|
U.S. suspends BP federal contracting EPA cites company’s criminal prosecution for Deepwater Horizon as basis for action; BP stresses suspension is temporary, limited Wesley Loy For Petroleum News
In yet more fallout from the Deepwater Horizon disaster, London-based BP has lost its ability to sign new contracts with the U.S. government.
Such contracts can range from oil and gas leases to fuel sales to the U.S. military, a significant business for BP.
The U.S. Environmental Protection Agency announced the action against BP on Nov. 28.
“EPA is taking this action due to BP’s lack of business integrity as demonstrated by the company’s conduct with regard to the Deepwater Horizon blowout, explosion, oil spill, and response,” the EPA said.
Under a plea agreement announced Nov. 15, BP has agreed to plead guilty to 11 counts of felony manslaughter and other charges in connection with the fiery blowout on April 20, 2010, aboard the drilling rig Deepwater Horizon offshore Louisiana. BP has agreed to pay $4 billion in fines and other penalties.
Also, three current or former BP employees face criminal charges in connection with the disaster.
The federal government is now pursuing potentially huge civil claims against BP.
Suspension is ‘standard practice’ “For the Deepwater Horizon investigation, EPA was designated as the lead agency for suspension and debarment actions,” the EPA said. “Federal executive branch agencies take these actions to ensure the integrity of federal programs by conducting business only with responsible individuals or companies. Suspensions are a standard practice when a responsibility question is raised by action in a criminal case.”
The EPA added: “The BP suspension will temporarily prevent the company and the named affiliates from getting new federal government contracts, grants or other covered transactions until the company can provide sufficient evidence to EPA demonstrating that it meets federal business standards. The suspension does not affect existing agreements BP may have with the government.”
The EPA provided Petroleum News with a copy of the “notice of suspensions” given to BP. Among the numerous subsidiaries and affiliates listed in the notice is BP Exploration (Alaska) Inc.
The eight-page notice says BP’s “seriously improper conduct provides the basis for its suspension” from federal contracting.
BP and its subsidiaries have been published in the System for Award Management, or SAM, as “ineligible” to receive any federal contract, the notice says. The General Services Administration maintains the SAM website.
BP companies also are “precluded from receiving certain federal assistance, loans and benefits,” the notice says.
The notice adds: “It is important to note that suspension is not imposed for the purpose of punishment. It is a discretionary measure used to insure that the Government conducts public business with responsible persons.”
Existing contracts remain valid BP, in a Nov. 28 press release, said the EPA action “relates only to future potential contracts with the U.S. government. The temporary suspension does not affect any existing contracts the company has with the U.S. government, including those relating to current and ongoing drilling and production operations in the Gulf of Mexico.”
BP continued:
“The EPA’s action is pursuant to administrative procedures providing for discretionary suspension until a company can demonstrate ‘present responsibility’ to conduct business with the U.S. government. BP has been in regular dialogue with the EPA and has already provided both a present responsibility statement of more than 100 pages and supplemental answers to the EPA’s questions based on that submission.
“Moreover, in support of BP’s efforts to establish present responsibility, the U.S. Department of Justice agreed, in the plea agreement, that it will advise any appropriate suspension or debarment authority that in the Department’s view, BP has accepted criminal responsibility for its conduct relating to the Deepwater Horizon blowout, explosion, oil spill and response. The EPA has informed BP that it is preparing a proposed administrative agreement that, if agreed upon, would effectively resolve and lift this temporary suspension. The EPA notified BP that such a draft agreement would be available soon.”
BP said it has made “significant enhancements” since the Deepwater Horizon accident. It has been implementing recommendations from an internal investigation, and has made key leadership changes and reorganized its upstream business. The company also has created a centralized safety and operational risk organization.
“In the two and a half years since the Deepwater Horizon accident, the U.S. government has granted BP more than 50 new leases in the Gulf of Mexico, where the company has been drilling safely since the government moratorium was lifted,” BP said. “BP is the largest investor and deepwater leaseholder in the Gulf of Mexico with more than 700 gross blocks and seven rigs currently conducting drilling operations.”
The company added that it has invested more in the United States than any other oil and gas company over the past five years. And BP noted it has spent billions to clean up the Gulf spill and to pay claims.
| 