BBC Procurement: Nineteenth Report of Session 2007-08, Report, Together with Formal Minutes, Oral and Written Evidence

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The BBC spends over 500 million each year on goods and services ranging from broadcast specific products to more generic items. It has a centralised procurement function and manages spending along category, enabling it to control its spending more effectively than in the past. The BBC was aiming to deliver 75 million savings from procurement in the three years to April 2008, and is on course to achieve those. But savings have varied widely between categories and it has achieved least from those where it has spent most, Production Resources and Technology and Broadcast Equipment. In recent years the BBC has used fewer suppliers and has established central contracts for a greater proportion of its goods and services, but in 2006-07 it still used over 17,000 suppliers. That year the BBC spent more than 200 million through local deals and made nearly 38,000 individual purchases from suppliers with which it had no central contract. During 2006-07 the BBC introduced an upgraded electronic purchasing system, but 2,000 of the 4,500 licences it had paid for to give staff access to the system were not being used. The average cost of processing a purchase using the system is 6, although the cost is more than six times greater when buyers do not use a central contract. The BBC uses technology across all of its procurement activities, including letting tenders through eAuctions. The BBC has made estimated annual savings of 3 million (14 per cent) from the 19 eAuctions it ran between April 2005 and March 2007, but since then had let only five more contracts in this way.

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