California’s Federal Laboratory Contracting Act

California has a number of formal acts in statute. The Federal Laboratory Contracting Act is found in the Public Contract Code Division 2 (General Provisions), Part 2 (Contracting by State Agencies), Chapter 7, which contains Sections 12500 to 12502. Chapter 7 was added in 2006 by Chapter 256.

Section 12500 provides that Chapter 7 is known and may be cited as the Federal Laboratory Contracting Act. Section 12501 provides two legislative findings and declarations, including that technological advances are an important part of California’s economy and that state agencies should contract with the Department of Energy (DOE) and National Aeronautics and Space Administration (NASA).

Section 12501.5 requires the Governor to designate the Secretary of State and Consumer Services as the state’s representative for purposes of communicating and negotiating with representatives of the United States Department of Energy, National Aeronautics and Space Administration, federally funded DOE and NASA research and development centers in California, and NASA field centers in California regarding any issue that may affect a contractual relationship between the state and these federal entities.

In addition, the Secretary of State and Consumer Services or his or her designee are required to develop policies and procedures to encourage and enable the contracting process with federally funded DOE and NASA research and development centers and NASA field centers, as well as develop model contract language that is available for use by any state agency or department in negotiating a contract with one of these centers.

Section 12502 provides that a state agency that enters into a prime contract with a federally funded DOE or NASA research and development center or NASA field center, or that enters into a prime contract with another entity that, in turn, issues a subcontract to a federally funded DOE or NASA research and development center or a NASA field center located in California may, if requested by the contracting party, make contract payments to the center for contracted services in advance.

In addition, a state agency that enters into a prime contract or issues a subcontract may not indemnify the center with respect to products liability, intellectual property, and general liability claims arising out of the activities to be carried out by the center pursuant to the contract. A state agency is prohibited from auditing the records of any federally funded DOE or NASA research and development center or NASA field center, but the state agency may rely on the services of any cognizant federal audit agency to satisfy auditing requirements.