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B-192237 1 (1979-01-15)

handle is hein.gao/gaobadguy0001 and id is 1 raw text is: 1. - DECISION FILE: B-192237 MATTER OF: THE CIMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON. D. C. 20548 DATE: January 15, 1979 United States Forest Service - Request for Advance Decision DIGEST: 1. Surety which completes defaulted contract under performance bond may be reimbursed for expenses it incurs in completing contract.from un- expended contract balance free from setoff by Government of debts of contractor. Unexpended contract balance incorporates all funds remaining in Government's hands, including withheld per- centages and progress payments, whether earned prior or subsequent to original contractor's default, less any liquidated damages to which Government is entitled. 2. Claim by payment bond surety against unexpended contract funds for payments to materialmen and laborers on behalf of defaulted contractor is subject to setoff by the Government for debts of contractor unless surety shows that it has satisfied all such claims. Absent consent of defaulted contractor, payment bond surety may not ordinarily be reimbursed from unexpended funds earned by contractor prior to default. 3. To extent Government has no claim against de- faulted contractor or surety, Government is mere stakeholder of contract funds in its possession. Any funds remaining in Government's hands after appropriate reimbursement to surety should be retained pending outcome .of litigation between surety and defaulted contractor. The Acting Director of Administrative Services, United States Forest Service (USFS), has forwarded to our Office a request for advance decision regarding the priority of payment for funds withheld under a pontracton the panish Peaks Project, Pike and San Tsabel National Forests.

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