If you work in the construction and contracting industries, you’re already well aware of the importance of surety bonding. What you may not be aware of, especially if you’re a small business trying to grow to compete at larger levels, is that there are federal and state laws regulating the kinds of bonds you must carry if you bid on government jobs.
These laws are the Miller Act (at the Federal level) and the Little Miller Acts of each state. First established in the 19th century, the Heard Act (later superseded by the Miller Act) was put in place to protect the government from contractors who didn’t finish their job. State acts followed quickly. Learn about the New Mexico Little Miller Act, what it is and what you have to do in order to stay in compliance with this important law.
Federal Miller Act Statutes
At the Federal Level, the Miller Act was first established in its current form in 1935. It replaced the earlier Heard Act of 1894, which was found to have critical weaknesses. The general idea behind the act is that it serves to protect contracting bodies, subcontractors and material service providers against contractors who fail to complete a job they contracted to perform.
Under this statute, performance bonds are required to be carried to protect the contracting body, and payment bonds required to protect your subcontractors and material services providers. These bonds are required for most jobs over $100,000, though in some cases it increases to a minimum of $150,000.
State Miller Acts
Since the Miller Act protects only contracts for the Federal government, the states quickly realized it was a good idea and moved to follow suit. Most states these days have their own version of the act, which are collectively referred to as “Little Miller Acts.” They provide for the same kinds of protection – performance and payment bonds – at the state level for jobs over a given amount, which varies from state to state.
New Mexico Little Miller Act
In New Mexico, just as with most other states, there are protections in place requiring the carrying of payment and performance bonds. The New Mexico Little Miller Act, detailed in Chapter 13, Article 4 of the New Mexico Statutes, essentially requires that for any construction contract is taken on in excess of $25,000, a performance bond and a payment bond must be carried by the contractor. Each bond is to be valued at 100% of the value of the contract.
If you fail to complete the work required of you, both the government and any subcontractors or material providers with whom you work can file bond claims, or liens, against your company to recoup their losses.
Obtaining Surety Bonds
In order to get the surety bond services you need under the New Mexico Little Miller Act, turn to NSSI. We pride ourselves on fast, simple and straightforward bonding with over 25 years of helping small to medium sized businesses compete with the big names. For more information or to get started, get in touch with us today!