BP Sues Uncle Sam over EPA Suspension on New Federal Contracts

BP plc, responding to a U.S. government decision last November to bar the company from federal contracts to supply fuel and services, has sued the U.S. government, according to a story by Reuters.

The suit was filed in a Houston District Court, and makes the claim that the federal ban is causing the company “irreparable harm.”

This is the latest chapter in a saga that began in April, 2010, when the BP-owned Macondo well blew out off the coast of Louisiana.

The British energy giant said that the decision by the Environmental Protection Agency (EPA) to bar them from the federal contracts is “an abuse of discretion.”

For its part, the EPA cited BP for a “lack of business integrity” because of the well blowout.

BP and the EPA were in negotiations on a possible contract for BP when the federal agency issued the debarment. BP is asking for a judge to order the EPA to lift the suspension, and to allow BP to bid for government contracts.

BP pleaded guilty to manslaughter, as well as to obstruction of Congress and other criminal charges related to the blowout and subsequent rig explosion Jan. 29. BP then negotiated with the Justice Department to pay a penalty of $4 billion.

While pleading guilty meant that BP would have to come to an agreement with the EPA before the suspension applied to them on government contracts is lifted, BP believes that because the criminal case was resolved, the suspension should have been lifted without further delay.

The suspension applies to new contracts only; existing ones are not affected. However, keeping BP from bidding for government contracts has kept if off the playing field and has cost it a shot at business deals with the government that could be worth billions of dollars.

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