7 April 2010 | Lindsay Clark
A UK parliamentary report has highlighted some weaknesses in purchasing at the BBC while simultaneously praising a multi-million pound procurement saving.
Criticism in the report, published today by the House of Commons Committee of Public Accounts (PAC), focuses on a 10-year IT contract with German computer firm Siemens, worth £230 million annually.
The report says that IT procurement was taking place outside the contract. “The BBC … lacked sufficient control over the services procured by divisions through the contract, as many areas of the BBC were still buying technology services and commodities from suppliers other than Siemens, undermining the delivery of savings from the contract.”
Although performance against key service targets within the contract was high, most of the early technology projects commissioned under the contract experienced delays, with the result that there were cost overruns and some benefits from the projects were available later than planned, the report said.
However, the PAC did highlight the BBC’s procurement savings of £37 million in the two years to March 2007. To achieve this the corporation established a central procurement function with qualified staff to strengthen its procedures and control spending more effectively.
Responding to the report, a BBC spokesman said: “The PAC’s observation is based on an audit of the contract it conducted in 2006, which used data from 2004-5 and earlier. Since 2005, all spend outside preferred suppliers has required central approval. This allows us to test the market and ensure the BBC obtains best value.”