Contractor Liability and Indemnification Act

Contractor Liability and Indemnification Act - Directs a State court or a U.S. district court, in any civil action brought by a Government employee alleging liability of a Government contractor for harm concerning which the employee is entitled to receive worker compensation payments: (1) at the request of any party, to make findings of fact as to the proportion of fault of the United States in causing such harm; and (2) to reduce any judgment of liability rendered against the contractor by the proportion of fault of the United States. Reduces the amount the United States is entitled to obtain through right of subrogation arising from worker compensation payments for harm for which the contractor is liable by the proportion of fault of the United States.

Allows a contractor 90 days after such a civil action is brought to notify the U.S. Attorney General of his or her intention to seek such a reduction of liability. Allows the United States 90 days after receipt of such notice to intervene as a party in such action. Sets forth factors to be considered by the court in determining the proportion of fault of the United States.

Requires Government contracts (including contracts facilitating national defense) to include a provision that the Government will hold harmless and indemnify the contractor against specified types of claims or losses arising out of, or resulting from, risks that are defined by the contract involved as unusually hazardous or nuclear in nature or as giving rise to possible liability against which the contractor cannot reasonably protect itself through private or self-insurance, regardless of whether the claim or loss results from the negligence or wrongful act or omission of a contractor. Excludes from such requirement any contract for the procurement of goods or services which are sold to nongovernmental purchasers for identical applications. Provides that a contract indemnification provision may require the contractor to maintain a specific amount and type of financial protection.

Declares that indemnification and hold harmless agreements between the United States and a contractor, a contractor and a subcontractor, or two subcontractors may not cover claims or losses caused by the willful misconduct or lack of good faith of the contractor's or subcontractor's principal officials.

Allows a Government entity to discharge its indemnification obligation by making direct payments out of specified funds to the contractor, subcontractor, or the third party involved. Requires an indemnification provision to provide for: (1) notice to the Government of any claim or action against, or loss by, the contractor; and (2) the election by the Government to control or assist in the settlement or defense of such claim or action.

Allows any contractor or contractor aggrieved by an agency determination not to provide indemnification to seek judicial review of such determination.

Declares that nothing in this Act shall be construed to create any liability of the Government.