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B-214905 1 (1984-05-15)

handle is hein.gao/gaobadlrv0001 and id is 1 raw text is: THE COMPTROLLER MENERAL OECISION OP THU UNITED STATES WAGNINGTON. D.C. 00540 FILE: B-214905 OATE: May 15,1984 MATTER OF: Watervliet Arsenal, Department of the Army OIGEST: Payment of withheld contract funds that are claimed by payment bond surety, the DOL for wage underpayments, and the IRS for tax indebtedness may be made in the full amount of the DOL claim, then of the IRS claim, with the remaining balance payable to the surety. By letter dated April 5, 1984, the contracting officer at Watervliet Arsenal, Department of the Army (Army), requested a decision of our Office in regard to the dis- bursement of funds withheld under contract No. DAAA22-83-C- 0133 between Dennis H. Tremont, Inc. (Tremont), and the Army. By letter dated January 9, 1984, the Department of Labor (DOL) notified the Army that an investigation disclosed that Tremont had at that point failed to pay $12,117.23 in wages and overtime in violation of the Davis- Bacon Act and the Contract Work Hours and Safety Standards Act (CWHSSA). In addition, $100 in liquidated damages was computed to be due as a result of the CWHSSA violations. DOL requested that sufficient funds be withheld to cover the back wage deficiency. Shortly thereafter, the Internal Revenue Service (IRS) requested to be paid by the Army a sum of $5,895.15 plus interest and penalty charges from the contract proceeds to satisfy the tax liability of Tremont. On February 27, 1984, the attorney for International Fidelity Insurance Company (Fidelity), the payment bond surety for Tremont, wrote the Army and requested that the next $23,867.59 which becomes due to Tremont be paid by the Army to Fidelity as reimbursement of the payment it made on Tremont's payment bond. The Army has requested that we determine the priority of the claims of the DOL, IRS, and Fidelity.

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