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B-234166 1 (1989-08-14)

handle is hein.gao/gaobadnnt0001 and id is 1 raw text is: ~~i.LA o*The Comptroller General of the United States Washington, D.C. 20548 Decision Soil Conservation Service--Termination of Matter of- Collection Action File: B-234166 Date: August 14, 1989 DIGEST The Department of Agriculture, Soil Conservation Service, may not terminate collection of a debt arising from underpayment of the Department's proportionate share of a settlement payment made to a grant recipient by its contractor's surety company. Under the Federal Claims Collection Standards, collection action may be terminated if there is no legal basis for recovery by the United States. Because the Department of Agriculture has a significant basis for recovery, it must proceed with collection action. DECISION The Department of Agriculture, Soil Conservation Service (SCS), has submitted a claim against the Batavia Kill Watershed District (District) for resolution and instructions under 4 C.F.R. S 105.1(c) prior to referral by SCS to the U.S. Department of Justice. As will be explained below, there exists no law or regulation which would authorize SCS to terminate collection action and, therefore, the debt should be collected. BACKGROUND According to the submission, in 1973, under a watershed workplan agreement and a project agreement, the District contracted for construction of a multipurpose structure. The federal cost share of the structure was 96.12 percent. The contractor failed to diligently pursue the work and the District terminated its right to proceed. The contractor's surety refused to take over the contract and, consequently, the District reprocured the work at an additional cost of $574,678.27, with the federal government paying 96.12 percent ($552,380). After protracted litigation between the District and the surety, the surety paid the District $600,000 in settlement of the District's claim. Out of this amount, the District paid $110,000 as legal fees to the attorney who represented it in the court actions against the /

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