The final part of our construction blog series on federal claims and issues focuses on the Miller Act and how it applies to project in Texas.
There are probably fewer federal laws better known to sureties and contractors than the Miller Act which requires the utilization of payment and performance bonds by prime contractors for improvements (construction, alteration, or repair) to federal construction projects exceeding $100,000. There are numerous state versions of the Miller Act often referred to as “Little Miller Act” statutes. In Texas, Texas Government Code Chapter 2253 provides for the utilization of payment and performance bonds to protect public works projects.
The performance bond ensures that the government receives the completed job it has paid to build. Conversely, the payment bond ensures that laborers and materialmen for the project are paid because one cannot properly place a lien on a public facility for such labor or materials.
Keep in mind, the Miller Act has certain payment bond notice provisions to maintain a claim by lower tier laborers or materialman so get help early if you have not been paid by the prime contractor. Additionally, sureties must consider advising the contracting officer if laborers and materialmen have not been paid to ensure the government becomes a stakeholder in the funds paid.
This concludes our construction series on federal claims and issues. If you have a question or need assistance with a project where you think these might be applicable, please contact Ian McLin or anyone from our construction section and we would be happy to be of service.