Home Office's £224 million bill for cancelling border contract set aside

Will Green is news editor of Supply Management
18 February 2015

A compensation payment of £224 million that the UK government was ordered to pay after cancelling a border security contract has been set aside following a High Court hearing.

The e-Borders contract, between the Home Office and technology firm Raytheon Systems, was signed under the previous Labour administration in 2007 but cancelled by the government in 2010 on the grounds that targets were being missed.

Mr Justice Akenhead, following a hearing at the Technology and Construction Court in London, ruled the payment should be “set aside for resolution by a new arbitral tribunal”. His judgement overturned the decision of a tribunal last year, which he said did not consider all that was presented to it.

The e-Borders programme involved tracking passengers entering and leaving the UK, and checking their details against police, security and immigration watch lists.

In a letter to MPs last year home secretary Theresa May said: “The contract, signed in 2007 and 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.

“Key milestones had been missed and parts of the programme were running at least a year late. Raytheon Systems Ltd had been in breach of contract since 2009. Prolonged negotiations had taken place under the previous government which had led nowhere.”

Raytheon did not respond to SM’s request for comment.

A Home Office spokesman said: "We are pleased with the judgement handed down by the court. However, the legal process is ongoing and it would be inappropriate for us to comment further at this time.”

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