Enforcement of CO final decision for Government claim

I have a general question about policy/actual practice and would appreciate hearing any experience or thoughts on what would happen in the following situation.

The Contracting Officer for a Corps of Engineers contract has issued a final decision on what is effectively a Government claim and demand for the return of disputed monies paid to the Contractor. The CO can send the final decision to the COE's Finance Center and attempt to collect the demand from payments due to the contractor on its other contracts.

The Contractor will appeal the CO's final decision to the Court of Federal Claims. Would the CO continue to pursue collection efforts, even though the decision might be overturned by the Court of Federal Claims? Would the Finance Center, absent any further direction from the CO, continue to pursue the collection efforts if the Finance Center learned of the appeal to the Court of Federal Claims?

Thanks in advance for your comments or thoughts.

Basically, until it is overturned during appeals, it must be repaid.

The certifying officer can be personaly held accountable. Therefore, he/she would request Treasury to recover the funds.

See below from 31 CFR Ch. II (7?1?04 Edition):

? 285.12 Transfer of debts to Treasury

for collection.

(a) Definitions. For purposes of this

section:

Agency means a department, agency,

court, court administrative office, or

instrumentality in the executive, judicial,

or legislative branch of the Federal

Government, including government

corporations.

Creditor agency means any Federal

agency that is owed a debt.

Debt means any amount of money,

funds or property that has been determined

by an appropriate official of the

Federal government to be owed to the

United States by a person. As used in

this section, the term ??debt?? does not

include debts arising under the Internal

Revenue Code of 1986.

Debt collection center means an agency

or a unit or subagency within an agency

that has been designated by the Secretary

of the Treasury to collect debt

owed to the United States. FMS is a

debt collection center.

FMS means the Financial Management

Service, a bureau of the Department

of the Treasury.

Person means an individual, corporation,

partnership, association, organization,

State or local government, or

any other type of entity other than a

Federal agency.

Secretary means the Secretary of the

Treasury.

( In general. Cross-servicing means

that FMS or another debt collection

center is taking appropriate debt collection

action on behalf of one or more

Federal agencies or a unit or subagency

thereof.

© Mandatory transfer of debts to FMS.

(1) Except as set forth in paragraph (d)

of this section, a creditor agency shall

transfer any debt that is more than 180

days delinquent to FMS for debt collection

services. For accounting and reporting

purposes, the debt remains on

the books and records of the agency

which transferred the debt.

Basically, until it is overturned during appeals, it must be repaid.

The certifying officer can be personaly held accountable. Therefore, he/she would request Treasury to recover the funds.

See below from 31 CFR Ch. II (7?1?04 Edition):

? 285.12 Transfer of debts to Treasury

for collection.

(a) Definitions. For purposes of this

section:

Agency means a department, agency,

court, court administrative office, or

instrumentality in the executive, judicial,

or legislative branch of the Federal

Government, including government

corporations.

Creditor agency means any Federal

agency that is owed a debt.

Debt means any amount of money,

funds or property that has been determined

by an appropriate official of the

Federal government to be owed to the

United States by a person. As used in

this section, the term ??debt?? does not

include debts arising under the Internal

Revenue Code of 1986.

Debt collection center means an agency

or a unit or subagency within an agency

that has been designated by the Secretary

of the Treasury to collect debt

owed to the United States. FMS is a

debt collection center.

FMS means the Financial Management

Service, a bureau of the Department

of the Treasury.

Person means an individual, corporation,

partnership, association, organization,

State or local government, or

any other type of entity other than a

Federal agency.

Secretary means the Secretary of the

Treasury.

( In general. Cross-servicing means

that FMS or another debt collection

center is taking appropriate debt collection

action on behalf of one or more

Federal agencies or a unit or subagency

thereof.

? Mandatory transfer of debts to FMS.

(1) Except as set forth in paragraph (d)

of this section, a creditor agency shall

transfer any debt that is more than 180

days delinquent to FMS for debt collection

services. For accounting and reporting

purposes, the debt remains on

the books and records of the agency

which transferred the debt.

Thanks George!

I have a general question about policy/actual practice and would appreciate hearing any experience or thoughts on what would happen in the following situation.

The Contracting Officer for a Corps of Engineers contract has issued a final decision on what is effectively a Government claim and demand for the return of disputed monies paid to the Contractor. The CO can send the final decision to the COE's Finance Center and attempt to collect the demand from payments due to the contractor on its other contracts.

The Contractor will appeal the CO's final decision to the Court of Federal Claims. Would the CO continue to pursue collection efforts, even though the decision might be overturned by the Court of Federal Claims? Would the Finance Center, absent any further direction from the CO, continue to pursue the collection efforts if the Finance Center learned of the appeal to the Court of Federal Claims?

Thanks in advance for your comments or thoughts.

I don't know how the section from 31 CFR cited by George answers your questions, which were:

1. "Would the CO continue to pursue collection efforts, even though the decision might be overturned by the Court of Federal Claims?"

2. "Would the Finance Center, absent any further direction from the CO, continue to pursue the collection efforts if the Finance Center learned of the appeal to the Court of Federal Claims?"

The answer to both questions is yes. See FAR Subpart 32.6, Contract Debts. Specifically, see 32.605, Final Decisions; 32.606, Debt Collection; and 32.607-2, Deferment of Collection.

If the contractor appeals the CO's final decision, the contractor can ask the CO to defer collection. The appeal does not itself suspend or delay collection.

Thanks Vern. I appreciate your comments.