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the total amount payable by the terms of the contract. Whenever the total amount payable by the terms of the contract shall be more than $5,000,000 the said payment bond shall be in the sum of $2,500,000.
(b) The contracting officer in respect of any contract is authorized to waive the requirement of a performance bond and payment bond for so much of the work under such contract as is to be performed in a foreign country if he finds that it is impracticable for the contractor to furnish such bonds.
(c) Nothing in this section shall be construed to limit the authority of any contracting officer to require a performance bond or other security in addition to those, or in cases other than the cases specified in subsection (a) of this section. Sec. 1, act of Aug. 24, 1935 (49 Stat. 793); 40 U. 8. O. 270a.
(a) Every person who has furnished labor or material in the prosecution of the work provided for in such contract, in respect of which a payment bond is furnished under this Act and who has not been paid in full therefor before the expiration of a period of ninety day after the day on which the last of the labor was done or performed by him or material was furnished or supplied by him for which such claim is made, shall have the right to sue on such payment bond for the amount, or the balance thereof, unpaid at the time of institution of such suit and to prosecute said action to final execution and judgment for the sum or sums justly due him : Provided, however, That any person having direct contractual relationship with a subcontractor but no contractual relationship express or implied with the contractor furnishing said payment bond shall have a right of action upon the said payment bond upon giving written notice to said contractor within ninety days from the date on which such person did or performed the last of the labor or furnished or supplied the last of the material for which such claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom the material was furnished or supplied or for whom the labor was done or performed. Such notice shall be served by mailing the same by registered mail, postage prepaid, in an envelop addressed to the contractor at any place he maintains an office or conducts his business, or his residence, or in any manner in which the United States marshal of the district in which the public improvement is situated is authorized by law to serve summons.
(b) Every suit instituted under this section shall be brought in the name of the United States for the use of the person suing, in the United States District Court for any district in which the contract was to be performed and executed and not elsewhere, irrespective of the amount in controversy in such suit, but no such suit shall be commenced after the expiration of one year after the date of final settlement of such contract. The United States shall not be liable for the payment of any costs or expenses of any such suit. Sec. 2, act of Aug. 24. 1935 (49 Stat. 794); 40 U. 8. O. 2700.
The Comptroller General is authorized and directed to furnish, to any person making application therefor who submits an affidavit that he has supplied labor or materials for such work and payment therefor has not been made or that he is being sued on any such bond, a certified copy of such bond and the contract for which it was given, which copy shall be prima facie evidence of the contents, execution, and delivery of the original, and, in case final settlement of such contract has been made, a certified statement of the date of such settlement, which shall be conclusive as to such date upon the parties. Applicants shall pay for such certified copies and certified statements such fees as the Comptroller General fixes to cover the cost of preparation thereof. Sec. 3, act of Aug. 24, 1935 (49 Stat. 794); 40 U. 8. C. 270c.
The term "person" and the masculine pronoun as used throughout this Act shall include all persons whether individuals, associations, copartnerships, or corporations. Sec. 4, act of Aug. 24, 1935 (49 Stat. 794); 40. U. 8. C. 270d. · This act shall take effect upon the expiration of sixty days after the date of its enactment, but shall not apply to any contract awarded pursuant to any invitation for bids issued on or before the date it takes effect, or to any persons or bonds in respect of any such contract. The Act entitled “An Act for the protection of persons furnishing materials and labor for the construction of public works,” approved August 13, 1894, as amended (U. S. C., title 40, sec. 270), is repealed, except that such Act shall remain in force with respect to contracts for which invitations for bids have been issued on or before the date this Act takes effect, and to persons or bonds in respect of such contracts. Sec. 5, act of Aug. 24, 1935 (49 Stat. 794); 40 U. 8. C. 2700-270d.
The 1929 text of this section was specifically repealed by section 6, supra. The subject matter is covered by the above provisions.
A similar statute applicable to contracts with the District of Columbia for public buildings or other public works was enacted July 7, 1932 (47 Stat. 608).
Notes of Decisions Beneficiaries of statute.--Those furnishing for payment of labor and material claims, labor and materials to subcontractors for these are not protected even though there Government work are protected by bond given be statute requiring their protection. Id. by contractors securing payments of persons Persons furnishing materials for construcsupplying labor and materials in prosecution of Government buildings are protected tion of work. Trimount Dredging Co., et al., by contractor's statutory bond, though matev. U. S. Fidelity & Guaranty Co. (Md., 1934), rials were supplied to subcontractor and bond 171 A. 700.
expressly covers only materials furnished Statute giving person supplying labor or contractor (Heard Act, 40 U. S. C. A., sec. materials action on Government contractor's 270). U. 8. v. James Baird Co. (App. D. C., bond should be liberally construed to protect | 1934), 73 F. (20) 652. such person. Equitable Casualty & Surety Where contract with government for con. Co. et al. v. Helena Wholesale Grocery Co.struction of post office building required pay. (C. C. A., 1932), 60 F. (20) 380.
ment of prevailing wage scale and contractors A bond given to the United States, pur- agreed to pay such wage regardless of consuant to U. 8. C. 40:270, for the faithful tractual relationship between contractor and performance of a construction contract and laborer, subcontractor who agreed to do elecfor the making of prompt payment to all trical work for fixed price held entitled to repersons supplying the principal with labor cover prevailing wage for work wbich he and materials in the prosecution of the performed himself (Heard Act, 40 U. S. C. A., work, inures to the laborers and material- sec. 270). U. S. ex rel. Southern G-F Co. r. men as obligees, together with the United Landis & Young (D. C., 1935), 16 F. Supp. States, though the claims of the Govern- 832. ment have priority. American Surety Co. Contracts within the statute.-Contract v. Westinghouse Electric Manufacturing Co. for clearing, dredging, and construction in (1935), 296 U. 8. 133 (affirming (C. C. A., connection with Marine Corps flying field, 1935), 75 F. (20) 377).
held within statute providing contractors Government contractor suing for use of for public work should execute bond that laborers and materialmen whom subcontrac-contractors should pay persons supplying tor did not pay, could not recover against labor and materials. Trimount Dredging surety on subcontractor's bond, where con- Co. et al. v. U. S. Fidelity & Guaranty Co. tractor, though it inserted in its contract (Md., 1934), 171 A. 700. and bond to Government required clause for Test of "public work" within statute repayment of labor and materials, did not quiring contractor for public work of United repeat clause in subcontract and subcontrac- States to furnish bond for payment of matetor's bond. Trimount Dredging Co. et al. o. rialmen is whether the work during its progU. 8. Fidelity & Guaranty Co. (Md., 1934), ress belonged to a representative of the pub171 A. 700.
lic, though it need not be attached to the soil Undertaking of surety on subcontractor's (Heard Act, 40 U. S. C. A. 270). U. S. o. bond is confined to terms of its contract, Metropolitan Body Co. (C. C. A., 1935), and is not amplified by equitable rights 79 F. (2d) 177. against its principal extraneous to such Under statute requiring person contracting contract. Id.
with United States for construction of "pubWhere neither contract nor bond provides lic buildings" or completion of “public works,” to execute bond conditioned that con- | considered replacements rather than consumtractor should make prompt payment to all able materials, in light of general and normal persons supplying him with labor and mate use of trucks, since question was determinable rials, "publie buildings” and “public works" in light of work actually done by particular mean buildings or works of United States, trucks in question, which evidence showed to precluding liability on bond where United be of extraordinarily wearing character '(40 States did not own building (Heard Act, U. S. C. A. sec. 270). Id. U. S. C. 40 : 270). Maiatico Const. Co. v. Government levee contractor's bond held U.S. (App. D. C., 1935), 79 F. (20) 418; to cover claim for truck rental, notwithstandcertiorari denied (1935), 296 U. S. 649. ing trucks rented were same ones previously
Whether or not a work is "public" within sold to contractor by claimant and taken the meaning of the phrase "For the construc- back by claimant for balance of purchase tion, alteration, or repair of any public work price when contractor defaulted and seemed of the United States” as used in this section, about to fail, but only covered claim to exdoes not depend on its being attached to the tent that it represented really fair and actual soil. If it belongs to the representative of rental, and did not cover entire amount of the public, it is public. Therefore, contracts rental agreed upon, which equaled balance exceeding $2,000 in amount for alteration of purchase price (40 U. S. C. A. sec. 270). or repair of vessels, boats, and aircraft beid. longing to the United States or for the con- "Final settlement" within statute. Where struction of such craft where it is provided the administrative officer having the work that title shall pass to the United States dur- in charge (in this case the Secretary of ing the progress of the work as partial pay. the Interior) has found that the contract ments are made, are within the statute has been performed and has stated the (1936) 38 Op. Atty. Gen. 418.
amount due: the contractor, and approved This section is applicable to contracts in his claim therefor, this is "final settlement" excess of $2,000 for remaking Government within the meaning of the statute, although owned mattresses and for manufacture of the officer, instead of ordering payment, re unitorms from Government-owned cloth. fer the claim "for direct settlement," to the (1936) 38 Op. Atty. Gen. 424.
General Accounting Office. Globe Indemnity Materials covered.-Provisions furnished Co. 0. U. S. (1934), 291 U. S. 476, reGovernment contractor and subcontractor for versing (C. C. A. 1933) 66 F. (2d) 302. feeding laborers, where location of work ren. Words "final settlement," within statute dered furnishing of board necessary, held authorizing materialmen to sue on Govern"materials in prosecution of work provided ment contractor's bond after complete per for in contract within" statute giving ma- formance of contract and "final settleterialmen action on bonds. Equitable Cas- ment" thereof, mean final determination by ualty & Surety Co. et al. v. Helena Whole- proper governmental authority of amount sale Grocery Co. (C. C. A., 1932), 60 F. which Government is finally bound to pay (20) 380.
or entitled to receive under the contract Right of recovery on Government con. (40 U. S. C. A. sec. 270). U. S. v. Hampton tractor's bond by one furnishing subcon- Roads Shipbuilding Corp. (C. C. A. 1934), tractor with lumber for concrete forms, which 72 F. (20) 948. lamber was at least partially exhausted and Where new contractor, to which contract not returned, held question for jury under for lighthouse tender was let on original evidence (40 U. 8. C. A. sec. 270). U. 8. v. contractor's default;. had not yet completed Tompkins Co. (App. D. C., 1934), 72 F. (20) and delivered the vessel, materialmen's action 383.
on bond of original contractor held premaGasoline and heavy oil, supplied to State ture, since there was no "complete performhighway contractor for operation of trucks, ance and final settlement" of original conrollers, etc., and rayolight oil, used to furnish tract though Government had terminated light in danger signals, held "materials für- original contract and completion contract nished in the prosecution of the work" with was let for less than unpaid balance on in statute and contractor's bond (36 PS sec. original contract. (40 U. S. C. A. sec. 270). 142). Commonwealth v. Ciccone (Penna., Id. 1934), 173 A. 642.
Action was premature, since nothing had Words "labor and materials in the prose- been done to indicate that Government would cution of the work," used to define coverage not look to surety of original contractor for of Government contractor's bond, should be reimbursement for any loss it might suffer, given liberal construction (40 U. S. C. A. and since, if there should be default on part sec. 270). Mass. Bonding & Ins. Co. v. U. 8. of new contractor and Government should (C. C. A., 1937), 88 F. (20) 388.
have additional expense in securing compleGovernment levee contractor's bond held tion of vessel, Government would have the to cover claim for parts for trucks used by right to look to bond of original contractor contractor, including rebuilt and new motors to indemnify it and had done nothing to preand almost every part of truck, as against clude it from asserting such right. Id. contention that parts furnished were to be l' Where administrative department in forwarding claim makes every determination such claims have been settled in full; such prerequisite to payment, there is a "final an equity does not arise from the doctrine settlement" within statute governing subcon- of subrogation, nor from an express contract tractors' suits on contractor's bond under of the principal, made before he became inGovernment contract, notwithstanding Comp- solvent, to indemnify the surety out of those troller General may not approve administra particular funds in this case the "retained tive determination in his auditing of ac- percentage" due the principal under a concounts (Heard Act, as amended, 40 U. 8. C. A. struction contract. American Surety Co. v. sec. 270; Budget and Accounting Act 1921, Westinghouse Electric Manufacturing Co. sec. 304, 31 U. S. C. A. sec. 44). Christman (1935), 296 U. S. 133 (affirming (C. C. A.. Co. v. Michigan Gypsum Co. (C. C. A. 1936), 1935), 75 F. (20) 377). 85 F. (20) 474.
Moneys due by the Government as deLetter written in behalf of Chief of Engi. ferred payments under a building contract neers to Government General Accounting were paid over by the Government to the Office, transmitting voucher for direct settle contractor, although the contractor had ment in favor of contractor covering final failed to perform the obligation imposed payment, and inclosing itemized statement on him by the Materialmen's Act, 40 U. S. C. of work done, held "final settlement" within 270, and by his bond, to pay persons who statute limiting time for suit on Govern- supplied labor and materials in the progress ment contractor's bond (Heard Act, 40 of the work. The contractor, in obtainU. S. C. 270). Corell v. U. S. (C. C. A., ing his bond, had promised the surety in 1935), 77 F. (20) 161.
writing that he would not assign any such Multiple suits.--Under statute authoriz- payments to any third person and had, on ing single suit by creditor in name of United the contrary, undertaken to assign them States on bond of contractor for public to the surety to the end that, in the event works, court is without jurisdiction of sec of any breach or default in the Government ond suit, which is treated as a nullity (Heard contract, such money might be credited upon Act, as amended, 40 U. S. C. A. 270). U. S. any loss or damage sustained by the surety v. Century Indemnity Co. (D. C., 1935), 9 under the bond. Held that an equitable lien F. Supp. 809.
arose from the assignment in favor of the Disposition of funds withheld by Govern. surety to have the moneys received by the ment.-Labor and material claimants were contractor from the Government applied to subrogated to lien of surety on general the satisfaction of the claims of laborers contractor's bond against balance of con- and materialmen, and that this equity was tract price retained by Government, and had superior to the claim of one who, with noexclusive right thereto, where contractor tice, had lent money to the contractor and became bankrupt, and surety, which com- under power of attorney from the contractor, pleted project, was insolvent, and amount had collected the deferred payments from of claims exceeded amount of retained funds. the Government and applied them to his loan. Philadelphia Nat. Bank v. McKinlay (App. Martin v. National Surety Co. (1937), 300 D. C., 1934), 72 F. (20) 89.
U. S. 588. Person furnishing labor and material for Jurisdiction of courts.-Federal court of Government project has equitable lien on district where work was done bad jurisdiccontract price until fund is paid to general tion in suit on Government contractor's Government contractor, irrespective of statu- bond, though surety was domiciled in another tory bond (40 U. 8. C. A. sec. 270). Id. district, and State court, which had decreed
Claimants furnishing labor and materials surety's dissolution and appointed receivers to original Government contractor who be- had not authorized suit against receivers came bankrupt, and whose surety completed (40 U. S. C. A. sec. 270). U. S. v. Union work under a new Government contract, hela Indemnity Co. (D. C., 1934), 6 F. Supp. 360. entitled to maintain suit in District of Co- Surety taking over work.--A bondsman, in lumbia Supreme Court for distribution of taking over a Government contractor's work portion of contract price retained by Gov-as assignee of the contract, stands in the ernment, where surety also became insolvent position of the assignor and as against the (40 U. S. C. A. 270). Id.
Government can assert no greater rights Where a bond securing payment of the than that of the assignor. claims of materialmen was required by A surety on a contract with the United statute, and its full amount has been paid States is in contractual relations with the by the surety and applied in part satisfac- United States from the time of the execution tion of such claims, the surety, against such of the bond. Southern Surety Co. v. U. S. claimants, has no equity to reimbursement (1932), 75 Ct. Cl. 47. from funds of its insolvent principal until
543. For text of this section as published in the 1929 Edition, see 581, 582, post.
544. Bonds; officers of the Quartermaster and Finance Departments.-All officers of the Quartermaster's, Subsistence, and Pay Departments, the chief
medical purveyor, and assistant medical purveyors, and all storekeepers shall, before entering upon the duties of their respective offices, give good and sufficient bonds to the United States, in such sums as the Secretary of War may direct, faithfully to account for all public moneys and property which they may receive. The President may, at any time, increase the sums so prescribed. But the Quartermaster General shall not be liable for any money or property that may come into the hands of the subordinate officers of his department. R. S. 1191; sec. 1, act of Feb. 27, 1877 (19 Stat. 243); 10 U. 8. C. 1312.
Provided further, That hereafter the provision of section eleven hundred and ninety-one of the Revised Statutes of the United States may, in discretion of the Secretary of War, be waived in the cases of officers of the Quartermaster Corps who are not accountable for public funds or public property. Sec. 1, act of Aug. 29, 1916 (39 Stat. 626); 10 U. 8. O. 1313.
The President is authorized, if in his opinion the interest of the United States requires the same, to regulate and increase the sums for which bonds are, or may be, required by law, of all district attorneys, collectors of customs, naval officers, and surveyors of customs, Navy agents, receivers and registers of public lands, paymasters in the Army, Commissary-General, and by all other officers employed in the disbursement of the public moneys, under the direction of the War or Navy Departments. R. S. 3639; 31 U. S. C. 521.
The War Department recommends express repeal of so much of the first paragraph of this section, based on R. S. 1191 as amended ; 10 U. S. C. 1312, as relates to medical purveyors and storekeepers, which has been eliminated from the United States Code.
By act of Sept. 21, 1922 (42 Stat. 974), naval officers of customs were designated "comptrollers of customs." By act of Mar. 3, 1925 (43 Stat. 1145), the offices of "register" and "receiver" of public lands were consolidated. By act of Aug. 24, 1912 (37 Stat. 591), the office of the commissary general was consolidated with that of the Quartermaster General. By act of Apr. 27, 1914 (38 Stat. 356), the Chief of the Quartermaster Corps was designated "Quartermaster General of the Army." The Finance Department was created by enactment embodied in 68, ante.
545. Bonds; deputies of disbursing officers.--* * Provided, That every deputy so designated for a disbursing officer who is bonded shall, if not already under bond, give bond as required by the head of the department concerned. Act of July 3, 1926 (44 Stat. 888); 31 U. 8. C. 103a.
546. Bonds; special disbursing agents.-Whenever it becomes necessary for the head of any department or office to employ special agents, other than officers of the Army or Navy, who may be charged with the disbursement of public moneys, such agents shall before entering upon duty give bond in such form and with such security as the head of the department or office employing them may approve. R. S. 3614; 31 U. 8. C. 481.
547. For text of this section as published in the 1929 Edition, see 1315, post.
548. Bonds; officers of the National Guard.-* Provided further, That officers of the organized militia who may hereafter be furnished, under proper authority, with funds for the purchase of coffee, or other components of the travel ration for the use of their respective commands, shall not be required to furnish bonds for the safe-keeping and disbursement of the same. Act of May 11, 1908 (35 Stat. 117); 32 U. S. C. 48. 548. For text of this section as published in the 1929 Edition, see 2030, post. 550. Bonds; District of Columbia Schools.
* Provided, That a bond shall not be required on account of military supplies or equipment issued by the War Department for military instruction and practice by the students of high schools in the District of Columbia. Sec. 1, act of Feb. 25, 1929 (45 Stat. 1278), making appropriations for the District of Columbia. A similar provision has appeared in prior and subsequent appropriation acts.