The Home Office has sacked lead contractor Raytheon from the £1.2bn e-Borders programme, saying it has "no confidence" in the firm.
The immigration minister Damian Green said today the programme was running at least 12 months late and that Raytheon had been in breach of contract since July last year.
Raytheon was the lead contractor of the "Trusted Borders" consortium which won a £650m deal to build the e-Borders system in 2007. A further £92m was added to the contract in 2008, and so far taxpayers have paid out £188m.
"The government is determined to get value for money from its major contracts and requires the highest standard of performance from its suppliers," said Green.
"We will now be seeking alternative providers to continue to deliver this project as a matter of urgency."
The other members of Trusted Borders, including Serco, Detica, Accenture and Qinetiq will also effectively be sacked*, as their contracts were dependent on Raytheon. The lead contractor was responsible for systems integration, travel services and overall project management.
The government said it remains in favour of the aims of e-Borders, which was conceived under then-Home Secretary David Blunkett following a scandal over immigration figures. It was planned to collect and centrally store details of every journey into and out of the UK by 2014, with passport details checked against an array of domestic and international watch lists.
Today's announcement casts statements about e-Borders by the last government in an unflattering light.
In January, Green's Labour predecessor Phil Woolas told the Commons that e-Borders was on target track 95 per cent of journeys by the end of this year, as required by the contract schedule. Just before Parliament was dissolved in April, however, MPs on the Home Affairs Select Committee said they did not believe the government's assurances.
A today Home Office spokesman said Woolas' claims were a matter for the previous government.
Raytheon representatives could not be immediately reached for comment. ®
*This story originally said Trusted Borders members other than Raytheon would keep their contracts, based on incorrect information provided by the Home Office.