U.S. Shouldn’t Have Been Doing Business With BP In The First Place, Analyst Says

BP had “a long history of breaking the law” even before causing the ongoing monster oil disaster on the Gulf Coast, and the federal government shouldn’t be doing business with such firms, a progressive policy analyst says.

BP’s situation illustrates the need to enact something called “High Road Contracting” to weed out irresponsible companies, says Karla Walter, senior policy analyst at the Center for American Progress, a left-leaning think tank in Washington.

Walters proposal comes as lawmakers on Capitol Hill insist that they want to enact strong new legislation to hold BP and other oil companies responsible for their actions.

“Before the Deepwater Horizon explosion, BP had a long history of breaking the law,” Walter says, referring to the BP-leased drilling rig that first caused the ongoing spill. “And when it did so too often workers died, the environment got polluted, and taxpayers were left holding the bag. In 2005 an explosion at a BP refinery in Texas killed 15 workers. BP received the two largest penalties in the Occupational Safety and Health Administration’s history for the disaster: one for its initial violations and then again in 2009 because it failed to rectify the problems that caused the explosion.

“A year after the refinery explosion, BP caused the largest oil spill ever on Alaska’s North Slope. Investigators found that BP had ignored warnings about pipeline corrosion and cut back on precautionary measures to save money. BP’s record should’ve warned the government to stop entering into risky deals with the company, but it still allowed BP to sign new lease agreements and get billions of dollars in new contracts,” Walter adds.

BP continued to receive lucrative federal contracts and drilling leases despite its record of wrongdoing. Current regulations require that the government only do business with responsible businesses, but existing policies and procedures fail to police this requirement, Walter says.

“Debarment is the process by which the government uses to ban irresponsible firms from doing business with it. But it’s rarely used, is too slow, and it occurs after-the-fact,” she says, speaking in a new web video. “Only a handful of large contractors have been suspended since the 1990s. And even when large corporations like GE and IBM have been suspended, it’s been for a period of days, not years.

“Responsibility review is the government’s tool to prescreen every company’s legal record on a case-by-case basis before doing business with it,” Walter says. “But again, this tool is weak and inadequate. Rather than a thorough prescreening, the responsibility process is more of a check-the-box exercise that allows serious lawbreakers to continue receiving contracts and leases. The government must start using both tools more effectively.”

In order to strength its screening of the companies with which it does business, the federal government should adopt the so-called “High Road Contracting” proposal so that it has the power and information it needs to stop doing business with irresponsible companies in the first place and prevent BP-like tragedies from happening again, Walter says.

“All companies should be required to demonstrate that they are fit to do business with the government, not just the few that are singled out for debarment and suspension,” she says. “The ‘High Road Contracting’ proposal will do this by making companies’ full legal records available to the government officials when they’re considering contract or lease awards and giving them adequate guidance on how to evaluate these records. Seat and local governments with responsibility policies have shown that they can deliver more reliable, higher quality goods and services for the government and reduce the cost to taxpayers when irresponsible employers violate the law. The BP disaster is proof that our country needs to enact the ‘High Road Contracting’ proposal.”

The publisher of the news site On The Hill, Scott Nance has covered Congress and the federal government for more than a decade.

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