EU Border System: IBM, Atos Face €212m Lawsuit in 2026

The European Union’s IT agency has initiated legal proceedings against IBM, Atos and Leonardo over delays in developing the bloc’s digital Entry/Exit System (EES), a technology platform designed to strengthen border management across the Schengen area.

The dispute concerns the delivery of the central IT infrastructure for the system, which electronically records the entry and exit of non-EU nationals at Europe’s external borders. The Financial Times reported that the proceedings were filed by the European Union Agency for the Operational Management of Large-Scale IT Systems (eu-LISA) in Estonia.

The three companies were part of a consortium awarded a six-year contract in 2019 to implement and maintain the central EES infrastructure.

The legal action follows repeated disagreements over project deadlines and financial penalties during the system’s development. According to the Financial Times, the contract value increased from €142 million to €212 million as the project encountered delays.

EU-LISA has clarified that the legal proceedings concern the development and delivery phase of the project and do not affect the current functioning of the Entry/Exit System.

IBM, Atos and Leonardo face legal action over EES contract

The original contract was awarded in 2019 to a consortium involving IBM Belgium, Atos Belgium and Italian defence and technology group Leonardo.

The agreement covered the implementation and maintenance of the central Entry/Exit System, which forms part of the European Union’s wider digital border management infrastructure.

However, the project encountered repeated delays, leading to disagreements between the contractors and eu-LISA over delivery obligations and revised implementation schedules.

In an October 2021 letter reviewed by the Financial Times, Atos Belgium and IBM Belgium challenged both the basis and calculation of a financial penalty imposed by the agency. The companies argued that external circumstances, including the COVID-19 pandemic, contributed to the delays.

In February 2022, the three contractors also contested new deadlines proposed by eu-LISA.

The disagreement subsequently developed into a legal dispute, with eu-LISA pursuing contractual and legal remedies against the companies.

EU Entry/Exit System covers 29 Schengen countries

The Entry/Exit System is a major European digital infrastructure programme designed to modernise the management of the bloc’s external borders.

It electronically records the entry and exit of non-EU nationals travelling to participating European countries for short stays. The system collects information from travel documents, along with biometric data such as facial images and fingerprints.

Its objectives include identifying travellers who exceed permitted visa-free or visa-related stays, preventing identity fraud and supporting border security.

The system applies across 29 European countries participating in the Schengen framework.

The EES began its progressive rollout on 12 October 2025 and became fully operational on 10 April 2026, replacing manual passport stamping with electronic records at participating external border crossings.

The programme requires centralised IT infrastructure to support the collection, processing and exchange of border-crossing information across multiple national authorities.

This makes system availability, integration and coordination important elements of its overall operation.

Contract delays and rising project costs raise procurement questions

The reported increase in the EES contract value from €142 million to €212 million highlights the financial implications of delays in large-scale public-sector technology programmes.

The project involved multiple contractors with responsibilities spanning implementation and maintenance of a central system used by participating European countries.

Such programmes require coordination between technology providers, government agencies, national border authorities and other public-sector stakeholders.

Delays can affect contractual milestones, implementation schedules and the financial obligations of suppliers. Disagreements over responsibility for delays can also develop into disputes over penalties and contractual performance.

The EES case illustrates the importance of clearly defined delivery milestones, accountability frameworks and risk allocation in complex government IT procurement.

For technology companies participating in public-sector infrastructure projects, these factors can have implications extending beyond the immediate contract, particularly where projects involve multiple jurisdictions and critical national or regional systems.

EU-LISA says legal proceedings will not affect system operations

Despite the contractual dispute, eu-LISA has said the legal proceedings will not affect the functioning of the Entry/Exit System.

The agency told the Financial Times that the case relates to delays in delivering the system during its development and is separate from its current operation.

The distinction is important because the EES is already operational across the participating countries.

The European Commission and eu-LISA have continued to advance the wider digitalisation of border management, with the EES forming part of a broader network of European information systems supporting security and migration management.

The legal proceedings therefore concern responsibility for the project’s earlier delivery difficulties rather than an announced suspension of the system.

Government technology contracts face greater delivery scrutiny

The dispute involving IBM, Atos and Leonardo highlights the challenges associated with delivering large-scale government technology programmes involving multiple suppliers and public-sector stakeholders.

For technology contractors, such projects can provide significant opportunities to participate in long-term digital infrastructure development. However, they also involve complex technical requirements, regulatory obligations, delivery deadlines and contractual risks.

The EES case also demonstrates how disagreements over project execution can continue after a system has entered operational service.

The next developments will include the progress of the legal proceedings and any further information disclosed by eu-LISA or the companies involved concerning the disputed contractual obligations.

For the government IT and systems integration sector, the case provides a significant example of the importance of project governance, supplier accountability and delivery management in critical public infrastructure programmes.

Follow B2B Market Signal on social media for the latest business news, industry developments, market intelligence and analysis. Connect with us on LinkedIn and follow us on Instagram at @b2bmarketsignal for regular updates