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UK Required To Pay Raytheon Over Border Security Program Termination

Aug. 18, 2014 - 03:45AM   |  
Trade visitors stand in front of a Raytheon booth during the Singapore Air Show on Feb. 11. Raytheon will receive a substantial payout from the British government over a canceled border protection program. (Roslan Rahman / Getty Images)
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LONDON — Britain will make a hefty payout to a US defense company after a tribunal found London had unlawfully terminated a contract to provide the country’s electronic borders program.

The verdict was revealed in a letter from Home Secretary Theresa May.

The Home Office Interior Ministry must pay £224 million (US $373.85 million) to Raytheon Systems.

Of that sum, £126 million is for assets such as computer systems the company delivered prior to the contract being terminated, while £50 million is in damages.

The eBorders program was devised in 2003 to count everyone in and out of Britain by collecting advance passenger information on all scheduled inbound and outbound journeys.

“We are looking carefully at the tribunal’s detailed conclusions to see if there are any grounds for challenging the award,” May said in a letter to lawmaker Keith Vaz, who chairs the parliamentary body scrutinizing her ministry’s activities.

“The government stands by the decision to end the eBorders contract with Raytheon. This decision was, and remains, the most appropriate action to address the well-documented issues with the delivery and management of the program.”

May said major milestones had been missed by Raytheon in 2010 and parts of the program were running at least a year behind schedule.

The situation was “a mess with no attractive options,” she said.

“All other alternatives available to the government would have led to greater costs than the result of this tribunal ruling.”

A new version of the electronic borders system is still being developed.

In a statement, Raytheon said the tribunal ruling confirmed that it delivered “substantial capabilities” to the Home Office under the eBorders program.

“Raytheon remains committed to partnering with the UK government on key defense, national security and commercial pursuits,” it added.

Vaz called the situation a “catastrophic result.”

“It is now clear that the UKBA [the now-defunct United Kingdom Border Agency] didn’t know what they wanted from the eBorders program,” he said.

Vaz said his committee wants to hear from Raytheon to “understand just what went wrong and ensure that procurement of this kind never happens again.”

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