The Miller Act and Little Miller Act are must-knows in the world of contractors and construction. Many contractors have heard of the two, but at NSSI we often find that not everyone fully understands what is involved with them. Not knowing could cost you a job, or even your company, so it is essential to comprehend how they apply to you in your state. If you don’t know how the Miller Act affects you, read this guide courtesy of NSSI.
Explanation of the Little Miller Act
There are two statues: the Miller Act and the Little Miller Act. The Little Miller Act statute only applies to some states, but Connecticut is one of them. The Little Miller Act of Connecticut refers to filing a lien on a state construction project, on which you file said lien pursuant to the Little Miller Act of Connecticut.
Unlike other claims, this claim is not filed against state property; rather, it is filed against a specific posted bond. This bond centers on the Miller Act, which requires by law that all contractors working on state projects post surety bonds. If the contractor does not provide the work promised in the surety bond, or the client is dissatisfied with the contractor’s work, the client of the project can authorize a lien on a posted bond.
The Types of Surety Bonds You Need
The surety bonds needed to work on a government or state project depend on the state where the work is being performed. Often, contractors need a payment bond, performance bond or both. According to the Connecticut State Land Board, the required types of surety bonds are specified in the contracts for the project.
A payment bond guarantees that the material suppliers and any subcontractors working on your project will be paid, even if you cannot complete the project. With the Little Miller Act, payment bonds give workers without a direct contract with the original project contractor provide an alternate source of payment.
State governments require these payment bonds to avoid leaving the project workers shortchanged. If there were no payment bonds, both the contractor and the government workers would be at risk for litigation. All public works projects require both payment and performance bonds in most cases.
Performance bonds ensure that all project performance is completed by the contractor. If the contractor does not follow the terms of the performance bond, state projects may be delayed for weeks or even years. This results in the state having to pay for new contractors, which can drastically raise the cost for the project.
However, a performance bond also protects the contractor. If the state asks for work that is not in the contract or makes changes to the work or pricing, you can use the figures and scope of work in the surety bond as proof otherwise. You cannot be accused by the state government of unsatisfactory work or defaulting on the project if the work was not part of your bond.
Provisions of the Little Miller Act
If a material provider or subcontractor does not get paid under the terms of the payment bond, or if the terms of the performance bond terms were not met, the claimant has a specified time frame within which to make a claim against the bond. Typically this claim is when a lien against the project takes effect. This provision allows the original contractor time to work out a resolution.
The Miller Act and Little Miller Act are essential to know and understand, for contractors, government project bidders and construction workers. They ensure that contractors and those working with and for them know what is at stake in all state-level projects. Contact NSSI to learn more today.