Priority of Payment among Competing Claimants for Funds Withheld under a Construction Contract

B-188473: Aug 3, 1977

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An Authorized Certifying Officer of the Bonneville Power Administration requested advice concerning the priority of payment among competing claimants for funds withheld under a construction contract. The setoff of fire suppression costs for a forest fire which occurred during the performance of the contract is appropriate even though the amount and liability are disputed. The Forest Service claim for the setoff of funds withheld under the contract has priority over the claim of payment bond surety, which is merely a subrogee of the contractor and creditor of the Government.

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