Contracts with State and Local Governments

Entering into a contract with a government entity is very different from entering into a contract with a private entity. When the federal government negotiates and enters into contractual agreements, there are a number of different laws that impose limitations on who they may contract with, on how bids must be received and on how contracted entities may behave.  When a contract is entered into with the state, on the other hand, state and local governments are not subject to the same laws that apply to federal contracts. However, many states have adopted similar laws modeled after federal regulations, while also setting their own requirements to ensure that contracting is fair.

State and Local Contract Laws

When a state, local or federal government enters into a contract, they do so using taxpayer money. These officials have also been elected to speak for the people and represent their interests, so the contracts that are being entered into should be for the public good.

In order to ensure that this is the case, a variety of different laws and regulations govern contracts made with the government. For instance,  three examples of laws that apply to federal contracts include the Federal Property and Administrative Services Act of 1949 (imposes rules for federal government acquisition of non-land property or for construction contracts for non-military/defense use); The Armed Services Procurement Act of 1947 (is similar to the Federal Property and Administrative Services Act of 1949 except applies to defense contracts) and the Competition in Contracting Act (an Act requiring open and fair competition before a contract is awarded).

While these laws apply to the federal government, many states have instituted similar laws and rules. For instance, California has a California Public Contract Code with multiple sections. Among the Code requirements, Section 101 requires efficiency in public contracts; Section 202 encourages competition; Section 1101 deals with public works contracts; and Section 1103 defines “responsible bidders” of government contracts.

Other states have their own versions of the laws, which may borrow in whole or in part from federal requirements. While there are some differences among these different state law and codes, common threads include requiring a bidding process before the government contracts with a worker; requiring that anyone contracting with the government use fair and equal hiring procedures and pay at least minimum wage; and requiring that all who bid on government contracts operate a drug free workplace.

Because each state has its own rules and because there are many regulations that apply to government contracts, it is important to consult with an experienced attorney before entering into a government contract or bidding on a government project.

Case Studies: Navigating Government Contracts and Regulations

Case Study 1: Federal Contract Limitations

John’s Construction Company specializes in non-military/defense projects and seeks to secure a federal contract. They face challenges navigating the rules imposed by the Federal Property and Administrative Services Act of 1949. This case study explores how John’s Construction Company overcomes these limitations, ensuring compliance with federal regulations and successfully securing the contract.

Case Study 2: State-specific Contract Requirements

Sarah’s Engineering Firm is interested in bidding on a state government project. They must comply with the specific requirements outlined in the California Public Contract Code. This case study delves into Sarah’s experiences, examining sections such as efficiency in public contracts, encouraging competition, and defining “responsible bidders.” We gain insights into their impact on the contracting process.

Case Study 3: Ensuring Fair Competition in Government Bidding

Mark’s Technology Solutions is eager to participate in government bidding processes. They encounter a situation where fair competition is crucial, and they must comply with the Competition in Contracting Act. This case study explores Mark’s challenges in the bidding process and the legal implications of ensuring fair competition among contractors.