A-67634, FEBRUARY 5, 1936, 15 COMP. GEN. 688

A-67634: Feb 5, 1936

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WITHHOLDING OF AMOUNT DUE CONTRACTOR IN LIEU OF PERFORMANCE BOND A CONTRACT FOR LAUNDRY SERVICE NOT BEING A CONTRACT FOR "NAVAL SUPPLIES" IS NOT WITHIN THE TERMS OF SECTION 3719. BY REFERENCE (C) THERE WAS AWARDED TO THE MOHAWK LAUNDRY. WHICH IS THE LATEST COMMUNICATION FROM THE CONTRACTOR. IT IS PROPOSED THAT THIS OFFICE WITHHOLD $50.00 DUE ON OUTSTANDING BILLS IN LIEU OF BOND. 2. WHICH AMOUNT IT IS ANTICIPATED WILL NOT BE EXCEEDED DURING THE CURRENT FISCAL YEAR. IT APPEARS THAT A PERFORMANCE BOND WILL NOT BE REQUIRED UNDER THE PROVISIONS OF SECTION 3719. IT IS CONSIDERED ADVISABLE. AS THE CONTRACTOR WILL BE IN POSSESSION FROM TIME TO TIME OF ARTICLES OF GOVERNMENT PROPERTY FOR LAUNDERING.

A-67634, FEBRUARY 5, 1936, 15 COMP. GEN. 688

WITHHOLDING OF AMOUNT DUE CONTRACTOR IN LIEU OF PERFORMANCE BOND A CONTRACT FOR LAUNDRY SERVICE NOT BEING A CONTRACT FOR "NAVAL SUPPLIES" IS NOT WITHIN THE TERMS OF SECTION 3719, REVISED STATUTES, REQUIRING FURNISHING OF BID AND PERFORMANCE BONDS, OR CERTIFIED CHECKS IN CONNECTION THEREWITH, AND MONEY DUE A CONTRACTOR UNDER THE CONTRACT MAY BE WITHHELD IN LIEU OF THE FURNISHING OF A PERFORMANCE BOND IN SUCH CASE, BUT IF THE ADVERTISED SPECIFICATIONS REQUIRED THE FURNISHING OF A BOND THERE SHOULD BE DEDUCTED FROM THE AMOUNT OTHERWISE PAYABLE UNDER THE CONTRACT AN AMOUNT EQUAL TO THE PREMIUM THEREON.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE NAVY, FEBRUARY 5, 1936:

THERE HAS BEEN RECEIVED YOUR REQUEST OF NOVEMBER 12, 1935, FOR DECISION ON A QUESTION PRESENTED IN A LETTER DATED NOVEMBER 8, 1935, FROM THE MAJOR GENERAL COMMANDANT, UNITED STATES MARINE CORPS, AS FOLLOWS:

1. BY REFERENCE (C) THERE WAS AWARDED TO THE MOHAWK LAUNDRY, TOMS RIVER, N.J., CONTRACT NO. NOM-18484, DATED 1 JULY, 1935, FOR FURNISHING LAUNDRY SERVICE DURING THE FISCAL YEAR 1936 FOR THE MARINE BARRACKS, NAVAL AIR STATION, LAKEHURST, N.J. ALTHOUGH THE CONTRACT HAS BEEN DULY SIGNED BY THE MOHAWK LAUNDRY, THIS OFFICE HAS BEEN UNSUCCESSFUL, DESPITE REPEATED EFFORTS AND CONSIDERABLE CORRESPONDENCE, IN OBTAINING A PROPERLY EXECUTED PERFORMANCE BOND. BY REFERENCE (A), WHICH IS THE LATEST COMMUNICATION FROM THE CONTRACTOR, IT IS PROPOSED THAT THIS OFFICE WITHHOLD $50.00 DUE ON OUTSTANDING BILLS IN LIEU OF BOND.

2. IN VIEW OF THE FACT THAT LAUNDRY SERVICE FOR THE MARINE BARRACKS, NAVAL AIR STATION, LAKEHURST, N.J., DURING THE PAST FISCAL YEAR UNDER CONTRACT NO. NOM-17161, DATED 19 JUNE, 1934, WITH THE SOUTH JERSEY SUPERIOR LAUNDRY, OCEAN GATE, N.J., TOTALED ONLY $368.76, WHICH AMOUNT IT IS ANTICIPATED WILL NOT BE EXCEEDED DURING THE CURRENT FISCAL YEAR, IT APPEARS THAT A PERFORMANCE BOND WILL NOT BE REQUIRED UNDER THE PROVISIONS OF SECTION 3719, REVISED STATUTES. IT IS CONSIDERED ADVISABLE, HOWEVER, AS THE CONTRACTOR WILL BE IN POSSESSION FROM TIME TO TIME OF ARTICLES OF GOVERNMENT PROPERTY FOR LAUNDERING, THAT SOME FORM OF COLLATERAL BE FURNISHED. THE PROCEDURE PROPOSED BY REFERENCE (A) WILL, THEREFORE, BE SATISFACTORY TO THIS OFFICE PROVIDED THE WAIVER OF PERFORMANCE BOND, THE WITHHOLDING OF PAYMENT OF ACCOUNTS FOR JULY, AUGUST, AND SEPTEMBER 1935, TOTALING $56.94, AND THE PAYMENT OF SUBSEQUENT ACCOUNTS BE APPROVED BY THE COMPTROLLER GENERAL.

3. IN VIEW OF THE LAST PARAGRAPH OF REFERENCE (A), IT IS REQUESTED THAT THE COMPTROLLER GENERAL BE ASKED TO RENDER A DECISION WITH REGARD TO THE PROPOSED PROCEDURE AT THE EARLIEST PRACTICABLE DATE.

IT WILL BE NOTED THAT SECTION 3719, REVISED STATUTES, REFERRED TO IN THE QUOTED LETTER, RELATES TO PROPOSALS AND CONTRACTS FOR "NAVAL SUPPLIES," REQUIRING IN CONNECTION THEREWITH BID AND PERFORMANCE BONDS, OR CERTIFIED CHECKS. SEE 10 COMP. GEN. 528, 531. HOWEVER, THE CONTRACT IN THIS CASE WAS NOT FOR FURNISHING NAVAL SUPPLIES, BUT FOR LAUNDRY SERVICE; AND HENCE IS NOT WITHIN THE TERMS OF SECTION 3719, REVISED STATUTES. ACCORDINGLY, THERE APPEARS TO BE NO LEGAL OBJECTION TO THE PROPOSED PROCEDURE THAT IN LIEU OF PERFORMANCE BOND THE UNITED STATES RETAIN UNTIL AFTER THE CONTRACT IS COMPLETED THE SUM OF $50 AS A CASH BOND. HOWEVER, IN EVENT A PERFORMANCE BOND WAS REQUIRED BY THE TERMS OF THE ADVERTISED SPECIFICATIONS, AND THERE IS WITHHELD THE SUM OF $50 IN LIEU THEREOF, THERE SHOULD BE DEDUCTED FROM THE AMOUNT OTHERWISE ACCRUING UNDER THE CONTRACT FOR LAUNDRY SERVICE AN AMOUNT EQUAL TO THE PREMIUM ON THE PERFORMANCE BOND WHICH SHOULD HAVE BEEN FURNISHED IN ACCORDANCE WITH THE TERMS OF THE ACCEPTED BID. 11 COMP. GEN. 440.