B-13700, DECEMBER 2, 1963, 20 COMP. GEN. 295

B-13700: Dec 2, 1963

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

IT IS THE CONTRACTOR-S. WHERE THERE IS A VALID ASSIGNMENT OF MONEYS PAYABLE UNDER A GOVERNMENT CONTRACT. THERE IS NO NECESSITY FOR A SPECIFIC CLAIM THEREFOR FROM THE ASSIGNEE. THE FORM OR MEANS OF INDICATING SUCH RECOGNITION IS NOT MATERIAL INSOFAR AS THE GENERAL ACCOUNTING OFFICE IS CONCERNED. THERE IS NO OBJECTION TO ADMINISTRATIVE INSTRUCTIONS TO THE EFFECT THAT THE "TRUE COPY OF THE INSTRUMENT OF ASSIGNMENT. 1940: I HAVE YOUR LETTER OF NOVEMBER 28. AS FOLLOWS: REFERENCE IS MADE TO THE " ASSIGNMENT OF CLAIMS ACT OF 1940 . A COPY OF WHICH IS ATTACHED FOR YOUR CONVENIENT REFERENCE. WHERE MONEYS DUE UNDER A CONTRACT HAVE BEEN ASSIGNED IN ACCORDANCE WITH THIS LAW. IS REQUIRED TO EXECUTE CERTIFICATES ON VOUCHERS.

B-13700, DECEMBER 2, 1963, 20 COMP. GEN. 295

ASSIGNMENT OF CONTRACT PAYMENTS THE ASSIGNMENT OF CLAIMS ACT OF 1940, AUTHORIZING, UNDER SPECIFIED CONDITIONS, THE ASSIGNMENT OF MONEYS DUE OR TO BECOME DUE UNDER GOVERNMENT CONTRACTS, DOES NOT AUTHORIZE THE ASSIGNMENT OF THE CONTRACT ITSELF, AND HENCE, IT IS THE CONTRACTOR-S, AND NOT THE ASSIGNEE-S, RESPONSIBILITY TO EXECUTE REQUIRED CERTIFICATES ON VOUCHERS, INVOICES, ETC., HAVING REFERENCE TO MATERIAL FACTS INCIDENT TO PERFORMANCE OF THE CONTRACT AND ESTABLISHING THE RIGHT TO PAYMENT. WHERE THERE IS A VALID ASSIGNMENT OF MONEYS PAYABLE UNDER A GOVERNMENT CONTRACT, AS AUTHORIZED BY THE ASSIGNMENT OF CLAIMS ACT OF 1940, THERE IS NO NECESSITY FOR A SPECIFIC CLAIM THEREFOR FROM THE ASSIGNEE, BUT THE VOUCHER, INVOICE, OR OTHER DATA IN SUPPORT OF A PAYMENT DIRECT TO THE ASSIGNEE SHOULD CLEARLY INDICATE THAT THE CONTRACTOR RECOGNIZES THE ASSIGNMENT, ITS VALIDITY, AND THE RIGHT OF THE ASSIGNEE TO RECEIVE PAYMENT. THE FORM OR MEANS OF INDICATING SUCH RECOGNITION IS NOT MATERIAL INSOFAR AS THE GENERAL ACCOUNTING OFFICE IS CONCERNED. THERE IS NO OBJECTION TO ADMINISTRATIVE INSTRUCTIONS TO THE EFFECT THAT THE "TRUE COPY OF THE INSTRUMENT OF ASSIGNMENT," WHICH THE ASSIGNMENT OF CLAIMS ACT OF 1940 REQUIRES AN ASSIGNEE OF GOVERNMENT CONTRACT PAYMENTS TO FILE WITH SPECIFIED OFFICES AND PERSONS, MAY CONSIST OF (1) A DUPLICATE ORIGINAL, (2) A COMPLETE PHOTOSTATIC COPY OF THE ORIGINAL, OR (3) A CERTIFIED TRUE COPY OF THE ORIGINAL. HOWEVER, WITH RESPECT TO CERTIFIED COPIES, IT WOULD APPEAR DESIRABLE THAT THE CERTIFICATE BE EXECUTED BY A NOTARY PUBLIC OR OTHER OFFICER AUTHORIZED BY LAW TO ADMINISTER OATHS.

COMPTROLLER GENERAL WARREN TO THE FEDERAL WORKS ADMINISTRATOR, DECEMBER 2, 1940:

I HAVE YOUR LETTER OF NOVEMBER 28, 1940, AS FOLLOWS:

REFERENCE IS MADE TO THE " ASSIGNMENT OF CLAIMS ACT OF 1940 ," APPROVED OCTOBER 9, 1940, ( PUBLIC, NO. 811, 76TH CONGRESS), A COPY OF WHICH IS ATTACHED FOR YOUR CONVENIENT REFERENCE.

WHERE MONEYS DUE UNDER A CONTRACT HAVE BEEN ASSIGNED IN ACCORDANCE WITH THIS LAW, THE QUESTION ARISES AS TO THE PROCEDURE TO BE FOLLOWED IN MAKING PAYMENTS UNDER THE CONTRACT WITH PARTICULAR REFERENCE TO THE MATTER OF WHETHER THE ASSIGNEE, AS WELL AS THE CONTRACTOR, IS REQUIRED TO EXECUTE CERTIFICATES ON VOUCHERS, INVOICES, OR OTHER SIMILAR DOCUMENTS SUBMITTED FOR PAYMENT. IT WILL BE APPRECIATED IF YOU WILL ADVISE THIS AGENCY AS TO WHETHER SUCH CERTIFICATES MUST BE SIGNED BY THE ASSIGNEE IN EACH CASE, AND IF SO WHAT FORM OF CERTIFICATE WILL BE SATISFACTORY TO YOUR OFFICE.

REFERRING TO PROVISO NO. 4 OF THE ACT, REQUIRING THAT THE ASSIGNEE, "SHALL FILE WRITTEN NOTICE OF THE ASSIGNMENT TOGETHER WITH A TRUE COPY OF THE INSTRUMENT OF ASSIGNMENT WITH" THE AGENCIES SPECIFIED, PLEASE ADVISE WHETHER THE FOLLOWING INSTRUCTION WOULD BE APPROPRIATE:

"TO THE ORIGINAL (BUT NOT THE COPIES) OF EACH NOTICE OF ASSIGNMENT THERE SHOULD BE ATTACHED ONE TRUE COPY OF THE INSTRUMENT OF ASSIGNMENT. THIS MAY CONSIST OF (A) A DUPLICATE ORIGINAL CONTAINING ALL THE SIGNATURES, SEALS, ACKNOWLEDGMENTS, ETC., WHICH APPEAR ON THE ORIGINAL, (B) A COMPLETE PHOTOSTATIC COPY OF THE ORIGINAL, OR (C) A CERTIFIED COPY OF THE ORIGINAL, PROVIDED THAT SUCH COPY IS ACCURATE AND COMPLETE IN ALL RESPECTS, INCLUDING SIGNATURES, SEALS, ACKNOWLEDGMENTS, ETC., WHICH MAY BE TYPEWRITTEN.'

WITH RESPECT TO THE CERTIFICATION OF A COPY OF THE ORIGINAL ASSIGNMENT, DO YOU CONSIDER IT NECESSARY THAT SUCH CERTIFICATE BE EXECUTED BY A NOTARY PUBLIC OR OTHER OFFICER AUTHORIZED BY LAW TO ADMINISTER OATHS.

THE ASSIGNMENT OF CLAIMS ACT OF 1940, PUBLIC, NO. 811, SEVENTY-SIXTH CONGRESS CONGRESS, APPROVED OCTOBER 9, 1940, PROVIDES:

THAT SECTIONS 3477 AND 3737 OF THE REVISED STATUTES BE AMENDED BY ADDING AT THE END OF EACH SUCH SECTION THE FOLLOWING NEW PARAGRAPH:

"THE PROVISIONS OF THE PRECEDING PARAGRAPH SHALL NOT APPLY IN ANY CASE IN WHICH THE MONEYS DUE OR TO BECOME DUE FROM THE UNITED STATES OR FROM ANY AGENCY OR DEPARTMENT THEREOF, UNDER A CONTRACT PROVIDING FOR PAYMENTS AGGREGATING $1,000 OR MORE, ARE ASSIGNED TO A BANK, TRUST COMPANY, OR OT FINANCING INSTITUTION, INCLUDING ANY FEDERAL LENDING AGENCY: PROVIDED,

"1. THAT IN THE CASE OF ANY CONTRACT ENTERED INTO PRIOR TO THE DATE OF APPROVAL OF THE ASSIGNMENT OF CLAIMS ACT OF 1940, NO CLAIM SHALL BE ASSIGNED WITHOUT THE CONSENT OF THE HEAD OF THE DEPARTMENT OR AGENCY CONCERNED;

"2. THAT IN THE CASE OF ANY CONTRACT ENTERED INTO AFTER THE DATE OF APPROVAL OF THE ASSIGNMENT OF CLAIMS ACT OF 1940, NO CLAIM SHALL BE ASSIGNED IF IT ARISES UNDER A CONTRACT WHICH FORBIDS SUCH ASSIGNMENT;

"3. THAT UNLESS OTHERWISE EXPRESSLY PERMITTED BY SUCH CONTRACT ANY SUCH ASSIGNMENT SHALL COVER ALL AMOUNTS PAYABLE UNDER SUCH CONTRACT AND NOT ALREADY PAID, SHALL NOT BE MADE TO MORE THAN ONE PARTY, AND SHALL NOT BE SUBJECT TO FURTHER ASSIGNMENT, EXCEPT THAT ANY SUCH ASSIGNMENT MAY BE MADE TO ONE PARTY AS AGENT OR TRUSTEE FOR TWO OR MORE PARTIES PARTICIPATING IN SUCH FINANCING;

"4. THAT IN THE EVENT OF ANY SUCH ASSIGNMENT, THE ASSIGNEE THEREOF SHALL FILE WRITTEN NOTICE OF THE ASSIGNMENT TOGETHER WITH A TRUE COPY OF THE INSTRUMENT OF ASSIGNMENT WITH---

"/A) THE GENERAL ACCOUNTING OFFICE.

"/B) THE CONTRACTING OFFICER OR THE HEAD OF HIS DEPARTMENT OR AGENCY.

"/C) THE SURETY OR SURETIES UPON THE BOND OR BONDS, IF ANY, IN CONNECTION WITH SUCH CONTRACT, AND

"/D) THE DISBURSING OFFICER, IF ANY, DESIGNATED IN SUCH CONTRACT TO MAKE PAYMENT. NOTWITHSTANDING ANY LAW TO THE CONTRARY GOVERNING THE VALIDITY OF ASSIGNMENTS, ANY ASSIGNMENT PURSUANT TO THE ASSIGNMENT OF CLAIMS ACT OF 1940 SHALL CONSTITUTE A VALID ASSIGNMENT FOR ALL PURPOSES.'

ANY CONTRACT ENTERED INTO BY THE WAR DEPARTMENT OR THE NAVY DEPARTMENT MAY PROVIDE THAT PAYMENTS TO AN ASSIGNEE OF ANY CLAIM ARISING UNDER SUCH CONTRACT SHALL NOT BE SUBJECT TO REDUCTION OR SET OFF, AND IF IT IS SO PROVIDED IN SUCH CONTRACT, SUCH PAYMENTS SHALL NOT BE SUBJECT TO REDUCTION OR SET-OFF FOR ANY INDEBTEDNESS OF THE ASSIGNOR TO THE UNITED STATES ARISING INDEPENDENTLY OF SUCH CONTRACT.

SEC. 2. THIS ACT MAY BE CITED AS THE " ASSIGNMENT OF CLAIMS ACT OF 1940.'

IT IS TO BE OBSERVED THAT THE ASSIGNMENT PERMITTED BY THE SAID ACT RELATES TO "THE MONEYS DUE OR TO BECOME DUE" UNDER A PUBLIC CONTRACT. THE ACT DOES NOT AUTHORIZE ASSIGNMENT OF THE CONTRACT ITSELF, WITH THE RESULTANT SHIFT OF RESPONSIBILITY FOR ITS PERFORMANCE, ETC., FROM THE CONTRACTOR TO THE ASSIGNEE, CONSEQUENTLY, IRRESPECTIVE OF AN ASSIGNMENT BY A CONTRACTOR OF "THE MONEYS DUE OR TO BECOME DUE," THE CONTRACTOR IS CHARGED WITH THE DUTY OF PERFORMING THE CONTRACT IN ACCORDANCE WITH ITS TERMS. SUCH BEING THE CASE, IT IS THE RESPONSIBILITY OF THE CONTRACTOR TO EXECUTE CERTIFICATES ON VOUCHERS, INVOICES, ETC., AS REQUIRED BY THE CONTRACT OR OTHERWISE, SUCH CERTIFICATES HAVING REFERENCE TO MATERIAL FACTS INCIDENT TO PERFORMANCE OF THE CONTRACT AND AS ESTABLISHING THE RIGHT TO PAYMENT--- MATTERS WHICH, GENERALLY, WOULD NOT BE WITHIN THE KNOWLEDGE OF THE ASSIGNEE--- IT BEING CONSIDERED FOR ALL PRACTICAL PURPOSES THAT NO MONEY IS DUE AND PAYABLE BY THE UNITED STATES UNTIL SUCH CERTIFICATES ARE EXECUTED BY THE CONTRACTOR. SINCE IT IS THE RESPONSIBILITY OF THE CONTRACTOR TO ESTABLISH THAT AN AMOUNT IS DUE AND PAYABLE UNDER A CONTRACT THERE WOULD APPEAR TO BE NO NECESSITY OR REQUIREMENT FOR A CERTIFICATION IN THAT RESPECT FROM THE ASSIGNEE. AS IS INDICATED BY YOUR LETTER, HOWEVER ONCE IT IS ESTABLISHED THAT AN AMOUNT IS DUE AND PAYABLE UNDER THE CONTRACT THE QUESTION ARISES AS TO THE PROCEDURE THEN TO BE FOLLOWED, THAT IS, WHETHER THE ASSIGNEE SHOULD BE REQUIRED SPECIFICALLY TO CLAIM THE MONEYS DUE, WHETHER PAYMENT SHOULD BE MADE DIRECT TO THE ASSIGNEE ON THE CONTRACTOR'S USUAL CERTIFICATION, ETC.

THERE WOULD APPEAR TO BE NO NECESSITY FOR A SPECIFIC CLAIM FROM AN ASSIGNEE UNDER A VALID ASSIGNMENT FOR AN AMOUNT ESTABLISHED TO BE DUE AND PAYABLE UNDER A PARTICULAR CONTRACT. HOWEVER, IT IS TO BE RECOGNIZED THAT DISPUTES UNKNOWN TO THE GOVERNMENT MAY EXIST BETWEEN THE CONTRACTOR AND ITS ASSIGNEE IN CONNECTION WITH THE ASSIGNMENT, THE CONSIDERATION OR A CONDITION OF THE ASSIGNMENT MAY HAVE FAILED, ETC. ALSO, IT IS TO BE NOTED THAT THE ASSIGNEE, AND NOT THE CONTRACTOR, IS REQUIRED TO SUPPLY THE GOVERNMENT INFORMATION AS TO THE ASSIGNMENT, AND THAT A "TRUE COPY" OF THE ASSIGNMENT IS REQUIRED TO BE FURNISHED. HAVING REGARD THEREFOR, IN ORDER TO INSURE THAT PAYMENTS ARE PROPERLY MADE, TO PREVENT FRAUDS UPON THE UNITED STATES, AND TO PROTECT THE RIGHTS OF ALL PARTIES INVOLVED, IT WOULD APPEAR THAT THE VOUCHER, INVOICE, OR OTHER DATA IN SUPPORT OF A PAYMENT DIRECT TO THE ASSIGNEE SHOULD CLEARLY INDICATE THAT THE CONTRACTOR RECOGNIZES THE ASSIGNMENT, ITS VALIDITY, AND THE RIGHT OF THE ASSIGNEE TO RECEIVE THE PAYMENT. THE FORM OR MEANS OF INDICATING SUCH RECOGNITION IS NOT MATERIAL INSOFAR AS THIS OFFICE IS CONCERNED. FOR INSTANCE, THE CONTRACTOR'S CERTIFICATION ON A VOUCHER IN WHICH THE NAME OF THE ASSIGNEE IS SHOWN WOULD SUFFICE FOR AUDIT PURPOSES.

THERE WOULD APPEAR TO BE NO OBJECTION TO THE PROPOSED INSTRUCTION QUOTED IN YOUR LETTER WITH RESPECT TO THE "TRUE COPY" OF THE INSTRUMENT OF ASSIGNMENT WHICH THE ASSIGNEE IS REQUIRED TO FURNISH BUT, WITH RESPECT TO EXAMPLE (C), IN ORDER TO ESTABLISH CLEARLY THAT THE COPY OF ASSIGNMENT FURNISHED IS A"TRUE" COPY, IT WOULD SEEM DESIRABLE THAT THE CERTIFICATE TO THAT EFFECT BE EXECUTED BY A NOTARY PUBLIC OR OTHER OFFICER AUTHORIZED BY LAW TO ADMINISTER OATHS.