B-214985: May 22, 1984

The Navy requested a decision as to whether a payment bond and surety should be paid to an insurance firm which filed a claim under performance and payment bonds provided by a prime contractor. Both the insurance firm and the contractor had advised the Navy to make all progress payments to the insurance firm. However, the Navy erroneously sent the final payment to the contractor which attempted to...

B-214985: May 22, 1984

THE AGENCY IS NOT LIABLE TO THE SURETY SINCE A TAX CLAIM HAS PRIORITY OVER THE CLAIM OF A PAYMENT BOND SURETY. COTTON STATES WAS THE SURETY UNDER MILLER ACT (40 U.S.C. A SETTLEMENT AGREEMENT WAS EVENTUALLY REACHED ENTITLING THE CONTRACTOR TO A FINAL PAYMENT OF $119. THE CONTRACTOR WAS ONLY SUCCESSFUL IN PAYING THE SURETY APPROXIMATELY $64. IT NOW CLAIMS THAT THE NAVY IS LIABLE TO IT FOR THE $55. T...