[Request for Decision Concerning Claim of DLA Contract Assignee]

B-219841: May 28, 1986

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The Defense Logistics Agency (DLA) requested a decision on whether it should pay a contract assignee's claim. GAO noted that DLA: (1) entered into a contract with a firm which later authorized assignment of all proceeds to a bank; (2) received notification of the assignment; (3) sent the final payment on the contract to the firm rather than the assignee; (4) unsuccessfully placed a stop payment on the check; and (5) refused to reimburse the assignee for the proceeds, contending that the assignee had not shown that it made the loan to the firm to finance contract performance. GAO held that the assignment was valid. Accordingly, the claim, but not the interest, may be paid.

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