(U.S. only) state government question

[Stephen C. North]

Greetings.  A state government employee would like to license certain
open source software, but believes it is impossible because its OSI
approved license (specifically, the CPL) specifies a different state
(in this case the State of New York) as the jurisdiction for legal claims.
The employee says, one state can't be bound by the laws of another.

Is this truly a problem?  Has anyone solved it already?

Stephen North