The Miller Act requires that for federal construction contracts exceeding $100,000, the prime contractor must furnish both performance and payment bonds. While the performance bond guarantees the completion of the project, the payment bond specifically protects subcontractors and suppliers by assuring payment for their contributions to the project.
This legislation is particularly significant because it provides a remedy for subcontractors and suppliers who cannot place a mechanic’s lien on federal property. By allowing them to make claims against the payment bond, the Miller Act offers a level of financial security that encourages participation in federal projects.
Who Is Protected Under the Miller Act?
The Miller Act extends protection to:
- First-tier subcontractors: Those who have a direct contractual relationship with the prime contractor.
- Second-tier subcontractors: Those who contract with first-tier subcontractors.
- First-tier suppliers: Suppliers who provide materials directly to the prime contractor.
- Second-tier suppliers: Suppliers who provide materials to first-tier subcontractors.
It’s important to note that the act does not protect third-tier subcontractors or suppliers who are further removed from the prime contractor.
Filing a Claim Under the Miller Act
To enforce their rights under the Miller Act, claimants must adhere to specific procedures:
- Notice Requirement: Second-tier subcontractors and suppliers must provide written notice to the prime contractor within 90 days of the last day they furnished labor or materials to the project. This notice should be sent via a method that provides proof of delivery, such as certified mail with return receipt requested.
- Filing a Lawsuit: If payment is not received after providing notice, claimants have up to one year from the last date of labor or material provision to file a lawsuit against the payment bond. This legal action must be initiated in the U.S. District Court where the project is located.
Importance for Subcontractors and Suppliers
The Miller Act plays a vital role in protecting the financial interests of subcontractors and suppliers involved in federal construction projects. By ensuring a mechanism for payment through bonds, it mitigates the risk of non-payment and promotes a more secure working environment for those contributing labor and materials to public works.
Lienguard, is a national commercial lien filing service that has served the construction industry for over four decades. We file the notices and lien documents necessary to protect our client’s interest. See our lien services and lien pricing to learn how we can provide help with the Miller Act.
Frequently Asked Questions
What Is the Purpose of the Miller Act?
The Miller Act aims to protect subcontractors and suppliers on federal construction projects by requiring prime contractors to post payment bonds. This ensures that those providing labor and materials are compensated, even if the prime contractor defaults on payment.
Who Can Make a Claim Under the Miller Act?
First and second-tier subcontractors and suppliers—those who have direct or indirect contracts with the prime contractor—are eligible to make claims under the Miller Act. Third-tier and more remote parties are not covered.
What Are the Deadlines for Filing a Claim?
Second-tier claimants must provide written notice to the prime contractor within 90 days of their last work or material supply. All claimants must file any lawsuit to enforce the claim within one year of the last date they provided labor or materials to the project.
How Should Notice Be Delivered to the Prime Contractor?
Notice should be sent via a method that provides written, third-party verification of delivery, such as certified mail with return receipt requested. This ensures there is proof that the notice was received within the required timeframe.
Can a Subcontractor Waive Their Rights Under the Miller Act?
A subcontractor cannot waive their rights to make a bond claim under the Miller Act in advance. Any waiver must be in writing, signed after the labor or materials have been provided, and cannot be a condition of the contract.