If you want to find success as a contracting and construction business, your goal should be to win a government contract at some point in time. It’s an essential step in growing from a small or medium-sized business to competing at the highest levels. Of course, this also requires being familiar with the laws and statutes that regulate government contracts. Specifically, you’ll need to know which kinds of surety bonds to carry, and at what level.
The Federal Miller Act is in place to regulate bonding at the national level, while state acts referred to casually as Little Miller Acts serve the same purpose at the state and local levels. Learn about the Washington Little Miller Act, the surety bonds it requires you to carry, and where to go to get in compliance to win your bid.
How the Miller Act Works
The Miller Act is a Federal act first put into place in 1935 to ensure peace of mind, not just for the government, but for materials providers and subcontracted service providers with whom you work. It requires anyone who works for the government at a contract valued at greater than $100,000 (sometimes $150,000) to carry and post both performance bonds and payment bonds. These bonds have to be at the value of the contract to ensure all of those to whom you have an obligation will get their value.
Little Miller Acts have the same idea, but they function at the state and local level, rather than the federal level.
Payment Bonds
Payment bonds are essential to being able to obtain goods and services for your contract. You’ll almost always work with subcontractors of some variety or another, whether it’s additional workforce or just providers of equipment, vehicles and materials. A payment bond ensures they’ll get paid. If you fail to complete the job, they can file a lien, or bond claim, against the payment bonds to obtain the monies you owe them.
Performance Bonds
A Performance Bond is similar, but it protects the contracting body or the person or entity with whom you’re contracted for the job. If you don’t complete the work, the government can stand to lose a lot of money. Filing a claim against your performance bond will permit them to recover some of their losses.
It’s also worth noting that both payment and performance bonds, unlike insurance, are loans. If you use them, you’re required to pay them back.
Washington Little Miller Act
Under the Washington Revised Code, Title 39, Chapter 39.08.010-39.08.100, the Washington Little Miller Act is laid out. It states that if a project exceeds $50,000, performance and payment bonds are required. If you fail to complete the job, the wronged parties can file a claim against the bond within 30 days.
Complying with the Washington Act
National Surety Services, Inc., has been providing fast, easy and secure bonding services for well over two decades and counting. If you’re in need of more information about Washington surety bonding services or getting in compliance with the Washington Little Miller Act, get in touch with us to get started today.