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BP Banned From Federal Contracts

The EPA has temporarily suspended BP and its named affiliated companies from new contracts with the federal government.

The agency is taking this action due to what it calls BP’s “lack of business integrity” as demonstrated by the Deepwater Horizon blowout, explosion, oil spill, and response. According to the agency, suspensions are standard practice when criminal cases raise questions about a company’s lack of responsibility.

On November 15, BP agreed to pay $4.5 billion and pleaded guilty to eleven counts of misconduct or neglect of ship officers, one count of obstruction of Congress, one misdemeanor count of a violation of the Clean Water Act, and one misdemeanor count of a violation of the Migratory Bird Treaty Act, all arising from its conduct leading up to or its response after the 2010 Deepwater Horizon disaster. The explosion killed 11 people and caused what the EPA describes as the largest environmental disaster in US history.

According to CNN, BP currently holds hundreds of leases to drill for oil or gas in the US, as well as billions of dollars worth of agreements to supply the US government with fuel. These agreements will not be affected by the announcement.

However, the ban is expected to hurt BP and leave “an extremely negative mark” on the company, according to Charles Tiefer, a law professor at the University of Baltimore who specializes in government contracting, quoted by Bloomberg Businessweek.

The EPA did not disclose how long the ban would last but Businessweek says that such suspensions usually last 18 months or less, or as long as it takes to conclude legal proceedings.

Last month, the US Coast Guard confirmed that oil from a sheen spotted on the Gulf of Mexico near the site of the sunken Deepwater Horizon offshore rig matches samples from BP’s Macondo well. The Coast Guard notified BP and Transocean that either party or both may be held accountable for any cost associated with operations related to the sheen. The sheen is thought to be from the wreckage, as the well was capped with cement in September 2010.

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