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In the wake of the events of September 11, 2001, President Bush pledged, "Whatever it costs to defend our country, we will pay it." Not since the bombing of Pearl Harbor, has America been so shocked and surprised by the hostile acts of others. Then, as now, emergency spending to mobilize the industrial base and apply America's industrial strength to the war effort were seen as the key to victory. When American soil is attacked, the urgency of fueling the American war machine becomes paramount. Congress passed the First War Powers Act just eleven days after the Japanese bombed Pearl Harbor. The Act gave the President broad powers in times of war to circumvent nearly all of the constraints of government contracting. It "provided a virtually complete emancipation from peacetime procedural limitations on contracting. Congress renewed these extraordinary contractual powers during the Korean War and ultimately passed Public Law 85-804 HEREINAFTER ALSO REFERRED TO AS 85-804 as permanent legislation. 85-804 continues to allow extraordinary relief to government contractors to facilitate the national defense. Many contractors face liability for waste generated (in whole or substantial part) while performing government contracts. Nationwide cleanup for past environmental sins is expected to cost hundreds of billions of dollars. Therefore, it is no surprise that government contractors have sought 85-804 relief for environmental liabilities.
Public Law 85-804, as implemented, authorizes DoD and other federal agencies to indemnify contractors against losses from unusually hazardous or nuclear risks. The law requires that if any actions are taken under the law, they be reported to Congress annually. Reported actions can include specific contractors' claims for costs already incurred or the inclusion of indemnification clauses in contracts to protect DOD contractors from future risks. The Comprehensive Environmental Response and Liability Act (CERCLA) as amended, commonly known as Superfund (42 U.S.C. 9601-75), imposes liability for cleanup, on a variety of potentially responsible parties, including owners, facility operators, and generators of hazardous substances. Under CERCLA, DoD is included among parties responsible for environmental cleanup of its facilities. If DoD pays cleaup costs related to a contractor's activities, the contractor remains a potentially responsible party under CERLCLA, and DoD could seek reimbursement or possible contribution from the contractor or its insurer.