B.P. Banned From New Federal Contracts In The U.S.

Author: November 28, 2012 9:15 am

British Petroleum has been banned from new federal contracts in the United States following the 2010 disaster in the Gulf of Mexico, which was the worst oil spill in United States history. The Environmental Protection agency has made a statement to the effect that the practice (banning companies) is “standard practice” when criminal actions are a consideration.

Earlier this month, BP plead guilty to charges of criminal misconduct with regard to the oil spill and received a record level of fines totaling 4.5 billion dollars.


Reuters reports,

“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 said in a statement. It did not say how long the suspension could last.

In London, BP had no immediate comment.

BP recognized the risk that it could be banned from U.S. government contracts when it agreed earlier this month to plead guilty to criminal charges over the spill, but it said at the time it had “not been advised of the intention of any federal agency to suspend or debar the company in connection with this plea.”

The ban comes at an extremely inopportune time for the oil giant, as a large portion of their business comes from oil in the Gulf of Mexico and later today (Wednesday 11/28) the drilling rights for 20 million acres of offshore territory are up for auction.

It is unknown how long the ban will be in place, but the longer it lasts, the more damage it does to the company that has admitted to a criminal oversight with regard to protecting workers and the environment. Reuters goes on to report that, “BP’s Finance Director Brian Gilvary told investors on a November 15 conference call that should a blanket ban be put in place, the company may have to rethink its entire U.S. business.”

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