Federal Lab Contracting Act

California’s Public Contract Code provides “The Federal Laboratory Contracting Act.” Section 12500 names the act contained in Chapter 7 of Part 2 of Division 2.

Section 12501 contains two legislative findings and declarations, including that technological advances are an important part of California’s economy and, therefore, it would be wise for state agencies to contract with federally funded Department of Energy (DOE) and National Aeronautics and Space Administration (NASA) research and development centers and NASA field centers located in California that are often at the forefront of science and technology.

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 DOE, NASA, 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.

The Secretary of State and Consumer Services is 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 and must 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 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 NASA field center located in the state 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, including the Defense Contract Audit Agency, the United States Government Accountability Office, the DOE Office of Inspector General, and the NASA Office of Inspector General, to satisfy auditing requirements.

This section defines the phrases “federally funded research and development center” and “NASA field center.”