International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

The Influence of Contract Management on Performance of Outsourced Projects in Medium Manufacturing Enterprises in Nairobi County, Kenya
Joshua M. Mutua, Esther Waiganjo, Isaac N. Oteyo

The study set out to determine the influence of contract management on performance of outsourced projects in medium manufacturing enterprises in Nairobi County, Kenya. The population of interest was all medium manufacturing enterprises with official premises in Nairobi. Out of the 22 firms targeted, twenty responded fully which translated to 90.91% response rate. The findings indicate that project outsourcing is widespread with product development, marketing and IT being the most common type of outsourced projects. However the study established that the overall performance of projects was only moderately satisfactory, with success being influenced by contract management. Essentially contract management had a positive correlation with project performance. Contract management and other factors accounted for 66% variation in project performance. Contract management was found to have the strongest influence on performance of outsourced projects. The fixed-price contract was beneficial in ensuring project costs were within budget. 95% of all firms surveyed considered a clear statement of project objectives in contracts important for successful project delivery, while project acceptance criteria and dispute resolution mechanism were rated as important contractual devices. Project management training, especially on contract management, was identified as one avenue of improving the performance of outsourced projects. The study recommends the introduction of contract management training and certification for project managers and project team members to enhance project performance in medium manufacturing enterprises. This capacity building should be done in partnership with Centres of Excellence in institutions of higher learning to promote project management practice and strengthen linkages with industry players.

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