Skip to Content

Court orders U.K. to pay Raytheon $374 million over borders fiasco

Passport control at Gatwick AirportPassport control at Gatwick Airport

At last the blame game for the endless lines at immigration at London’s Heathrow airport is over. It’s now officially the fault of the U.K. government and its Border Agency, not defense and security systems company Raytheon Co. (RTN).

For the last four years, the British government has been trying to blame Raytheon for failing to deliver on a $1.25 billion contract to provide an electronic border control system aimed at speeding up immigration lines while ensuring that terrorists don’t enter the country.

But an arbitration court ruled Monday that the government had acted unlawfully when it cancelled the eBorders contract in 2010, and ordered it to pay Raytheon $374 million in damages.

The ruling means that the reputational damage to Raytheon is far less than it could have been. The company is increasingly relying on electronic and cyber-security work to offset long-term pressure on its traditional business of supplying weapons systems, such as Patriot and Tomahawk missiles, to the U.S. government.

The contract was one of a string of embarrassing failures in high-profile, big-budget software procurements by the previous Labour government. As such, the incoming coalition government of Conservatives and Liberal Democrats felt little loyalty to it when it took office in 2010 and, under pressure to cut a ballooning budget deficit, felt that cancelling the contract would be the least damaging option for taxpayers.

The government was criticized at the time for acting hastily, and on the advice of a Border Agency management that appeared keen to deflect blame for the program’s failings.

However, the government stood by the decision Monday.

“The situation we inherited in 2010 was a mess,” Immigration and Security Minister James Brokenshire said. “Key milestones had been missed and parts of the programme were running at least a year late.”

By the time the contract was canceled, he added, it had already cost taxpayers over 259 million pounds ($432 million).

Meanwhile, back at Heathrow…well, you know the rest.