EPA Prohibits Retail Supplier from Entering into Contracts with Federal Government

Retail supplier BP Energy Company (BPEC) has notified retail regulators in several jurisdictions that it and certain of its affiliates, including its ultimate parent, BP p.l.c. (collectively BP), received notice November 28, 2012 that the United States Environmental Protection Agency (EPA) has temporarily suspended BP from entering into new contracts with the U.S. government.

"The EPA's action is pursuant to administrative procedures providing for discretionary suspension until a company can demonstrate 'present responsibility' to conduct business with the U.S. government," BPEC said in letters to several regulators regarding updates to its retail supplier licenses.

"BP has been in discussions with the EPA regarding BP's ability to contract with the US government, BP understands that the EPA is preparing a comprehensive administrative agreement and that a draft of such an agreement will be provided soon. It is BP's expectation that entering into such an agreement with the EPA will result in the temporary suspension being lifted," BPEC said

The suspension does not affect existing agreements BP may have with the government, the EPA said.

In a news release, the EPA said that it 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."

Specifically, the EPA said that on November 15, 2012, "BP agreed to plead guilty to eleven counts of Misconduct or Neglect of Ship Officers, one count of Obstruction of Congress, one misdemeanor count of a violation of the Clean Water Act, and one misdemeanor count of a violation of the Migratory Bird Treaty Act, all arising from its conduct leading to the 2010 Deepwater Horizon disaster."

"Suspensions are a standard practice when a responsibility question is raised by action in a criminal case," the EPA said.