02 March 2006 | Rebecca Ellinor
The BBC has been censured for disregarding best practice on the procurement of designers and contractors for its new White City facilities.
A report from the House of Commons public accounts committee found that although the work was completed on time, the BBC should "better integrate design and construction… to reduce the risk of design changes after contracts have been let", which "inevitably heightens the risk of cost increases".
The BBC signed a 30-year deal with Land Securities Trillium (LST) to finance, construct and operate White City 2 - comprising three new buildings - and provide property services at 48 other BBC locations.
The BBC said it separated design and construction to avoid delays. But it made 300 changes after signing the deal, a process the report described as time-consuming and overly-complicated.
Office of Government Commerce (OGC) good practice guidance recommends bringing together designers, builders and specialist suppliers in one team.
In the case of White City 2, after the BBC signed with LST in September 2001 the firm took on the design team the BBC had commissioned separately a year earlier.
The report found that several aspects of the project constituted risks to value for money. The potential return to the private sector was "excessive" and the BBC could not be sure of sharing in any gains from refinancing.
LST's price was £210 million, £31 million higher than the other shortlisted bidder. As BBC governors were later asked to approve a further £60 million to fit out the properties, the report recommended "whole life costs of projects should be assessed before projects proceed".
Less than five years into the deal the BBC bought out LST and it is now seeking a new facilities management supplier. The three shortlisted companies are Carillion Services, Haden Building Management and Johnson Controls.
The BBC told SM
it aimed to learn from the recommendations but most of the contract variations were just "design confirmations" which were anticipated.