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BP banned from new contracts with US government

BP has been temporarily banned from signing any new contracts with the US government due its "lack of business integrity" over the Gulf of Mexico oil spill.

Bp banned us contracts 28 11 2012Enlarge
BP has been banned from winning new contracts with the US government, which says the oil company showed a "lack of business integrity" over the 2010 oil spill in the Gulf of Mexico. (Carl Court/AFP/Getty Images)

BP has been temporarily banned from signing any new contracts with the US government, due to the oil company's "lack of business integrity."

The Environmental Protection Agency announced today that it would suspend BP and any of its affiliates from getting new federal government contracts or grants, "until the company can provide sufficient evidence to EPA demonstrating that it meets federal business standards."

Such measures are to ensure that the government does business only with "responsible" companies, the EPA said.

The agency referred to BP's handling of the 2010 Deepwater Horizon blowout and subsequent oil spill, a disaster that killed 11 people and caused the biggest environmental catastrophe in US history.

Earlier this month, BP pleaded guilty to 14 criminal charges over the incident, for which it agreed to pay a fine of $4.5 billion.

The company knew that pleading guilty might lead to a suspension from government contracts, but, according to Reuters, "it said at the time that it had not received any indication that government departments would go ahead with such a ban."

Today's suspension won't affect existing contracts. According to Bloomberg, last year BP signed fuel orders with the Defense Department worth around $1.35 billion, making it the Pentagon's biggest fuel supplier.

BP's shares dropped by up to 2.9 percent on the London market following the announcement, Bloomberg said.

The Federal Times said that suspensions like this one can last up to a year.

To get them lifted, according to the site, "a company often will hire outside firms to help improve the company's ethics program, its ability to conduct internal investigations, and its ability to communicate with the government. Often a company will submit to the government a plan for improvement and progress reports over several years."

http://www.globalpost.com/dispatch/news/regions/americas/united-states/121128/bp-banned-new-contracts-us-government