Home Office to pay more than £220m over bungled e-Borders termination

The Home Office has today been ordered to pay US defence contractor Raytheon Systems more than £220m by an arbitration tribunal considering the termination of the e-borders contract.


By Samera Owusu Tutu

18 Aug 2014

Raytheon were contracted to develop the e-Borders programme for the Home Office in 2007, but this was cancelled in 2010 — Raytheon went on to question whether the termination was lawful.

In a letter to the Home Affairs Select Committee’s chair Keith Vaz, Home Secretary Teresa May stated: “The Tribunal’s ruling does not pass any judgement on whether Raytheon had defaulted on the contract nor whether the Home Office was therefore justified in terminating it.

“Instead the Tribunal looks at the way the contract had been managed by the UK Border Agency and finds the processes used in reaching a decision and carrying out the termination were flawed.”

May outlined that the tribunal had awarded Raytheon over £49m in damages; £9.6m for disputed contract change notices; over £126m for the assets acquired while the programme ran from 2007 to 2010, and £38m in interest.

The contract, worth around £750 million in total, was terminated by the government in 2010, at which point it had cost the taxpayer £259.3 million including £195 million in supplier costs.

As well as “looking carefully at the tribunal’s detailed conclusions to see if there are any grounds for challenging the award”, May noted that: “The Treasury will work with the Home Office to make sure these costs are met without any impact on frontline services.”


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