Miller Act
Also called: Miller Act bonds, Little Miller Act, federal bonding statute, 40 U.S.C. 3131
The Miller Act is the federal statute, 40 U.S.C. 3131 to 3134, that requires performance and payment bonds on federal construction contracts above a dollar threshold and gives unpaid subcontractors and suppliers the right to sue on the payment bond.
The FAR implements the Act in Part 28, with the threshold and alternatives in FAR 28.102. Because mechanics' liens cannot attach to federal property, the payment bond is the subcontractor's only security: a first-tier sub or supplier can sue on the bond after ninety days of nonpayment, and a second-tier claimant must first give the prime written notice within ninety days of last furnishing labor or material (40 U.S.C. 3133). Every state has a Little Miller Act doing the same for state and local public works, with its own thresholds and notice rules.
What to check: as a prime, your surety's capacity before bidding and the premium in your price; as a sub, a copy of the payment bond (the prime must provide it on request), the notice deadline and the form of notice, and the one-year limit on suing after last work.
What it is not: a guarantee of prompt payment. The bond is a remedy of last resort, and the notice deadlines forfeit it if missed.
See also: Performance and payment bonds, Bid bond, Subcontractor, Prime contractor
Questions that use this term
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