Contract Management Practices and Project Performance of Parastatals Under the Ministry of Energy and Petroleum in Kenya

The relationship between contract management practices and the performance of projects is integral to achieving project goals, managing risks, fostering collaboration, and ensuring long-term success, both developed and developing world have had its fair share of challenges associated with poor project contract management and consequently leading loses in taxpayers’ money. The primary objective of this study was to determine the influence of contract management practices on the project performance of ministry of energy and petroleum parastatals in Kenya. The research was based on specific objectives, such as contract planning, contract monitoring, contract cost management, and contract documentation on the performance of ministry of energy and petroleum parastatals. Theories, such as the transaction-cost economics theory, stakeholder theory, institutional theory, and agency theory, also guided the study. This study employed a cross- sectional survey approach and mainly concentrate on 13 ministry of energy and petroleum parastatals in Kenya. To meet the research objectives, the departmental heads and other officers across various departments were used as analysis units across the firms. The pilot study targeted 9 respondents, 10% of the final study sample size, of which respondents were randomly chosen in each firm. The primary data was collected through a self-administered questionnaire that included open and closed-ended questions designed to obtain definite responses. Statistical Package for Social Sciences (SPSS version 28) was used to analyze the data, present the variables through coding, and summarize all the respondents' responses. Data analysis was presented in the form of tables. The Cronbach’s Alpha value was greater than 0.7 which indicated that the questionnaire met the minimum acceptable threshold. The study findings showed that contract management practices namely contract planning, contract monitoring, contract cost management and contract documentation significantly influence the performance of parastatals in Kenya. The study concluded that performance was predicted to improve for every unit increase in these practices. The study further recommends that the parastatals should improve contract monitoring to increase their project performance. Also, management should develop and implements risk mitigation plans. According to the research, the parastatals should ensure contract planning process involves all relevant stakeholders, including procurement, legal, and technical teams. To achieve this, companies should ensure active participation of diverse stakeholders, including procurement, legal, and technical teams.