Following the initial surge in emergency response to the Gulf of Mexico oil spill, BP is in negotiations with several contractors to clean up paperwork and settle hundreds of million of dollars in payment disputes.
Several contractors are claiming overdue invoices related to cleanup efforts following the April 20 explosion on BP’s Deepwater Horizon rig. The overdue payments, some more than 120 days old, are needed to pay employees, subcontractors and suppliers. Loupe Construction of Reserve, La., which was BP’s largest prime emergency-response contractor in St. Bernard Parish, La., claimed it was owed roughly $100 million.
By early November, DRC Group of Mobile, Ala., was owed $50 million for work it did in Plaquemines Parish and $35 million in Jefferson Parish, says a source close to the firm.
In recent weeks, BP has come to the negotiation table to work through the issues with both Loupe and DRC, according to spokespersons from both companies. However, in an emergency environment in which speedy response often trumps precise accounting measures, details about how much is specifically owed to contractors are murky.
BP spokeswoman Hejdi Feick would not discuss specific negotiations but said, “The most common reason for an invoice being held up is a lack of supporting documentation,”
As of Nov. 4, BP says it had paid more than $9.4 billion on 92,000 invoices. The company works directly with more than 3,000 prime vendors. Feick says accounts-payable offices have staffed up to expedite work.
Karl Dix Jr., an Atlanta lawyer representing Loupe, says the two parties are making progress, but it is an arduous process. “The priority was to get the work done rather than document the work,” he says. “It always takes awhile for the documentation to catch up and people to get paid.”
Many subcontractors are stuck in the middle. Denver-based Strad Energy Services claims it is owed nearly $4 million in payments as a DRC Group subcontractor.