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BP Business Economic Loss Claim Appeal 2017-1341:Constructor of Modular and Pre-Fab Buildings Not Engaged In Oil & Gas Industry

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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

Claimant provides building construction, renovation, and repair services in Baton Rouge, LA. The Settlement Program issued Claimant an award of $769,215.09, pre-RTP. BP appeals, asserting the Settlement Program did not properly investigate whether Claimant is an excluded business and not entitled to an award under the Settlement Agreement because of its being a business that provides services to the oil and gas industry. BP maintains the record demonstrates that Claimant should be excluded pursuant to the oil and gas exclusion, as its business activities properly fall under NAICS Code 237120–”Oil and Gas Pipeline and Related Structures Construction.”  However, the Settlement Program elected to maintain Claimant’s NAICS code 236220–“Commercial and Institutional Building Construction,”
as reflected on its 2010 tax return, and based the award on that finding.
The Oil and Gas Pipeline NAICS code BP argues for requires that the business be “primarily engaged” in the construction of oil and gas lines, mains, refineries, and
storage tanks. Specialty trade contractors are included in this group if they are engaged in activities “primarily related” to oil and gas pipeline and related structures construction. Both aspects of this definition require a finding the entity is “primarily” so engaged, as opposed to incidentally or occasionally so engaged.
A careful de novo review of the record in this matter, including the exhibits submitted by BP with its brief, support the reviewer’s conclusion that Claimant is primarily in the business of constructing and assembling modular and prefabricated commercial buildings. No evidence from either source points to construction or work on oil and gas lines, mains, refineries, or storage tanks, and certainly not as a primary emphasis. Claimant appears to build structures for a wide range of customers in a variety of industries. Assessing the totality of the evidence in the record, the determination that Claimant’s relation to the Oil and Gas Industry was incidental, and did not warrant
reclassification, is affirmed.
Claimant’s Final Proposal, reflecting the award, is hereby selected.

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