Fed Contract Compliance with State Law

Look up "government contractor defense" or "defense contractor defense"

In the example you gave concerning environmental laws, there are some Federal environmental laws (I believe CERCLA is one and the Clean Air Act) where the government has waived sovereign immunity in regard to state environmental laws and regulations.  As a result, the Navy complies with California air quality laws and regulations when painting ships in California ports.  This painting is usually done by contractors.

As far as I am aware all contracts to which the Federal Government is a party must be governed by Federal law under the Supremacy Clause, Article VI, Clause 2, of the United States Constitution and principles of sovereign immunity.

Retreadfed said:

Look up "government contractor defense" or "defense contractor defense"

In the example you gave concerning environmental laws, there are some Federal environmental laws (I believe CERCLA is one and the Clean Air Act) where the government has waived sovereign immunity in regard to state environmental laws and regulations.  As a result, the Navy complies with California air quality laws and regulations when painting ships in California ports.  This painting is usually done by contractors.

I agree.

Every contractor has to obey the laws of the state(s) where it does business.  Having a federal contract does not exempt or excuse a contractor from obeying state laws.  

State laws cannot stop the federal government from doing federal government functions.  A state cannot limit the federal government’s ability to contract.

These are general principles.  I think states try to avoid conflicts with federal government operations.  For specifics, an attorney should be consulted.  For example, I understand from my contracting officer practice that state building codes might not apply for construction contracts on a military reservation — but I do not know how far this principle reaches to other situations.

Retreadfed said:

Look up "government contractor defense" or "defense contractor defense"

In the example you gave concerning environmental laws, there are some Federal environmental laws (I believe CERCLA is one and the Clean Air Act) where the government has waived sovereign immunity in regard to state environmental laws and regulations.  As a result, the Navy complies with California air quality laws and regulations when painting ships in California ports.  This painting is usually done by contractors.

I forgot all about Boyle.  I did more looking on recent developments and there are definitely cases relevant to OPs example.  Another related and parallel issue is agent relationships.  So it seems the contractor could be immune from claims or liability using one or both of these arguments.

On 6/22/2019 at 11:23 AM, burner2214 said:

Is there a Federal statute or regulation that requires Federal contracts or actions to comply with state laws?

For instance (this is a totally made up hypothetical) let's say a Federal contract includes the use of a chemical in manufacturing that is banned by the state where manufacturing is to take place. Let's say this banned chemical is used in performing work under the federal contract and its use leads to contamination of a local waterway. Clearly the company would be liable for violating state law, but would the USG have any liability for signing a contract in contravention with state law? I think the answer is "it's a bad idea to do this, but technically no the Federal government can't be held liable for violations of state law."

Not looking for a legal opinion of course, just references to statutes or cases.

In the instant example,  I would definitely check with the lawyers. Beyond non-compliance with state law, there would likely be violations of the Clean Water Act and perhaps RCRA and CERCLA for contaminating groundwater and/or waterways. 

I will also say that federal employees aren’t necessarily exempt from civil or criminal violations of RCRA or CERCLA that occur on Federal Property.

Top civilian management employees at Aberdeen Proving Grounds or Edgewood Arsenal were arrested, prosecuted, fined and some served prison sentences back in the late 80’s or early 90’s for improper storage and discharge, leakage, etc.  of hazardous chemicals that they claimed they weren’t even aware of. And the Federal Government wasn’t allowed to even pay for their legal expenses. 

And a contractor would not be immune from violations of those laws.

On ‎6‎/‎22‎/‎2019 at 12:23 PM, burner2214 said:

Is there a Federal statute or regulation that requires Federal contracts or actions to comply with state laws?

On a case-by-case basis, there may be (e.g., CERCLA).  But, no, there is no single federal statute/reg that requires federal contracts/actions to comply with all state laws.

On ‎6‎/‎22‎/‎2019 at 12:23 PM, burner2214 said:

Clearly the company would be liable for violating state law

Are you sure?  What if performance was on federal property?

jwomack said:

On a case-by-case basis, there may be (e.g., CERCLA).  But, no, there is no single federal statute/reg that requires federal contracts/actions to comply with all state laws.

Are you sure?  What if performance was on federal property?

See for example, 

52.212-4 (q): “ Other compliances. The Contractor shall comply with all applicable Federal, State and local laws,  executive orders, rules and regulations applicable to its performance under this contract.”

The instant example involves violations of federal law, so may not address the original question of compliance with state laws. 

However, the above commercial contract clause requires the CONTRACTOR to comply with state laws and regulations that would be “applicable to its performance under [the] contract. “ 

The original question is complex of course. I believe the question concerns whether the federal government could be liable for contractor violations of state law. 

Off installation work would surely be applicable to compliance with state and local laws. One question there would be - does the federal government also have liability for its contractor violating state laws off site? The contract requires the contractor to comply but is the fed government then contracting for work that is directly in violation of state laws? 

On site compliance is more complicated because applicability of state laws on-site may depend upon the specifics of the situation. 

The provided example of polluting a stream or ground water actually involves violations of not only state but Federal law.

On 6/28/2019 at 4:47 AM, jwomack said:

On a case-by-case basis, there may be (e.g., CERCLA).  But, no, there is no single federal statute/reg that requires federal contracts/actions to comply with all state laws.

Are you sure?  What if performance was on federal property?

Good point, no I'm not sure. In my hypo I assumed, but didn't say that performance was on private property. My point with that statement was to obviate discussions about the contractor's liability.

On 6/28/2019 at 5:17 AM, joel hoffman said:

See for example, 

52.212-4 (q): “ Other compliances. The Contractor shall comply with all applicable Federal, State and local laws,  executive orders, rules and regulations applicable to its performance under this contract.”

The instant example involves violations of federal law, so may not address the original question of compliance with state laws. 

However, the above commercial contract clause requires the CONTRACTOR to comply with state laws and regulations that would be “applicable to its performance under [the] contract. “ 

The original question is complex of course. I believe the question concerns whether the federal government could be liable for contractor violations of state law. 

Off installation work would surely be applicable to compliance with state and local laws. One question there would be - does the federal government also have liability for its contractor violating state laws off site? The contract requires the contractor to comply but is the fed government then contracting for work that is directly in violation of state laws? 

On site compliance is more complicated because applicability of state laws on-site may depend upon the specifics of the situation. 

The provided example of polluting a stream or ground water actually involves violations of not only state but Federal law.

Yes this is the crux of the matter. In the real life scenario it's not related to environmental contamination. For obvious reasons I don't want to provide actual scenario facts.

There is a part of the contract that conflicts with 52.212-4(q), so the contractor basically had to chose between complying with the contract and violating state law. It unknowingly chose the former and this eventually came to light, but not from a party that is likely to bring a complaint.

My conclusion is that I should assume sovereign immunity and research laws, regs, and policy for waivers related to the specific facts of the case.

On 6/27/2019 at 7:33 PM, formerfed said:

I forgot all about Boyle.  I did more looking on recent developments and there are definitely cases relevant to OPs example.  Another related and parallel issue is agent relationships.  So it seems the contractor could be immune from claims or liability using one or both of these arguments.

Oh interesting. I wasn't really looking at it from the contractor's perspective. I'll have to do some more research into the scope of Boyle and subsequent cases. I.e. does it just apply to injuries resulting in defects in design of manufactured products or are contractors immune from all state laws when fulfilling the terms of USG contracts unless immunity is specifically waived by the Federal government?

burner2214 said:

My conclusion is that I should assume sovereign immunity..,

Absolutely not — wrong answer (in my opinion).  The general assumption must be that contractor will comply with all applicable laws, federal, state, and local, in performance of the contract.

ji20874 said:

Absolutely not — wrong answer (in my opinion).  The general assumption must be that contractor will comply with all applicable laws, federal, state, and local, in performance of the contract.

Yes, All APPLICABLE laws, fed, state and local.

Another clause with similar effect for construction contracts: 

52.236-7 -- Permits and Responsibilities (Nov 1991)

“The Contractor shall, without additional expense to the Government, be responsible for obtaining any necessary licenses and permits, and for complying with any Federal, State, and municipal laws, codes, and regulations applicable to the performance of the work...” 

Note that the contract clause wording would have a higher precedence than a conflicting specification or statement of work per the Order of Precedence Clause at 52.217-8 , which is applicable when your contract uses the Uniform Contract Format (UCF).

I will add that each situation must be evaluated based upon the circumstances, regardless of sovereignty rules. There is no “one answer” that fits all situations. One must determine which Fed, state and local laws and regulations are “applicable” .

We don't know what clauses are in the contract or what potential violations of state law may be involved.  Not all violations of state law are criminal violations.  Instead, some may only result in civil or administrative remedies.  Take for example California's proposed law requiring debarment of contractors who bid on the border wall.  That raises several issues that go beyond any contract such as can a state enact laws designed to frustrate Federal policy?

Thinking out loud here but my research on a specific contract issue of this nature would include any FAR part 23 clauses that may be in the contract.  I could imagine, by example, that an agency failed when writing their requirements to be consistent with what FAR part 23 might demand. 

In so suggesting I realize that the OP's question relates to application of state law but the contract might have been in violation of federal requirements in the first place.

Here's one relevant to my interests.

https://www.casemine.com/judgement/us/5914b38badd7b04934766e4a

Basically, what I read is that federal preemption involves not only a clear indication in the text of the relevant statute, but also in the intent of Congress. Absent those elements, a requirement contrary to state law would not suffice to give the contractor the right to violate that law.

There seems to be a "sister doctrine" to Sovereign Immunity which is Intergovernmental Immunity Doctrine.  It's described as, "A principle established under Constitutional Law that prevents the federal govt and individual state governments from intruding on one another's sovereignty.  Intergovernmental immunity is intended to keep government agencies from restricting the rights of other government agencies."

So, admittedly not knowing the specific situation, I'm going to make some assumptions and broad-jumps here.  I would think that, under this doctrine, if the State attempted to act against the Fed, for example:  "Because of the actions your contractor caused, we're fining the govt $1000.00 per day"; I believe the Fed can refuse to pay under this doctrine.  Thoughts?

With respect to this and the original question, where the State has been delegated authority to administer environmental laws , the State agency can indeed deny permits , stop jobs for safety and environmental rules violations and impose various requirements for design construction and operations. I saw it happen in at least two states during the Chemical Weapons Demilitarization Program . Cost the US Taxpayers hundreds of millions of dollars.

Whether or not fines were involved, delays and idiotic actions by the Department of Environmental Regulation (DER) caused unnecessary and unreasonable delays ($) and additional unnecessary and costly measures. For instance, early in the construction phase,  they rooted around in a dumpster outside the site project offices while on a site visit. They found two small,  empty White Out eraser bottles and immediately stopped all on-going activities on site! , The stoppage affected over 130 Govt and Contractor staff and several hundred construction workers for two days until everyone had attended “remedial training”, because it was a RCRA site! “White Out”!!!!!

The MSDS for "Wite Out" can be found here:

http://productsafety.biclink.com/MSDSSheets.aspx

joel hoffman said:

they rooted around in a dumpster outside the site project offices while on a site visit. They found two small,  empty White Out eraser bottles and immediately stopped all on-going activities on site! , The stoppage affected over 130 Govt and Contractor staff and several hundred construction workers for two days until everyone had attended “remedial training”

PepeTheFrog's tiny little amphibious heart almost stopped

absolutely insane

A hydraulic hose happened to break in an excavator one day. So the DER required that hydraulic fluids on all construction equipment on the site be replaced with vegetable oil...

To put this in some context, the site wasn’t contaminated. There were chemical weapons and bulk chemicals stored in hundreds of ammunition igloos that were being disposed of .  Unfortunately, one of the sites was located in a tree hugging, Birkenstock wearing , Subaru Driving state. I suppose that the Mad Scientists who devised these weapons of mass destruction were as weird at the opposite end of the spectrum as the regulators, who were devious in their own right.

Not exactly on point yet related this interesting article was posted to WIFCON....good read

Supremacy, Inc. Found here  /legacy/reg/3d5660526184d95a.html