Like other U.S. states, Mississippi has instituted a series of laws similar to the U.S. Little Miller Act. These laws protect public construction projects from builder’s liens by transferring liability to a surety agent. Surety bonds provided under the Little Miller Acts generally guarantee “full and faithful” performance of a contract as well as payment for all materials suppliers and subcontractors.
Mississippi’s version of the Little Miller Act is fairly boilerplate, although it includes the possibility for contractors to establish their own surety by depositing funds into the State Treasury. The state may also provide “lump sum” payment in lieu of a surety bond for contracts valued at less than $25,000.
Learn the details of Mississippi’s Little Miller Act and its specific requirements by reading on.
Requirement to Maintain Surety Bonds for Public Projects
All contracts awarded by public agencies in the state of Mississippi shall be secured by surety bonding equivalent to the full value of the contract. This surety bonding protects public agencies in the form of a payment bond that guarantees “full and faithful performance of the contract” (M.C. §31-5-51). A payment bond must also be provided guaranteeing payment of all vendors, materials suppliers, contractors and laborers involved on a project.
Mississippi Code §31-5-51, 4 specifies that only subcontractors, material suppliers to the main contractor or subcontractor, subcontractors of subcontractors, or laborers who worked directly at the project site may be eligible for a payment bond claim.
Contractors may be eligible to establish their own personal surety by depositing an amount equivalent to the full value of a contract within the Mississippi State Treasury.
For contracts valued less than $25,000, the state may opt to provide a lump sum payment to contractors only rendered upon the satisfactory completion of the contract in full, including payment of all suppliers and subcontractors.
Requirement of General Liability Insurance for Contractors
One unconventional aspect of the Mississippi Little Miller Act is that it contains requirements for general liability insurance. These laws are usually covered in other parts of official code or requirements for licensed professionals, but Mississippi legislators evidently felt the Little Miller Act’s passage was an opportunity to include the language.
- 31-5-51, 7 provides that all contractors engaging in work that exceeds $5,000 for state work or $25,000 for local county, city or municipal agencies must have general liability insurance coverage of at least $1,000,000.
Making Claims on Payment or Performance Bonds
Individuals who have not been paid within 90 days may seek action on a bond to claim the value of any unpaid work or materials. They have within a year of the last date that materials or labor were provided for their claim to be acted upon. Sub-subcontractors without a direct contractual relationship to the main bonded contract holder must notify the contract holder within 90 days of work or materials provided that they have a possible claim for unpaid services.
If contract holders do not honor payment bond claims or do not provide payment within a reasonable time so as to delay payment or act in bad faith, a judge may award attorney fees to a bond claimant (M.C. § 31-5-57). Similarly, claimants may be forced to pay attorney fees if a judge deems that their claim actions were fraudulent or not in good faith.
Ensuring You Are Compliant With Mississippi’s Little Miller Act
If you require assistance obtaining the performance and payment bonds needed to be in compliance with Mississippi’s Little Miller Act, or you have any questions about general bonding requirements, then contact our helpful surety bonding experts today.