Request by Subcontractor for Payment

B-203291: Jun 15, 1981

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A subcontractor requested assistance in regard to the prime contractor's refusal to pay it for work performed under an Army contract. According to the subcontractor, the Army notified it that funds withheld by the Government would be released to the prime contractor, but that neither the prime contractor nor it's surety under the contract intended to pay the subcontractor. The subcontractor requested that GAO investigate the surety's involvement and determine if there is any legitimate reason for the surety's refusal to pay it. It also requested that the surety be removed from the list of approved sureties if GAO should determine that it has not carried out its Miller Act obligation. The Act's payment bond is the only protection provided by the Government for subcontractors. If a subcontractor furnishing labor and materials used in the performance of the prime contract continues to be aggrieved after attempting to work out an adjustment of his unpaid account with the contractor and its surety, the subcontractor may bring suit under the Act for collection in the United States District Court. The GAO responsibility to subcontractors under Government construction contracts is limited to furnishing copies of the Act contracts and payment bonds when entitlement has been established under the requirements of the Act. Other than that, the settlement of obligations between contractors and subcontractors is outside of GAO jurisdiction, because there is no privity of contract between the subcontractor and the United States.