UK government must pay Raytheon £220m in compensation after e-Borders cancellation

By John Leonard
19 Aug 2014 View Comments
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The UK government has been ordered to pay out a total of more than £220m after a tribunal found against it in a dispute with US supplier Raytheon over the cancellation of the e-Borders project in 2010.

The tribunal found that the process by which the contract had been terminated by the Home Office was flawed and ordered the Home Office to pay just under £50m in damages to Raytheon. In addition, the government must also pay £9.6m for disputed contract-change notices, £126m for assets acquired through the contract and £38m in interest – a total bill of almost £224m.

Further reading

The Trusted Borders consortium led by Raytheon was granted the contract for the e-Borders scheme in 2007 by the UK Border Agency (since disbanded), in preference to a rival bid by a group headed by BT.

Under the e-Borders scheme, immigration and government security systems were to be linked with transportation hubs to check and log every passenger travelling in and out of the country, in a plan that included biometric passports and visas, and the abandoned national identity card scheme.

However, the project ran into problems early on and in 2008 a group of peers insisted that the programme must be speeded up. By 2010 the programme was apparently one year behind schedule and e-Borders was cancelled by incoming immigration minister Damian Green, who effectively sacked Raytheon at the same time. Subsequent to the cancellation, Raytheon sued the government for £500m, claiming that it had met its contractual obligations for the programme.

It was hoped that an alternative supplier could be found, but in March the head of the UK Border Force, Sir Charles Montgomery, told MPs that the scheme had been abandoned in its current form.

The government has defended its action in terminating the contract, saying that to leave it in place would have cost even more, with little guarantee of its eventual success.

James Brokenshire, minister for immigration and security, said: "The government stands by the decision to end the e-Borders contract with Raytheon. The situation we inherited in 2010 was a mess. Key milestones had been missed and parts of the programme were running at least a year late. The contract, signed in 2007, had already cost the taxpayer £259.3m and yet wasn't delivering."

However, David Hanson, the shadow Home Office minister, called for the government to provide more information about the failure of the programme, the way it was terminated and plans for the its replacement.

"[Home secretary] Theresa May must now make clear what legal advice she took before taking a decision that has cost the taxpayer £224m. She must also set out how much the taxpayer has had to pay out to foot the bill for the Home Office's legal fees.

"The home secretary needs to make clear when the e-Borders programme will be back on track. As a result of this stalled process, we are still far away from counting people in and out of the UK," Hanson said.

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