Contractors operating in Kenya’s construction sector must hold valid registration and categorisation certificates issued by the National Construction Authority under the National Construction Authority Act, 2011. Disputes over registration, whether triggered by deregistration, a category downgrade, non-renewal, or disciplinary proceedings, can stall a project, disqualify a contractor from tendering, and expose both contractors and employers to legal risk. This guide explains the registration and categorisation regime, the disputes that most commonly arise, the statutory appeal process, and the consequences of contracting without valid registration.
The NCA Registration and Categorisation Regime
Under section 15 of the National Construction Authority Act, 2011 (the “NCA Act”), a person may not carry on the business of a contractor in Kenya unless registered by the Authority’s Board. Section 16 defines “contractor” broadly as anyone who, for reward, undertakes construction, installation, erection, alteration or related works, subject to exemptions for low value works and private residential houses not requiring structural design. Carrying on business without registration is itself an offence, punishable by a fine of up to one million shillings, imprisonment of up to three years, or both.
Registration is not a single, undifferentiated licence. Under section 16(2) and the Third Schedule, the Board registers contractors into classes of work, among them building works, civil engineering (including roads and water works), electrical engineering services and mechanical engineering services. Within each class, the National Construction Authority Regulations, 2014 create eight tiers, generally referred to as NCA1 through NCA8, running from NCA1 (unlimited value works) down to NCA8 (the entry tier, restricted to lower value works). Placement depends on a scored technical and financial evaluation of the applicant’s qualifications, experience, equipment and financial capacity. The shilling value attached to each tier is revised by the Authority from time to time, so contractors should confirm current thresholds directly with the NCA rather than older published figures. Registration must also be renewed annually, with the renewal application lodged before expiry together with evidence of continuing professional development for the licence year.
Common Registration Disputes
Several types of dispute recur in practice.
Deregistration and suspension. Sections 24 and 25 give the Board power to suspend a contractor or delete its name from the register. Suspension can follow a conviction under the Act, gross professional misconduct after due inquiry, or a breach of the Authority’s regulations or by-laws. Deletion can follow, among other grounds, failure to notify a current address within six months, non-payment of annual fees for two consecutive years, failure to meet registration criteria, or failure to discharge a contractor’s duties. A contractor whose name is deleted must surrender its certificate and, under section 25(5), cannot simply re-register under a different name.
Category downgrade. Because tier placement depends on an evaluation of technical and financial capacity, a reassessment, whether on renewal or following a complaint, can move a contractor to a lower tier. This restricts the value of contracts the firm may lawfully undertake and can render an ongoing project, tendered for at the higher tier, technically non-compliant partway through.
Non-renewal. Where a renewal application is late, incomplete, or refused because the Authority is not satisfied the contractor still meets the criteria for its tier, the certificate lapses. For practical purposes this is treated the same as if the contractor was never registered for that period.
Disciplinary proceedings. Section 22 allows the Board to inquire into a contractor’s conduct on its own initiative or on a written complaint, commonly from a client, another contractor, or a project professional. The contractor must be informed of the allegations, and may respond, appear in person or through an advocate, and call and inspect evidence. The Board may then caution the contractor, direct corrective action, suspend registration, or delete the contractor from the register.
The Appeal Process
The Act gives contractors a structured route to challenge an adverse decision. Under section 26(4), a contractor aggrieved by a decision to refuse registration, delete its name, or suspend it, may appeal to the National Construction Appeals Board within thirty days. The Appeals Board is established under Part IV of the Act (sections 27 to 29) and sits with a chairperson who is a High Court advocate nominated by the Attorney-General, a professional member with architecture, engineering or project management experience, and a member nominated by the Chartered Institute of Arbitrators (Kenya Chapter). The Board itself may appear as a respondent.
A further right of appeal lies from the Appeals Board to the High Court, again within thirty days of its decision, under section 27(4). Because these are short time limits, a contractor facing suspension, downgrade or deregistration should treat the thirty day window as urgent and begin preparing an appeal as soon as the decision is communicated. Separately, section 26(2) allows the Board, on application or its own motion, to restore a deleted name or lift a suspension after further inquiry, sometimes faster than a full appeal. NCA decisions and regulations remain subject to ordinary judicial review; in Republic v National Construction Authority & 2 others; Joint Building and Construction Council (Exparte) [2022] KEHC 333 (KLR), the High Court quashed National Construction Authority regulations for non-compliance with the Statutory Instruments Act, confirming the Authority’s rule-making can be challenged where due process is not followed.
Consequences of Contracting Without Valid NCA Registration
Beyond the criminal exposure under section 15, a lapse in registration creates practical difficulties for the underlying contract and any dispute that follows. Public and many private employers require proof of current NCA registration at the appropriate category as a condition of tendering and contract award, and increasingly as a continuing condition through the contract’s life. A contractor that is deregistered, downgraded, or allows its certificate to lapse mid-project risks being found in breach of contract, independently of performance issues, and may face termination, a call on performance security, or a claim for the cost of a replacement contractor.
Where a payment or performance dispute reaches litigation or arbitration, an employer facing a claim from an unregistered contractor may argue the works, or the contract itself, were tainted by the statutory illegality in section 15 and cannot be enforced. Kenyan courts and tribunals generally approach such arguments with caution, since striking down a whole contract for regulatory non-compliance can produce unjust outcomes for a party that actually performed the work, and the result tends to turn on the facts and whether the illegality goes to the heart of the bargain or is a separable regulatory failing. Both sides should treat NCA compliance as a live issue to verify at the outset and monitor throughout, since problems tend to surface at the worst possible moment, mid-dispute.
How We Can Help
Clay & Associates Advocates advises contractors, developers and employers on the full lifecycle of NCA compliance and disputes, from registration and categorisation applications, through responding to disciplinary inquiries, suspension and deregistration notices, to appeals before the National Construction Appeals Board and the High Court. We also advise on the contractual fallout of registration disputes, drafting contracts that anticipate registration risk and representing clients in resulting litigation or arbitration. For related contentious matters, see our Litigation & Dispute Resolution practice.
Sources: National Construction Authority Act, 2011 (Kenya Law); National Construction Authority Regulations, 2014 (Kenya Law); National Construction Authority, Local Contractors; Republic v National Construction Authority & 2 others; Joint Building and Construction Council (Exparte) [2022] KEHC 333 (KLR).
Frequently asked questions
What is the difference between NCA registration and NCA categorisation?
Registration is the basic requirement under section 15 to be recorded on the Authority’s register. Categorisation, under section 16(2) and the Third Schedule, places a registered contractor into a class of work and a tier, commonly NCA1 to NCA8, based on technical and financial capacity. A contractor can be validly registered but still be restricted, by category, from tendering for works above a certain value.
How long do I have to appeal an NCA deregistration or suspension decision?
Under section 26(4), an appeal to the National Construction Appeals Board must be lodged within thirty days of the Board’s decision. A further appeal to the High Court must be lodged within thirty days of the Appeals Board’s decision, under section 27(4). Both limits run from the date of decision, so act quickly once an adverse decision is communicated.
Can a contractor be paid for work done without valid NCA registration?
It depends on the facts. Working without registration exposes the contractor to prosecution under section 15, and an employer may resist payment by arguing the contract or works were tainted by that illegality. Kenyan courts and tribunals do not apply an automatic rule that such contracts are unenforceable, but a contractor is far better protected by holding valid registration and category throughout the project than by relying on an illegality argument after the fact.
What should a contractor do if its NCA registration lapses during an ongoing project?
Apply for renewal or reinstatement immediately, notify the employer if the contract requires it, and check the contract for clauses tying registration status to termination or payment. Where the lapse resulted from suspension or deregistration, also consider the thirty day appeal window under section 26(4) without delay, since a successful appeal or restoration under section 26(2) can resolve the contractual problem too.
