B-141143, AUG. 30, 1961

B-141143, AUG. 30, 1961

TO MARYLAND CASUALTY COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JULY 20, 1961, MAKING INQUIRY AS TO WHEN YOUR COMPANY MAY EXPECT PAYMENT OF $4,770.66, CLAIMED TO BE DUE YOU AS TO THE COMPLETING SURETY UNDER CONTRACT NO. 14-20-600-4215, DATED APRIL 9, 1958, BETWEEN THE BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR, AND HUGH AND PHILIP RICHEY, D/B/A RICHEY CONSTRUCTION COMPANY, ST. JOHNS, ARIZONA.

YOUR PRESENT CLAIM FOR $4,770.66 APPEARS TO CONSIST OF THE SUM OF $14,903.88, ALLEGED IN YOUR LETTER OF NOVEMBER 29, 1960, TO BE THE BALANCE DUE UNDER THE INDICATED CONTRACT, LESS A PAYMENT OF $8,123.91, ACKNOWLEDGED BY YOUR LETTER OF DECEMBER 7, 1960, TO MR. WALTER O. OLSON, CONTRACTING OFFICER, AND LESS THE FURTHER SUM OF $2,009.31--- SEE YOUR LETTER OF MARCH 6, 1961, TO MR. OLSON.

BY DECISION DATED DECEMBER 8, 1960, WE ADVISED YOUR COMPANY, AMONG OTHER THINGS, THAT WE DO NOT CONTEST YOUR RIGHT AS COMPLETING SURETY TO RECEIVE ANY AMOUNT REMAINING IN THE CONTRACT FUND UP TO THE COST OF COMPLETION, NOTWITHSTANDING ANY OUTSTANDING TAX OR LABOR CLAIMS AGAINST THE ORIGINAL CONTRACTOR, AND THAT OUR OFFICE WOULD BE GLAD TO CONSIDER ANY FURTHER CLAIMS ON THAT BASIS WHEN PROPERLY PRESENTED. WE STATED FURTHER, HOWEVER, THAT ANY CLAIM YOUR COMPANY MAY HAVE AS A RESULT OF EXPENDITURES UNDER THE PAYMENT BOND AGAINST UNDISTRIBUTED CONTRACT FUNDS REPRESENTING RETAINED PERCENTAGES OR EARNINGS WITHHELD AGAINST THE ORIGINAL CONTRACTOR, ARE SUBJECT TO THE CLAIMS OF THE UNITED STATES. OUR DECISION CONCLUDED WITH THE FOLLOWING PARAGRAPH:

"IN VIEW OF THE FOREGOING, WE MUST, EXCEPT TO THE EXTENT THAT THE CLAIM IN EXCESS OF $8,123.91 DERIVES SOLELY FROM COSTS INCURRED BY THE SURETY UNDER THE PERFORMANCE BOND, MAINTAIN THE POSITION THAT YOUR CLAIM TO THE $14,903.88 IS SUBJECT TO THE SET OFFS PROPOSED BY THE BUREAU OF INDIAN AFFAIRS.'

WE NOW FIND THAT THROUGH INADVERTENCE WE FAILED TO TRANSMIT TO MR. OLSON, FOR HIS GUIDANCE, A COPY OF THE DECISION OF DECEMBER 8, 1960. WE ENCLOSE A COPY OF OUR LETTER OF TODAY TO THE CONTRACTING OFFICER, THE SAME BEING SELF-EXPLANATORY. IT IS ASSUMED THAT UPON RECEIPT OF OUR LETTER, MR. OLSON WILL TAKE APPROPRIATE ACTION IN THIS MATTER.