Puppys have no real control over their elimination. They go like every 3-4 hours. Smaller dogs go more often.
Dogs are extremely clean animals and will not sleep near their refuse unless they are forced in a pet store condition. Keep the crate clean.
It bodes bad for future litter box or outdoor training to allow the pup to go in its crate.
You should get an X pen or somehow, using hardware store lattice, or 2X4s and chicken wire, create a larger "backyard" for the dog. Place something like a plastic tarp or old vynal on the floor to protect it.
Use newspapers and make a large "square" as a target for the puppy. newspaper train the pup first. until it is capeable of holding its bladder, you should not expect it to go only when you take him/her outside. Try to make the square and X pen limits at least 10 feet (6 feet will do, but more distance is more ideal. A wild dog will poop as far from her/his den as possible because preditors will come and kill her, and her puppies of she does not. Dogs will range far looking for the ideal Poop place (thus all the walking around and turning activity) from the opened door of the kennel.
Take some urine and doodoo and place it on the target and show it to the puppy. Don't force the dog's face in it. They have amazing scent organs and usually know what your are getting at. Keep the poop there, refresh with new poop till the pup "gets it". Once the puppy smells it, give treat (tiny treats like kitty food). Spend a weekend at home monitoring puppy. Find out by Timing between eating and drinking the time for the food to go through the pup. Usually the food they are pooping now is the food they ate yesterday. Make a serious study of pooping times. You will be able to tell how long it takes for water/food to go through the little intestinal tract. This sounds silly but it actually gives concrete results.
Behavior train. Be very happy and excited when pooping is done in the right spot. Modify, but never punish a puppy.
At this stage keep the crate door open so the puppy can go to the bathroom when he needs it.
I taught a pet store dog litter box training, so I spent a long time on this problem. I hope I am of help. If it is a toy dog, it might be
better to litter box train.
Have your friend or the puppys owner read some books on how dogs act in the wild and also how to train puppys. This stuff is in all those books. Knowledge will create a better bond between human and dog. The worst thing you can do is expect more "intellegence," or "human-type understanding" from a dog. They are small carnivorous animals. The human is the one with the brain. Extreemly well trained dogs get that way with 100% commitment by the human and constant training. Left alone, the dog will poop anywhere it darn well pleases.