Surety bonding is a fact of life for contracting and construction businesses. It’s the way in which you give security and peace of mind to the people with whom you’re contracting, as well as to those entities who contract with you. It’s even required by law, depending on the individual state and project you’re undertaking.

The statutes that regulate surety bonding on government contracts are the Miller Act at the federal level, and the Little Miller Act, at the state level. Like most other states, North Dakota has its own version of this act, which you’ll need to know if you wish to bid on public works projects in this state. Learn about the North Dakota Little Miller Act, and what you need to know to stay in compliance with this law as you grow your contracting business.

Explaining the Miller Act

As far back as the late 19th century, in 1894, the government realized the necessity to protect itself against major jobs that a contractor might not finish for one reason or another. Whether irresponsibility or unforeseen disasters occurred, the government stands to lose a lot of money if a contractor doesn’t fulfill their responsibilities.

Thus, an act called the Heard Act was passed, which required contractors to carry a bond that promised reimbursement of such losses. Since this Act proved to have serious issues, it was replaced in 1935 by the act that is still in existence today: the Miller Act. This act states that for any contract over $100,000, you’re required to carry a payment bond to protect subcontractors and services or material providers. You must carry a performance bond to protect the contracting body.

What is a Little Miller Act?

The states, of course, realized right away that the Miller Act was a good idea, but it only protected federal contracts. Thus, each state enacted its own Little Miller Act based on the Federal one. Each state’s statute has its own requirements as to what jobs require bonds and at what value, but most deal with the same payment and performance bonds.

The North Dakota Little Miller Act

In North Dakota, the Little Miller Act is referred to as the Mechanic’s Lien Statute. It’s outlined in the Century Code, Title 48, Chapter 48. Like most acts of this sort the North Dakota Little Miller Act can get fairly detailed, but the basics are that any time you enter a contract with the state for any public improvement project, which is valued at $100,000 or more, you are required to carry a performance and payment bond equal to the contract value.

Should you as the contractor then fail to perform your agreed-upon duties, the contracting body or any subcontractors or services providers you use can file a lien known as a bond claim against you. This enables them to recoup some or all of the losses they suffer from the failure to complete the job.

Getting in Compliance

If you’re in North Dakota and you need help getting in compliance with the North Dakota Little Miller Act, National Surety Services, Inc, is here to help. We pride ourselves in providing simple and fast surety bonding services across the nation. If you’d like more information or to get started, get in touch with us today.