Are State P.I. Licenses required for federal government work?


We recently bid on a federal contract for investigation services  and lost to a competing  private American Flaginvestigation firm that submitted a bid that was significantly higher.  You can’t win them all.  But then I checked to see if the company that won the bid was even licensed as a PI agency to conduct work in all the states that were outlined in the solicitation.  They were not, so I sent a letter of protest.

I have removed the identifying information about the agency, contract and even the responding contracting officer, because this is more about the information –

The response contained the following …

The solicitation did not specifically require private investigator state licensing for the performance of the work.  While, the solicitation included Section xxxxxx-70 Contractor Responsibilities (APR 1984), which stated, “The contractor shall obtain all necessary licenses and/or permits required to perform this work,” state licenses were not specifically mentioned nor required by [gov. agency] in the solicitation.

No state workers’ compensation program, commission, or licensing structure can reach, affect, or control the federal system contemplated here. The essential element is the federal Government’s judgment as to what contractors it deems competent to fulfill Government requirements and the Federal Government’s right to administer federal law without interference from the states. The states cannot control federal decisions or requirements in this regard. Thus, no state can impose its licensing requirements on a federal contractor investigating federal workers’ compensation cases.

The two principles that support this are federal primacy and pre-emption.

Under America’s  federalism system, federal law commands primacy over state law so that a conflicting state law must be set aside in favor ofthe controlling federal law, PPL Energyplus, LLC v. Solomon,

766 F.3d 241 (C.A. N.J. 2014).  The federal system comes first and has the ultimate authority.  Any state law that interferes with or is contrary to federal law on the point must yield ground, see U.S. Const. Art.

6, Cl.2, and comp. Free v. Bland, 369 U.S. 663, 666, 82 S.Ct. 1089, 8 L.Ed.2d 180 (1962).  Federal law has primacy over state law, White v. National Steel Corp., 938 F.2d 474 (C.A. 4 1991).

Besides, in this matter, federal workers would be either under the Federal Workers’ Compensation  Act (FECA), 5 U.S.C. §§8101 et seq. or the Federal Longshoremen’s and Harbor Workers Compensation Act (FLHWCA), 33 U.S.C. §§901 et seq. Under federal primacy, federal installations are not subject to state workers’ compensation laws, and the U.S. Government cannot be  held secondarily liable under state law, Wilcox v. United States, 910 F.2d 477 (C.A.8 1990); the other federal system would be the Longshoremen’s and Harbor Workers’ Compensation Act, Kalaris v. Donovan, 697 F.2d 376 (C.A.D.C. 1983).

Under Leslie Miller, Inc. v. State of Arkansas, 352 U.S. 187,77 S.Ct. 257 (1956), United States contracts and written instruments are immune from state control. Under Johnson v. State of Maryland,

254 U.S. 51, 41 S.Ct. 16 (1920), states cannot interfere with federal primacy and work, a doctrine hearkening back to the landmark McCulloch v. Maryland, 4 Wheat 316. A state has no standing to interfere with either the award or administration of a federal contract.

Under the parallel doctrine of pre-emption, if a state law interferes with Congress’s  purposes and objectives, federal law and requirements pre-empt the state law, Sickle v. Torres Advanced Enterprise Solutions, LLC, –F.Supp.–, 2013 WL 7231238 (D.D.C. 2013). Sickle states, “When a state law stands

as an obstacle to the accomplishment  and execution of the full purposes and objectives of Congress, that

state law is pre-empted under the doctrine of conflict pre-emption,” see also Hines v. Davidowitz, 312

U.S. 52,61 S.Ct. 399, 85 L.Ed. 581 (1940).  A Court will find pre-emption where it is impossible for a private party to comply with both state and federal law and where the state law is an obstacle to the accomplishment and execution of Congress’s full purposes and objectives, cf. Crosby v. National Foreign Trade Council, 530 U.S. 363, 120 S.Ct. 2288 (2000).  A state workers’ compensation commission could not bar an investigator under a federal contract looking into federal workers’ compensation matters for want of a state license.

In conclusion on this point, a contractor conducting federal administrative investigations involving federal matters under this [gov. agency] contract would not be required to be licensed in a given state. The states have no authority over federal operations.