Priority to Funds Withheld Under Six Separate Contracts

The Acting Assistant Secretary of the Air Force, Financial Management, requested a decision regarding priority to funds withheld under six separate contracts between a contractor and the Air Force. The Internal Revenue Service's claim for unpaid taxes and the Air Force's claim for reprocurement costs have priority over surety's claim for monies spent to pay the withholding taxes for the contractor's employees. Claims by the workers who were underpaid are given priority over the Air Force's claims for reprocurement cost at the request of the Air Force. Contracts for services covered by the Service Contract Act are not subject to the Miller Act.