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B-226553 1 (1987-12-11)

handle is hein.gao/gaobadmyd0001 and id is 1 raw text is: ;The Comptroler General of the United States Washington, D.C. 20548 Decision Defense Logistics Agency - Disposition of Funds Paid in Settlement of Contract Action File: B-226553 Date: December 11, 1987 DIGEST Funds recovered from a contractor's insurance company in settlement ot a claim by the government against the contractor for damage to government property may not be considered as a refund and credited to the agency's appropriations, but must be deposited into the Treasury. DECISION The Chief, Accounting and Finance Division, Defense Construction Supply Center, Defense Logistics Agency, Columbus, Ohio, has requested our decision on whether certain funds, which were paid by a contractor's insurance company in settlement of the government's claim for damages to its property caused by the contractor's negligent performance, may be used to fund three contracts to correct or repair the damage. We conclude that funds paid on behalf of a contractor to settle a claim by the government for damages may not be used to repair damages caused by the contractor. Funds recovered from damage claims must be deposited in the Treasury. The Defense Construction Supply Center entered into a contract in the amount of $150,800 with Hatfield and J & L Electric of Columbus, Ohio, a joint venture, on September 30, 1985, for the installation of a 400 KVA uninterrupted power supply system to provide uninterrupted power to equipment installed in a computer center. During the installation, certain electrical connections were incorrectly made which caused extensive damage to some of the computer software and peripheral equipment. Contracts in the amount of $101,725 were entered into with three other contractors to repairs the damage. The insurance company for the original contractor paid the government $114,934.14 C-4084

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