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B-159304, JUN. 13, 1966

B-159304 Jun 13, 1966
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TO CALIFORNIA PUMP AND WELLS: REFERENCE IS MADE TO YOUR LETTER OF MAY 12. YOU STATE THAT YOU WERE A SUBCONTRACTOR FOR PRECISION DRILLING COMPANY UNDER CONTRACT WITH THE DEPARTMENT OF THE ARMY TO DRILL A DEEP WATER WELL AT SIERRA ARMY DEPOT. PUMP HOUSE AND OTHER RELATED SERVICES WAS COMPLETED AND ACCEPTED BY THE GOVERNMENT ON SEPTEMBER 18. A TOTAL AMOUNT OF $837.64 WAS AWARDED TO PRECISION. IT IS AN ESTABLISHED RULE OF LAW THAT CONTRACTS OR AGREEMENTS TO PERFORM WORK FOR OR TO FURNISH SUPPLIES TO PRIME CONTRACTORS ENGAGED IN THE PERFORMANCE OF CONTRACTS WITH THE GOVERNMENT DO NOT CREATE PRIVITY OF CONTRACT BETWEEN THE SUBCONTRACTOR AND THE UNITED STATES. SINCE YOU ARE NOT A PARTY TO THE PRIME CONTRACT.

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B-159304, JUN. 13, 1966

TO CALIFORNIA PUMP AND WELLS:

REFERENCE IS MADE TO YOUR LETTER OF MAY 12, 1966, IN WHICH YOU REQUEST THAT WE CONSIDER YOUR CLAIM FOR MONIES ALLEGEDLY OWED YOU BY THE HARTFORD INSURANCE GROUP, SAN FRANCISCO, CALIFORNIA, ACTING AS SURETY ON PAYMENT BOND N-3240884, OBTAINED BY PRECISION DRILLING COMPANY, SANTA ROSA, CALIFORNIA, UNDER CONTRACT NO. DA 04-036-AMC-28 (M).

YOU STATE THAT YOU WERE A SUBCONTRACTOR FOR PRECISION DRILLING COMPANY UNDER CONTRACT WITH THE DEPARTMENT OF THE ARMY TO DRILL A DEEP WATER WELL AT SIERRA ARMY DEPOT, HERLONG, CALIFORNIA. CONSTRUCTION OF THE WELL, PUMP HOUSE AND OTHER RELATED SERVICES WAS COMPLETED AND ACCEPTED BY THE GOVERNMENT ON SEPTEMBER 18, 1964. AT THAT TIME THE PRIME CONTRACTOR, PRECISION DRILLING COMPANY, SUBMITTED A CLAIM OF $1,080.21 BEFORE THE ARMED SERVICES BOARD OF CONTRACT APPEALS FOR EXTRA MATERIALS AND SERVICES PERFORMED BY YOU UNDER THREE SEPARATELY PRICED ITEMS OF THE CONSTRUCTION PROJECT. IN DECISION ASBCA NO. 10574, SEPTEMBER 23, 1965, A TOTAL AMOUNT OF $837.64 WAS AWARDED TO PRECISION. APPARENTLY ALL OR PART OF THIS SUM HAS NOT BEEN PAID YOU AND YOU REQUEST THAT WE ORDER THE SURETY TO MAKE THE PAYMENT.

IT IS AN ESTABLISHED RULE OF LAW THAT CONTRACTS OR AGREEMENTS TO PERFORM WORK FOR OR TO FURNISH SUPPLIES TO PRIME CONTRACTORS ENGAGED IN THE PERFORMANCE OF CONTRACTS WITH THE GOVERNMENT DO NOT CREATE PRIVITY OF CONTRACT BETWEEN THE SUBCONTRACTOR AND THE UNITED STATES. SEE UNITED STATES V. DRISCOLL, 96 U.S. 421 (1877); MERRITT V. UNITED STATES, 267 U.S. 338 (1925); ARMSTRONG V. UNITED STATES, 169 F.SUPP. 259 (1959).

SINCE YOU ARE NOT A PARTY TO THE PRIME CONTRACT, YOU HAVE NO BASIS FOR SUBMITTING A CLAIM AGAINST THE GOVERNMENT IN THIS MATTER. THE GOVERNMENT'S ONLY OBLIGATION HERE IS TO PAY THE PRIME CONTRACTOR THE AMOUNT SPECIFIED IN HIS CONTRACT WITH THE GOVERNMENT, AND THE AMOUNT AWARDED BY THE ARMED SERVICES BOARD OF CONTRACT APPEALS WHICH APPARENTLY HAS BEEN DONE. IN VIEW OF THE FACT THAT YOUR CONTRACT IS WITH PRECISION DRILLING COMPANY, YOUR REQUEST FOR PAYMENT MUST BE SETTLED WITH THAT COMPANY.

THE ONLY PROTECTION WHICH THE GOVERNMENT PROVIDES FOR SUBCONTRACTORS IS CONTAINED IN THE MILLER ACT, 40 U.S.C. 270A. THIS LAW REQUIRES CERTAIN GOVERNMENT CONTRACTORS TO FURNISH PAYMENT BONDS WHICH ARE IN THE NATURE OF A SUBSTITUTE FOR MECHANICS' LIENS NOT RECOGNIZABLE BY THE GOVERNMENT. THE EVENT A SUBCONTRACTOR IS UNABLE TO WORK OUT AN ADJUSTMENT OF ITS UNPAID ACCOUNT WITH THE GOVERNMENT CONTRACTOR OR ITS SURETY, IT IS GIVEN THE RIGHT UNDER SECTION 2 OF THE MILLER ACT, 40 U.S.C. 270B, TO ENFORCE COLLECTION THROUGH SUIT UNDER THE PAYMENT BOND. HOWEVER, A SUBCONTRACTOR'S RIGHT TO SUE ON A PAYMENT BOND EXPIRES ONE YEAR AFTER THE DAY ON WHICH THE LAST OF THE LABOR WAS PERFORMED OR MATERIAL WAS SUPPLIED, 40 U.S.C. 270B (B).

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