BP oil spill proves fertile ground for procurement

The oil has stopped seeping into the Gulf of Mexico, but federal spending in response to Deepwater Horizon disaster still is flowing.

As of Aug. 31, federal agencies have spent nearly $126 million in contracts to respond and recover from the April 20 BP oil spill, according to governmentwide procurement data.

Those figures are an estimate, as several federal procurement offices have relocated to the Gulf Coast and do not have access to their normal contract writing systems, making it difficult to populate the Federal Procurement Data System-Next Generation with updated contract information, according to a note attached to the data.

The Commerce Department's National Oceanic and Atmospheric Administration has been the largest federal spender, issuing more than $55 million in contracts. The spending includes contracts for the lease of small ships; commercial fishing equipment and electronic measuring instruments to check oil content.

The Environmental Protection Agency was the second biggest customer, with $23 million in contracts, generally for supplies and services to remove and dispose of oil.

The Homeland Security Department, meanwhile, has issued $21 million in contracts -- almost exclusively on behalf of the Coast Guard -- for a host of needs, including laundry trailers, waste treatment and helicopter flights. Among the contracts FEMA issued was a $129,000 award for armed guard services in Louisiana to Inter-Con Security Systems, Inc. of Pasadena, Calif. A supervisor at the private security company said the contract was to guard a trailer, but she did not have any additional details.

BP likely will pick up the bill for the contract spending. In July, the White House issued a governmentwide memo directing agencies to document all costs and spending "that can be reasonably related to the oil spill." The memo, which applies to past and future costs, urged agencies to categorize all spending to "preserve options for cost recovery and reimbursement."

"The government has billed us already for some of its spending and we have reimbursed the amount," a BP spokesperson told Government Executive. The company said it did not have a running tally for the entire amount in contracting costs that it has repaid the government.

In total, 11 federal departments have issued contracts in response to the oil spill. But it is not clear yet if taxpayer funds were well spent. More than 19 percent of the contracts -- more than $24 million -- either were not competed or were not available for competition, according to the procurement data. Agencies typically cited the urgency of the contract or the uniqueness of the source.

Small businesses have played a significant role in the contracting efforts, receiving close to $35 million in Gulf Coast contracts, or 27.6 percent of the total costs. The annual federal small business contracting goal, which the government has repeatedly missed, is 23 percent.

Service-disabled veteran-owned small businesses have earned the most in Gulf Coast-related contracts among the socioeconomic subcategories, taking in $4.4 million in contracts. On the other hand, small businesses located in Historically Underutilized Business Zones have been a virtual nonfactor, with only $426,000 in contracts -- or 0.3 percent of the total contract spending.

The government has a history of responding to significant domestic and international incidents through investments in federal contracting. Agencies issued nearly $19 billion in contracts after Hurricane Katrina in 2005, according to procurement data. Most recently, the government spent $141 million on recovery and relief contracts in Haiti following the devastating earthquake last January.

A new threat arose on Thursday when an offshore oil production platform in the Gulf of Mexico caught fire, forcing 13 workers to jump into the water. Mariner Energy, the oil and gas producer which owns the platform, said all the employees were safe and uninjured. It is not yet clear if oil from the platform is leaking into the gulf.