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B-182911 1 (1975-02-05)

handle is hein.gao/gaobadcof0001 and id is 1 raw text is: 5 ~ . THE COMPTROLLER GENERAL oECISION . . OF THE UNITED STATES : WASHINGTON, D.C. 20548 FILE: B-182911 DATE: February 5,1975 MATTER OF: Reeves Electric Construction Company DIGEST: Where subcontractor notifies contracting office of contrac- tor's refusal to pay monies owed subcontractor and contractor refuses to pay subcontractor until Government pays it amount retained under contract and surety under Miller Act states that it has no objection to release of monies to contractor, provided money is used to pay bills under contracts on which it is surety, Government should not disburse funds to con- tractor since Government is on notice of claims by subcon- tractor for which surety is potentially liable should contractor not pay subcontractor. Accordingly, in the absence of an agreement between the parties, it is suggested that funds be retained pending judicial determination of rights of parties. By letter of December 17, 1974, the certifying officer at the Rocky Mountain Regional Office of the National Park Service, United States Department of the Interior, Denver, Colorado, requested our decision as to the propriety of a final payment under contract No. CX-1200-4-9017 for the resurfacing of roads at the Custer Battlefield National Monument in Montana. Contract No. CX-1200-4-9017 was awarded to Reeves Electric Construction Company (Reeves) on June 28, 1974. Work under the contract was accepted as complete on October 12, 1974. On October 25, 1974, a copy of the final estimate (Payment Estimate No. 5), together with the Release of Claims, was sent to Reeves for execution. On October 29, 1974, Portable Pavers, Inc. (Portable Pavers), one of Reeves' subcontractors under the above contract, advised the contracting officer's staff that its invoices to Reeves in the amounts of $24,768.60 and $6,989.40 had not been paid. Prior to this notice by Portable Pavers, the contracting officer had sent a telegram dated October 25, 1974, to the surety on the present contract, United States Fidelity and Guaranty Company, requesting the surety's consent to the release of the retention amount of $23,725.94. The surety replied, in pertinent part, as follows: - 1 -

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