EPA temporarily suspends BP from new US government contracts

The US Environmental Protection Agency temporarily suspended BP Exploration & Production Inc., BP PLC, and BP affiliates from new contracts with the federal government, citing what EPA called BP’s lack of business integrity regarding the Macondo deepwater well blowout and resulting oil spill.

An explosion and fire on the Deepwater Horizon semisubmersible in April 2010 killed 11 people. Transocean Ltd. owned the Deepwater Horizon, which later sank.

Regarding Macondo, EPA was designated the lead agency for suspension and debarment actions. Federal agencies take these actions to ensure the integrity of federal programs, and suspensions are a standard practice when a responsibility question is raised by action in a criminal case.

On Nov. 15, BP agreed to plead guilty to 11 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 (OGJ, Nov. 26, 2012, p. 25).

EPA said the BP suspension temporarily will 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.

EPA was designated as the lead agency for suspension and debarment actions. 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.

On Nov. 28, BP said it has been in regular dialogue with the EPA and already provided a present responsibility statement of more than 100 pages and supplemental answers to the EPA's questions.

"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," BP said. "The EPA notified BP that such a draft agreement would be available soon."

A civil trial is scheduled before a federal judge in New Orleans in February 2013. US Atty. Gen. Eric Holder said Nov. 15 that negotiations continue with BP on the civil claims and potential fines.

BP has said settlement of the criminal case is consistent with its stance that it is not grossly negligent. The company also has said it is prepared to defend itself against such claims in civil proceedings.

Under provisions of the Clean Water Act, BP still could face penalties and fines as high as $20 billion if found to have been grossly negligent, which involves “conscious and voluntary disregard.”

Potential fines for the oil spill could range from $1,100/bbl to as high as $4,300/bbl.

Contact Paula Dittrick at paulad@ogjonline.com.

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