When you’re running a construction and contracting company, the best way to grow your business is the ability to bid on major government contracts. When you step up to take these bids on, you’ll likely encounter the terms “Miller Act,” and “Little Miller Act.” For a small business, these can be somewhat intimidating terms, especially if you’re not sure what they mean.

In truth, these two terms simply refer to the statutes that regulate the kind of surety bonds you have to carry as a contractor. You’re probably already familiar with surety bonds and what they do; these regulations just specify the levels at which you need to be bonded. Let’s examine the South Dakota Little Miller Act, how it works, what kinds of bond you’ll need and where to go to get in compliance with state law.

Understanding the Miller Act

The Miller Act was first enacted in the mid-1930s as an expansion of and replacement for the existing Heard Act. Though it’s been updated once or twice, it’s still in use today. It requires that for any construction company working on a government job valued at over $100,000, and sometimes over $150,000, you’ll need to carry two types of bonds.

The first of these is a performance bond. This bond tells the government that you have the intent and ability to complete the job for which you contracted. The second is a payment bond. This gives peace of mind to your vendors and subcontractors that you’ll pay for goods and services rendered in the course of the job.

Understanding the Little Miller Act

Little Miller Acts began to be established not long after the Federal Miller Act. Where the federal act provides protection at the national level for contracts taken out with the Federal government, Little Miller Acts provide the same level of protection for state contracts. Each state has its own requirements and levels at which these bonds have to be provided.

If you fail to complete a job, or you don’t pay your vendors and subcontractors, they can file a lien, or bond claim, against the appropriate bond (performance for contract holder, payment for vendors or subcontractors). This will enable them to recover some of the funds lost for the failed job.

South Dakota Little Miller Act

The South Dakota Little Miller Act is outlined in the South Dakota Codes, Title 5 Chapter 21. It states that for any Public Works or construction job a contractor undertakes at the state level, a payment and performance bond must be held with a value equal to the full value of the job. In some cases for jobs valued at less than $25,000, the contracting body may choose to waive the requirement.

Getting the Bonds You Need

If you’re in need of more information about the South Dakota Little Miller Act, or you are looking for fast and easy South Dakota surety bonding services, NSSI is here to help. Give us a call today to find out how our 20 years of experience can get you ready to compete with the big boys!