If you run a contracting or construction business, it’s a foregone conclusion that you’ll need to secure surety bonds at some point in time. These are the means by which you protect your reputation and your business should something unforeseen happen. They make sure that your clients, vendors and subcontractors are covered if you can’t live up to your obligations.
In fact, bonding is so important to the business that there are legal statutes in place that require carrying of certain bonds before you can sign onto a government contract. These legal statutes are called the Miller Act. Each state also has its own statutes, called Little Miller Acts, based on the federal law. Learn about the Montana Little Miller Act, what it means for your business, and where you can go to get the bonding services you need for compliance.
Overview of the Miller Act
The Miller Act in its current incarnation was first signed into law in 1935. It arose out of the former Heard Act of 1894, which was the first effort at regulating the requirement for contractors to carry bonds when they take on government contracts. The original version of the act was fraught with limitations both procedural and substantive, which required major rewrites and revisions to fix.
The current Miller Act requires that for any government contract over $150,000, the contractor must post both a payment and a performance bond. A payment bond ensures that you’ll pay your material vendors and subcontractors for services rendered. A performance bond will ensure that you live up to your end of the job and will complete the work you contracted to perform.
Little Miller Acts
The Miller Act only covers Federal government jobs. When it comes to working for state and local agencies, each state has their own statutes, called Little Miller Acts. These serve the same purpose as the federal act, but are tailored for the jobs you might take for state governments, like highway work, state building projects and the like.
Each state has its own statutes and requirements. They all require payment and performance bonds, but the value of the contracts and the level of the bonds change from state to state. Just like all other states, Montana has its own regulations regarding these bonds.
Montana Little Miller Act
The Montana Little Miller Act is a bit different than in many other states as there is no minimum value for a state contract to require a bond. That is, all state contracts require posting of bonds, whether they are for $5,000 or $1 million. However, the government can waive the requirements for certain construction projects which cost less than $50,000.
For those looking to securing the right surety bonding for their construction business in Montana, NSSI is here to help. We have decades of experience and deliver a fast turnaround and a hassle-free application process. If you need help with establishing your Montana Little Miller Act surety bonding compliance, we’re ready to help. Give us a call today for more information or to start your application process.