The South Carolina version of the U.S. Miller Act contains several requirements that make it different from its counterparts in other states.
It is one of the few Little Miller Acts to require a bid bond, for instance. It also contains specific language intended to apportion the total available value of payment or performance bonds based on each subcontractor’s contribution to the project as well as the current stage of completion the project is in.
Learn all about South Carolina’s Little Miller Act, including its most important requirements, by reading on.
Requirement for Bid Bonds on all Competitive Sealed Bidding
Unlike many other versions of the Little Miller Act, South Carolina mandates bid bonds for certain public design-bid-build procurement procedures. These projects include all sealed bidding procurements and potentially any other contracts as determined by the State Engineer’s Office.
The bid bond must be in place for a bid to be valid, and it must be equivalent to at least five percent of the total bid value (SCC §11-35-3030, 1).
Requirement for Performance and Payment Bonds
All contracts for public works projects must be secured by a performance and a payment bond equal to 100% of the total value of the contract. This requirement reflects a change made to South Carolina law in 2012 that increased the required bond amount to cover 100% of the contract value in all instances.
At the discretion of the governmental body awarding the contract, the bonding requirements may be waived for projects valued at $50,000 or less. The body may also require additional bonding based on the needs of individual projects (SCC §11-35-3030, 2(a), (b)).
Taking Action on a Payment Bond
Subcontractors and vendors supplying work or materials to bonded contractors can make a claim upon a payment bond for non-payment after 90 days of the last date that labor or materials were furnished. The amount of the claim can only correspond to an accurate value of the exact work performed or materials provided, as stated by the original contract.
A claim cannot be made more than a year from the last date that labor or materials were provided (SCC §11-35-3030, 2(c)).
Actions Based on Contracts Yet-to-Be-Completed
South Carolina often chooses to make “progress payments” for projects based upon milestones within projects that cannot be greater than 3.5% of the project value. Bond claimants are only eligible to take action for non-performance or non-payment based on their contribution to the project and the current portion of the project completed (SCC §11-35-3030, 4).
In other words, South Carolina strictly limits the funds available through a bond claim according to the actual work completed by the claimant at the current stage of the project.
For example, if a project valued at $500,000 was only half complete, and the total value of work provided to the project by a specific subcontractor was $80,000, then they are only eligible for a bond claim upon 8% of the total project value.
Learn More About South Carolina’s Little Miller Act
If you have any questions about the specific language or legal implications of South Carolina’s Little Miller Act, or you want to obtain bonding related to the requirements set forth in the act, then you can contact our surety bonding experts today.