In the construction industry, we speak a lot about the filing of a mechanic’s lien. But what if you are working on a public project? In the event a government project goes sour, contractors and materials suppliers must turn to the Miller Act, or its parallel state legislation, as a remedy. Whether for the federal, state, county or municipal government, here are some basic facts you need to know today!
The federal Miller Act was originally enacted as the Heard Act in 1893. This law, which later became known as the Miller Act, requires prime contractors on some government construction projects to post bonds guaranteeing both the performance of their contractual duties and the payment of their subcontractors and material suppliers. Similarly, a “Little Miller Act” is a U.S. state statute that imposes the same requirement on prime contractors in certain state construction projects. Keep in mind that there are generally two types of bonds being asked for here – one for performance and one for payment.Louisiana does not have a “Little Miller Act” exactly, we have the Public Works Act, La. R.S. 38:2241 et seq.
The Act was intended to address some important concerns that exist in the performance of government construction projects. Firstly, the contractor’s abandonment or non-performance on a government job could lead to substantial delays and excessive expenses to the government procurement process. The performance bond requirement aids in differentiating between which contractors are serious about the project and which are not. Of course, the bond itself helps offset some of the cost of potential non-performance and the need for a substitute. Similarly, the payment bond requirement helps mitigate some of a subcontractor’s and/or material supplier’s potential reluctance to work on such projects in light of sovereign immunity preventing one from filing a mechanic’s lien against the government.
If you are a subcontractor or material supplier, the process of filing a Miller Act claim is relatively straightforward. Firstly, you will need to determine if you have the right to file a claim. Second, you will need to send a Miller Act Notice to the prime contractor within 90 days from the last furnishing of labor and/or materials. You may also send notice to the surety (optional). Lastly, you may then file suit against the bond within 1 year from the last furnishing of labor/materials. The Miller Act requires that suit is filed in Federal Court and there are some strict requirements that need to be followed.
Make sure you file your Miller Act Claim properly and on time. Here at Wolfe Law, we are always ready to take your bond related questions. Contact us today for an initial consultation.