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B-192516 1 (1978-11-08)

handle is hein.gao/gaobadgpg0001 and id is 1 raw text is: THW COfMlPTROLLrN LENERAL DECISION OF THE UNITro STATES FILE: B-192516 DATE: November 8, 1978 MATTER OF: American Fidelity Fire Insurance Co. DIGEST: Army, although a mere stakeholder, became liable to Miller Act surety where surety notified Army of unpaid claims against contractor and asserted its prior rights to contract retainages, but where through clerical error, Army mailed final pay- ments to contractor rather than to surety as agt.:ed by all parties. Surety may be paid upon . submission of evidence that all outstanding claimE have been paid and suraly assigns to Government any right it may have to recoup erroneous payments made to contractor. The Department of the Mi-ay, Finance and Accounting Center, Indian;polis, Indiana, has requested a decision as to whether the claim of a bonding company should be paid. The Amrican Fidelity Fire Insurance Company (American Fidelity) has filed claims for $5,413.15 and $1,30..9b under Army contracts DAKF48-76-C-A011 and DAKF48-77-C-0013, for modifications to buildings at Fort Hood, Texas. American Fidelity was surety under Miller Act (40 U.S.C. S 270) performance and payment bonds furnished by the prime contractor, H. C. Hodge General Contracto7s (Hodge). The record indi- cates the following sequence of events. On May 10, 1977, counsel for American Fidelity advised the contracting officer that certain claims from subcontractors under DAKF4B-76-C-AOl1 had been received. Because Hodge hail not paid these suppliers, the surety requested that all further payments to the contractor be withheld pending further instructions. On June 6, 1977, the surety advised the contractiag officer of the contractor's failure to make payments under DAKF48-77-C-0013 and made the same request concerning futther payments by the Army under the second contract. On June 16, 1977, the contracting officer re- ceived a letter from Hodge statinri thnt all monios

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