The Secretary of Interior

Decision Date12 November 1965
Docket NumberB-157886
CourtComptroller General of the United States

By letter dated October 19, 1965, the deputy assistant secretary of the interior has requested our decision regarding the disposition of the balance of $9, 102 due under contract no 14-20-015q-760, dated May 22, 1964. The contract, awarded by the bureau of indian affairs (the bureau) to fidelity builders, incorporated, phoenix, Arizona, for the construction of a health station at laveen, Arizona, was completed on February 18, 1965. Claims for the final payment have been presented by the first national bank of Arizona phoenix, as assignee, and by the district director, internal revenue service (IRS), phoenix.

Paragraph 8 (A), general provisions (construction contract), standard form 23-a, incorporated in the contract, reads as follows:

"8. Assignment of claims

(a) pursuant to the provisions of the assignment of claims act of 1940, as amended (31 U.S.C. 203, 41 U.S.C. 15), if this contract provides for payments aggregating $1, 000 or more claims for moneys due or to become due the contractor from the government under this contract May be assigned to a bank trust company, or other financing institution, including any federal lending agency, and May thereafter be further assigned and reassigned to any such institution. Any such assignment or reassignment shall cover all amounts payable under this contract and not already paid, and shall not be made to more than one party, except that any such assignment or reassignment May be made to one party as agent or trustee for two or more parties participating in such financing. Unless otherwise provided in this contract, payments to an assignee of any moneys due or to become due under this contract shall not, to the extent provided in said act, as amended, be subject to reduction or setoff. (the preceding sentence applies only if this contract is made in time of war or national emergency as defined in said act and is with the department of defense, the general services administration the atomic energy commission, the national aeronautics and space administration, the federal aviation agency, or any other department or agency of the United States designated by the president pursuant to clause 4 of the proviso of section 1 of the assignment of claims act of 1940, as amended by the act of May 15, 1951, 65 Stat. 41.)"

On February 17, the bureau received a notice of assignment signed by both the contractor and the assignee together with a copy of an assignment executed by the contractor assigning to the bank all moneys due or to become due under the contract in accordance with the assignment of claims act of 1940, as amended. On February 23, the contracting officer signed an acknowledgment of the notice and assignment.

On March 18, IRS served on the contracting officer a notice of levy dated March 15, issued by the district director phoenix, attaching the moneys due under the contract pursuant to 26 U.S.C. 6331 (A), in satisfaction of the contractor's indebtedness to the United States in the total amount of $17, 321.97, representing employees withholding taxes and insurance contributions for the second, third, and fourth quarters of the calendar...

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