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B-187283 1 (1976-11-04)

handle is hein.gao/gaobadegd0001 and id is 1 raw text is: DIGEST:: t* ~~ TTH IN.CDMPTIOLLLVR Gd2NEUFAL- LuDCJSIO daIO OF HE tIN ITL0 BSTATLV,3 ClaimsActS 1 U.S..N8 23T Q1 .SC.C 15 (970), A Z.;'f& A HN T N ,.2b FILE: U 187283 DAT a isMbe t bo4, 1976 MATTER OF; Balboa InsaIsnce Co, DIGEST: 17,6&retyinot financing institution tinder y sanent of Claims Act, 31 utsoc9 8 903, 41 U.SC, 6 15 (1970), anJ assignment by prime contractor to surety of rights in ofrGovernment con vacL is not binding on Governent e 2L Upon proof of paynent of all claims against payment b.id # surety and upon execution of indemnification and bold hamle os agreemnt, prime contractor's surety may be paid funds retained by Navy. Balboa nsurance Company (Balboa) has filed a claim for .7,66250 retain ta by the Department of the Navy (lNy) from progress payments under Navy contractoN-62474s75-C-6434 for the rehabilitaondon the chapel and auditorium and the replacement of roof, drains at the Navaland Marine Corps Reserve Cen Lern Los Angeles, CaltfoT,4as Balboa was surety under, performftance and -payment boids furnished by the prime contractor, United Califoria Builders (United). The Navy has-retained 47,862,50, which Balboa claims is due to it, less an agreed amount of $200.00 for the completion by the Navy of punch list items kiuvolvhag general cleanup. Balboa has informed this Office that it has pid sums to three subcontiactors on this contract totalling 4,2 .4O and has withheld payment to two other subcontractors totalling $18,811.16 pending the completion of wiarranty work under the sub- contracts, The' Navy has advised that Balboa's actions have boon taken pursuant to its obligations under the payment bond. The record indicates that Balboa is the only claitant of these fun's. Balboa argues that these funds should be paid to 'it as assignee of the rights in United's contract because of the general indemnity agreement signed by United and Balboa which provided for assignment co Balboa of United's rights in the contract in the event of United's dCfault. We ogree with the Navy that this assignment would not bind the United States because Balboa, as surety, does not qualify as a financing institution within the meaning of the Asrsignment of Claims Act, 31 U.S.C. § 203, 1 -

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