When you’re trying to grow your construction and contracting company, you’ll eventually need to start bidding on government contracts. When you do, you’ll need the right surety bonds in place to make sure you’re giving your government contracting body peace of mind. It will reassure them that you’ve got the ability to complete the job while providing security in case you can’t.
The laws that regulate these bonds are the Miller Act at the Federal level, and Little Miller Acts at the state levels. Each state has its own Little Miller Act, and while all are based on the Federal act, they all have very different structures and requirements. Check out the requirements of the Vermont Little Miller Act and learn where you can go for fast, secure and easy information and surety bonding for your business.
How the Miller Act Works
The Miller Act, first established in 1935, replaced an earlier act called the Heard Act. While both acts required a contractor working with the government to carry a payment bond to protect vendors and subcontractors, and a performance bond to protect the contracting body (the government), the earlier act was problematic at a procedural level.
In the end, the current, stronger act ensures that if you fail to complete a job, whether it’s due to unforeseen emergencies or irresponsibility, the government can recover part of their losses. Additionally, your suppliers and subcontractors will get paid for the goods and services they provided.
What the State Act Does
The Miller Act, however, only protects at the federal level. As such, it didn’t take long for the states to realize that they, too, needed similar protections. They began to pass statutes based upon the Miller Act which provided the same requirements for bonding at the state level. Each state has its own requirements regarding the level of contract for which you need to be bonded, but they all have the same idea at their core.
In general, you’ll need to abide by the more stringent of your state’s act or the federal act, based upon each individual job.
Vermont Little Miller Act
Vermont’s State Statutes, Title 19 Chapter 1, spell out the terms of the Vermont Little Miller Act. It requires that for any contract you take out with the state, you are required to carry a bond for performance and payment. In the case of contracts valued at a maximum of $100,000, the performance bond may be waived at the discretion of the bondholder.
If you fail to complete a job, the government can file a claim against your performance bond to recover some of their losses. Your materials vendor and/or subcontractors, in turn, can file a claim against your payment bonds to get the money they’re owed.
Where to Get Bonded
If you need bonds to stay in compliance with the Vermont Little Miller Act, NSSI is here to make it happen. For 25 years we’ve offered fast, secure and easy Vermont surety bonding services to companies of all sizes. Get in touch with us for more information or to start your application today!