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B-189183 1 (1979-01-12)

handle is hein.gao/gaobadgur0001 and id is 1 raw text is: 
                                -34
                           THE COMPTROLLER GENERAL
   DECISION                OF  THE   UNITED STATES
                           WASHINGTON, 0. C. 20546




   FILE: B-189183               DATE: January 12, 1979

   MATTER  OF:   Robert L. Singleton; Capital City
                 Construction, Inc., et al.

   DIGEST:                 L   -


1.  GAO will not question indebtedness owed by
    8(a) subcontractor to Small Business Administration
    (SBA), notwithstanding allegations of fraudulent
    inducement to debt and alleged breach of collateral
    agreement by SBA, since allegations are unsupported
    and are contradicted by SBA.


2.  Where surety has paid only fraction of outstanding
    claim under its payment bond, surety will not
    be permitted to share in retainage held by
    Government despite assertion that SBA advance
    payment to contractor was improper.


3.  Right of set-off as to debts owed is inherent
    -Unted-States   and extends to debts owed as
    result of loan by SBA to 8(a) subcontractor7
    SBA's capacity as Government agency could not
    be disregarded by courts.


4.  SBA was not authorized to subordinate its interest
    to surety in view of dollar amount of contract.


5.  Pearlman v. Reliance Insurance Company, 371 U.S.
    132 (1962), does not affect Government's right
    to priority to contract retainage against
    surety which has completed payments under pay-
    ment bond.


6.  Attorney's liens are not recognizable against
    United States.

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