The Environmental Protection Agency announced that BP is temporarily ineligible from receiving future contracts with the federal government, according to Bloomberg.
The EPA said it imposed the ban because the company’s conduct during the 2010 Deepwater Horizon disaster showed a "lack of business integrity." The action doesn’t affect existing contracts, and BP said it already was working to get the ban lifted. The incident killed 11 people and caused the largest environmental disaster in U.S. history, it said.
The ruling follows the Nov. 15 settlement agreement between BP and the Justice Department in which BP pleaded guilty to 14 criminal charges and agreed to pay $4.5 billion in penalties.
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The suspension does not apply to current BP contracts with the federal government, including the recent $1.37 billion in contracts awarded to BP affiliates in September by the Department of Defense.
Some critics believe the suspension by the EPA was discussed as part of the original settlement agreement and not as an isolated action.
"It's just inconceivable to me that BP's lawyers that their board of directors would have entered into that agreement last week without the issue of a suspension or debarment having been addressed," Samuel Buell, a Duke University Law School professor and former federal prosecutor, told Reuters.
The EPA and BP are already working on an agreement that would lift the suspension, reports Bloomberg.
The next oil-drilling auction will be held in March for 38 million acres in the Gulf of Mexico, where BP is currently the largest deep-water leaseholder.