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BP Business Economic Loss Claim Appeal 2015-752: Defense Contractor Exclusion


The following is an Appeal Panel Decision issued pursuant to Section 6 of the BP Deepwater Horizon Economic & Property Damages Settlement Agreement and the Rules Governing the Appeals Process. Links may have been added to assist the reader. The original decision may be found here.

BP appeals this BEL award to a wood supply company in McComb, Mississippi. In the Notice of Appeal, appellant raises several issues. However, in its subsequent memorandum, BP only argues that claimant is an excluded defense contractor or sub-contractor/supplier. Accordingly, this is the only issue preserved for appeal and the only point that will be considered by this Panelist.

In the portion of the Settlement Agreement discussing excluded parties, Exhibit 18, Section 5 lists the following: Defense Contractors and Their Sub-Contractors and Suppliers: Claims from businesses and their employees for which at least 50% of annual revenue is generated from contracts with the United States Department of Defense will be considered as defense contractors.

In support of its contention, BP references a letter from the President of the company which states: “We have been involved in the US Corps of Engineers projects…Products used in these projects require specialized knowledge in understanding the specifications for materials and being able to provide same through our long-standing relationship with our various raw material suppliers.” BP provides no information indicating that at least 50% of the company’s revenues comes from contracts with the U.S. Department of Defense.

In response to BP’s argument, claimant submitted numerous affidavits from the President of the company which attest to the following:1) Eighty to eighty five percent of the claimant’s sales are “to the state of Louisiana to contractors” providing pile driving services. 2) The company only performed work with the U.S. Army Corp of Engineers in the capacity of material men, never having a direct relationship with USACE but rather providing wood products to sub-contractors and/or contractors who were working directly for USACE. 3) No contract exists between claimant and the US Army Corps of Engineers. 4) The company is not registered in the database that is required to do business with the Corps. 5) The claimant derives no revenue from contracts with the US Dept of Defense.

The realities in this case clearly do not fit within the Defense Contractor exclusion outlined in the Settlement Agreement. BP’s argument rests on a thin reed. This appeal is denied and there is a ruling herein in favor of claimant’s final proposal.


The preceding was the appeal panel decision in Appeal 2015-752. Learn more about the BP Deepwater Horizon Settlement Business Economic Loss (BEL) Claim Appeal Process.

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