Claim by Subcontractor for Payment

A subcontractor filed a claim with GAO for the value of labor and materials furnished to a contractor. An agency had awarded a contract for the construction of a building, and the contractor then entered into a subcontract arrangement with the claimant for the performance of a portion of the contract. After completion of the work, the subcontractor notified the agency that he had not been paid by the contractor and instituted a suit against the contractor which resulted in a judgment in favor of the subcontractor. The subcontractor had notified the agency of the court action and requested that it place the amount in question in a court fund pending the outcome of the suit. However, the agency released the funds to the contractor. Later, the subcontractor attempted to make a claim under the payment bond and, at this time, he discovered that the agency had not required the contractor to furnish the bond which is mandatory. The subcontractor then initiated a tort claim with the agency basing his claim on the negligent failure of the agency to require the contractor to furnish a payment bond. The agency determined that such a claim is not cognizable under the Tort Claims Act. In his appeal to GAO, the subcontractor argued that he did everything required of him to establish his entitlement to payment. Therefore, at the very least, the Government should have held the funds pending the outcome of the court action. He further argued that he should not be left without a remedy because of the Government's negligence or oversight. GAO has held that settlement of obligations between Government contractors and those furnishing material for the contract work is not required of the Government. The Miller Act does not authorize the settlement of such claims by the Government. Since GAO concluded that no basis existed for authorizing payment of the claim, it was denied.