[Proper Disposition of Funds Due Under Contract for Security Guard Services]

A certifying officer of the Federal Aviation Administration (FAA) requested a decision as to the proper disposition of funds otherwise due a firm under contract for security guard services. FAA withheld payment for work performed during months for which it did not receive invoices. There were also competing claims to the withheld funds. GAO held that, after the deduction of the agency's prompt payment discount, the withheld funds should be used first to satisfy the claims of underpaid workers and then to satisfy the Government's liquidated damages claim stemming from labor violations. Any remaining funds should be forwarded to the Internal Revenue Service.