Question $2$

Case Study $2$: Mike$$s General Dealer

Mike Rush and his family own a General Dealer store in the rural area of Polokwane, Limpopo. They had been servicing the community for over a decade. To travel to Polokwane was quite a distance for this community, the General Dealer store was therefore a major benefit to them. The store employed over $30$ people and had been playing a big role in community projects as well. The dealer had enjoyed excellent relationships with many suppliers who bring goods to the store on a weekly basis.

The area had been hit by heavy rainfall over the past two months. This had a major impact on the road to the store since it was a gravel road. Some of the logistics companies complained to Mike about the state of the road, since their trucks were at times stuck in the mud. Mike tried to bring the matter to the attention of the local municipality, but their procurement process was taking time to be concluded. This was not helping Mike at all. There was a risk that if the situation was not resolved, the store could lose some of its suppliers.

Mike and his family decided to construct a tarred road themselves. Since the stretch of road was only $2$ Kilometres, they concluded that it would not be that much, and above all, it would be an investment to the store and the community. Mike realised that they will be challenged by the project since they do not come from a construction background.

Mike$$s General Dealer has employed you as an advisor for this project.

$($a$)$

Discuss and analyse what should they consider when considering contracting for this project. In your analysis, comment on the selection of the broad categories of contracts. $(25)$

$($b$)$

Mike had some understanding of how contracts work. He was undecided on which types of contracts to use. Discuss whether Mike$$s General Dealer should consider a bespoke contract, or standard forms of contract. In your analysis, state the benefits for the selected contract form. $(25)$