Miller Act statutes are a necessary part of being a construction and contracting business. These acts, at both the federal and state level, very closely regulate the kinds of surety bonds that a business absolutely must carry if they wish to work on government contracts. That means if you’d like to do any sort of public works project, from construction on a county park to working on a major federal building, or even highway work, you’ll likely fall under either the federal or state version of this act.
At their core, these acts are fairly straightforward. They can, however, carry a lot of detail and can vary widely from state to state. It’s important to understand what the federal Miller Act is, what the state Little Miller Acts are and how they affect you as a contractor. Let’s check out a detailed overview of the background and history of these acts, what they mean for you as a contractor and where to find information on the laws regulating your state.
Understanding Surety Bonds
Surety bonds are at the core of the construction and contracting industry. If you’ve got such a business, you likely have some level of understanding of what a surety bond is and what it covers. Unlike an insurance policy, which is designed to protect a specific entity, piece of equipment or the like against disaster and which pays compensation should the worst happen, a surety bond is more like a loan that protects the client from your failure to complete a job.
Three parties participate in any surety bond. The first is the obligee. That’s your client, the person with whom you contract the job. The second is the principal. That’s you, the contractor. Finally, the surety is the company that issues the bond and backs up your work.
How bonds work is simple — if you fail to complete the aspect of your job that is covered under a given bond, the bond will reimburse those who stand to lose from this failure. For example, if you have a performance bond, it states that you’ll finish the job you promised to do. If you fail, the obligee can place a claim against the bond to be reimbursed for the money they lost from you not completing the work.
This reimbursement comes in the form of a loan, which you eventually have to pay back. In addition, calling in a bond means that you may have a more difficult time getting bonded for future jobs.
The History of Bonds
Many people don’t realize that surety bonds have been around since ancient times. The earliest codified form of sureties exists in the Code of Hammurabi, dating back to 1,790 B.C.E. Ancient references to surety bonds have been found throughout ancient Persia, Assyria, Babylon, Carthage, Rome, the ancient Hebrews and even medieval England. Modern principles of surety bonding date back to about the year 150 C.E. under the laws of Rome.
By the 19th century, corporate suretyship bonds were the prevalent type of bond used. That meant that private companies were often able to take jobs without being bonded. In those days, many projects given to private contractors were abandoned or unfinished. Potentially worse, they would fail to pay subcontractors and material providers used to provide necessary extra resources, materials and equipment for the job.
Either the company wouldn’t have the resources to fulfill their obligations, they were insolvent and went out of business or they would simply abandon the job, as there was little consequence to doing so. This placed a huge burden on the taxpayers, who had to cover extra costs rising from such defaults.
The Heard Act
Because of this taxpayer burden and to ensure that contracting companies began to live up to their expectations, the Heard Act was passed in 1894. This act authorized the use of corporate surety bonds to secure all federally funded projects, even with private contractors. This was the first legal requirement allowing for mechanics, construction and payment liens for unfinished jobs.
Unfortunately, the Heard Act soon proved to be very difficult to enforce. Firstly, it established a single bond for the purpose of payment and performance, which may not have left enough money for all parties to become properly reimbursed upon failure of a job.
Second, In order actually to file a lien against a contractor, the materials supplier or subcontractor had to prove that the services or materials supplied were completely consumed and absolutely necessary in pursuing the work. As it was very hard for the courts to make such a determination, the Act became plagued with procedural and enforcement difficulties. It became necessary for a stronger act to be put in place.
The Federal Miller Act
In 1935, the Federal Miller Act was first passed by congress and signed into law. At the same time, the Heard Act was repealed. Where the Heard Act had established a single bond for the purposes of payment and performance, the Miller Act split these into two different bonds, the payment bonds and performance bonds now used across the industry.
The Miller Act has certainly evolved over the years; as early as 1959, it underwent a number of important evolutions in coverage. Still, it remains largely intact and is the heart and soul of what makes it possible for private companies to bid on government contracts today.
The Miller Act protects suppliers and first tier subcontractors, allowing them to file civil action in the U.S. District Courts for any unpaid amount. Such actions are brought on the payment bond held by the contractor and must be filed between 90 days and one year after the last labor on the project is complete, or the last materials supplied. No notice is required.
A performance bond must also be held. This bond protects the Federal government in the case of an unfinished project, and in such a case, as with first tier subcontractors, the government can file civil action, placing a lien against the performance bond to recover the funds lost in the job, up to the value of the bond, which is normally 100% of the value of the contract. Such bonds are required for any federal construction project in excess of $100,000.
The Miller Act and Small Businesses
In 1988, in an effort to aid small contractors in getting surety bonds, Congress passed the Small Business Administration Reauthorization and Amendment Act. At the time, smaller contractors were having a very difficult time getting bonded for government contracts due to the underwriting standards in the industry. Under this act, a program was established that helped small businesses get such bonds, enabling them to compete at higher levels.
Through the program, the government encouraged surety providers to participate by giving the SBA the authority to issue such bonds without prior SBA approval. The SBA, under the act, can authorize any surety company to service, monitor and issue performance and payment bonds under the Administration’s guarantee, if the surety is capable of such issuance, monitoring and service.
What Is a Little Miller Act?
It didn’t take long after the Federal Miller Act came into formal existence for individual states to realize that similar protections were needed at the state level. This led to each state moving to pass their own acts based on the Federal one. While each state’s version of the act has its own name, they are collectively and colloquially called “Little Miller Acts.”
As such, you may hear the Little Miller Act in your state referred to by a different, more formal sounding name, or it may simply be referred to by the chapter and section of your state code. Still, if it requires the posting of payment and performance bonds for contractors who bid on state level public works projects, it’s likely a Little Miller Act.
How to Navigate a Little Miller Act
Almost every public jurisdiction has a Little Miller Act in play, requiring prime contractors to post payment and performance bonds. The bond amount, however, can vary widely from state to state. Below, we will outline the basics of each state’s act.
What is more important is to carefully go over your state’s acts to understand whether your state varies the value of the bond. Most states, for example, require the bond to be for the full value of the contract, but certain exceptions require a lower value — Alabama, for example, only requires a payment bond at 50% of the total contract value.
This difference can have a number of effects on the contractors working on the project. It can allow contractors with a lower bonding capacity, for example, to bid on a project and compete at higher levels. It also, however, creates risk for subcontractors in the event of non-payment if the bond value isn’t sufficient to cover the cost of the work or materials provided.
There can also be varying notice requirements between states. In some areas, up-front notice is required when work commences, and a copy of said notice must be supplied to subcontractors upon written request. In other jurisdictions, no such notice is necessary. Those who may file a claim against the bond must be aware of what they need to do to remain in compliance with such provisions.
Claim Time Frames and Statute of Limitations
Time frame is another important aspect that claimants must observe. In some states a claim must be filed within 90 days. In some, there is a 180-day limit, while in others there’s a year or anywhere in between. These time frame requirements, however, are quite different than the statute of limitation to file a court action.
Notice provisions state the timeframe within which the claimant can provide notice of nonpayment. The statute of limitations is the deadline to file the lawsuit which will allow for enforcement of the bond claim. Both dates are equally important.
Little Miller Acts by State
The sections below will outline the basics of each state’s Little Miller Act. Contractors, however, are encouraged to read through their state’s individual statutes in detail and seek advice from a knowledgeable legal professional before moving forward with their bid. Failure to comply with your state’s act can result in, at the very least, rejection of bids for projects, and at worst, loss of contracting licensure in your state.
Little Miller Acts are among the most vital laws relating to contracting companies. They are what allow you, as a small to medium-sized business, to compete at much higher levels, to grow your business, and to gain success in what you do. In many ways, they are the heart and soul of the industry, and their importance cannot be understated.
A brief overview of each state’s Little Miller Act can be found below, as can a link to the full text of each state’s statutes. Contractors are always advised to review carefully the full state law, act or statute before moving on getting bonded.
Click on the link to go to the Little Miller Act for your state:
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- District of Columbia
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington State
- West Virginia
- Wisconsin
- Wyoming
Alabama
Under the Alabama Little Miller Act, requirements are somewhat less strict than many other states. In this state, any public works contract for construction, transportation or other state-related work that exceeds $50,000 in value must carry a payment bond for 50% of the contract value and a performance bond at 100% of the contract value.
At the completion of the contract, notice must be posted in a city or county-circulated newspaper, and no restitution may be sought for 30 days after the notice has been posted. After that period, parties who seek to file a bond claim have up to one year to submit a demand letter and begin proceedings, after which the contractor has 45 days to respond.
The full text of the law is contained in the Alabama State Code.
Alaska
Alaska’s Little Miller Act requires that any public works contract over $100,000 must carry payment bonds equal to half the amount of the contract for contracts up to $1 million. If the contract is between $1 million and $5 million, the bond must be equal to 40% of the contract value. If the contract exceeds $5 million, the bond must carry a flat value of $2.5 million. In addition, a performance bond must be posted in an amount equal to the amount of the payment bond.
In order to post a lien against the bond, a suit must be filed within 90 days of the last work performed or within one year from the settlement of the contract.
The full text of the law is contained in the Alaska Statutes.
Arizona
Under the Arizona Little Miller Act, any public works project on the state level, regardless of the value of the contract, requires contractors to post performance and payment bonds. Each bond must be in the full contract amount. Thus, if the contract value is for $250,000, the contractor must post a performance bond in that amount and a payment bond in that amount.
The contractor must furnish a copy of this bond upon non-payment representation, or filing of a suit. Lawsuits may be filed against the bond after 90 days have passed since the last work was performed, but must be filed within one year of the same.
The full text of the law is covered in the Arizona Revised Statutes.
Arkansas
According to Arkansas state law, the Little Miller Act in this state requires that for all state contracts totaling more than $50,000 in value, a contractor must post a payment and a performance bond. These bonds must each carry a value equal to the full value of the contract. Such bonds have to be filed with the circuit courts in the county where the work will be done.
In order to file an action against the bonds, the subcontractor or government must file an action within six months of the final payment or final work on the contract.
The full text of the law is found in the Arkansas Statutes.
California
In California, the Little Miller Act covers any public works contracts valued at $25,000 or higher. For such contracts, primary contractors are required to post payment and performance bonds equal to 50% of the value of the contract. Architects and engineers are expressly exempted from such requirements.
In order to file a claim against a bond, subcontractors are required to file a notice within six months after ceasing work on the project.
The full California Little Miller Act is described in the California Civil Code.
Colorado
Like other states, Colorado’s Little Miller Act requires posting payment and performance bonds. In this case, any construction contracts in excess of $150,000 in value require a performance and payment bond, each equal to 50% of the total value of the contract.
Filing a claim against a bond in Colorado requires the wronged party to file a notice of complaint and to pursue remedy in court. This notice carries a ninety-day period, during which time the contractor can make the issue right; otherwise, the courts can step in.
This act is outlined in the Colorado Revised Statutes.
Connecticut
Connecticut has a Little Miller Act that applies to any contract exceeding $100,000 in value for construction or repair of public works or public buildings. For such bonds, a payment and performance bond must be carried, each of which total the value of the contract. Contractors do not have to provide bonds for general bids valued less than $100,000, sub-bids less than this amount or bids submitted by consultants.
This statute is more complex than the Little Miller Acts in other states; a number of exemptions exist, including bids for contracts less than $25,000, sub-bids for less than $50,000 and others. A lien can be placed against such bonds if the contractor has not paid for services within 30 days following receipt of payment by the state or ceases work for 30 days.
The full text of this act can be found in the Connecticut General Statutes.
Delaware
The U.S.A’s first state, Delaware, requires payment bonds for all contracts of any value dealing with state public works projects. Such bonds must be for at least 10% of the value of the submitted bid. This statute carries a requirement that work must commence on the project within 30 days of the bid’s acceptance, and failure to execute the contract results in forfeiture of the bond total to the injured party.
The Department of Revenue can then award vendors money from the forfeited bonds within 15 days of contract execution, at its discretion.
Likewise, a performance bond must be posted with a value equal to 100% of the contract. Lawsuits against the bond can be posted any time within three years of the last date of work on the contract.
The full text of the law can be found in the Delaware Code.
Columbia
The laws in the District of Columbia regarding Little Miller statutes are rather straightforward. For any contract exceeding $25,000, a performance bond equal to the contract value must be posted. In addition, a payment bond is required for 50% of the value of services for contracts up to $1 million, 40% for those up to $5 million, and in the amount of $2.5 million for contracts valued at over $5 million.
If payment has not been rendered, or if work stops for a period of longer than 90 days, laborers and subcontractors, as well as material services providers can file a lawsuit to place a lien against the bond. This requires giving written notice to the contractor. The statute of limitations on such claims is one year.
The full text of the statutes can be found in the District of Columbia Code.
Florida
In Florida, the Little Miller Act states that any project that is valued at $100,000 or more must post a performance and payment bond. Each bond must equal the value of the contract. In this state, however, if the project is valued at less than $200,000, the official board that awards the contract can actually make special arrangements at their discretion which allow for exemptions.
In addition, these bonds cap at $250 million, meaning contracts that are valued over $250 million require bonds at $250 million. That is, if your contract is for $500 million, you need only carry a payment bond and a performance bond in the amount of $250 million each.
The time limit to file claims is between 45 days after the contract begins and 90 days after the product finishes. The claim time frame can be shortened to 60 days if the contractor has officially stopped working on a project, via filing a notice.
The full text of the Florida Little Miller Act can be found in the Florida Statutes.
Georgia
Under the Little Miller Act in Georgia, performance and payment surety bonds are required for all Public Works contracts valued at greater than $100,000. Each bond must be at least equal to the value of the contract. In addition, the state can choose to request such bonds for projects valued at lower than $100,000 at their discretion.
Also at the discretion of the state, a letter of credit can replace a bond if the contract is valued at less than $300,000. Upon request, a contractor must post a notice of bonding and furnish a copy of their bond agreement within 15 days of commencing work.
Action to place a lien against a bond must be undertaken within 90 days of the last labor being performed or the last equipment supplied.
The entirety of the Georgia Little Miller Act is contained in the Georgia Code.
Hawaii
Under Hawaii’s Little Miller Act, any time a construction contract is estimated at a value of more than $25,000, the contractor must offer bid security in the form of surety bonds, equivalent cash value, or some other means specified in the agreement terms. This includes a performance bond and a payment bond, each equal to the value of the contract.
Liens can be filed in court against the bond within 90 days of the last claim for material, or within 90 days of the cessation of last work on the contract.
The full text of this act can be found in the Hawaii Revised Statutes.
Idaho
In Idaho, the state’s Little Miller Act is formally referred to as the “Public Contracts Bond Act.” It covers all public works contracts of any value and requires posting a performance bond and payment bond, each equal to 85% of the contract value. Stipulations also exempt contractors from retainage withholdings, and there are provisions for the use of government options instead of bonds.
Filing a claim against a bond in Idaho requires a waiting period of 90 days after work is completed before a claim can be filed but requires posting a notice of intent to claim within that 90-day period. The lawsuit itself must then commence within one year of the date of last labor or materials furnishing.
The full Idaho act is contained in the Idaho Code.
Illinois
Under the Illinois Little Miller Act, formally called the “Public Construction Bonds Act,” contracts valued at over $50,000 are regulated, as are state subdivision projects at $5,000 or more. Such projects require payment and performance bonds. The value of this bond will be set by the board, commission, agents or officials setting the contract.
Enforcement of a bond requires a lawsuit filed between 120 days of last work and within six months of the final acceptance of the project. A notice must likewise be filed within 180 days of the final work.
To read the full statute, see the Illinois Compiled Statutes.
Indiana
In Indiana, there are three different levels of bonding required under the Little Miller Act. The first is a bid bond for all contracts, though at the discretion of the director, this can be waived for projects up to $200,000 in value. The value of the bond is set by the director. Second is a payment bond equal to 100% of the contract value for contracts valued over $200,000. Finally, a performance bond is required for bonds of at least $200,000 equal to 100% of the contract value. For contracts less than $200,000, the division can opt to require a performance bond at their discretion.
To enforce a lien against such a bond, a claim must be filed no later than 60 days after the completion of last work, but no sooner than 30 days after. This requires also sending a copy of the claim to the surety company.
For the full text of this act, see the Indiana Code.
Iowa
The Iowa Little Miller Act covers any contracts for public improvements and dictates where waivers are possible. In general, contracts for public improvement whose value exceed $25,000, must be accompanied by a performance bond and a payment bond. Even for contracts of lesser value, at the discretion of the contracting agency, such bonds may be required. Each bond must be not less than 75% of the value of the contract.
In some cases, in lieu of a bond, the contractor may deposit money, certified check or other form of financial security in the same amount.
Wronged parties have the right to file a claim against the bond within 30 days of final work or even after 30 days if the contractor has failed to pay for services rendered.
To read the entire text of the act, including exemptions, claims process and more, see the Iowa Code.
Kansas
Kansas’ Little Miller Act is officially titled the Kansas Fairness in Public Construction Contract Act. This act is a bit different than those in other states and in many ways is more complex. In addition to requiring specific payment and performance bonds in specific amounts, it makes it illegal to waive the right of a subcontractor or public entity to file claim against a bond.
In Kansas, all payments must be rendered within 30 days of completion of work and a properly completed and undisputed payment request submitted. If there are extenuating circumstances, the payment can be rendered up to 45 days later. Failure to make timely payment incurs 18% annual interest on the undisputed amount.
Bonds for performance and payment are required for any contract exceeding $100,000 in value and must at least equal the value of the contract.
To read the full Kansas Little Miller Act, see the Kansas Statutes.
Kentucky
The Kentucky Little Miller Act requires bonding for any contract awarded that’s valued in excess of $40,000. Performance and payment bonds must be posted, and each must carry a value equal to the value of the contract. Agencies have the right to lessen or waive performance bond requirements for specific projects at their discretion.
Claims against the bond must be submitted to the contracting agency, who will issue a written decision within 120 days. Any court proceedings will proceed within one year of the decision issued by the contracting agency.
To read the full text of the Kentucky Little Miller Act, consult the Kentucky Revised Statutes.
Louisiana
Louisiana’s Little Miller Law is quite complex compared to other states. For public contracts valued at a minimum of $5,000, performance and payment bonds are required; for all contracts, a bid bond is required. For contracts under $50,000 in value, bond requirements can be waived. For certain small businesses, bond values can be set at half that of bonds required by larger businesses. In some cases, bonds can be replaced by letters of credit or other collateral.
As with other states, bond claims are pursued through the state courts, but can involve complex requirements and procedures. For more information about how the Little Miller Act works in Louisiana, see the state codes.
Maine
Maine, by contrast, has a fairly straightforward Little Miller Act. Any contract that exceeds $125,000 in value for construction, repair or alteration of any public area or public work, including transportation jobs, requires a performance bond and a payment bond. Each bond must be equal to the full amount of the contract in value.
Action can be brought against a contractor who fails to complete their contracted work. If they have not paid their suppliers within 90 days of ceasing work, the subcontractor can file a bond claim to get compensation owed. Generally, such action must be brought within one year.
To read the full text of Maine’s Little Miller Act, see the Maine Revised Statutes.
Maryland
In Maryland, the Little Miller Act states that any contractor who bids on a project with a value exceeding $100,000 must require performance and payment bonds. Unlike other states, while the performance bond must be in the full value of the contract, the payment bond generally needs only be equal to half the contract value.
If the contractor fails to pay subcontractors within 90 days of ceasing work, they can file legal action to secure a bond claim. This requires a notice of intent sent by certified mail to the contractor before filing a lawsuit.
Read the full Maryland Little Miller Act in the Maryland Code.
Massachusetts
Massachusetts’ Little Miller Act is a bit more stringent than many other states. In this state, any contract valuing $5,000 for alteration, repair, remodeling, demolition or construction of facilities requires payment and performance bonding, and contracts valued $2,000 or greater for any other public works require the same. The bonds must each be in the full value of the contract.
Bond claims for non-payment can be filed any time after 65 days, following final cessation of work on the project. Facilitating a claim requires providing written notice to the contractor before filing suit.
The full Massachusetts Little Miller Act is contained in the Massachusetts General Laws.
Michigan
Michigan’s Little Miller Act is also a bit more lenient in its terms for payment and performance bonds. In this state, for any contract exceeding $50,000 in value, both performance and payment bonds must be posted. In this state, however, they are required to be at only a minimum 25% of the value of the contract each. That being said, the contracting body has the authority to require higher bonds at their discretion.
Subcontractors who haven’t been paid within 90 days of work completion may file a suit to recover damages within 30 days through a bond claim. They must provide written notice of their intent to do so.
Read the entire Michigan Little Miller Act requiring a contractor’s bond for public works or buildings.
Minnesota
Like Louisiana, Minnesota has a very complex Little Miller Act in comparison to other states. The exact amount of the bond value depends on the level of the contract. All contracts valued at a minimum of $25,000 require payment and performance bonds, and the higher the value of the contract, the more you must post in bonds. Specifically, those over $100,000 require significantly higher levels of bonding. Exemptions are available for certain manufacturers and road maintenance projects.
Claims on performance bonds and payment bonds require filing a notice of intent to file a lawsuit within 120 days of the last performance of work.
Read the entire Minnesota Little Miller Act as laid out in the Minnesota Statutes.
Mississippi
Mississippi is very stringent in the application of its Little Miller Act. No minimum values are set for contracts requiring bonds> Any contract for a public works contract in this state requires the contractor to post a payment bond and a performance bond, each in the full value of the contract.
Those seeking to file a bond claim in this state must issue written notice to the contractor within 90 days of the date of last labor stating their intent to file a claim. It must be delivered by certified mail with return receipt requested and postage prepaid. Further, the Mississippi act requires that liability insurance be carried by the contractor.
To learn more about the full act, see the Mississippi Code.
Missouri
Under the Missouri Little Miller Act, payment and performance bonds are required for all contracts valued at over $25,000. Such bonds have to be in an amount determined by the contracting body.
The act also does not include a set statute of limitations for filing a lawsuit. It simply states that those obligated to receive payment have the right to sue for a bond claim.
To see the full statute, read it from the Missouri Revised Statutes.
Montana
The Montana Little Miller Act, like Mississippi’s act, has no minimum value for a contract requiring a payment or performance bond. In this state, however, contracts that cost less than $50,000 may, at the discretion of the contracting agency, see the bond requirements waived.
Bonds should be in the amount of the contract. Actions can be taken against the bond after a 90-day waiting period following the final performance of work on a project. This requires issuing a boilerplate notification to the contractor of intent to file, followed by legal action.
Look over the full text of the statute as it appears in the Montana Code Annotated.
Nebraska
Under Nebraska’s Little Miller Act, any contract valued at $15,000 or greater is required to carry bonds. These include payment and performance bonds, each equal to the full value of the contract.
Any parties who have not received full compensation from the contractor can file a bond claim by issuing written notice within 90 days of the last completed work. Any time thereafter, before one year has passed, a lawsuit can commence to place a claim against the bond.
Read the Nebraska statute as defined in the Nebraska Revised Statutes.
Nevada
The Nevada Little Miller Act is roughly the same as the Federal Miller Act. It requires all those who contract with the state for public works projects exceeding a value of $100,000 to carry performance and payment bonds. The bonds must be at least 50% of the total contract amount each, with their total value set by the contracting body.
The state exercises a 90-day waiting period after the last work is done on a job for the contractor to pay subcontractors. If parties are not paid, they may issue notice that they intend to file a bond claim within this time. 30 days after issuing notice, they can file a lawsuit to apply a bond claim.
Read the full Nevada Little Miller Act as contained in the Nevada Revised Statutes.
Hampshire
In New Hampshire, the Little Miller Act covers any public works projects, including bridge and transportation, that are valued at a minimum of $25,000. These require payment and performance bonds be posted, each equal to 100% of the contract value.
Placing a bond claim begins when the claimant files notice of their intent to place a claim within 90 days after the last work was done. As with other states, district courts determine whether the claim can be laid.
To read the full New Hampshire Mechanics Lien Statute, see the New Hampshire Revised Statutes.
New Jersey
New Jersey’s Little Miller Act requires bonding for projects valued over $200,000 or over $100,000 in the case of school facilities. Under this law, payment and performance bonds have to be posted, with each equaling the value of the contract. In addition, for projects valued at a minimum of $850,000, such bonds will need to also carry a Certificate of Authority from the U.S. Treasury.
If the contractor fails to pay their debts within 90 days of last work being done on the job, their subcontractors can file a bond claim. This requires issuing written notice of intent to file, and the lawsuit must commence within one year.
To review the full New Jersey act, see the Revised New Jersey Statutes.
New Mexico
In New Mexico, any construction project that you bid upon valued at greater than $25,000 requires you to carry payment and performance bonds. Each must equal the full value of the contract. The contractor has 90 days after completion of last labor to fulfill their obligations, after which time the subcontractors can file a bond claim.
Filing a bond claim requires issuing notice that the subcontractor intends to file a suit, and there is then a 30-day period to allow for mediation. Afterward, the courts will settle the suit.
Look over the full New Mexico law in the New Mexico Statutes.
New York
In New York, contractors who take on contracts of at least $100,000 in value must provide payment and performance bonds, each one equal to the full contract value. If the contractor fails to pay their claim, subcontractors can file a claim against the bond.
Filing a claim requires that they notify the contractor of their intent within 120 days of last work completion. Such notice requires specific language and information, including the amount owed and the identification of the party filing the claim, and it has to be delivered via registered mail.
The full text of the New York act is contained in the New York Consolidated Laws.
North Carolina
In North Carolina, all public works contracts with a value exceeding $300,000 require payment bonds and performance bonds, each valued at 100% of the total value of the contract. Subcontractors must also post these bonds if the value of the services they provide is to exceed $50,000. This is different from most other states.
Claims against a bond require a waiting period of 90 days to allow for payment. Following this, there is a one year statute of limitations to file action against the surety bonds. Subcontractors have to notify higher tier contract holders of their relationship within 75 days, and they have only 120 days to file a bond claim.
Look over the full North Carolina Little Miller act in the North Carolina General Statutes.
North Dakota
North Dakota has a Little Miller Act covering contracts in excess of $100,000 in value. As written, the act requires only a single bond in equal value to the contract itself.
Any party who is owed money by the contractor and hasn’t been paid within 90 days of completion of work can file a claim against the bond for payment. On demand in these cases, a copy of the bond must be furnished, and in order to begin the process, the person filing the claim must notify the contractor in writing, served by registered mail.
Read the full text of the North Dakota Little Miller Act as contained in the North Dakota Century Code.
Ohio
Ohio is a state in which the Little Miller Act does not specify a minimum contract account. Under state laws, any person who bids on any state contract, or a contract for a political subdivision of the state, from institutions and agencies to districts and municipalities, must file a bond whose total value equals the value of the bid. The only exception is the Department of Transportation.
Lawsuits to file bond claims require waiting 60 days after the furnishing of final labor. In addition, to have the right to issue a claim, subcontractors who issue materials or services equal to more than $30,000 must file a notice with the principal contractor of this furnishing within 21 days before providing goods or services.
Read the full text of the Ohio Little Miller Act in the Ohio Revised Code.
Oklahoma
In Oklahoma, the Little Miller Act addresses contracts of $50,000 and up. Such contracts require that the contractor post a bond which carries a value equal to the full value of the contract. For contracts valued at less than $50,000, an affidavit of payment for all debts incurred must be submitted by the contractor.
Filing a bond claim begins when the subcontractor serves the contractor notice of their intent to file within 90 days of the completion of the last labor. The notice has to be sent certified or registered mail and must contain specific information. Legal proceedings must then begin within one year. If the claim is against owed taxes, there is a six-month limit instead of one year.
See the full text of the act as defined in the Oklahoma Statutes.
Oregon
Similar to the Federal act, Oregon’s Little Miller Act requires bonding for projects over $100,000. Unlike the Federal version, in Oregon, public transportation projects over $50,000 must carry such bonds. Each bond (payment and performance) must be equal to the value of the contract.
Anyone seeking to file a claim against the bond must issue a written notice of their intent to claim within 180 days, which must carry the identity of the claimant and contractor, description of labor and materials, balance due, description of the project, name of surety and principal and other relevant details. After that, a lawsuit can proceed within two years.
Read the full Oregon act as contained in the Oregon Revised Statutes.
Pennsylvania
Pennsylvania’s Little Miller Act is properly called the Public Works Contractors’ Bond Law of 1967. It requires that any contract with the state which is valued at more than $5,000 requires the contractor to post payment and performance bonds equal to the contract’s full value. In addition, letters of credit, escrow accounts or other forms of financial security are required for contracts that exceed $10,000.
As with many other acts, Pennsylvania requires a 90-day waiting period before filing a claim, but in order to file a claim, the subcontractor must issue written notice to the contractor within that waiting period.
Learn more by reading the full text of the act in the Pennsylvania Statutes.
Rhode Island
In Rhode Island, under that state’s Little Miller Act, contractors who take on construction or general contracting jobs for the state which amount to more than $50,000 in value are required to post a payment bond and a performance bond, each equaling between 50% and 100% of the value of the contract.
After the standard 90-day waiting period, subcontractors can file suit to obtain a bond claim, so long as they have issued notice of their intent to do so during the 90 days, providing that they have not been paid by the end of the period. Such suits must be brought within two years following the end of final work on the project.
The full statute is available in the Rhode Island General Laws.
South Carolina
South Carolina, unlike many other states, requires bid bonds for sealed bidding procurements and other contracts at the discretion of the State Engineer’s Office. Without a bid bond equal in value to 5% of the bid, the bid is not considered valid.
When a contract is awarded, any public works project requires the contractor to carry performance and payment bonds, each equal to 100% of the total contract value. This requirement has only been in place since 2012.
Those subcontractors who wish to file a bond claim can do so after 90 days of completion of final work on a project, and their claim can be for no more than the total cost of labor and/or materials provided under the original contract. Claims must be made within a year.
Explore the full text of South Carolina’s Little Miller Act as laid out in the South Carolina Code.
South Dakota
In South Dakota, under that state’s Little Miller Act, payment and performance bonds are required to be posted for any job at the state level. In some cases, when the total contract value is under $25,000, the contract holder may opt, at their discretion, to waive the bonding requirement. Bonds that are required must be at the full value of the contract.
To file a bond claim, the claimant has to file a notice within 60 days, and legal proceedings must begin no later than six months after final completion of labor on the project.
The full text is contained within the South Dakota Codified Laws.
Tennessee
In Tennessee, all contractors who perform public works projects in the state are required to be secured by the posting of a surety bond for materials and labor. This payment bond is required to be set at only 25% of the contract price; individual contract holders, however, can opt to require a higher amount at their discretion. Performance bonds are not required by law, but the statute provides for the contract awarding agency to choose to require performance bonds at a value of their choosing.
To make a bond claim, written notice is required within 90 days of a subcontractor’s last contribution to a project. If the contractor fails to pay, legal proceedings can then follow, which will result in a claim against the bond to recover losses. Tennessee’s law also requires a bond be set aside to cover taxes and penalties for any contract greater than $10,000.
The full Tennessee Little Miller Act is found in the Tennessee Code.
Texas
Texas is one of the two largest states in the Union and has a very strong Little Miller Act. All state contracts in the Lone Star State are required to be covered by the furnishing of both a payment bond and a performance bond. Each bond must cover the full value of the contract.
After 60 days of nonpayment following the final completion of work, a subcontractor or other payment bond beneficiary can file a suit to get a claim against the bond. This will enable them to recover the monies owed for goods and services rendered.
The Texas Little Miller Act is long and somewhat complex; see the full text as it appears in the Texas Government Code and Texas Property Code.
Utah
The Utah Act is rather stringent, but fairly straightforward as these laws go. For any government or public works contract at the state level, you will need to post a payment bond and a performance bond, each equal to the value of the contract. Anyone wishing to file a claim against one of these bonds must file notice with the registry within 20 days of final work on the contract. The requirements for filing notice are very detailed and strict, however, and it’s in the best interest of contractors to study them carefully.
See the full text of the law as represented in the Utah Code.
Vermont
As with several other states, Vermont’s Little Miller Act doesn’t set a minimum contract level that requires a payment or performance bond. Any contract you take for a public works project in this state must be fully bonded at the value of the contract for both performance and payment. Individual contract award agencies, however, may choose to waive this requirement for contracts valued under $100,000.
Claimants looking to file suit against the bond must notify the contractor of their intent, in writing, within 90 days of cessation of labor on the project. The lawsuit itself must proceed within one year.
See the full Vermont Little Miller Act as described in the Vermont Statutes.
Virginia
Virginia’s Little Miller Act requires payment and performance bonds on public projects that are valued at over $100,000. Each bond must be valued at the same level as the contract (thus, for a $150,000 contract, a payment bond for $150,000 and a performance bond for $150,000 must be posted).
Contractors who fail to pay a subcontractor or material supplier within 90 days of services provided can see bond claims filed. Service providers have up to one year to file a bond claim, a period that was extended in 2011 from the previously required 180 days.
See the full text of the Virginia act in the Virginia Code.
Washington State
In Washington State’s Little Miller Act, performance and payment bonds are required for each public works project whose value exceeds $35,000, though an exemption option is in effect. For projects less than this amount, the entity can require either bonds or to retain 50% of the contract until any liens are released. For contracts over $100,000, full bonds are required.
Notable exceptions are for highway projects totaling over $2.5 million, which may require bonds at 50% of the total value.
After a thirty-day waiting period following cessation of work, unpaid subcontractors can file for a bond claim. This requires issuing a written notice with specific language, and after it is issued, legal proceedings can begin.
Read the full Washington Little Miller Act, contained within the Revised Code of Washington.
West Virginia
West Virginia has a Little Miller Act that requires that any Public Works project in the state, including repair, rebuilding, transportation, construction and others, must have both a posted payment bond and a performance bond, each in the full value of the contract.
If a contractor does not pay their subcontractors and material suppliers, these entities may file a legal claim against the bond in court to recoup the monies they are owed. See the full text of the West Virginia Little Miller Act in the West Virginia Code.
Wisconsin
The state of Wisconsin, likewise, regulates bond requirements for state level contractors in its Little Miller Act. Any job valued at over $10,000 requires payment bonds, and any job over $30,000 requires both payment bonds and performance bonds. All bonds are to be posted at the full value of the contract.
The state also has a clause that allows for the state to pay subcontractors directly for materials and services for contracts between $10,000 and $100,000 in value. For those contracts up to $250,000, the state can directly pay subcontractors via checks made out to both the contractor and the subcontractor, requiring both signatures. This helps to prevent bond claims.
Wisconsin’s rules are very strict and specific for contracts of varying levels, and before seeking bonds to bid on a project in this state, it’s essential that contractors familiarize themselves with their details.
You can view the full text of the Wisconsin act as contained in the Wisconsin Statutes.
Wyoming
In Wyoming, the state Little Miller Act regulates all public works jobs valued at over $7,500. These must have a bond posted to cover all work done. For jobs over $100,000, the bond needs to be only 50% of the value of the contract; lower value jobs require the full value of the contract.
Bond claims can only be filed after 30 days past final completion of work. They require issuing notice to the bond obligee of the intent to file suit. Such a suit must proceed within one year of completion of work.
See the full text of Wyoming’s Act as it appears in the Wyoming Statutes.
Get Help from the Experts at NSSI
The information above is not intended in any way as a full description of the requirements of each state’s Little Miller Act. It is simply a brief overview of basic requirements. Contractors should always take the time to review the full statutes, and even to seek legal advice and help, before proceeding.
When it comes time to get bonded, turn to a trusted resource that has a long legacy of successfully helping small and medium-sized contracting businesses to launch their success into the stratosphere. For over two decades, National Surety Services, Inc., has been here to provide information, guidance and lightning-fast bonding services for contractors and construction companies at all levels.
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