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B-199740 1 (1981-08-26)

handle is hein.gao/gaobadjrj0001 and id is 1 raw text is: A?'o L : . ... : , S * : ., •..S. . .. . / ; • tS&. ~ I *01_LERC THE COMPTROLLER GENERAL DECISION OF THE UN ITEO STATES WASHINGTON. 0. C. 20549 FILE: B-199740 DATE: August 26, 1981 MATTER OF: Department of the Army-f-Request for Advance Decision DIGEST: , I. United States may properly assert priority for debts owed to it. Since Small Business Administration (SBA), by virtue of assignment from assignee bank, may, under assignment, declare 'all of contractor's secured loans to be due and payable, SBA is owner of loan debts. Thus, contractor's debts are owed to United States and SBA has priority for Federal Government in contract's proceeds. 2. GAO approach in resolving competing private interests of assignee banks and payment bond sureties in contract balances (namely, allowing mutual agreements as to disposition of balances given conflicting court decisions), is not for application where, under assign- ment, defaulted bank loans secured by assignment are now owed to United States. Thus, SBA may not concede any of contract balance to payment bond surety even if surety has paid all claims under bond. 3. SBA enjoys benefit of no set-off provision of Assignment of Claims clause of contract by virtue of assignment from assignee bank. Thus, debt owed SBA has priority over possible IRS lien. The Corps of Engineers, Department of the Army (Army), has requested an advance decision as to the proper disbursement of $41,810 constituting the final balance due under contract No. DACW64-73-C-0076 with the Small Business Administration (SBA) which I2 , I

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