BP Has Help Challenging Loss of Federal Contracts After Gulf Spill

A Louisiana wildlife official displays oil from a marsh on April 19, 2011 at Middle Ground in southern Louisiana. A year after the BP oil spill coated Gulf coast beaches and marshes, BP claims that most of the oil has been removed. Louisiana Wildlife and Fisheries says, however, that much of the coastal cleaning has been superficial, as the oil has seeped into the soil, killing marshes and further eroding the state's damaged Mississippi Delta ecosystem.
National Journal
Ben Geman
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Ben Geman
Dec. 3, 2013, 9:50 a.m.

Busi­ness and oil-in­dustry groups are ur­ging a fed­er­al court to over­turn BP’s sus­pen­sion from re­ceiv­ing new gov­ern­ment con­tracts, call­ing it a “dis­turb­ing” over­reach that threatens oth­er com­pan­ies do­ing busi­ness with fed­er­al agen­cies.

The Amer­ic­an Pet­ro­leum In­sti­tute, the U.S. Cham­ber of Com­merce, and oth­er groups filed a court brief on BP’s be­half in the oil gi­ant’s case against the En­vir­on­ment­al Pro­tec­tion Agency, which im­posed the freeze in late 2012 fol­low­ing the dis­astrous 2010 oil spill in the Gulf of Mex­ico.

EPA sus­pen­ded BP, a ma­jor fuel sup­pli­er to the mil­it­ary, shortly after the com­pany reached a $4 bil­lion crim­in­al plea deal over the spill, which was caused by a blo­wout of a BP well be­ing drilled a mile be­neath the ocean sur­face.

The busi­ness groups that filed a brief on BP’s be­half Monday say EPA’s sus­pen­sion of all BP busi­ness units — re­gard­less of wheth­er they were con­nec­ted to the ac­ci­dent — from new con­tracts with any fed­er­al agency sets a dan­ger­ous pre­ced­ent.

“These ex­pans­ive as­ser­tions of au­thor­ity, and EPA’s ac­tions pur­su­ant to that au­thor­ity, pose a grave threat to fed­er­al con­tract­ors and private in­dus­tries with busi­ness touch­ing on fed­er­al pro­grams or fed­er­al lands,” states the brief that’s also sup­por­ted by the Na­tion­al As­so­ci­ation of Man­u­fac­tur­ers, the Na­tion­al Ocean In­dus­tries As­so­ci­ation, the Or­gan­iz­a­tion for In­ter­na­tion­al In­vest­ment, and the tech­no­logy in­dustry trade group Te­chAmer­ica.

They al­lege that EPA’s “un­pre­ced­en­ted as­ser­tion of sus­pen­sion power over af­fil­i­ates” is il­leg­al.

They want the court to over­turn EPA’s des­ig­na­tion of BP’s cor­por­ate headquar­ters as a “vi­ol­at­ing fa­cil­ity” and the sus­pen­sion of the com­pany’s af­fil­i­ates lif­ted, not­ing it was BP Ex­plor­a­tion and Pro­duc­tion spe­cific­ally that pleaded guilty to charges of felony man­slaughter, en­vir­on­ment­al crimes, and ob­struc­tion of Con­gress.

Their brief was filed with the U.S. Dis­trict Court in Texas where BP filed suit in Au­gust chal­len­ging the fed­er­al sus­pen­sion. It ar­gues that the im­plic­a­tions of EPA’s ap­proach, if BP loses the case, are “dis­turb­ing” and that en­abling this “guilt by as­so­ci­ation” would have ma­jor con­sequences.

“If an en­tire cor­por­ate fam­ily is sus­pen­ded or dis­qual­i­fied from fed­er­al pro­grams, a cas­cade of im­pacts will fol­low,” the brief states, cit­ing lay­offs and harm to the broad­er eco­nomy.

The trade groups also warn of a ripple ef­fect if fed­er­al con­tract­ors must “struggle with un­cer­tain­ties” cre­ated by the threat of sus­pen­sion of an en­tire cor­por­a­tion based on the im­prop­er con­duct of a few em­ploy­ees of a single af­fil­i­ate.

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