The US Environmental Protection Agency, EPA has suspended BP plc and other companies in the BP group from new federal contracts until they demonstrate they can meet federal business standards (see Reuters press report). The decision is a consequence of the misbehaviour and lack of business integrity shown by the company in the Deepwater Horizon oil spill of 2010.
According to EPA, "The BP suspension will temporarily prevent the company and the named affiliates from getting new federal government contracts, grants or other covered transactions until the company can provide sufficient evidence to EPA demonstrating that it meets Federal business standards. The suspension does not affect existing agreements BP may have with the government."
Given that BP was the 45th largest contractor of the US Federal Government in 2011, and that the value of US government contracts secured by companies within the BP group exceeded USD 1,470 mn, it seems clear that the BP group will invest significant time and effort to try to prove as soon as they can that they do actually meet sound business standards. Surely, the internal cleaning up exercise will not be minor and corporate compliance programs will most likely be improved and strengthened.
This case is, in my view, a strong reminder that we need to introduce a full system of suspension and debarment in the EU public procurement Directives, in order to allow all Member States to avail themselves of such a powerful tool to discipline misbehaviour by public contractors, while guaranteeing a level playing field across the internal market [my proposals, particularly concerned with competition infringers, can be read at Sanchez Graells, Public Procurement and the EU Competition Rules (Oxford, Hart, 2011) 382-385]. It may not be too late to include it in the current revision of the public procurement rules, due to be approved by the end of the year. Hopefully.