Environmental Protection

BP Sues US for Ban on New Contracts

BP seeks injunction that would lift an order by the EPA suspending BP from future contracts days after BP tried to block claim payments to Gulf businesses.

On August 12, BP sued the U.S. government over a decision to bar the oil giant from getting new federal contracts to supply fuel and other services after the company pleaded guilty to manslaughter and other criminal charges related to the 2010 Gulf of Mexico oil spill.

BP is seeking an injunction that would lift an order by the Environmental Protection Agency that suspends the company from such contracts.

The Houston Chronicle reported that the suspension by the EPA was first issued in November 2012 and it only affects new federal contracts and not existing ones.

The company was ineligible for new contracts worth up to $1.9 billion to provide fuel to the federal government this year because of the suspension. BP has been a major supplier of fuel to the U.S. military.

The newspaper reported the company said in court papers filed in Houston federal court that the EPA's decision to suspend the company from such contracts and its continued enforcement of that order is arbitrary, capricious and "an abuse of discretion."

BP said in its court filing that the EPA order, which includes 21 different BP entities, was continued by the agency just last month after BP lost an administrative challenge to the suspension.

An EPA spokesman declined to comment on BP's court action, referring questions to the Justice Department, which also declined to comment.

BP pleaded guilty Jan. 29 to manslaughter, obstruction of Congress and other criminal charges stemming from the well blow-out and rig explosion in the Gulf. It was ordered to pay a $4 billion criminal penalty that it negotiated with the Justice Department.

The guilty plea keeps the suspension in place until BP can work out an administrative agreement with the EPA. However, in its court filing Monday, BP suggests that the suspension should have ended once the criminal case was resolved.

Earlier in August 2013, the Houston Chronicle reported BP’s attempt to block claims payments of more than $130 million to Gulf Coast businesses, stating the settlement program run by court-appointed claims administrator Patrick Juneau had been plagued by poor productivity and excessive administrative costs. US District Court Judge Carl Barbier upheld previous rulings and publicly scolded BP at a hearing the next day. 

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