BBC criticised for poor procurement

The BBC, the largest broadcasting organisation in the world, has been criticised by the UK National Audit Office (NAO) for a lack of competitive procurement over its handling of an IT contract.

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

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 The report concluded that the lack of competitive procurement and an outdated assessment of Siemens’ contractor capacity led to the project being delayed.

Despite the report recognising the advantages of Siemens, it said that the BBC still should have undertaken a thorough analysis of who could provide the best value for money.

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.

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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