As far back as 1894 in the late 19th century the government realized the importance of protecting itself against unscrupulous and irresponsible contractors and even against losses from unforeseen consequences on a job. This resulted in the Heard Act, which required contractors to be bonded against such issues.
The Heard Act had major weaknesses, however, and by 1935, it was replaced with the statutes that still regulate bonding today: the Miller Act. Each state then followed suit. As a contractor, you’ll need to understand how both Federal and state Little Miller Acts apply to you. Explore the details of the New Jersey Little Miller Act, what they mean to you as a contractor and where to get the surety bonding services you need.
What Is the Miller Act?
First established in its current form in the 30s, the Federal Miller Act is in place to protect both the government and those entities with whom you work when you take on a government job. In general, if you bid on a job that is valued at $100,000 or more, you will be required to carry two specific kinds of bonds to ensure you live up to your responsibilities.
The first kind of bond you’ll need to carry is a performance bond, and that protects the contracting body (the government). If you fail to complete your job, the contract holder can place a bond claim or lien against you to recoup their losses from the job. The second kind of bond is a payment bond, which covers your subcontractors and providers of goods and services, also called materials providers.
Miller Acts only cover federal jobs, so naturally, the states followed suit with acts of their own modeled off the federal act. These are known universally as Little Miller Acts. They provide for the same sorts of protection, requiring you to carry payment and performance bonds when you bid on a state government job of a certain level.
Each state has its own statutes and requirements for these bonds. In general, on any given job you are required to abide by whichever rule is more strict: the state Little Miller Act or the Federal Miller Act.
New Jersey Little Miller Act
Revised New Jersey Statutes Title 2A, Chapter 44, specify the terms of the New Jersey Little Miller Act. It states that any state or public works projects in the amount of $200,000 ($100,000 for school facilities), you will need to carry the proper payment and performance bonds. In addition, for bonds valued at $850,000 or more, you’ll need a Certificate of Authority from the U.S. Treasury Department.
Getting Bonded and Educated
Understanding the specifics of Little Miller Acts can be tricky. At NSSI, we make it a point to both ensure you’re covered under federal and state law, and to understand the requirements you face. If you need help with the New Jersey Little Miller Act or any other surety bonding services, get in touch with us for answers and to get started today.