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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concluded that a lack of competitive procurement and an outdated assessment of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.”