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B-194025 1 (1979-05-09)

handle is hein.gao/gaobabjjk0001 and id is 1 raw text is: op op4 00 n * r Lt u _•. . . . . ._.......___,- . .. __ ,=, .. . .. m l . - . .. - - - - .wP flf....f-l.. w .- i I . . at5 - United States General Accounting Office %Akektntnwv AC 9f0548R uil U; General Counsel - at I.. WOWu II tsk I s a .t In Reply 8 0 t: -194025 ;~ k~ 7~ 4~,hv/~ 4, A r dV%' rt.45A~?14 !~ /\Y 19Y9 4r /~6[oe;cr7 The Honorable Richard S. Sc:hweiker United States Senate to8 Dear Senator Schweiker: We refer to ourletter dated January 23, 1971--,eusting cur views on thm request IoF.. J.Neyerl,_Inc, (leyerl), tha't-yo trod ce a private relief bill in Congress to reimburLe that firm for services performed as a subcontractor under Department of E1jergy (DOE) contract ET-77-C-01-8918, 'And eSt7 yae n claims it perforred steel erection series foriliny-a t L%, jnca. (0S3)a the prime contractor Ig p e ih$theBureau of Hines facility at BrUCtOt Pennsylvania; Mt BSI is unable to pay heya r the$73,OOO.63 due for the work performed; that thenS coiract has been toriated by the Government for default and that no payment bond exists to pro~tpct the rights of sub- contractors under this contract az required by thetiller Act, 40 US.C. 27,0a etseg. (1976). The Miller Act Is applicable only to ca4,truqtlon cantract', and not. to contracts for tle furnishing of supp.ies 6r, services to the united States. We have exam,ed a copy of the contract in question ,and note that it was regarded by the Bureau of Mines as, andadvert1aed ae,;a supply contract rather than one for'construction,, Under this circumstadee, no payment bond is ordinarily requitred of prime cbntractors and thus as in most supply con- tracts, Meycrl assumed the risk of nonpayment without recourse to the United States. This result is based on the ,theory that no privity of con- tract exists between-the Government and a subcontractor which providas legdl justificationi,* cupport a claim by a subcontractor agains Lth' United States, Se 32aCom..,Gen. 174 (1952). Consequently, DOE properily refused to reimburse feyerl for its claim. Similarly, where a construction contract has been awarded without the Mller Act payment bond, a prime contractor's failure or refusal to pay a subc,-ntractor for work performed would not entitle the subcontractor to recioer its loss fror the United States, Sea ,exliLumber & SuUp;!y Cor , United States, 48R F.2d 88 4tU Cir..197U.,fU-ted States S- ~mith, 324 F.2d_622_(f lCir. , .. -_ ,I, •_ . 62A ir_ s -- Iitk$w9CZ5 m Dwz I I I

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