Poor procurement caused digital woes for BBC

4 February 2011
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4 February 2011 | Adam Leach

The BBC has been criticised by the National AuditOffice for a lack of competitive procurement over its handling of an IT contract.

The broadcasting giant’s Digital Media Initiative (DMI) contract was delayed by nearly two years because BBC buyers awarded the deal to Siemens, an existing supplier, without thoroughly assessing their suitability, the report by the NAO said.

The report, conducted on behalf of the BBC Trust, aimed to understand why the DMI, which hoped to make efficiency savings by updating IT systems across the organisation, suffered long delays and consequently resulted in poor value for money.

The report found that the main cause of the delays was Siemens’ inability to deliver the project within the timescale given. While it recognised the advantages of using Siemens, it concluded that a lack of competitive procurement and an outdated assessment of Siemens’ contractor capacity led to the project being delayed.

The report suggested that even with a pre-existing contract with Siemens, the BBC should have undertaken a thorough analysis of who could provide the best value for money.

In response to the report, the BBC Trust has agreed that open competition should be used when appropriate in procurement processes. As a result it has identified a number of criteria, which must be approved by the organisation’s director of procurement. These include ensuring “the procurement strategy is appropriate for the particular tender and fits to the overall outsourcing strategy”, “the procurement governance model and indicative timescales are appropriate and realistic for the services/goods being procured” and “the commercial deal ensures best value on a whole-life basis.”

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