MILLER ACT CLAIMS FOR NONPAYMENT OF FEDERAL GOVERNMENT PROJECTS
Because liens cannot attach to property owned by the government, Congress enacted the Miller Act to provide a substitute to guarantee payment to subcontractors and material suppliers working on government projects. Codified at 40 U.S.C. §§ 3131-3134, the Miller Act mandates the furnishing of payment bonds by prime contractors and defines and limits where and when a claim may be brought by unpaid subcontractors and suppliers. Because these limitations, particularly the time to bring a claim, may differ from the local statute of limitations in the roofing contractor’s home state, roofing contractors … must familiarize themselves with the Miller Act’s applicability and requirements to minimize the risk of losing their rights to bring valid claims.
The Miller Act Applies to Which Projects?
The Miller Act applies to all projects for the construction, alteration or repair of any public building or public work of the federal government where the prime contract exceeds $100,000. The prime contractor is obligated to obtain a payment bond, and it is this payment bond that governs the roofing contractor’s recovery. Anyone who has not been paid and who has the right to bring a claim under the Miller Act can obtain a certified copy of the payment bond and the contract for which it was given by submitting an affidavit and request, along with any required fees, to the department secretary or agency head of the contracting agency.
When unpaid on a private construction project, an unpaid contractor or supplier can typically file a mechanics lien against the project itself. The lien attaches directly to the property, preventing transfers and sales, and protecting the unpaid contractor’s right to payment.
On jobs when the federal government owns the property itself, there is no legal right to lien it. Instead, unpaid contractors or suppliers must turn to 40 U.S.C. § 3131; commonly referred to as The Miller Act.
Under the Miller Act, before any contract of more than $100,000 is awarded on a federal building or work, the prime contractor must post a bond to protect those supplying labor and/or materials to the project. The bond is always there to protect qualifying subcontractors and suppliers from non-payment.
Here are five things you should know about the Miller Act:
- Prime Contractors: If you are the prime contractor, you cannot bring a claim under the Miller Act. Instead, you have a contract claim against the government, and must bring a lawsuit against it. The Miller Act deadlines are not applicable, and you should consult with an attorney to discuss your claim.
- First Tier Subcontractors and Material Suppliers: If you contracted with the prime contractor to provide labor and/or materials, you can sue the surety on the Miller Act Bond. Suit must be brought within 1 year from the last date you provided materials or services. A Miller Act Notice may be provided to the Owner and/or Surety.
- Second Tier Subcontractors and Material Suppliers to First Tier Subcontractors: If you contracted with a first tier subcontractor, within 90 days from the last furnishing of labor and/or materials, you must deliver a Miller Act Notice to the prime contractor. The law has specific requirements for what must be contained in the notice, and how it must be sent. You need not deliver it to the surety, but it may be a good idea. Suit on the bond must be brought within 1 year from the last date you provided materials and/or services.
- Third Tier Subcontractors and Suppliers to Suppliers: If you contracted with a second tier subcontractor, or if you are a supplier to a supplier, you do not have any rights under the Miller Act. Instead, you must simply seek payment from the party they contracted with.
- If you aren’t paid on a project, you have a right to see the bond and the contract. Send an affidavit to to the contracting agency confirming that you both supplied labor and/or materials to the project, and have not been paid.
So, how do I go about filing a Miller Act Claim? Contact the Procurement Officer of whatever agency is paying for the Contract and ask for their forms (if any) to obtain the name of Surety Bond and that starts the ball rolling! We will have more in this series including the Forms themselves this weed!