Understanding the Federal Miller Act is essential for anyone involved in federal construction projects. The Miller Act requires the prime contractor to secure a Miller Act bond to ensure payment protection for subcontractors and suppliers. Our comprehensive guide breaks down the key components of the Miller Act, including payment and performance bonds, ensuring you have the knowledge to protect your rights and secure your payments.

Whether you’re a contractor, subcontractor, or supplier, navigate the complexities of federal project payments with confidence.

Key Takeaways

• Comprehensive Understanding of the Miller Act: The Federal Miller Act is essential for contractors, subcontractors, and suppliers involved in federal construction projects. It ensures that those who furnish labor or materials are protected by requiring the primary contractor to secure payment bonds, thereby guaranteeing compensation if payments are not made.
• Eligibility and Filing Deadlines: Only first—and second-tier subcontractors and direct suppliers are eligible to file a Miller Act bond claim. It is crucial to submit a claim within 90 days of the last provision of labor or materials and initiate a lawsuit within one year if payment is not received. Prompt filing enhances the likelihood of securing owed payments without lengthy legal battles.
• Proper Procedures for Enforcing Claims: Successfully enforcing a Miller Act claim involves filing the lawsuit in the federal district court where the project is located and naming the surety company that issued the bond. Understanding the correct filing process and adhering to deadlines is vital for protecting your rights and ensuring that claims are handled efficiently.

What is The Federal Miller Act?

When you undertake work on a federal construction project anywhere in the United States and do not receive payment, you have the right to submit a bond claim under the Federal Miller Act, which functions similarly to a mechanics lien.

These claims cannot be made directly against the federal government’s property, as the government will not allow third-party liens on its land. To address this, the government mandates that the primary contractor secure a Miller Act payment bond, ensuring that all subcontractors and suppliers involved in the project are compensated. Should you remain unpaid, your claim must be directed toward this payment bond.

This type of claim is known as a “Miller Act Claim.”

Who Can File a Miller Act Claim?

The Miller Act offers extensive eligibility for parties to file a claim, broadly stating that anyone who “furnishes labor or material” is protected. However, the Act places stricter limits on how deep these rights penetrate the contracting hierarchy.

Subcontractors: Both first-tier subcontractors (those who work directly with the prime contractor) and second-tier subcontractors (those who work with first-tier subcontractors) are granted rights under the US Miller Act. Subcontractors beyond the second tier do not have these protections.

Suppliers: Only suppliers who have a direct contractual relationship with the general contractor or a first-tier subcontractor are entitled to Miller Act rights. Suppliers further down the supply chain, such as those supplying other suppliers, are not eligible to file claims under the Act.

General Contractors: It’s important to understand that general contractors themselves do not have rights under the Miller Act. If a general contractor is not compensated, their only option is to initiate a lawsuit against the public entity that hired them.

In summary, while the Miller Act provides broad protections for those supplying labor and materials, these rights are confined to first and second-tier subcontractors and direct suppliers. General contractors must seek remedies through legal action against the hiring public entity if they encounter payment issues.

When Is the Deadline to File a Miller Act Claim?

Individuals possessing Miller Act rights must initiate legal action to uphold their claims within one year after their final delivery of labor or materials to a construction project.

However, many stakeholders face an earlier cutoff when submitting a formal claim, known as a “Miller Act Claim.” Specifically, second-tier subcontractors and suppliers to first-tier contractors are required to file their claims within 90 days of their last provision of labor or materials to the project.

Regardless of these deadlines, it is recommended that anyone with a valid claim submits their Miller Act Claim as soon as possible. Prompt filing triggers the bond claim process, which can lead to receiving payment without the necessity of pursuing further legal action.

Who Should Receive a Miller Act Claim?

A subcontractor or supplier must submit their Miller Act Claim (the prerequisite before initiating legal action) to the primary contractor. Additionally, it is often advantageous to forward a copy of this claim to the surety company involved.

Do I Need to Send Notice the Miller Act Was Filed?

Absolutely. Submitting a Miller Act Claim itself acts as the necessary notice. According to the Miller Act, you must send your claim to the general contractor via certified mail with a return receipt requested. Additionally, it is recommended that a copy of the claim be forwarded to the public entity overseeing the project and to the surety company.

Can I Include Attorney’s Fees, Collection Costs, or Other Amounts in the Lien Total?

No. Your Miller Act Claim must include only a statement of the principal amount you are seeking. Recovering attorney fees from the prime contractor and the surety is allowed solely if your contract with the hiring party contains a clause that grants you the right to claim such fees. (Reference: United States ex rel. Maddox Supply Co. v. St. Paul Fire & Marine Ins. Co., 86 F.3d 332, 4th Cir. 1996)

When Is the Deadline to Enforce a Miller Act Claim, or How Long Is My Claim Effective?

To uphold your Federal Miller Act Claim, you must initiate a lawsuit within one year after your final delivery of labor or materials to the project. The process of filing a Miller Act Claim is somewhat intricate, as it requires naming both yourself and the United States of America as plaintiffs. Additionally, the lawsuit must be brought before the federal district court that has jurisdiction over the location of the project.

Who Cancels the Claim When I Get Paid?

Typically, all involved parties in a settlement, including the surety, will endorse a settlement agreement that resolves and concludes the Miller Act Claim. This agreement generally serves as the sole necessary cancellation. However, you also have the option to draft and distribute a formal withdrawal of your Miller Act Claim to all relevant parties if needed.

Payment Bond and Performance Bond Requirements

While the prime contractor secures a payment bond, its primary role is to protect subcontractors and suppliers involved in the federal project, ensuring they receive compensation for their provided labor and materials.

On the other hand, the performance bond is an agreement between the prime contractor and the federal government, guaranteeing that the contractor will complete the project in accordance with the contractual obligations.

It is important to understand that the Miller Act does not extend its protections to general contractors. Additionally, subcontractors and suppliers beyond the second tier are not covered under the Miller Act. This means that only first-tier contractors, second-tier subcontractors, and first-tier suppliers (those directly contracted with the general contractor) are eligible for Miller Act protections if they face payment issues while working on a federal construction project.

How Do I Make a Miller Act Payment Claim?

The Miller Act requires that a payment bond serves as a substitute for federal property. This means that if anyone supplying labor or materials to a federal construction project does not get paid, they can file a claim directly against the bond and potentially receive compensation from the bonding company if their claim is approved.

Typically, the bonding company will review the claim, request supporting documentation, and then decide to pay either the prime contractor or the bonding company itself.

Unlike many state, county, and private projects, federal projects under the Miller Act do not require preliminary notice to file a bond claim. To submit a claim, you simply need to file within 90 days of your last provision of labor or materials to the project.

The process is straightforward: Determine if you provided any labor or materials to a federal construction project within the past 90 days. If so, you are likely eligible to file a Miller Act claim and receive payment. Below is a general, step-by-step guide on how to file a Miller Act claim.

4 Steps to File Your Miller Act Claim

Step 1: Submit the Miller Act Notice to the Prime Contractor
Begin by sending your payment claim notice to the prime contractor. This notice is the actual claim, distinct from any preliminary notices. Subcontractors or suppliers who did not directly contract with the prime contractor must send this notice within 90 days of their last work or material delivery.

Even if you did contract directly, it’s advisable to send the notice within this timeframe. Use certified mail with a return receipt requested, though any method providing written, third-party proof of delivery is acceptable. According to Miller Act § 3133, the notice must accurately state the claimed amount and identify the party for whom the labor or materials were provided. No specific form is mandated by the statute.

Step 2: Follow Up with the Surety
The Miller Act does not require you to notify the government entity overseeing the project or the prime contractor’s surety directly. Instead, you only need to inform the prime contractor, who is responsible for passing the claim to the bonding company. It’s beneficial to send your claim to the surety simultaneously with the prime contractor to ensure prompt attention. If you’re unaware of the bonding company, the Miller Act permits you to request this information.

Step 3: Provide Documentation and Complete the Sworn Claim Form
After identifying the surety, they will supply a “Claim Form” and request supporting documents such as contracts, invoices, emails, change orders, purchase orders, and shipping confirmations. Compile and submit this information promptly to the surety, who will review your claim and require a notarized signature on the sworn claim form. Expect a 30-45-day period for the surety to evaluate and respond to your claim.

Step 4: Receive Payment or Pursue Legal Action
Once your bond claim notice and supporting documents are submitted, the surety will either approve and pay your claim or reject it. If approved, you will need to return a lien release and waiver in exchange for payment and may need to provide a formal cancellation of your Miller Act claim.

If the claim is denied, your next step is to file a lawsuit to enforce your Miller Act claim in the federal district court where the project is located, naming the United States of America as a party. Consulting a construction attorney is recommended to assist with this legal action. Remember, the lawsuit must be filed within one year of your last provision of labor or materials for the federal construction project.

How Do I Enforce a Miller Act Claim?

If a payment is not made following a bond claim, the claimant might need to take legal action to enforce their Federal Miller Act claim. Enforcing such a claim typically involves initiating a lawsuit.

When Is the Right Time to File an Enforcement Lawsuit?
A claimant has a 90-day window from the last date labor or materials were provided to the project to make a Miller Act claim. But when exactly should the lawsuit be initiated?

Generally, the enforcement lawsuit should be filed after the initial 90-day period has elapsed. However, the exact timing can vary depending on the specifics of each case. If there is potential to resolve the dispute without going to court, it is often better to pursue those avenues first. Nonetheless, claimants have up to one year from the last date they supplied labor or materials to file the lawsuit. This timeframe provides an opportunity to attempt negotiations before resorting to legal action. If it becomes apparent that a resolution is unlikely, it may be prudent to file the lawsuit sooner rather than later.

The timing for filing a lawsuit varies with each situation, but all claimants must initiate legal action within one year of their last contribution to the project to preserve their right to sue.

Where Should the Lawsuit Be Filed?
The lawsuit must be submitted to the federal district court located in the area where the project took place. The geographic location of the claimant, the principal contractor, or the surety’s residence is irrelevant for the purposes of the Miller Act claim.

Who Needs to Be Included in the Lawsuit?
Determining the parties to name in the lawsuit can be complex. When enforcing a Miller Act claim, the lawsuit targets the bond itself. This means the surety company that issued the bond must be named. While the bond beneficiary (usually the primary contractor) can be included, it is not always necessary.

This process has a unique aspect: the lawsuit is filed in the name of the United States on behalf of the claimant. This can seem unusual, but it is a standard procedure for Miller Act claims.

Enforcing a Miller Act claim involves careful consideration of timing, jurisdiction, and the parties involved. Understanding these elements is crucial for successfully pursuing legal action to secure the owed payment.

Miller Act Statutes and Regulations

The Miller Act is a cornerstone of federal law designed to protect subcontractors and suppliers involved in federal construction projects. Codified in 40 USCS §3131, the Miller Act mandates that prime contractors secure a payment bond for any federal construction project exceeding $100,000. This payment bond serves as a financial guarantee, ensuring that those who furnish labor or materials are compensated even if the prime contractor fails to pay.

Integral to the implementation of the Miller Act is the Federal Acquisition Regulation (FAR). The FAR outlines the specific requirements for obtaining a payment bond and provides detailed procedures for filing a Miller Act claim. By adhering to these federal regulations, prime contractors help maintain a fair and secure payment environment for all parties involved in federal construction projects.

Understanding the Miller Act statute and the FAR is crucial for anyone working on federal projects. These regulations not only establish the legal framework for payment bonds but also ensure that subcontractors and suppliers have a clear path to secure their payments.

Benefits of Filing a Claim

Filing a Miller Act claim offers several significant benefits for subcontractors and suppliers working on federal construction projects:

• Ensuring Timely Payment: The Miller Act requires the prime contractor to obtain a payment bond, which acts as a safety net for subcontractors and suppliers. This bond guarantees that they will receive payment for their labor and materials, even if the prime contractor defaults.
• Protecting Rights: By filing a Miller Act claim, subcontractors and suppliers can safeguard their rights. The claim process ensures that they are recognized and compensated for their contributions to the project, providing a legal avenue to address payment issues.
• Resolving Disputes: The Miller Act claim process can help resolve disputes between subcontractors, suppliers, and prime contractors. By formally filing a claim, parties can address payment disagreements in a structured manner, often leading to quicker resolutions.
• Providing a Remedy: For those who have not been paid for their work, the Miller Act provides a clear remedy. Filing a claim against the payment bond can result in receiving the owed compensation, offering a practical solution to financial disputes on federal projects.

These benefits highlight the importance of understanding and utilizing the Miller Act to protect financial interests and ensure fair treatment in federal construction projects.

Choosing the Right Representation

Navigating the complexities of filing a Miller Act claim can be challenging, making it essential to choose the right legal representation. A qualified attorney specializing in construction law can provide invaluable assistance throughout the process. Here are some key factors to consider when selecting representation:

• Experience: Look for an attorney with a proven track record in handling Miller Act claims. Experience in this specific area of law ensures that the attorney is familiar with the nuances and intricacies of the claim process.
• Knowledge: Ensure that the attorney has a deep understanding of the Miller Act and federal regulations. This expertise is crucial for effectively navigating the legal requirements and maximizing the chances of a successful claim.
• Communication: Choose an attorney who is responsive and communicative. Clear and consistent communication is vital for staying informed about the progress of your claim and for addressing any questions or concerns that may arise.
• Results: Research the attorney’s history of success in handling Miller Act claims. A strong track record indicates the attorney’s ability to achieve favorable outcomes for their clients.

By carefully selecting the right representation, subcontractors and suppliers can ensure that their rights are protected and that they receive the payment they deserve. An experienced and knowledgeable attorney can guide them through the Miller Act claim process, providing the support needed to secure their financial interests.

Get in Touch

Navigating the complexities of the Federal Miller Act is crucial for anyone involved in federal construction projects. This comprehensive guide equips contractors, subcontractors, and suppliers with the essential knowledge to protect their rights and ensure timely payments through effective bond claims.

By understanding the eligibility criteria, filing deadlines, and proper procedures, stakeholders can confidently address payment issues and secure the compensation they deserve. Whether you’re new to federal projects or seeking to reinforce your existing practices, this guide serves as an invaluable resource for successfully managing your financial interests and fostering smooth project completions.

At CRM Lien Services, we have been serving customers across the country with required reference documentation for lien claims since 1986. We assist property owners in navigating the mechanics lien process, informing them about their rights and responsibilities, including providing notices, securing payment, and releasing mechanic’s liens.

We have a wealth of expertise, are licensed and insured, and have a team of highly knowledgeable document processors. If you’re looking for a straightforward process for filing a mechanics lien, give us a call or shoot us an email.