About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

B-221506 1 (1986-07-14)

handle is hein.gao/gaobadmjt0001 and id is 1 raw text is: THE COMPTROLLER GENERAL OF THE UNITEO STATES WASHINGTON. 0. C. 20549 B-221 506 DATE: July 14, 1986 MATTER OF: Entitlement to Contract Payment-Department of the Air Force DIGEST: A surety called upon to answer for its principal's default is subrogated to any funds due or to become due under the contract and this subrogation right relates back to the date of the bond. -Therefore, a performance bond surety which com- pleted contract performance after the contractor's default, has priority to proceeds of Armed Ser- vices Board of Contract Appeals award over the prime contractor and the contractor's assignee bank. On September 15, 1985, the Armed Services Board of Contract Appeals (ASBCA) ruled that Western Mechanical Con- tractors, Inc., and Ben Matto (joint venture) (Western Mechan- ical or contractor) was entitled to payments totaling $15,915, plus interest, under contract number F38601-79-C-0010 with the Department of the Air Force. The contracting officer at Shaw Air Force Base requested our decision on whether the award should be paid to the contractor, to the contractor's surety, or to an assignee bank. In our opinion, the surety should receive the payment. FACTS Western Mechanical was awaraed the above-referenced contract in June 1977 for housing renovation at Shaw Air Force Base. On May 8, 1981, its rights to proceed were terminated under the authority of General Provision Number 5 of the con- tract entitled Termination for Default-Damages for Delay-Time Extension. Nearly a year after its default and termination, on May 2, 1982, Western Mechanical executed an assignment of the monies due it under the contract to the Allied Lakewood Bank of Dallas. Following termination, the surety on the contractor's performance bond, the Aetna Insurance Company, completed the project. However, for reasons not clear from the record, Aetna would not enter into the customary takeover agreement OECISION FILE:

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most