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B-202995 1 (1981-07-14)

handle is hein.gao/gaobabkcm0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 OFFICE OF GENERAL COUNSEL B-202995 July 14, 1981 John F. Gambal Gambal & Associates, Inc. 22 Shenandoah Drive North Caldwell, New Jersey 07006 Dear Mr. Gambal: Your letter of April 27, 1981 requested our review of therPostal Service's practices regarding tJ1rrights of a sureyjcalled upon to complete a defaulted construction pro- ject under a performance bond. You contend that the Postal Service practices are more restrictive than those of other Federal agencies in that a surety may not obtain a con- struction firm to contract with the Postal Service for the remaining work. In your view, this method should be an acceptable alternative to either the surety itself assuming responsibility for completion of the work through a take- over agreement or the Government completing the work through its own replacement contractor. The Postal Service, by letter dated May 14, 1981 clari- fied its earlier position by stating that the procedure you suggest may be acceptable in appropriate cases. However, the replacement contractor must be fully satisfactory to the contracting officer in that event, since the Postal Service retains responsibility for both selection of the replacement contractor and completion of the defaulted construction project. The Postal Service position, as clarified, appears to accommodate the legitimate interests of the surety where possible, while recognizing the fact that the Postal Service replacement contract necessarily retains its Governmental character. Of course, in those instances where the surety is not satisfied with this circumstance, it may request a take-over agreement which, if granted, would permit the surety to complete the work with a replacement contractor of its own choosing.

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