B-151736, OCT. 6, 1967

B-151736: Oct 6, 1967

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MAY BE PAID TO SURETY WHICH ACQUIRED ALL OF CONTRACTOR'S PROPERTY AND EQUIPMENT AND OWNS ALL OF THE STOCK OF THE DISSOLVED CORPORATION PROVIDED AN INDEMNITY BOND IS OBTAINED FROM THE SURETY. GIBSON: THIS IS IN REFERENCE TO THE QUESTION IN YOUR MEMORANDUM OF SEPTEMBER 26. THE MATTER WAS FORWARDED TO OUR OFFICE FOR REVIEW BY LETTER OF OCTOBER 2. WHICH ARE NOT IN DISPUTE. ARE AS FOLLOWS: RAFF WAS TO CONSTRUCT VARIOUS FACILITIES AT PLATTSBURGH AIR FORCE BASE PURSUANT TO CONTRACT NO. A CLAIM WAS FILED BY RAFF FOR EXPENSES INCURRED AS A RESULT OF WORK STOPPAGE UNDER THE CONTRACT WHICH WAS SETTLED FOR $219. WHICH WAS INCORPORATED IN THE STATE OF CONNECTICUT. WAS DISSOLVED BY FORFEITURE ON NOVEMBER 30.

B-151736, OCT. 6, 1967

CONTRACTS - PAYMENTS - DISSOLUTION OF CONTRACTING FIRM DECISION TO SPECIAL DISBURSING CLERK, CORPS OF ENGINEERS CONCERNING PROPRIETY OF PAYMENT TO SURETY OF DISSOLVED CORPORATION. AMOUNT DUE CONSTRUCTION CONTRACTOR--CORPORATION DISSOLVED BY FORFEITURE FOR FAILURE TO FILE STATUTORY REPORTS,--MAY BE PAID TO SURETY WHICH ACQUIRED ALL OF CONTRACTOR'S PROPERTY AND EQUIPMENT AND OWNS ALL OF THE STOCK OF THE DISSOLVED CORPORATION PROVIDED AN INDEMNITY BOND IS OBTAINED FROM THE SURETY.

TO MR. W. A. GIBSON:

THIS IS IN REFERENCE TO THE QUESTION IN YOUR MEMORANDUM OF SEPTEMBER 26, 1967, WHETHER PAYMENT OF $219,000 MAY BE MADE TO FREDERICK RAFF COMPANY, INCORPORATED (HEREAFTER REFERRED TO AS RAFF). THE MATTER WAS FORWARDED TO OUR OFFICE FOR REVIEW BY LETTER OF OCTOBER 2, 1967, FROM THE DIVISION COUNSEL, DEPARTMENT OF THE ARMY, NORTH ATLANTIC DIVISION, CORPS OF ENGINEERS.

THE FACTS, WHICH ARE NOT IN DISPUTE, ARE AS FOLLOWS: RAFF WAS TO CONSTRUCT VARIOUS FACILITIES AT PLATTSBURGH AIR FORCE BASE PURSUANT TO CONTRACT NO. DA-30-075-ENG-6008, JANUARY 22, 1954. A CLAIM WAS FILED BY RAFF FOR EXPENSES INCURRED AS A RESULT OF WORK STOPPAGE UNDER THE CONTRACT WHICH WAS SETTLED FOR $219,000. RAFF, WHICH WAS INCORPORATED IN THE STATE OF CONNECTICUT, WAS DISSOLVED BY FORFEITURE ON NOVEMBER 30, 1962, FOR FAILING TO FILE STATUTORY REPORTS.

THERE IS NO DISAGREEMENT THAT $219,000 IS A REASONABLE SETTLEMENT AND THAT THE CONTRACTOR IS ENTITLED TO THIS AMOUNT. THE VOUCHER TRANSMITTED IS MADE PAYABLE TO THE CONTRACTOR, TO BE MAILED IN CARE OF THE TRANS- AMERICA INSURANCE COMPANY (WHICH WE ASSUME IS THE SUCCESSOR IN INTEREST TO THE AMERICAN SURETY COMPANY OF NEW YORK). BY LETTER OF SEPTEMBER 22, 1967, THE DEPARTMENT OF JUSTICE ADVISED THE CORPS OF ENGINEERS THAT THEY WOULD HAVE NO OBJECTION TO MAKING PAYMENT TO THE SURETY IN THE INSTANT CASE. THIS LETTER ALSO STATES THAT THE SURETY ACQUIRED ALL OF RAFF'S PROPERTY AND EQUIPMENT AND OWNS ALL OF THE STOCK OF THE RAFF COMPANY WHICH IS STILL IN EXISTENCE.

PURSUANT TO OUR REVIEW WE WOULD HAVE NO OBJECTION TO MAKING PAYMENT AS PROPOSED BY THE VOUCHER IF AN INDEMNITY BOND IS OBTAINED FROM TRANS AMERICA AS INDICATED IN THE LETTER OF OCTOBER 2, 1967, FROM THE DIVISION COUNSEL OF THE NORTH ATLANTIC DIVISION, CORPS OF ENGINEERS.