KMPG’s £2.1m for BDUK broadband procurement work
The department of culture media and sport has paid the accountancy and consulting firm KPMG £2.15m for designing and running a broadband procurement framework that has resulted in just two suppliers, BT and Fujitsu, competing for some £830m in state funding.
In addition, the European Commission’s DG Competition, which must approve funds issued under the programme designed by KMPG, has still to approve it, more than six months after it was finalised.
Pinsent Mason, the law firm that signed it off, got £711,000.
The details, which are published as part of the DCMS transparency initiative, show that KMPG received £1,179,629.94 for ‘Temporary staff: interim managers’ between 12 July and 7 December last year, and a further £968,334.78 for ‘management consultants’ between 12 January and 27 March this year.
The person leading the project, whose identity is not disclosed in the DCMS documents, was on the senior civil servants’ pay scale of SCS1, which starts at £58,200, and goes up to £117.800.
KPMG was brought in via a pre-existing Treasury procurement framework. Civil service insiders were reportedly shocked by the temporary staff’s lack of experience in procuring telecommunications products and services, although they had experience in other large public sector procurements.
The framework they produced was highly controversial because it set eligibility thresholds too high for all but the largest suppliers. This was despite government desires at the time for at least some work to go to small and medium enterprises, and for communities to play an active role in the procurements. In the end nine firms were invited, and seven pulled out, leaving only BT and Fujitsu.
The on-going delay in getting the framework approved by Brussels has prompted several county councils to go their own way.
BDUK money may start flowing now that DCMS has appointed BT and Fujitsu, but leading telecoms lawyer Mike Conradi of DLA Piper, warns that any money actually disbursed may invite legal action from existing community network operators under state aid rules.