Taxpayer to cough up £224m after e-borders contract termination ruled unlawful
The UK taxpayer is facing a £224m bill after a tribunal in Massachusetts ruled that the government had unlawfully terminated a contract with a US defence firm.
Raytheon, the US company is question, is to receive hefty payouts regarding a contract to provide the much-maligned e-borders programme, which was commissioned by the Labour government and cancelled by the Conservatives.
In an expensive twist, the arbitration tribunal has decided that the process by which the government reached its decision to terminate the contract was defective.
The bill is broken down into £49.98m in damages, £126m for assets acquired during the contract period (2007 – 2010), £9.6m for disputed contract change notices and £38m in interest.
The programme was begun by Labour in 2003, and the Conservatives decided to scrap it after a series of delays.
The Conservatives are standing behind their decision and the minister for immigration and security, James Brokenshire, 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.
Raytheon, for its part, claimed the decision showed it had provided "substantial capabilities" to the UK government.
"Raytheon remains committed to partnering with the UK Government on key defence, national security and commercial pursuits," it said in a statement to the New York stock exchange.
The UK government has indicated it will examine the decision "to see if there are any grounds for challenging the award."