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MPs question value of canning Raytheon from e-borders

'Some 80 per cent of £1.1bn project has been written off'

MPs have questioned the value of terminating the Home Office's £500m e-borders contract with its supplier Raytheon, with questions remaining as to whether the £303m spent on its in-house successor programme will deliver.

In March the Home Office finally agreed to hand over £150m to defence company Raytheon over the dispute relating to the cancellation of its £750m contract for the programme. This was on top of the £35m it spent on legal fees during a protracted arbitration process.

In addition to this the Home Office spent more than £340m on the e-Borders programme since 2006, a further £303m on its successor programmes after 2011, and is estimated to spend a further £275m before it is delivered in 2019. That brings the programme's total lifetime costs to £1.1bn.

However, Lin Homer, former chief executive of the UK Border Agency, said the current projected costs of £1.1bn were actually in line with the department's original estimates.

Sir Charles Montgomery, director general of Border Force, claimed that there had been improvements since the programme had been reset 18 months ago.

However, Amayas Morse, comptroller and auditor general of the National Audit Office, noted the programme had continued to receive red and amber red ratings from the Major Projects Authority - meaning successful delivery is extremely unlikely.

Mark Sedwill, permanent secretary at the Home Office, said he accepted the recommendations of the MPA, saying it was still a risky project. "It is very complex are we are delivering at scale and at pace."

MP Caroline Flint said: "At this stage it looks like the ambition and vision is going to be delivered eight years too late. So in my book that represents a waste of taxpayers' money in terms of money put in for outputs."

Public Accounts Committee chair Meg Hillier said: "The cancellation of the programme has arguably led to as many problems as it was purported to solve."

Homer said: "I don’t think this was a programme that failed to deliver; I think this was a contract that failed."

However, Flint noted that given the costs of writing off the contract, the legal fees and the subsequent costs paid to Raytheon, restructuring the programme rather than terminating it may have been more in the taxpayer's interest.

Homer said the reason the Raytheon contract was terminated rather reset was due to the costs involved of doing so, a move which risked taking the lifetime costs beyond the Treasury envelope of £1.1bn.

David Mowat MP commented: "We have ended up with massive changes to shore up legacy systems, which just about work. Nothing close to what was envisaged."

He said: "The NAO is of the view that 80 per cent of what has been done in the last 10 years is of no value."

Homer said she did not accept that figure, but agreed that the significant amount paid to Raytheon did not represent value for money.

Richard Daniel, chief executive officer at Raytheon, said the company "certainly didn't want the contract terminated." He added: "A reset seemed like a logical way of moving the programme forward."

Daniel said: "The relationship is crucial on big complex programmes.. From our perspective, maybe we should have spent more time understanding HO and how they operated. Early on there was a difference in expectations in how contract would have run. ®

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