Contracting businesses of just about every size have to deal with the surety bonding process at some point in time. When you start the process it can seem frustrating and confusing at first, as you run up against unfamiliar statutes and terms like “Little Miller Act.” While it’s important that you stay on top of what these terms mean for you, it doesn’t have to be stressful or confusing.

Indeed, almost every state has a Little Miller Act, and it’s really not as complicated as you might otherwise think. Let’s take a look at the Arkansas Little Miller Act, what it means for your performance and payment bonds, and how it affects your business operations.

What Is a Little Miller Act?

A Little Miller Act is a statute that is held in most states, that is based upon a federal act (the Miller Act). This act requires any major contractor on a state project to be bonded against both their ability to complete the job (performance bonds) and their ability to pay subcontractors and vendors (payment bonds).

Each state has different provisions in its Little Miller Act, but typically, the require posting a performance bond and payment bond. The former is a type of surety service that covers financial loss to the contracted party if the contractor fails to live up to their obligations and finish the job. The latter provides a means of payment to subcontractors and supply vendors if the prime contractor fails to forward payment for services rendered.

Why Performance and Payment Bonds Matter

Sometimes, despite the best of intentions and efforts, things come up that you did not foresee and you did not expect. These things, from accidents to sudden financial crashes, can cause untold harm to your projects and your business. A performance bond ensures that when things go wrong, the principal with whom you’re dealing gets compensated for their losses.

When a contractor fails to live up to their contracted responsibility, whatever the reason, it can cause critical issues with government projects. The bonding process not only makes sure that these issues are covered if they arise, but it weeds out irresponsible contractors—after all, those with a history of poor performance will have issues getting bonded in the first place.

Likewise, payment bonds are there to provide peace of mind to vendors, suppliers and subcontractors who might be reluctant to work with a contractor with whom they are unfamiliar. Being able to say that you are bonded gives confidence that you live up to your responsibilities.

Arkansas Little Miller Act

The Arkansas Little Miller Act, detailed in the Arkansas Statutes Title 22, Chapter 9, sections 401 through 405 and Title 18, Chapter 44, Sections 501-508, requires both performance and payment bonds for any construction projects which fall under the Federal Miller Act.

If you are a contractor in Arkansas and you want to be sure you are in compliance with the Little Miller Act, your best bet is to work with a qualified and reputable bonding agency like National Surety Services, Inc. For more information or to start your Arkansas surety bonding process, contact NSSI today!

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