BP Banned from U.S. Federal Contracts

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In citing the “lack of business integrity,” the government of the United States has banned BP from any new federal contracts. The decision from the government came after BP agreed earlier in November to plead guilty to criminal charges stemming from the 2010 Deepwater Horizon explosion and oil spill that killed 11 workers and polluted hundreds of miles of shoreline along the Gulf of Mexico, according to the New York Times.

BP has agreed to pay $4.5 billion in penalties, which includes criminal fines of $1.26 billion. According to the EPA, the suspension from new contracts for BP will remain active “until the company can provide sufficient evidence to E.P.A. demonstrating that it meets federal business standards.”

  

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The suspension will not change any of the current federal contracts that BP has, but it should cause a major blow to the company, which is one of the largest contractors with the United States government. BP has $1.47 billion in federal business as of 2011, according to General Services Administration data. The majority of the revenue is from the Defense Department, which is supplied over $1 billion in fuel per year.

Along with the penalties and the fines, BP is required to hire a safety monitor to oversee all of its operations in deepwater. BP must also hire an ethics monitor to make sure that company employees do not skip out on federal regulations and laws, hold environmental and safety audits for all of their drilling rigs and make sure all the equipment and workers meet federal training and safety requirements.

It seems as though officials at BP were taken by surprise at the decision for the suspension. Rupert Bundy, the general counsel for BP, said, “We have not been advised of the intention of any agency to suspend or debar us in connection with the settlement.”

Edward J. Markey, a representative from Massachusetts, has long wanted a ban on contracting with BP for its actions following the oil spill and for misleading Congress.

“After pleading guilty to such reckless behavior that killed men and constituted a crime against the environment, suspending BP’s access to contracts with our government is the right thing to do,” Markey said Wednesday. “The wreckage of BP’s recklessness is still sitting at the bottom of the ocean, and this kind of time out is an appropriate element of the suite of criminal, civil and economic punishments that BP should pay for their disaster.”

According to BP, the company employs 23,000 Americans and has invested over $52 billion in the United States over the last five years.