BP Banned From US Government Contracts


The Environmental Protection Agency (EPA) in the US has temporarily suspended BP from new US government contracts.

The ban stemmed from the British oil giant’s conduct regarding the blowout at its Deepwater Horizon rig which killed 11 workers in April 2010.

It comes after the company agreed to plead guilty to charges over its part in the largest environmental disaster in US history, and to admit lying to Congress about the amount of oil that was spilling from the Macondo well.

“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 agency said.

“Suspensions are a standard practice when a responsibility question is raised by action in a criminal case.”

The move prevents BP from getting new government contracts or grants “until the company can provide sufficient evidence to EPA demonstrating that it meets Federal business standards,” EPA added.

Existing agreements between the company and the government are not affected.

Professor Joe Lampel from Cass Business School said the decision would be a blow to BP.

“The ban comes at the end of a complex process during which BP has settled most of the claims against it,” he said.

“Therefore this suspension should be seen as an additional penalty rather than a pressure tactic that the US government often uses when it wants to force firms to concede liability.”

He said the ban would most probably be lifted after a sufficient grace period has passed.

“BP has been working hard to repair its reputation and I suspect that it will do whatever it takes to satisfy regulators that it now meets all the necessary standards,” he added.

At the end of last month, BP revealed that the disaster had cost it more than $38bn (£23.7bn) to date.