Question $1$

Case Study $1$: CSR Project Gone Wrong

Jadec Consulting is a software firm operating in Rustenburg. They have been very instrumental in helping mining companies with software solutions. Many mining firms in the area largely depend on their software for mining operations. Jabulani Mkhize, the owner, comes from an Information Technology background. He created many niche solutions for mining firms. This enabled him to grow the company, to a point that there were over fifty employees working for the company.

Over the years, Jadec Consulting had been contributing hugely to Corporate Social Responsibility $($CSR$)$ projects, even funding students from high school to university. Some of those students ended up working for the company. The impact they made to communities encouraged them to do more bigger initiatives. The company decided to embark on building a high school for the community in the Bapong township near Rustenburg. They approached the community and its leaders. The community was overjoyed with the idea. They pledged their full support for the project.

Jadec Consulting did not have experience in construction; therefore, they were going to heavily rely on other consulting firms who were specialists in this area. Their procurement department was tasked with the responsibility of finding suitable service providers for the project. It was in April that year when the project was initiated. The expectation was that by January, the following year, the school would commence. These were tight deadlines, especially given the fact that they did not have depth of knowledge in such projects. Peter Crox was appointed as the project manager for the initiative. Peter did not have the requisite knowledge of running construction projects. He had been managing software development projects for Jadec Consulting for years. However, management were confident that he would work well with other professionals who will be appointed for the project.

Peter Crox, together with the procurement manager, Lucy Calidz, and Portia Mpiya, the quality manager, were convinced that they will be able to pull off the project, as representatives of Jadec Consulting. The idea of the school was easy to conceptualise, because it was going to be two blocks with $10$ classrooms each and two offices, but when it came to the design and implementation, there was a lot to consider.

Their procurement process started with outlining the specifications for the school. The aim was to use this information when going out on tender. When the specifications were completed, they then advertised the tender. They developed the criteria for selecting the best service provider. The tender was put up for a month, to allow service providers a chance to prepare documents accordingly. Lucy recommended that they call a bidders$$ conference so that they could provide opportunities for further clarification of issues raised by potential service providers. Peter and Portia were against the idea, as they cited time constraints. They felt that since these are subject matter experts, they would be able to understand what was required. When the completed bids were returned, they selected the preferred service provider based on the pre$-$approved criteria. Tersia Construction Projects $($TCP$)$ emerged as the preferred service provider. John Pila was the project manager from TCP$.$ He had plenty of civil engineering experience before he became the project manager. Upon signing the contract, John asked to visit the site together with his team. To their surprise, they discovered that the site chosen had many rocks and therefore blasting would be required, instead of normal excavation. This was going to affect the construction of the foundation. They then requested more funds to do the blasting. Fortunately, Peter had contingency reserves for such. The building of the foundation started well. However, there were more claims coming from TCP because the provided specifications were not appropriate for the project. There

were many scope changes. Management was getting more worried about the escalating costs and the fact that there was a risk of not meeting the deadline. The community was also getting worried because many had high hopes that their children would be placed at the school, the following year.

$($a$)$

Based on this background, discuss how the team should have approached procurement strategy activities pertaining to this project? $(35)$

$($b$)$

The site clarification or bidder$$s conference did not feature here. Elaborate how this could have helped to alleviate some of the problems here. $(15)$