B-221519: Jul 1, 1986

ASKS WHETHER IT IS PROPER TO PAY THE CONTRACT SURETY. THE CONTRACT WAS ENTERED INTO ON SEPTEMBER 29. THE UNITED STATES WAS AUTHORIZED TO RETAIN AND HOLD 10 PERCENT OF THE ESTIMATED CONTRACT AMOUNT UNTIL FINAL COMPLETION AND ACCEPTANCE OF THE CONTRACT WORK. TO ASSERT ALL THE RIGHTS OF THE CREDITORS THAT WERE PAID TO ENFORCE ITS RIGHT TO BE REIMBURSED. THE SUPREME COURT HELD THAT PROPERTY INTERESTS...

B-221519: Jul 1, 1986

A Bureau of Indian Affairs (BIA) contracting officer asked whether it was proper to pay the contract surety or the trustee in bankruptcy the monies withheld on a BIA contract. GAO found that: (1) the surety paid subcontractors and suppliers its payment bond obligations after the contractor completed the work; (2) a payment bond surety which pays the debts of its principal has the right to reimburs...