[Request for Decision Concerning Army Obligation Under a Joint Payment Agreement]

The Army requested a decision regarding its liability to a supplier under a breached joint payment agreement. The Army agreed with its contractor and the supplier to issue payments checks to the contractor and supplier jointly. The Army then erroneously paid only the contractor and, when the supplier was unable to collect its funds from the contractor, the supplier claimed the amount from the Army. GAO held that the: (1) Army was liable to the supplier under the breached agreement; (2) supplier should account for the exact amount of its claim; and (3) Army should pay the supplier and pursue collection action against the contractor. Accordingly, the Army should pay the verified amount of the contractor's claim.