Home Office appeals against $300m Raytheon payment in e-Borders dispute

The Home Office has filed an appeal against a tribunal decision to award $300m to supplier Raytheon over the cancellation of its e-Borders contract.

The US defence contractor won the damages in August 2014 following a four-year legal battle, after the Home Office terminated a contract to supply an immigration computer system for the UK Border Agency in 2010. The government was widely criticised over the loss and the scale of the payment at a time when it was cutting costs across the public sector.

But Raytheon recently revealed in a call with financial analysts the UK government is fighting that decision.

“As we announced on 15 August 2014, we received a decision from the arbitration tribunal in connection with the proceeding between Raytheon Systems Limited (RSL) and the UK Home Office that the UK Border Agency unlawfully terminated RSL. As a result, we were awarded approximately $300m,” said Raytheon chief financial officer David Wajsgras.

“The Home Office has since filed a challenge to the decision. Payment of amounts awarded to Raytheon is now pending resolution of the challenge. As such, we have not included the impact in our third-quarter results or in our full-year guidance. Due to the ongoing legal matters, we cannot comment further at this time,” he added.

The government decided to sack Raytheon four years ago after it had concerns about the running of the £750m e-Borders contract, which had been seriously delayed.

The e-Borders programme was first commissioned in 2003 to improve the use of information to track people moving in and out of the UK’s borders. The aim was to conduct checks on travellers at the point of embarkation to the UK rather than on arrival in the country.

In 2011, the supplier began legal proceedings to sue the UK government for £500m. The arbitration tribunal's ruling concluded in 2014 that RSL delivered substantial capabilities to the UK Home Office under the e-Borders programme.

When the tribunal decision was announced, the Home Office said it was considering its legal options.

“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," minister for immigration and security James Brokenshire said at the time.

The Home Office confirmed it is appealing the tribunal decision, but declined to comment further while legal proceedings are underway.