Raytheon wants £500 million compensation from UK government

Raytheon is looking to relieve the cash-strapped British government of £500m, according to a letter written by the company's UK chief executive to the Home Affairs Select Committee.

US defence company Raytheon wants compensation for being fired in July last year from the UK Borders Agency's (UKBA's) £742m e-Borders project to track people electronically as they come and go from the UK.

"We maintain that the purported termination was unlawful and that Raytheon is entitled to recover substantial damages for wrongful termination," said Robert Delorge, chief executive of Raytheon UK in a letter to Committee chairman Keith Vaz.  

"We have made counterclaims in the arbitration in excess of £500 million in respect of these matters," Delorge told the Committee, which is looking into the e-Borders programme.

The US company was dropped from e-Borders after the project fell a year behind schedule and the UKBA said it had "no confidence in the company". Now Raytheon is in talks with the Home Office over the company's claims of a breach of contract by the department.

e-Borders, which is designed to play a key role in the government's crackdown on illegal immigration, is a four phase programme. Phase one, which involved collecting data from carriers such as airlines, was completed in 2009. A larger, second phase to build on the initial work was only partially complete when Raytheon's contract was terminated.

ìRelease Project 2 was not fully completed by the time of termination, because of various breaches of contract by the UKBA which are the subject of the arbitration and because the UKBA was never able to settle upon the scope of its requirements for that phase of the Programme.

Raytheon says that it had only "limited visibility of any targets or policy objectives" that the government may have had for e-Borders, but says that it delivered a system enabling the government to meet its aim of processing 100 million airlines passengers annually.

Doubts were recently raised about the future of e-Borders after Cabinet Minister Francis Maude wrongly cited e-Borders as an example of a project that had been cancelled to make savings.