What Is the Miller Act? Payment Bonds and Your Rights on Federal Construction Projects

The Miller Act is a federal law (40 U.S.C. § 3131) that requires contractors on U.S. government construction projects to obtain payment and performance bonds. These bonds provide a critical alternative to mechanics liens on federal work, allowing subcontractors, suppliers, and laborers to pursue payment claims against the surety if the contractor fails to pay. The payment bond functions like a guarantee: if you're not paid for work or materials on a federally funded project, you can file a claim against the bond rather than trying to lien the project itself—a right that doesn't exist on federal construction.

What Is the Miller Act and Why Does It Exist?

The Miller Act was enacted in 1935 to protect workers and suppliers on federal construction projects. At the time, federal construction was a growing part of the economy, but there was no clear way for those who supplied labor, materials, or equipment to recover payment if a contractor went unpaid. Mechanics liens don't work on federal property, so Congress created the payment bond mechanism instead.

Under the Miller Act, any contractor (or subcontractor who enters into a subcontract with a general contractor) on a federally funded construction project above a certain dollar threshold must provide two bonds:

1. Performance Bond — guarantees the contractor will complete the work according to the contract terms
2. Payment Bond — guarantees payment to laborers, suppliers, and subcontractors

The surety (the bonding company) backs both bonds. If the contractor doesn't pay you and disputes your claim, you pursue recovery through the surety, not through a lien on the property.

Which Federal Projects Require Miller Act Bonds?

The Miller Act applies to contracts awarded by the United States (federal government) for construction work. This includes:

• Direct contracts with the U.S. Army Corps of Engineers, Department of Transportation, Veterans Affairs, General Services Administration, and other federal agencies
• Design-build and construction-management contracts for federal projects
• Subcontracts entered into under those federal prime contracts

The law applies when a contract exceeds a certain dollar amount. This threshold is adjusted for inflation periodically, so verify the current minimum with the contracting officer or on the Federal Acquisition Regulation (FAR) website for your specific project. In general, most federally funded construction contracts substantial enough to involve subcontractors fall under the Miller Act.

Some common examples of Miller Act projects include:

• Highway and bridge construction funded by Federal Highway Administration
• Military base construction and renovation
• Veterans Affairs medical center projects
• General Services Administration office building construction
• Army Corps of Engineers water projects and facilities

How Does a Miller Act Payment Bond Protect You?

Unlike mechanics liens, which attach to real property, a Miller Act payment bond is a claim directly against the surety. Here's how the protection works:

1. You perform work or deliver materials on a federally funded project as a subcontractor, supplier, or laborer.
2. You submit invoices and requests for payment through normal channels (to the contractor, or as specified in your subcontract).
3. The contractor fails to pay you or disputes the amount owed.
4. You send a written notice to the surety (the bonding company) within the required timeframe, indicating that you have not been paid. The notice must include details of the work performed or materials supplied.
5. You file a claim against the bond if the surety doesn't resolve the debt. Your claim is against the surety's funds, not the contractor directly.
6. The surety either pays your claim or defends itself in court. If it loses, the court awards judgment against the surety.

This process means you don't rely solely on the contractor's financial health or willingness to pay—the surety's obligation to pay is primary.

Payment Bond Claims: Deadlines and Notice Requirements

The Miller Act sets a specific window for making claims. Generally:

• You must provide written notice to the surety within a certain period (often 90 days, though specific deadlines vary by contract and project)
• Your actual claim against the bond must be filed within one year from the date you last supplied labor or materials
• Some jurisdictions and contracts may have stricter requirements

The key is getting written notice to the surety as soon as you realize you won't be paid. Delays can bar your claim. Include in your notice:

• Your name and contact information
• The name of the project and location
• A description of work performed or materials supplied
• Dates of work or delivery
• Invoice numbers and amounts
• A statement that you have not been paid in full

Tracking these deadlines manually is easy to miss—especially when you're managing multiple projects. A free deadline lookup can help you verify your project's bonding requirements and claim windows without guesswork.

Miller Act vs. Mechanics Liens: Key Differences

A common question from subcontractors and suppliers: Why not just file a mechanics lien on a federal project?

The answer is simple: mechanics liens don't apply to federal projects. Liens require a property interest—you have to have the right to place a claim on the property. Federal property is immune from liens. Congress created the payment bond system instead.

Both serve the same purpose—protecting you when you're not paid—but the mechanism is entirely different because of the nature of federal property.

State "Little Miller Acts" and Public Works Bonds

Many states have enacted their own versions of the Miller Act for state and local public works projects. These state-level laws typically require similar bonding on projects funded by state, county, or municipal governments. The rules, thresholds, and claim procedures vary widely by state. If you're working on a state or local government project, check your state's specific requirements—don't assume the federal Miller Act applies. Some states combine bond claims with mechanics lien rights; others rely only on bonds.

Practical Steps to Protect Yourself on Federal Projects

1. Verify the project has bonding: Before starting work, confirm the prime contractor has posted payment and performance bonds with a surety. Request a copy of the bond.
2. Identify the surety: Make sure you have the surety's name and contact information. The contract should list this.
3. Track your work and dates carefully: Document all work performed, materials delivered, and labor hours. Note the dates.
4. Follow your subcontract terms: If your subcontract specifies how to request payment, follow those procedures. Don't assume payment will happen without follow-up.
5. Send written notice to the surety immediately if unpaid: Don't wait. Once you realize payment is delayed beyond your contract terms, send written notice to the surety, copying the prime contractor and the contracting officer.
6. Keep records of all notices and communications: You'll need proof that you provided timely notice if a claim goes to court.
7. Know your deadline: Whether it's a spreadsheet or a deadline tracking tool, knowing your claim deadline is non-negotiable. Missing it means you lose your right to pursue the bond. LienWarden's paid plans automatically track deadlines across your federal and state projects.

Frequently Asked Questions

Can I file both a mechanics lien and a Miller Act bond claim?

No. Mechanics liens don't apply to federal projects because they can't attach to federal property. If you're on a federal project, your only remedy for non-payment is a Miller Act bond claim. Some projects are hybrid—part federally funded, part privately funded—in which case you might file a mechanics lien for the private portion. Consult your project contract to understand the funding structure.

What if the contractor was paid but didn't pay me?

The Miller Act holds the surety responsible regardless of whether the contractor was paid by the government. The payment bond is an independent guarantee. The surety can't defend itself by saying "the contractor was paid but refused to pass it along to you." That's exactly what the payment bond is designed to prevent.

How long do I have to file a claim after the project ends?

Generally, you have up to one year from the date you last performed work or delivered materials. However, you must send written notice to the surety much sooner—typically within 90 days. Missing the notice deadline can bar your claim even if you file within the one-year window. Deadlines vary by specific contract language and state, so confirm the exact dates for your project.

Does the Miller Act apply to my subcontractor's subcontractor?

Yes. A lower-tier subcontractor (one who doesn't have a direct contract with the general contractor but instead contracts with another subcontractor) also has Miller Act rights, provided the project qualifies and bonding is in place. However, the notice and claim procedures may be slightly different. Verify your standing and confirm bonding details early in your engagement.