Effect of performance based contracting on performance of road agencies in Kenya

Abstract

The study sought to determine the effect of performance based contracting on performance of road agencies in Kenya. Typically, road agencies (RA) are entrusted with responsibility of managing road assets but a large portion of the road network in Kenya are either in poor or failed condition which calls for the need to put pressure on the road agencies to improve their efficiency in management of roads. To meet the growing demand for improved conditions of road assets, road agencies have been making deliberate effort to gradually move away from employing traditional engineering approach in favor of a contracting model where payments to the contractor are linked to achieving or exceeding performance goals stated in the contract; also known as performance based contracting(PBC).The study was guided by goal setting theory and it adopted a correlation survey design with a study population of 120 employees selected purposively from the four road agencies in Kenya and who were directly involved in project implementation. The results showed that R2= 0.832 meaning that performance based contracting(PBC) elements altogether explained 83.2% of road agency performance in Kenya and that PBC is a positive and significant predictor of road agency performance. The study recommends the interrogation of the implementation of PBC in other sectors to realise improved outcomes.