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What are the requirements for 'performance and payment bonds' under the Miller Act?

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Our shop is bidding on an Invitation for Bid (IFB) for a federal construction project, NAICS 236220. The project is for a building renovation at a VA hospital. The solicitation number is 36C77724B0001, and it mentions the Miller Act. The bid is due next week. We're a small business, but this project is over the simplified acquisition threshold and is not a set-aside. I have been told that we will need to provide bonds, but I am not sure which ones. What are the requirements for performance and payment bonds under the Miller Act?

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asked Tom B. Construction estimator, public works · Phoenix, AZ · 671 rep

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The Miller Act requires performance and payment bonds for any federal construction contract that exceeds a specific threshold. For your VA hospital renovation, if the contract value is above that threshold, you will need to provide both types of bonds. The FAR specifies the requirements for these bonds at FAR 28.102-1(a).

A performance bond guarantees that the contractor will complete the work according to the contract terms. A payment bond ensures that subcontractors and suppliers are paid for their work and materials. For construction contracts between a lower threshold and the Miller Act threshold, the contracting officer will select two or more alternative payment protections, such as an irrevocable letter of credit or a tripartite escrow agreement, as outlined in FAR 28.102-1(b)(1). Make sure you check the Invitation for Bid (IFB) for the specific bonding requirements.

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answered Marcus T. Verified vendorOwner, janitorial and facilities firm · Columbus, OH · 1370 rep

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Sign up to answerCite the FAR clause or procurement code where you can.

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