“Little Miller Act” is a colloquial name for state level legislation that’s modeled after a federal legislation which has been in existence for over 80 years. It regulates the kinds of surety bond that a contractor is required to carry should they wish to bid on a government contract. Still, the first time you encounter this term it can be intimidating.
Every state has a different version of their own Little Miller Act, and it helps to understand the origins of the act, its purpose and what it means for you as a contractor in Pennsylvania. Explore the Pennsylvania Little Miller Act, when you need to carry bonds and where to go for help remaining in compliance with this important statute.
About the Miller Act
The story of the Miller Act begins with its predecessor, the Heard Act, first enacted in 1894. This statute required that a single performance and payment bond be carried by any contractor working for the government. It was plagued with limitations at both the substantive and procedural levels, however. This led to its replacement with the improved Miller Act in 1935.
Under the Miller Act, a prime contractor on any government construction contract to extend surety bonds on jobs valued at over $100,000 or $150,000, depending on the job. These bonds include payment bonds to ensure that subcontractors and vendors are properly paid if the job isn’t completed, and performance bonds to allow the government to recover a degree of loss.
What Is a Little Miller Act?
Little Miller Acts do the same thing as the Miller Act, but they’re at the state level. They cover your public works projects and allow your vendors, subcontractors and the state itself to receive payment if you don’t finish the job. While each state’s act is different and unique, you’re usually bound by the stricter of the state or federal statute for the job at hand.
The Pennsylvania Little Miller Act
Under the Pennsylvania Little Miller Act (Title 8, Ch. 13 of the PA Statutes), bonds are required for any job valued at more than $5,000. It’s one of the strictest laws in the nation of its type. Payment and Performance Bonds under this act (properly called the Public Works Contractors’ Bond Law of 1967) are required to be furnished at the full value of the contract.
In addition, for contracts in excess of $10,000, financial security such as letters of credit or escrow accounts are required. In the case of a job not being completed, the government and/or service and materials providers can file a bond claim (lien) against the company for payment under the bond or financial security.
Easy Pennsylvania Bonding Services
If you’re in PA and you need help with compliance under the Pennsylvania Little Miller Act, National Surety Services, Inc., can help. Learn about our fast and simple surety bonding process and contact us to get started today!