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B-214905.2 1 (1984-07-10)

handle is hein.gao/gaobadlud0001 and id is 1 raw text is: ~4414 'A THE COMPTROLLN U8NENIAL OUCISION OP THE UNITED STATES WASHINGTON 0.0 . 29540 FILE: B-214905.2 OATE: July 10, 1.984 International Fidelity-Insurance Co.-- Reconsideration OIGEST: 1. Prior decision is affirmed on reconsideration where the protester has not shown any error of law or fact which would warrant reversal of the decision. 2. Payment of withheld contract funds that are claimed by payment bond surety, the Depart- ment of Labor (DOL) for wage underpayments, and the Internal Revenue Service (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. 3. Payment bond surety is not subrogated to the rights of unpaid or underpaid laborers. 4. The Federal Tax Lien Act of 1966 does not affect the government's separate remedial right of setoff. International Fidelity Insurance Co. (Fidelity) requests that we reconsider our decision in the matter of Watervliet Arsenal, Department of the Army, B-214905, May 15, 1984. In that decision, we stated that payment of withheld contract funds that are claimed by a payment bond surety, the Department of Labor (DOL) for wage underpay- ments, and the Internal Revenue Service (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. Fidelity, the surety in this case, asserts that we have overlooked certain court decisions which indicate that the surety should get priority over the DOL and the IRS. We affirm our prior decision. Fidelity cites the Supreme Court's decision in Pearlman v. Reliance Insurance Company, 371 U.S. 132,

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