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THE PROGRESSIVE REVIEW - April 21, 2011
BP Still Being Awarded Lucrative Government Contracts
by: Jason Leopold
Truthout.com
BP continues to receive tens of millions of dollars in
government contracts, despite the fact that the British
oil company is under federal criminal investigation over
the disaster in the Gulf of Mexico and twice violated its
probation late last year.
Last week, the Defense Logistics Agency awarded Air BP,
a division of BP Products North America, a $42 million
contract to supply fuel to Dover Air Force Base for the
next month and a half.
What makes this particular contract unique is that it is
one identified as "an unusual and compelling urgency"
contract, which means the government would be "seriously
injured"and national security could be at risk unless
the Defense Logistics Agency was permitted to "limit the
number of sources from which it solicits bids or proposals."
The Defense Logistics Agency sent out a request for
proposals on March 25 and set a deadline of April 1 for
offers to be returned. Included in the government's
proposal is a purchase request for 20 million gallons of
jet fuel at an average price of $2.10 a gallon.
According to government contracting regulations, "an
unusual and compelling urgency precludes full and open
competition" and "delay in award of a contract would
result in serious injury, financial or other, to the
Government."
Scott Amey, general counsel for watchdog group Project On
Government Oversight (POGO), said, "unusual and compelling
urgency" is often used by the government when it awards a
no-bid, sole source contract.
"It's just another way of getting around competitive
bidding," Amey said in an interview. "The military needs
to justify why there was little or no competition."
Michelle McCaskill, a spokeswoman for the Defense Logistics
Agency, told Truthout a copy of the justification for "the
unusual and compelling urgency" would be posted online
within 30 days after the contract award.
She added that the contract awarded to Air BP "was needed
to meet requirements at Dover [Air Force Base] during the
period of April 15, 2011 - May 31, 2011."
BP won the contract even though the company's federal
probation officer petitioned a US district court judge
last November to revoke the company's probation over a
46,000 gallon oil spill that occurred at BP's Lisburne
facility on Alaska's North Slope in November 2009.
The probation officer, Mary Frances Barnes, said in court
documents that the spill amounted to "criminal negligence"
under Alaska state law and the federal Clean Water Act and
violated the terms of the probation agreement BP signed in
November 2007 following a 212,000 gallon oil spill on the
North Slope a year earlier. BP has pleaded not guilty to
the probation violation charge and is fighting the case in
federal court.
Furthermore, last September, BP was found to have violated
the terms of a settlement agreement it entered into with
government regulators six years ago to make certain safety
upgrades at its Texas City refinery, where an explosion
in March 2005 killed 15 people and maimed and seriously
injured 170 others. The Justice Department refused to
pursue a probation revocation case in that incident, opting
instead to give BP another year to make the upgrades at
the refinery.
Libya?
McCaskill would not say exactly what the government's
"unusual and compelling urgency" is in awarding the fuel
contract to Air BP. One possibility is that the jet fuel
Air BP is supplying is intended for aircraft leaving Dover
Air Force Base carrying cargo to support NATO's air war
against Libya. Obama turned over control of the entire
Libya operation, known as Operation Odyssey Dawn, to NATO
on March 31. But over the past week, NATO has complained
that it is running short of munitions.
McCaskill referred questions about whether the jet fuel
Air BP is supplying over the next 46 days is being used
on aircraft utilized for Libya operations to Dover Air
Force Base. Brett Kangas, a spokesman for Dover, said he
was unable to obtain answers to specific questions about
what aircraft the fuel is being used for and what the
mission is.
But a March 31 news release posted on Dover Air Force
Base's web site provides some clues. It says Dover has
"four C-5M aircraft, all of which are involved in the
support of the international crisis in Libya."
"In order for the strike operations implementing the no-
fly zone to continue, the 'bullets' have to make it to
the fight and that is where Dover Air Force Base delivers,"
the Dover press release states. "Delivering oversized
cargo is the name of the game here at Dover [Air Force
Base, Delaware]."
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Last Friday, on the same day the Air BP contract was set
to begin, unnamed US and NATO officials told The Washington
Post NATO is running short on precision bombs and other
munitions for the military action that began a little more
than a month ago.
"The shortage of European munitions, along with the limited
number of aircraft available, has raised doubts among some
officials about whether the United States can continue to
avoid returning to the air campaign if Libyan leader
Moammar Gaddafi hangs on to power for several more months,"
the Post reported.
Kangas noted, however, that there is a possibility the jet
fuel could also be used for C-17 aircraft flying out of
Dover for humanitarian missions to Japan.
Awarding Air BP a contract to supply fuel for aircraft
supporting Libya operations, if that turns out to be the
case, would be ironic. Last year, BP confirmed that it
told the British government in 2007 that the company's
$900 million oil contract with Libya would be at risk
unless a prisoner transfer agreement, which allegedly
included Abdel Basset Ali al-Megrahi, the Libyan intelli-
gence official convicted of the Lockerbie bombing of Pan
Am Flight 103, between the two countries was hammered out.
Too Big to Fail
Environmental Protection Agency (EPA) officials held talks
about possibly debarring or limiting BP from receiving
additional government contracts several months after the
deadly April 20, 2010, explosion aboard the Deepwater
Horizon drilling rig, which claimed the lives of 11 workers
and spilled at least five million barrels of oil into the
Gulf.
But two senior EPA officials, who spoke to Truthout on
condition of anonymity, said those discussions "went
nowhere" largely because the federal government relies
too heavily on BP to meet its needs and "arguments were
raised" by "various agency officials" about the "possi-
bility of debarment being a threat to national security."
"But ultimately what it came down to was a lack of interest
in holding this company accountable," one EPA official
said.
In an interview last year, Jeanne Pascal, the former
debarment counsel at the EPA's Seattle office who spent
more than a decade working on issues related to environ-
mental crimes BP had been convicted of, said she had to
proceed with caution when she considered debarring the
oil company from receiving government contracts.
"If I had debarred BP while they were supplying 80 percent
of the fuel to US forces it would have been almost certain
that the Defense Department would have been forced to get
an exception," Pascal said. "There's a provision in the
debarment regulations that says in a time of war or extreme
need exceptions can be granted to debarment so that federal
agencies with critical needs can continue doing business
with debarred contractors. I was in a quandary. If I moved
forward with debarment we would have had a major federal
contractor doing business with the federal government with
no governmental oversight or audit provisions. I felt over-
sight terms and conditions were critical with BP, so I
pursued settlement of the matter in the hopes of getting
oversight and audit terms."
Amey, POGO's general counsel, said that "the government
still turns [to BP] with goods and services and does
not take into account their past performance, level of
responsibility and the fact that they violated laws is
a perfect example of a contractor too big to fail."
On POGO's Federal Contractor Misconduct Database, BP
comes in at number 48 in a list of the top 100 government
contractors. But the company ranks second, behind Lockheed
Martin, as having the most instances of misconduct - 53 -
since 1995, which has resulted in more than $1.6 billion
in fines.
Those factors do not appear to be of concern to the
federal government.
According to USAspending.gov, which tracks government
contracts, BP was awarded 52 government contracts worth
$56.5 million for fiscal year 2011 to supply fuel, gas,
and other petroleum products to agencies such as the
Defense Department and Department of Health and Human
Services. From fiscal year 2006 through 2010, BP received
707 government contracts worth nearly $7 billion.
However, the federal government does want the public to
believe it scrutinizes its awardees before turning over
billions in taxpayer dollars to companies such as BP.
Last Friday, the government launched its answer to POGO's
Federal Contractor Misconduct Database: the Federal
Awardee Performance and Integrity Information System
(FAPIIS).
"In 2008, Congress passed the law that created FAPIIS,
which agencies must check before awarding a contract or
grant to ensure the prospective awardee is 'responsible,'"
POGO reported. As a "condition for making FAPIIS public,
a few concessions had to be granted to the entities listed
in it. This included making so-called 'past performance
reviews' off-limits to the public and only posting data
entered into FAPIIS on or after April 15, 2011."
That means the public won't be able to find any inform-
ation about BP's past misconduct. Indeed, a search for
BP Products North America's government contracts did not
turn up any critical reports about the company.
Prior to the database search, a message pops up. It says:
"Contracting officials should be aware that use of the
information in the FAPIIS systems should not result in de
facto debarment. Current procedures emphasize that certain
past performance in the system may no longer be relevant
to a determination of present responsibility."
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