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BP Business Economic Loss Claim Appeal 2016-1751:DOD Contractor Earned Less Than 50% Income From GOVT Contracts–Award Affirmed

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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 BP Appeals Process. Links may have been added to assist the reader. The original decision may be found here, as well as a glossary of BP Settlement terms.

BP appeals the BEL award to claimant, a civil construction firm located in Mandeville, Louisiana. BP asserts the award is flawed because the Settlement Program(SP) failed to explore adequately whether claimant received over 50% of its revenues from Department of Defense(DOD) contracts and was thus excluded as an eligible
class member.
Claimant argues the SP properly and fully addressed this issue and rightfully concluded that while claimant did have contracts with federal agencies, claimant did not cross the 50% threshold.
A review of the record discloses that the SP was aware claimant derived revenues from governmental contracts and subsequently performed a measured analysis of claimant’s financial records. Examination of the Current/Last Review Notes of the SP under the section labelled “Defense Contracting” reveals there was a tri-partite process followed.Policy 465 used by the SP to evaluate this issue provides:”If the Claims Administrator determines that the Entity derived 50% or more of its 2010 revenue from DOD Contracts,the Entity is an Excluded Defense Contractor.” BP posits that claimant earned $5,351,811 in 2010 from DOD contracts and should be
excluded. However, the record reflects claimant earned and reported $13.2 million in income on its 2010 federal tax return,well below the 50% threshold limit required by the Settlement Agreement and policy 465.
There is no error. Remand is not warranted. The award is affirmed and the appeal of BP is denied.

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