State Power Over the Federal Contractor: A Problem in Federalism

In large measure both the federal officials, whose job it is to enter the commercial market to fulfill the government's material needs, and the federal contractor, wherever he may be and of whatever size he may be, tend to look upon attempts by states to tax or regulate with a skeptical eye. The state appears as some alien interloper whose activities result only in hardship and delay to the contractor and consequent annoyance and financial cost to the federal government. By and large, accordingly, a prevailing idea in the federal procurement circles seems to be that of avoiding, whenever possible, the impact of state intervention into contractual matters. Running through the procurement regulations is a thread of policy which has the effect of trying to insulate federal contracting from state power of whatever type.

That this is not entirely justified is one of the conclusions which will be reached in this Article.