The Czech Government has cancelled a US$1bn order for 199 eight-wheeled armoured personnel carriers (APCs) from Austrian manufacturer Steyr.
In November, the Pandur II failed to meet 24 of the 93 test criteria set out by the military, leading the Czech army to refuse to accept delivery of the vehicles.
Steyr says the vehicles were complete and fully operational, the Prague Daily Monitor reports.
"The first 17 units should have been delivered by the end of November," Czech Defence Minister Vlasta Parkanova says.
"To this day the situation is so that the vehicle has not passed the tests."
The Czech Government used Steyr's failure to deliver vehicles that met the test criteria as legal justification for cancelling the contract.
Steyr's Pandur II APC was selected by the Czech Republic in January 2006 after almost a year of bidding from several companies.
By Tim McAtackney