B-219738, APR 16, 1986

B-219738, APR 16, 1986

CLAIMS - SETTLEMENT ACCEPTANCE - FINALITY DIGEST: SETTLEMENT AGREEMENT BETWEEN THE DEPARTMENT OF EDUCATION AND A CLAIMANT SHOULD NOT BE PAID BECAUSE THE CLAIMANT HAS ABROGATED THE AGREEMENT AND FILED A COMPLAINT IN THE CLAIMS COURT.

DEPARTMENT OF EDUCATION-- COMPROMISE SETTLEMENT WITH PAN AMERICAN FINANCIAL CORPORATION:

THIS DECISION IS IN RESPONSE TO A REQUEST FROM MS. SERENA SMITH, AN AUTHORIZED CERTIFYING OFFICER OF THE DEPARTMENT OF EDUCATION. MS. SMITH REQUESTS OUR DECISION AS TO THE PROPRIETY OF PAYMENT OF A $10,000 SETTLEMENT TO PAN AMERICAN FINANCIAL CORPORATION (PAFC). THE SETTLEMENT IS A COMPROMISE OF A $12,605.68 CLAIM MADE BY PAFC AGAINST THE DEPARTMENT OF EDUCATION. THE CLAIM AROSE WHEN EDUCATION PAID CERTAIN CONTRACT PROCEEDS TO THE CONTRACTOR-ASSIGNOR RATHER THAN TO PAFC, THE ASSIGNEE.

AS WE UNDERSTAND IT PAFC HAS NOW ABROGATED THE SETTLEMENT AGREEMENT AND FILED A COMPLAINT IN THE UNITED STATES CLAIMS COURT. AS A RESULT, ANY QUESTION OF ADMINISTRATIVE SETTLEMENT OF THE CLAIM IS NOW MOOT.

THEREFORE, THE $10,000 VOUCHER SHOULD NOT BE PAID.