B-157625, SEP. 17, 1965

B-157625: Sep 17, 1965

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BUREAU OF LAND MANAGEMENT: REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 30 AND SEPTEMBER 4. THE TOTAL CONTRACT PRICE IS $23. BECAUSE THE CONTRACTOR WAS PROCEEDING TOO SLOWLY IN THE PERFORMANCE OF THE CONTRACT. THE CONTRACTOR WAS NOTIFIED THAT UNLESS IT DEMONSTRATED AN INTENT TO COMPLETE THE WORK WITHIN THE TIME PROVIDED IN THE CONTRACT. NO ACTION WAS TAKEN TO TERMINATE THE CONTRACTOR'S RIGHT TO PROCEED. THE PROJECT WAS SUBSTANTIALLY COMPLETED AS OF FEBRUARY 13. OTHERWISE SUCH AMOUNT WILL HAVE TO BE PAID TO THE CONTRACTOR DIRECTLY.

B-157625, SEP. 17, 1965

TO MR. VERNON D. WALKER, CERTIFYING OFFICER, BUREAU OF LAND MANAGEMENT:

REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 30 AND SEPTEMBER 4, 1965, FILE 1376 (D-736), REQUESTING A DECISION AS TO WHOM THE BALANCE DUE UNDER CONTRACT 14-11-0008-1342 WITH DIVERSIFIED ENGINEERS, INC., SHOULD BE PAID.

THE CONTRACT PROVIDES FOR THE FURNISHING AND COMPLETE ERECTION OF A SELF- FRAMING TYPE STEEL BUILDING. THE TOTAL CONTRACT PRICE IS $23,205.20, OF WHICH $2,413.02 REMAINS TO BE PAID.

BECAUSE THE CONTRACTOR WAS PROCEEDING TOO SLOWLY IN THE PERFORMANCE OF THE CONTRACT, THE CONTRACTOR WAS NOTIFIED THAT UNLESS IT DEMONSTRATED AN INTENT TO COMPLETE THE WORK WITHIN THE TIME PROVIDED IN THE CONTRACT, ITS RIGHT TO PROCEED WOULD BE TERMINATED. HOWEVER, NO ACTION WAS TAKEN TO TERMINATE THE CONTRACTOR'S RIGHT TO PROCEED, BUT IN DECEMBER 24, 1963, THE CONTRACTOR FORMALLY ACKNOWLEDGED ITS DEFAULT IN THE PERFORMANCE REQUIREMENTS OF THE CONTRACT AND AGREED WITH ITS SURETY THAT THE SURETY, IN ITS DISCRETION, COULD TAKE COMPLETE CONTROL OF THE PROJECT. THE SURETY THEN TOOK CONTROL OF THE WORK AND DIRECTED THE COMPLETION OF THE PROJECT. THE PROJECT WAS SUBSTANTIALLY COMPLETED AS OF FEBRUARY 13, 1964, AND FINALLY COMPLETED AND ACCEPTED JUNE 30, 1964.

BESIDES HAVING THE WORK COMPLETED, THE SURETY HAS INCURRED LIABILITY UNDER ITS PAYMENT BOND. IT HAS FILED AN ACTION IN A UNITED STATES DISTRICT COURT REQUESTING THE COURT TO DETERMINE ITS LIABILITY TO CLAIMANTS UNDER THE BOND WHOSE TOTAL CLAIMS EXCEED THE $11,208 PENAL SUM OF THE BOND.

THE SURETY HAS REQUESTED THAT THE FINAL BALANCE BE PAID TO IT. IN VIEW OF ASSIGNMENT RELINQUISHING ALL CLAIMS TO THE UNPAID BALANCE.

THE SURETY AHS REQUESTED THAT THE FINAL BALANCE BE PAID TO IT. IN VIEW OF THE CONTRACTOR'S ACKNOWLEDGED DEFAULT OF THE CONTRACT AND THE SURETY'S DIRECTION OF THE COMPLETION, WE PERCEIVE NO REASON WHY THE SURETY SHOULD NOT BE PAID FROM THE CONTRACT BALANCE TO THE EXTENT OF ITS ACTUAL COST OF COMPLETION OF THE CONTRACT, EXCLUSIVE OF ANY EXPENDITURES UNDER THE PAYMENT BOND. 31 COMP. GEN. 103, 108. SHOULD THERE BE A BALANCE REMAINING AFTER THE PAYMENT OF SUCH ACTUAL COST OF COMPLETION, A CHECK FOR THAT AMOUNT MAY BE ISSUED TO THE CONTRACTOR IN CARE OF THE SURETY PROVIDED THE CONTRACTOR AGREES IN WRITING TO SUCH DISPOSITION; OTHERWISE SUCH AMOUNT WILL HAVE TO BE PAID TO THE CONTRACTOR DIRECTLY.