BP Sues EPA Over Suspension From Future U.S. Contracts

BP Plc (BP/) sued the U.S. Environmental Protection Agency over its suspension from new federal government contracts following the company’s guilty plea to a pollution charge over the Gulf of Mexico oil spill.

BP, based in London, said the U.S. government continued to buy fuel from and sell oil leases to the company “for more than two and a half years after the Deepwater Horizon accident on April 20, 2010,” according to a complaint filed today in federal court in Houston.

The company said 21 BP entities were suspended “without any prior notice” in November 2012, and its exploration and production unit was disqualified from all federal contracts in February, after that unit pleaded guilty to a misdemeanor violation of the U.S. Clean Water Act tied to the worst offshore spill in U.S. history.

The EPA’s suspensions and disqualification “are contrary to federal law and regulations, exceed EPA’s statutory and regulatory authority and limitations, are unsupported and contradicted by the record in this matter” and abuse the agency’s discretion, BP said in the filing.

The company seeks a court order voiding the EPA’s decisions and barring related enforcement actions.

As of last month, BP is supplying fuel, lubricants and fueling services to U.S. government entities at home and abroad under contracts with a projected value of more than $1.2 billion, according to the complaint.

54 Leases

BP also said that since the spill, it has acquired 54 new offshore leases, all for exploration in the deep-water Gulf of Mexico. The EPA’s actions potentially block the company’s access to billions of dollars in new contracts in both business areas.

BP’s lawsuit names EPA Administrator Gina McCarthy and Richard Pelletier, the agency’s suspension and debarment chief, as defendants in their official capacities. BP claims Pelletier illegally considered company actions that predated the Deepwater Horizon incident in his decision to suspend the company’s access to new federal contracts.

Wyn Hornbuckle, a Justice Department spokesman, declined to comment on the lawsuit.

The case is BP Exploration & Production Co. Inc. v. McCarthy, 4:13-cv-O2349, U.S. District Court, Southern District of Texas (Houston).

To contact the reporter on this story: Laurel Calkins in Houston at laurel@calkins.us.com

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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