An arbitration tribunal orders the Home Office to pay Raytheon £224m after sacking them for failing to deliver on a controversial secure borders contract. They said they had lost confidence in Raytheon to deliver after it fell a year behind schedule. The tribunal did not pass judgement on whether Raytheon had failed to meet its contractual obligations – but it criticised UKBA officials for failing to properly brief the home secretary on whether the company had an arguable case to hold on to the deal.
The full ruling has not been made public, but the tribunal said the Home Office should make the following payments to Raytheon:
- £50m in damages for ending the contract
- £126m for assets the company delivered prior to being sacked, such as IT systems
- £10m to settle complaints relating to changes to the original contract
- £38m in interest payments
The arbitration tribunal found that the Home Office had unlawfully terminated [the company] for default in 2010 and therefore had repudiated the e-borders contract. The Tribunal denied all Home Office claims for damages and clawback of previous payments. The Tribunal’s ruling confirms that [Raytheon] delivered substantial capabilities to the UK Home Office under the e-borders program.
Home Secretary Theresa May:
The government stands by the decision to end the e-Borders 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 programme.
“The situation the government inherited was therefore a mess with no attractive options. All other alternatives available to the government would have led to greater costs than the result of this Tribunal ruling.”