B-169093, MAR. 17, 1970

B-169093: Mar 17, 1970

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SUBCONTRACTORS CONCEPT SUBCONTRACTOR'S CLAIM FOR UNPAID BALANCE DUE FROM PRIME CONTRACTOR UNDER CONTRACT WITH NAVY MAY NOT BE CONSIDERED BY GAO SINCE SETTLEMENT OF OBLIGATIONS BETWEEN CONTRACTORS AND THOSE FURNISHING LABOR AND MATERIALS IS MATTER OUTSIDE GAO'S JURISDICTION. MILLER ACT PAYMENT BOND IS THE ONLY PROTECTION PROVIDED BY GOVT. SCHENCK: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 9. YOU STATE FURTHER THAT DOMROSE FINISHED ITS WORK UNDER THE SUBCONTRACT BY FEBRUARY 1968 AND THAT THE PRIME CONTRACT WAS COMPLETED IN JULY 1968. 002.76 AND THAT THERE IS STILL DUE AND OWING DOMROSE $18. YOU INDICATE THAT YOU HAVE FILED SUIT UNDER THE MILLER ACT (40 U.S.C. 270. THE MILLER ACT PAYMENT BOND IS THE ONLY PROTECTION PROVIDED BY THE GOVERNMENT FOR SUBCONTRACTORS.

B-169093, MAR. 17, 1970

CONTRACTS--PRIVITY--SUBCONTRACTORS CONCEPT SUBCONTRACTOR'S CLAIM FOR UNPAID BALANCE DUE FROM PRIME CONTRACTOR UNDER CONTRACT WITH NAVY MAY NOT BE CONSIDERED BY GAO SINCE SETTLEMENT OF OBLIGATIONS BETWEEN CONTRACTORS AND THOSE FURNISHING LABOR AND MATERIALS IS MATTER OUTSIDE GAO'S JURISDICTION, THERE BEING NO PRIVITY OF CONTRACT BETWEEN SUBCONTRACTOR AND U.S.; MILLER ACT PAYMENT BOND IS THE ONLY PROTECTION PROVIDED BY GOVT. FOR SUBCONTRACTORS. SEE CT. CASES CITED.

TO MR. RONALD D. SCHENCK:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 9, 1970, REQUESTING OUR ASSISTANCE IN OBTAINING PAYMENT FOR YOUR CLIENT, GUSTAVE L. DOMROSE & SONS (DOMROSE), FOR WORK IT PERFORMED UNDER A SUBCONTRACT WITH SECURITY BUILDERS, PRIME CONTRACTOR FOR THE CONSTRUCTION OF AIRMEN'S DORMITORIES AT HAMILTON AIR FORCE BASE, MARIN COUNTY, CALIFORNIA.

YOU STATE THAT SECURITY BUILDERS ENTERED INTO THE PRIME CONTRACT WITH THE UNITED STATES NAVY ON MARCH 30, 1967, AND THAT DOMROSE ENTERED INTO A SUBCONTRACT WITH SECURITY BUILDERS ON AUGUST 4, 1967, IN THE AMOUNT OF $54,880, FOR THE FURNISHING OF MASONRY, LABOR AND MATERIALS FOR SAID JOB. YOU STATE FURTHER THAT DOMROSE FINISHED ITS WORK UNDER THE SUBCONTRACT BY FEBRUARY 1968 AND THAT THE PRIME CONTRACT WAS COMPLETED IN JULY 1968. ADDITION, YOU STATE THAT SECURITY BUILDERS HAS PAID DOMROSE $36,002.76 AND THAT THERE IS STILL DUE AND OWING DOMROSE $18,877.24. YOU ALSO CLAIM THAT SECURITY OWED YOUR CLIENT $14,549 FOR EXTRA PERFORMANCE BY IT AT THE REQUEST OF SECURITY BUILDERS.

YOU INDICATE THAT YOU HAVE FILED SUIT UNDER THE MILLER ACT (40 U.S.C. 270, ET SEQ.). THE MILLER ACT PAYMENT BOND IS THE ONLY PROTECTION PROVIDED BY THE GOVERNMENT FOR SUBCONTRACTORS. OTHER THAN THE REMEDY PROVIDED BY THE MILLER ACT, THE SETTLEMENT OF OBLIGATIONS BETWEEN CONTRACTORS AND THOSE FURNISHING LABOR AND MATERIALS IS A MATTER OUTSIDE THE JURISDICTION OF OUR OFFICE, THERE BEING NO PRIVITY OF CONTRACT BETWEEN THE SUBCONTRACTOR AND THE UNITED STATES. SEE KELLOGG V. UNITED STATES, 7 WALL. 361 (1868); WARRIOR CONSTRUCTORS, INC. V. HARDERS, INC; 387 F. 2D 727 (1967); UNITED STATES V. CLEVELAND ELECTRIC COMPANY OF SOUTH CAROLINA, 373 F. 2D 585 (1967).