BBC Digital Media Project Delayed For Two Years By Siemens Contract Tear-Up

The BBC’s Digital Media Initiative, an ambitious corporation-wide scheme to record, edit and store AV digitally, has been delayed by 21 months because its supplier wasn’t able to do the job, says a National Audit Office report for the BBC Trust.

The BBC awarded the contract to its current technology infrastructure contractor Siemens in February 2008, but the BBC terminated the contract by mutual consent in July 2009 and took the project in-house.

The BBC had not put the project out to tender and had assessed Siemens’ capability based on a 10-year technology contract it awarded to it back in 2004.

The NAO report says: “The BBC did not have an up-to-date assessment of its contractor’s capacity and capability to deliver the programme.” “The BBC did not have a strong assurance on price, quality and capacity to deliver as a new and specific competition may have provided.”

The contract protected the BBC from financial risk in the event of delays. They reached a financial settlement worth £27.5 million.

NAO says: “As a result, it did not achieve £26 million in benefits it expected from the Programme in the period 2009-10 to 2010-11.” And the BBC had to save money to make up for the delays.

The NAO found that the BBC’s in-house management of the project has been going fine.

The Digital Media Initiative will help tie together staff working in Manchester and London, and will eventually help make available shows for archive and iPlayer distribution.

The whole project is now slated to cost £133.6 million and be complete by 2017.