comments_image Comments

BP Still Being Awarded Lucrative Government Contracts

It apparently is of little concern to the government that BP is under federal criminal investigation and was responsible for our largest environmental disaster.

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. BP is the biggest supplier of fuel to the Defense Department.

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."

McCaskill could not obtain a timely response to questions about whether the Defense Logistics Agency received bids from other companies.

[UPDATE: On Thursday morning, McCaskill sent an email to Truthout stating the Defense Logistics Agency did receive bids for the "unusual and compelling" contract from other oil companies. Moreover, McCaskill said the fuel contract awarded to Air BP "is the third supplemental solicitation tied to the terms and conditions of the basic solicitation." In other words, the contract awarded to Air BP last week is part of a larger fuel contract the Defense Logistics Agency awarded to several oil companies last year. The contract given to Air BP supplemented the original contract by allowing the Defense Logistics Agency to purchase additional fuel. The agency supplemented the original contract twice before, most recently in February when it issued a requests for proposals to three oil companies, which included Air BP and Tesoro Refining and Marketing Company, seeking 14 million gallons of fuel to "provide support for ongoing operations on" Dover Air Force Base for about a month. That contract, also identified as "unusal and compelling," was awarded to ExxonMobil for $30.8 million, a bid that was more than $100,000 less than Air BP's. It is unknown what mission the contract awarded to ExxonMobil in February supported as that information is redacted in documents released to justify the "unusual and compelling" contract.]

BP won the most recent 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.

See more stories tagged with: