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B-181246 1 (1975-08-18)

handle is hein.gao/gaobadcod0001 and id is 1 raw text is: THE COMPTROLLER GENERAL SCISION ~ OF THE UNITED STATES WASHINGTON, . C. 2054S FILE: B-181246 DATE: August 18,1975 MATTER OF: Bamco Machine, Inc. DIGEST: 1. Assignment to bank of Government contract proceeds where bank's alleged financing is through intermediary holding company may not be recognized as statutory assignment since there has been no showing that intermediary or bank actually provided funds to Government contractor or that intermediary expended funds for the performance of the contract. 2. Government contractor's assignment to bank of contract pro- ceeds executed after contractor's operations ceased is invalid under 31 U. S. C. 203 (1970) since purpose of statute removing bar to assignments is to induce financial institutions to lend money to finance contractor's operations. 3. Government contractor's grant of security interest in accounts receivable to holding company alleged to be intermediary for bank's financing of contractor is not valid assignment under 31 U. S. C. 203 (1970), even if properly filed with Government, since Government contract proceeds may be assigned only to financing institutions and holding company does not qualify as proper assignee. The Accounting and Finance Officer of the Defense Supply Agency has requested an advance decision regarding the propriety of setting off certain funds which are now payable to Bamco Machine, Inc. (Bamco). On June 24, 1971, contract N00197-71-C-0394 (hereinafter the Navy contract) was awarded to Bamco by the Naval -Ordnance Station, Louisville, Kentucky, for 160 air flasks at a unit price of $140. 99. On April 17, 1973, the procuring contracting officer (PCO) issued a partial termination for default for 70 of the 160 flasks and by modi- fication No. P0005, dated June 15, 1973, the unit price of the remain- ing 90 flasks was reduced to $134. 6175. These 90 flasks were shipped on September 27, 197 3, and accepted at the destination on January 22, 1974. Upon examination, it was found that 23 of the 90 flasks were defective and required repairs amounting to $600, which the PCO requested be withheld. Bamco submitted its invoice in the amoirit of $12, 115. 57 for the 90 flasks with its final shipment. PtY84S pcsc 5 (C n ....

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