Today is the longest read and will hopefully give you thought for the week.

Major points below would be that Knysna Creative Heads Consortium did not tender the lowest price. And, as previously mentioned, the adjudicator of the bids used to manage the George branch of Urban Econ, a partner in the Knysna Creative Heads Consortium. Additionally, Chris Mulder was a client.

How this was allowed to pass makes one wonder who the Knysna Municipality is truly serving – not us, for sure!

BAC MEETING

Conflict of Interest :
Mr. Mike Maughan-Brown was a member of the Bid Adjudication Committee (BAC). In an email from Mr. Maughan-Brown, addressed to Mr. Mills of Belvidere Manor, Mr. Maughan-Brown undertook to ask the question regarding conflict of interest at the BAC meeting. However, there was no in-depth discussion of the probable conflict of interest at the BAC meeting. The issue of conflict of interest was raised previously by the compliance officer who was part of the Bid Evaluation Committee (BEC). The BEC concluded that there was not sufficient evidence of conflict of interest, and the compliance officer was not present at the later BAC meeting when the issue should have been addressed.

What is clear is that Mr. Maughan-Brown was aware of the fact that Dr. Mulder was a controversial developer who preferred to develop outside the urban edge. He knew that many Knysna residents have strong feelings towards Dr. Mulder and his developments. He was also aware of Dr. Mulder’s active involvement as stakeholder in the previous SDF public participation process.

What remains unclear is why he did not advise the BAC that Dr. Mulder should be disqualified due to conflict of interest. It may be that he was of the view that conflict of interest could be weighed against local knowledge and felt that local knowledge was more important. This approach is incorrect as conflict of interest is not a factor that can be balanced against other requirements, but must lead to disqualification of a tendering party.

The choice of Dr. Mulder would increase the likelihood of prolonged and expensive legal challenge to the process, as evidenced by his controversial history of development in the Knysna area and the obvious conflict of interest posed.

Combined Tender Points:
The team headed by City Think Space had the lowest price and the highest combined score.

In terms of section 8(8) of the Preferential Procurement Policy Framework Act (PPPFA)2, only the tender with the highest number of points scored may be selected. The points referred to are the combined points scored on price and functionality.

Contrary to the provisions of section 8(8), the BAC awarded the tender to the higher priced bid and the lower scoring bid on the combined scores.

In terms of section 9 of the aforementioned act, this may only be done on reasonable and justifiable grounds. As this is an exception, the grounds for deviating must be significant.

In evaluating whether the decision was reasonable and justifiable, it is necessary to consult the Terms of Reference in respect if the ISDF tender. Paragraph 1 deals with the background to the current process, and describes the documents guiding development that have to be reviewed and integrated as part of the ISDF process as:

• The Knysna Spatial Development Framework, which was adopted by Council in 2009.
• The Knysna Integrated Human Settlement Strategy, which was adopted by Council in 2008 .
• The Knysna State of the Environment Report.
• The Draft Local Economic Development Plan.

This is followed by the following information:

“However, each of these documents in itself has certain limitations, and they are not adequately aligned to one another. More importantly, they were all developed at the stage when the Knysna municipal area was in the middle of an unsustainable economic boom, fueled by a property development bubble.

“The economic downturn since 2008 has completely changed the environment in which the municipality operates and has necessitated a fundamental re-evaluation of the strategic plans of the municipality.”

The assessment by the Knysna Municipality shows the need to appoint a neutral and experienced planning team to prepare the ISDF instead of consultants headed by a property developer. As an example of the unplanned impacts associated with a mindset focused too strongly on development, the Thesen Islands project contributed significantly to the property bubble and the depletion of municipal infrastructure to service the rapid growth.

The municipality’s acknowledgement of the boom and bust cycles of the property development industry and subsequent lack of sustainability makes it crucial to ensure that those who formulate the planning for near- and long-term development work in the overall interests of the greater Knysna area and all its residents.

Representative stakeholders attended the BAC meeting, but it was very difficult to hear what was said. There was a brief discussion about the winning bid. Something was said about the advantage of local knowledge.

Ilse van Schalkwyk represented the BEC during the BAC meeting. The decision to award the bid to CMAI, contrary to the provisions of section 8(8) of the PPPFA, relied on her evaluation of the bids. In her opinion, Dr. Mulder’s bid was of a high quality and “agri-villages” were an example of his superior innovation.

Evidence shows that the concept Dr. Mulder has labeled as “agri-villages” is not new, but instead adapts an existing idea to justify developments outside the urban edge.

Regardless, what relevance “agri-villages” have to the preparation of an ISDF for a municipality, is unclear. Critics argue that “agri-villages” are no more than a thinly disguised attempt at circumventing policies to curb urban sprawl and develop outside the urban edge.

Nothing that was said by Ms. Van Schalkwyk, or any other person present at the BAC meeting came close to providing reasonable and justifiable grounds for not awarding the bid to City Think Space.

In addition, Ms. Van Schalkwyk should have recused herself from the BEC and the BAC meeting, as she used to manage the George branch of Urban Econ for a number of years. As Dr. Mulder was a client of the firm she managed, the question arises of whether her evaluation of Dr. Mulder’s abilities was not influenced by the fact that he was a former client. The same prejudice may have existed in favour of Urban Econ due to her association with them.

COMPARISON OF THE TWO LOWEST PRICED AND HIGHEST SCORING BIDS

We have requested access to the two lowest priced and highest scoring bids from the municipality, but have so far been denied access. We have based our objection on information obtained from the websites of the relevant bidding firms.

The Terms of Reference sets out the minimum skills and experience required in paragraph 11.

“Below is a summary of requirements for potential bidders & failure to comply with such requirements will result in disqualification of the bidder’s proposal.”

The requirements for the project leader and town planner are as follows:

• “The project leader must hold a relevant qualification at master’s degree level and proven track record of at least twenty years’ experience in relevant professional work and project management.”
• “Town and Regional Planner with extensive experience in the preparation of Spatial Development Frameworks, Structure Plans or equivalent instruments.”

City Think Space:
A visit to the website of the firm who submitted the lowest priced tender, City Think Space, reveals that it specialises in urban and spatial planning. It has extensive experience in spatial planning and has worked in areas as diverse as Cape Town and Umtata.

The firm clearly satisfies the requirements for the project leader, in that Barbara Southworth has 20 years experience in spatial planning.

Barbara Southworth will head the SDF component and clearly exceeds the requirements from a town and regional planning perspective.

The comments on functionality in the BEC report are positive and it is clear that the team has extensive experience.

The only aspect where City Think Space attracts less favourable comments than the winning bid is in respect of innovation and reference to national and international precedent. No examples are given to justify why the KCHC bid is considered superior.

From the comments of the BEC, it is clear that members of the City Think Space team have far more relevant experience and are significantly better qualified than KCHC to produce the ISDF.

Due to the fact that it specialises in spatial planning there is no risk of a conflict of interest arising between its duties in respect if the ISDF tender and members’ personal or professional interests.

Knysna Creative Heads:
According to the website of CMAI, Dr. Mulder is a qualified landscape architect and urban and environmental planner. He appears to have no spatial planning experience, as required for the ISDF contract and has been specialising in property development for the last 25 years. There is no indication that CMAI has 20 years experience in “relevant professional work”, as experience in property development cannot be considered as relevant to the requirements of the ISDF tender. There is a significant difference in planning a development, of a specific property for a particular client and planning at municipal level for all forms of housing from informal to upmarket and for all sectors of society.

The BEC report indicates that the project manager has “good project management capacity”. No mention is made of relevant professional experience, which is a requirement. As failure to meet this requirement results in disqualification, KCH should have been disqualified on this ground alone.

Dr. Mulder specializes in the development of gated communities, which tend to be isolated, affluent communities. The ISDF has to cater for all Knysna’s residents, rich and poor.

Marike Vreken is the town planner of the winning consortium.

A visit to the website reveals that Ms. Vreken specialises in regular planning applications such as consent use, subdivision and rezoning applications. There is no indication that Ms. Vreken has any experience in drafting SDFs, structure plans or other broad scale spatial planning instruments. No mention is made on the website of any spatial planning work done at municipal level [Ed: Actually, on the website it says that “In 2002 Marike returned to private consulting, working for Urban Dynamics Western Cape where her main responsibilities were the compilation of a municipal Spatial Development Framework (SDF) for the Theewaterskloof and Saldanha Bay Municipalities”].

The BEC report merely states that the SDF component will be headed by Maryke (sic) Vreken.

No mention is made that she meets the requirement of “extensive experience in the preparation of Spatial Development Frameworks, Structure Plans or equivalent instruments.”

As the KCHC does not meet the minimum requirements in respect of the town planner, it should be disqualified.

As most of Ms. Vreken’s work is in Knysna, the potential for conflict of interest is real and on this basis alone she ought to be disqualified. Ms Vreken has many pending town planning applications in Knysna.

Urban Econ is also part of ‘Dr Mulder’s group’. To our knowledge, it has been producing the employment statistics in support of all of Dr. Mulder’s developments since Uitzicht in 2004 and possibly even longer.

It is the same firm that provided the statistics in the 2006 SDF process in support of Dr. Mulder and the Forum for Sustainable Development’s alternative urban edge motivation. To say the least, the firm got it horribly wrong. It predicted that Knysna would run out of land for development by June 2007. As it turned out most of the developments that were approved have not gone ahead to this day, due to the weak economy and lack of infrastructure. The submission focused entirely on the provision of land for upmarket developments and ignored developments that had been approved or were in the process of approval, by developers other than CMAI and Forum members.

In addition to this, the fact that Urban Econ, ignored the property bubble and the lack of infrastructure in Knysna, in arriving at their anticipated growth figures, has to leave a question as to their ability to get it right this time.

RHEENENDAL STRUCTURE PLAN AND THE ISDF

Circumstances suggest that the winning team may have had more time to prepare its bid document for a very complex tender process, due to the overlap between the ISDF process and the Rheenendal Structure Plan discussions involving Dr. Mulder.

The terms of reference for the ISDF process and the Rheenendal Structure Plan are similar. The difference is that the Structure Plan process is conducted on a finer scale. CMAI were appointed during 2012 to prepare the Rheenendal Structure Plan.

The ISDF tender was advertised in 2013. No mention was made of the Rheenendal Structure Plan process in the tender document, even though both would require doing the same work.

The minutes of the compulsory briefing session that took place in February 2013 were requested from the municipality, but we have received no information.

Other parties that attended the compulsory briefing session said the Rheenendal Structure Plan was not mentioned at the compulsory briefing session that had to be attended by all prospective bidders.

CMAI therefore had an advantage in that they did not have to budget for the Rheenendal work already underway that would be part of the ISDF process.

In addition, CMAI would in effect be getting paid twice for the work already underway on the Rheenendal Structure Plan, first by PG Bison and the municipality, and then under the ISDF tender by the municipality. That dynamic would suggest the winning tender should have been less expensive, rather than more expensive than the competing bids.

Such a double payment is deemed improper by the Supply Chain Management Course Manual developed by the SAMDI in cooperation with the National Treasury, which states:

“Conflict of interest. The consultant should not receive any remuneration in connection with the assignment except as provided for in the contract. The consultant and its affiliates should not engage in consulting activities that conflict with the interest of the client under the contract.”

On the basis of this alone, CMAI should be disqualified from the bidding process and the tender awarded to the lowest priced and highest scoring bidder.

Click here to read:

• Environmental Groups Object 1: ISDF Tender Award & Chris Mulder
• Environmental Groups Object 2: CMAI & Chris Mulder’s Plans
• Environmental Groups Object 3: PG Bison/500 Houses for Rheenendal?
• Environmental Groups Object 4: PG Bison Bullies Environmentalists?
• Environmental Groups Object 5: Mike Maughan-Brown
• Environmental Groups Object 6: Conflicts of Interest
• Environmental Groups Object 7: Conclusion