BP suspended from winning US government contracts

29 November 2012

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29 November 2012 | Adam Leach

BP has been suspended from winning any contracts from the US federal government until the company has proven it meets “business standards”.

Yesterday, the US Environmental Protection Agency announced that due to the company’s conduct leading up to the Deepwater Horizon oil spill – which killed 11 people and caused huge environmental damage in 2010 – the firm was not deemed fit to carry out government work. The decision follows BP pleading guilty to 11 counts of misconduct or neglect of ship officers, one count of misleading congress, and one misdemeanor count of a violation of the Migratory Bird Treaty Act.

In a statement announcing the suspension, the EPA said: “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.”

These standards include governance and evidence that the firm has changed the way it operates and policies so the misconduct charges admitted to would not re-occur.

Responding to the announcement, BP explained it has been in regular dialogue with the EPA, already provided a ‘present responsibility statement’ – and more than 100 pages in response to EPA questions on that document – which outlines responsibilities. It also said it expected the suspension to be resolved soon.

“The EPA has informed BP 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,” the company said.

Existing contracts between BP and the US government are unaffected by the action.

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