If you’re looking for construction contracts in Louisiana, you need to get familiar with the Louisiana Little Miller Act. This act states the basic surety bond requirements that contractors need to get in order to conduct their business. Dealing with surety bonds can be a bit complicated, so it’s helpful to know the details of the local Little Miller Act beforehand.
While just about every state in the union has their own version of the Little Miller Act, they all deal with performance bonds and payment bonds. Learn more about the Louisiana Little Miller Act, and discover everything that’s required regarding surety bonds to make sure you’re conducting business in Louisiana the right way.
The Big Miller Act
Before we get into the Little Miller Act, let’s look at the federal Miller Act. Passed in 1935, this act regulates surety bonds for construction companies to ensure that all parties involved are protected in case the contractor fails to deliver. Because of that, some view the Miller Act as putting unnecessary pressure on the contractors.
Surety bonds are a typical part of any construction contract, and the Miller Act specifically deals with performance and payment bonds. A performance bond is a bond that protects subcontractors and project offerers in the case that a contractor’s performance doesn’t match what they promised. Payment bonds make sure everyone is financially protected if the contractor’s company folds.
Why You Need Surety Bonds
Legally speaking, you’re going to need surety bonds for your next project in most cases, but that’s just the beginning. Your company needs to use surety bonds in order to be successful in the construction industry. The entire workforce is reliant on surety bonds to get the good contracts and the help needed to profit.
Performance bonds show that your company is trustworthy. When there’s assurance that you’ll complete the project on time with the quality promised, it shows that you’re confident in your work. Payment bonds are a necessity if you ever need to find subcontractors, as they ensure subcontractors get paid even if the project is a failure. With payment bonds, subcontractors and material suppliers win either way.
Louisiana Little Miller Act
The specific rules for Louisiana surety bonds have a lot of nuance to it, depending on the type of project. For private works contracts, your surety bonds must cover the entire price of the contract if the total price is under $10,000. For anything over that, the surety bonds must cover at least 50 percent of the contract until you get to $100,000. For those contracts, the bonds must cover 33.33 percent of the contract, while $1,000,000 and up contracts require 25 percent of the contract to be bonded, but not less than $333,333 worth.
For public contracts, the legal requirements are much simpler. For contracts worth at least $150,000, you need to have surety bonds that cover at least 50 percent of the contract. While that is the technical rule, general practice in Louisiana is to have surety bonds cover the entire value of the contract.
Get Surety Bonds from NSSI
The Louisiana Little Miller Act requires most contracts to be bonded, so you need surety bonds from a place you can trust. That’s where NSSI can help. With our experience and dedication to service, we act as a business partner for you and make sure your surety bonds are in compliance with all industry standards. Contact us today to learn more about the various surety bonds we can offer you.