When you’re a small or medium-sized contracting business, the best way to grow your income and profits is to get those first jobs working on government contracts. You expect to carry certain levels of bonding when you pursue such jobs, but you might be confused and stressed when you hear terms like, “Miller Act” and “Little Miller Act.”
In truth, these terms are nothing to be stressed about – they’re just statutes regulating the kinds of surety bonds you’re required to carry and the levels at which you have to carry them. In this sense, they can be helpful in getting you ready to take on those big jobs. Let’s take a look at what the Ohio Little Miller Act means for you as a contractor, and what you need to do in order to stay compliant with state laws.
The Origins of the Miller Act
The first thing to understand is that the Miller Act is actually a Federal statute regulating contractors and surety bonds. It has its origins in a law called the Heard Act. This was first passed in 1894 and required all contractors to carry a single payment and performance bond to cover losses in case they failed to complete a contracted job.
Unfortunately, the Heard Act was limited by procedural and substantive limitations, and a more powerful law was required. This became the Miller Act, enacted in 1935. The Miller Act states that for any government contracting or construction job of at least $100,000 (certain exceptions can push this to $150,000), you must carry a payment bond to cover subcontractors and materials providers and a performance bond to allow the government to recoup losses for an unfinished job.
Enacting Little Miller Acts
The states soon discovered that this level of protection was a good idea. They enacted individual acts that worked like the Miller Act but covered state-level government laws. These are collectively and colloquially known as Little Miller Acts. Each state has its own requirements for bonding, and in most cases, you are required to abide by the state or federal act, whichever is the stricter, for any given job.
The Ohio Little Miller Act
The Ohio Little Miller Act, defined in the Revised Code of Ohio, Title I, Chapter 153, is rather stringent. It states that any person who bids on a state contract, or any political subdivision thereof including districts, institutions and agencies is required to file a bond, letter of credit, cashier’s check or certified check valued at the total amount of the bid. This excludes the department of transportation.
This ensures that if the contractor does not complete their job, be it from unforeseen problems or irresponsibility, the contracting body can recoup their losses, and that all subcontractors and vendors will be repaid for the goods and services provided.
Complying with the Ohio Act
National Surety Services, Inc., has been providing fast, simple and secure surety bonding services for over two decades. We are ready to educate you about everything you need to know regarding the Ohio Little Miller Act and get you the coverage you need. Get in touch with us for more information today.