What is the Miller Act, and when are performance and payment bonds required?

The Miller Act requires performance and payment bonds for any federal construction contract that exceeds a specific value, which is found in the FAR. For construction contracts below that value but above another threshold, the contracting officer selects two or more alternative payment protections.

My firm mostly does services, so I see the Service Contract Act more often than the Miller Act. But the principle is the same. The FAR outlines the rules for federal contracts, including the bond requirements for construction. You will find these rules in FAR Part 28, "Bonds and Insurance." The specific thresholds are detailed there. For state and local government construction projects, the requirements for bonds will be in the state or local procurement code and the particular portal's vendor guide. These are different from the federal rules.

Also, remember that a bid bond is a separate requirement from performance and payment bonds, and it ensures that you will enter into the contract if your bid is accepted. The solicitation will always specify if a bid bond is required.