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[Priority of Payment Between Payment Bond Surety and Contractor]

B-238695 Sep 13, 1991
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Highlights

The Army Corps of Engineers requested an advance decision regarding whether a contractor or its payment bond surety had priority to funds due under a contract. GAO held that federal regulations required the Corps to hold payment until the claimants reached an agreement on the identity of the proper payee or the judicial branch rendered a determination of their rights. Accordingly, the Corps should hold payment.

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