Contracts in fed enclaves

Many contracts with the federal government require that some or all of the

work must take place on government property. Companies holding those contracts

may be confused as to the applicability of state and local regulations to

their efforts. There is good reason to be confused.

Property owned by the federal government may be held under any of three

different types of legislative jurisdiction, depending on how the government

obtained the land. Exclusive legislative jurisdiction applies to land over

which the federal government has all of the legislative power. Traditionally,

state laws have almost no application in those areas.

Lands under exclusive legislative jurisdiction are called federal enclaves.

Most military posts are in federal enclaves. However, when the issue might

be important, the type of jurisdiction should be confirmed by research and

not just assumed.

Concurrent legislative jurisdiction applies to land over which a state

has reserved or over which a state has obtained legislative authority concurrent

with the federal government. State and federal laws apply in these areas.

Partial legislative jurisdiction applies to land over which a state has

granted the federal government some legislative authority but has reserved

for itself most of the legislative power.

In Miller v. Arkansas, the Supreme Court ruled that a state cannot require

licensing of construction contractors where the work is to be done exclusively

within a federal enclave. Similarly, in Koren v. Martin Marietta Services

Inc., a court found that Puerto Rico's wage and hour laws were inapplicable

to work performed within federal enclaves.

However, in North Dakota v. United States, the Supreme Court upheld

a state law requiring special labeling on liquor bottles sold in military

clubs and package stores within federal enclaves. According to the court,

the law was acceptable because it did not regulate the government directly

but operated only against companies supplying the liquor, and the language

of the federal procurement statutes did not clearly evince a congressional

intent to preempt state liquor laws.

In some cases, courts have determined that state and local laws must

give way even though the land on which the work is conducted is not within

a federal enclave.

Because the U.S. Criminal Code does not deal with crimes of a local

nature, Congress passed the Assimilative Crimes Act to adopt state criminal

laws as federal law for crimes committed in federal enclaves. However, sometimes

it is hard to tell if a state law falls under the act. For example, in King

v. Gemini Food Services Inc., a court rejected arguments that the Virginia

Right to Work Law was assimilated into federal law.

The jurisdictional issue can be very important in some cases. Contractors

should be paying more attention.

— Peckinpaugh is corporate counsel for DynCorp, Reston, Va., and formerly

a member of the government contracts section for Winston and Strawn, Washington,

D.C.