auditors and government – regulatory, audit/service

agencies and KRA.

Increase information on business activities and accurate and reliable and updated records/data:

Create platform for engaging the informal sector players – the informal sector associations for

mobilization, identification of trainees and follow-ups.

Provision of incentives 25% of procurement contracts to registered MSEs with compliance

certificates.

Fast-track enactment of the impending MSE Bill:- which addresses key challenges facing the

informal sector and provides for institutional framework for structure and administration.

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2.11 Marginalization of youth (Author: F16/1358/2011)

Youth marginalization is the treatment of people under the age of 35 as of less importance to the

society. In Kenya there are many such people who feel excluded and powerless, and who

struggle to survive. After independence, young people were generally seen as the “Promising

generation” that held the future in its hands and education would give them an even better chance

of reaching prosperity. Many years after independence has not shown a takeover of power by the

young or a substantial improvement in the life of youth in Kenya. To be young in Kenya has

come to mean being disadvantaged, vulnerable and marginal in the political and economic sense.

The marginalization of Kenyan youths is within the context of uncertain social status, and

increasing unemployment. Youths in Kenya today must struggle to make a living in a context of

cut-throat competition, where the exigencies of daily life on many occasions demand constant

resort to illegal activity and erode the functioning of common morality and ethics. Young people

seem to need an exceptional degree of strength of character, innovation and endurance to have

any hope for the future. Too frequently the needs of youths are only addressed as an afterthought

when it comes to political and economic development initiatives. It is due to this injustices that

youth protest because of social marginalization and high unemployment rates.

Kenyan youths are caught in the chasm between childhood and an unattainable social, political

and economic status that would define them as adults. Deprived of educational opportunities and

livelihoods, youths are actively mobilized by politicians, who recognize that their alliance is

valuable and their enmity dangerous. The youth have over the years faced numerous challenges

making it hard for them to participate in business in a manner commensurate to their numbers.

There is a low number of youth turning up to take the 30 percent government procurement

tenders reserved for them. This is an indication that there is something wrong on how the

programme is operated that needs urgent attention. The people implementing the programme

have failed to address vital aspects that the proponent ignored and therefore have not helped

address the jobless by allowing youth, women and people with disability to supply the

government with certain items.

Youth have been marginalized for years and the programme was not structured in a manner that

sought to address this constituency. A preliminary report on Youth Access to Government

Procurement (YAGPO) shows that only 30,000 youth have registered entities to do business with

the government and of which only 6,000 benefited from the ambitious programme. The initial

cost of registering entities is quite high and the requirements that the youth must meet to qualify

for tenders is unachievable. This has made the youth get discouraged from applying for the

tenders leaving them to the adult population who have the financial muscle to undertake the

procurement process.

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Corruption amongst the executives supposed to award the youth with the tenders has made it

hard for the programme to be a success. An example is in Kisumu County where the youth did

not win any government tenders last year despite the legal requirement compelling the area

government to give 30 percent of all contracts to marginalized groups. The county executive

made a statement implying that the youth had not applied for the tenders. The executives have

clearly been shortchanging the youth in the award of tenders. Senior citizens in many counties

have been getting preference over the youth in the award of tenders with the excuse that the

youth don‟t have enough experience. Moreover, there is belief among the senior citizens that the

youth are impatient to make a life for themselves and therefore this encourages the executives

who are also senior citizens to marginalize the youth as they award the tenders.

Mitigation measures

Stakeholders involved in the implementation of the programme should rethink the strategy and

take deliberate measures to increase the number of beneficiaries to acceptable levels.

An elaborate policy should be developed to integrate all business processes and also identify a

strong coordinating agency to run the programme.

A Youth ministry should be created to devolve the interests of the youth since the government

loses focus on every initiative it starts to empower the youth.

Young people should also form youth clubs to provide positive direction for themselves and their

colleagues who have suffered from disruptions in their education and exclusion from the job

market. Such clubs will promote „fine‟ youths and would form an important bridging role in

assisting young people.

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3.0 SUMMARRY, CONCLUSION AND RECOMMENDATIONS (Author: F16/1380/2011)

Jubilee government has not put in place adequate measures that ensure full participation of youth

in the civil engineering contracting and national development. As outlined in the report, Youths

still face several challenges some of which the government can address.

The following recommendations can be put in place to help ensure maximum, if not full

participation of youth in general government tenders, especially civil engineering contracting.

1. Regulatory strategies

Jubilee government should formulate and adopt policies are more favorable for youths in with

respect to regulatory and tax environment. Regulatory initiatives that will improve access to

capital markets and reducing barriers to business information, combined with strategic

investment in physical infrastructure. Minimum start-up capital should be reviewed and

increased for youths venturing in civil engineering contracting business or varied depending on

the contract one is taking up on.

2. Increase marketing, public awareness and information supply

As outlined in the report, a significant number of youths are still an aware of the various

financial services and support the government has put in place. The government should there

step-up campaign and awareness through institutions of higher learning and in secondary schools

and I village Barraza‟s. the government should support new, youth friendly technology platforms

such as mobile phone texting for the delivery of information to youth. This can be done in liaison

with mobile service providers (Safaricom and Airtel) which has contacts of majority of the

youths.

3. Training Programs

Since civil engineering contracting business is a field specific and technically oriented,

government should start up a less expensive short courses training programs for youths, for

example, a short course on construction project management. This will equip the youth will the

technical skill they require to start and manage the construction companies. A short course on

financial literacy (business language) will also suffice.

4. Good leadership

The government should ensure good leadership, especially among those appointed to work with

bodies mandated to manage the youth funds. The leaders in these bodies should be vetted before

they take the office. This will ensure honesty, integrity and proper appropriation and use of the

funds. Corruption will be minimized (if not eliminated) thus funds which would be

misappropriated and squandered will be available for youth enterprises.

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5. Others

It is recommended that the well-established and experienced players in the field of civil

engineering contracting to provide mentorship program to the youth. This will help to solve the

problem of lack of experience in the field. The youths should also exploring joint-venturing with

other contractors in the field or subcontract to gain the desired experience.

In general, the government should elevate the youth unemployment issue and provide leadership

from a dedicated office with its own budget and organizational structure.

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4.0 LIST OF REFERENCES (Author: F16/1374/2011)

1. Policy Research Working Paper 4538, World Bank, Washington, DC. Downloadable at

http://www.wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2008/02/2

8/000158349_20080228163807/Rendered/PDF/wps4538.pdf

2. Dencker, J.C., Gruber, M., and Shah, S. (2009), “Individual and Opportunity Factors

Influencing Job Creation in New Firms,” Academy of Management Journal, Vol. 52, No.

6, 1125-1147

3. Ministry of Youth Affairs, Kenya National Youth Policy, Sessional Paper No. 3, July

2007.

4. UNDP, Discussion Paper: Kenya‟s Youth Employment Challenge, January 2013.

5. Gatere, B. C. & Shale, N. I. (2014) international Journal of Social Sciences and

Entrepreneurship Vol.1, Issue 12, 2014

6. L. Jerotich, Interview, October 3, 2015

26

5.0 APPENDIX I: QUESTIONNAIRE FOR YOUTHS (Author: F16/1357/2011)

UNIVERSITY OF NAIROBI

DEPARTMENT OF CIVIL AND CONSTRUCTION ENGINEERING

FCE 572: ENGINEERING MANAGEMENT

ISSUE: WHY THE YOUTHS ARE NOT TAKING UP ON CIVIL ENGINEERING

CONTRACTS DESPITE JUBILEE GOVERNMENT PROMISE TO ENGAGE THEM.

YOUTH QUESTIONNAIRE

Name…………………………………….…………………….Sign……………Date.…/10/2015

YOUTH QUESTIONNAIRE

1. Are you aware of Access to Government Procurement Opportunities?

2. Have you taken any initiative to apply for those tenders? If no, why?

3. In your own opinion, why do you think most youth do not take up these opportunities?

4. What would you recommend to be done in order to improve the situation?

27

6.0 APPENDIX II: QUESTIONNAIRE FOR PROCUREMENT OFFICERS (Author: F16/1373/2011)

UNIVERSITY OF NAIROBI

DEPARTMENT OF CIVIL AND CONSTRUCTION ENGINEERING

FCE 572: ENGINEERING MANAGEMENT

ISSUE – WHY THE YOUTHS ARE NOT TAKING UP ON CIVIL ENGINEERING

CONTRACTS DESPITE JUBILEE GOVERNMENT PROMISE TO ENGAGE THEM.

QUESTIONNAIRE

Name……………………………Department………………………….Sign……………Date.…/

10/2015

N

yes

no

Remarks (where

appropriate)

1

a) Does your department comply with

the requirement to set aside 30% of

the procurement budget for special

groups, e.g. youth?

If yes, how do you ensure that these special

groups get the procurement opportunities?

2

Does your department comply with the

requirement to advertise the procurement

opportunities available for youth?

If yes, through which media?

3

Has the department awarded over half of

the percentage set aside to the youth since

inception of these policies?

4

What challenges have you encountered with

the youths that have been awarded the

contracts?

28

5

Has your department complied with the

PPOA requirements?

6

What kind of tenders/contracts have you

awarded to the special groups especially

youths in the past one year?

7

What percentage of civil engineering

tenders/contracts have awarded to youths in

the past one year?

8

In your own opinion, what could be the

possible reasons that prevent (barriers)

youth from taking up on the civil

engineering contracts/tenders?

9

What are the possible mitigation measures

to these barriers?