Corporate Crime

BP Suspended From Contracts With The U.S.

Following BP's admission of guilt and their agreement with the Department of Justice to pay a significant settlement, the company has been suspended from new contracts with the U.S. government.

(Reuters) - The British oil company BP Plc and its affiliates have been suspended from new contracts with the U.S. government due to the criminal charges in the Deepwater Horizon oil spill in 2010, the U.S. Environmental Protection Agency said on Wednesday.

Earlier this month, BP plead guilty to criminal misconduct in the Gulf of Mexico disaster, the worst oil spill in U.S. history, and agreed to pay record penalties of $4.5 billion.

The suspension does not effect existing contracts, only new contracts. New contracts cannot be made until BP clearly demonstrates that they can comply with all government standards.

More from Bloomberg

The suspension “sends the signal to BP, and incidentally to the whole oil and gas drilling industry, that the United States will take strong steps to protect itself against a recurrence of that tragedy,” Tiefer said.

Tiefer, who served on the U.S. Commission on Wartime Contracting, said the EPA’s action will also “take a toll” on BP.

Even after the suspension expires, BP may have “an extremely negative mark” with the U.S. government, which includes a contractor’s past performance as part of its evaluations for awards, Tiefer said.

This isn't the last BP will hear of it either. The Department of Justice is also pursuing a civil suit against BP, and another civil suit, filed by businesses and residents along the gulf coast, is currently making its way through the courts.

Without bluster but with all due diligence, the Obama administration has gone through the appropriate channels to punish BP for its negligence. And while this may not be the perp-walk some people were hoping for, it is the more realistic scenario and it comes in stark contrast to the inattentiveness of the Bush administration.

Republicans in Congress would like to apologize for this shakedown.

  • Scopedog

    Wow…this is very good news. And here I was thinking that I was going to have to endure more BS about how the President is joined at the hip with the energy companies and how he’s weak when it comes to dealing with polluters.

  • D_C_Wilson

    New contracts cannot be made until BP clearly demonstrates that they can comply with all government standards.

    Or when the next republican administration apologizes to BP.

  • trgahan

    If Deepwater Horizon would happened under Bush:

    A) the Justice Department’s budget would have been slashed enough to prevent them from pursuing the case against BP.

    B) the civil suit would likely be a the right wing media talking point meant to shame and paint the plantiffs as pursuing “jackpot justice.”

    C) BP would have walked away with another two dozen deep water Gulf oil leases as “re-imbursement” for having to comply with regulatory procedures.

  • bacalove