Who Can File a Bond Claim in a Construction Dispute?
A performance bond is a surety bond that helps ensure that subcontractors, material suppliers, and equipment lessors, get paid for the services, labor, or materials they provide to a public project.
Enacted in 1935, the “Little Miller Act” is a U.S. state statute that requires the general contractor on a public construction project to furnish a surety bond guaranteeing the performance of their contractual duties and/or the payment of their subcontractors and material suppliers. As a result, if a subcontractor or supplier on such a project finds themselves in the middle of a payment dispute, the Little Miller Act provides recourse for the subcontractor or supplier to demand payment from the delinquent general contractor for their work or the supplies they provided to the project.
Eligibility Requirements for Filing a Bond Claim
The Act was designed to protect sub-level providers of goods and services involved in a public works project. Specifically,
- Generally, first and second-tier subs, as well as suppliers and equipment rental companies are protected.
- Some state Little Miller Act protection also extends to even lower-tier subcontractors and supplier parties.
- Suppliers to suppliers SELDOM qualify for Little Miller Act protection.
- Parties who work directly with a public entity, even if they do not consider themselves a general contractor, are not eligible to seek payment from the project owner using the payment bond under the Little Miller Act requirement.
Bear in mind that since the Little Miller Act’s guidelines determine what parties are eligible, and that statute varies from state to state, eligibility to file a bond claim not only depends on the specific aspects of a particular dispute but also upon the state where the project took place.
If you are a subcontractor or a supplier on a public project that is awaiting payment for the services or goods your company provided and that payment is delayed, you may be entitled to file a bond claim to be compensated for what you are owed. Need more information? Contact a Bond Claim Specialist at ConstructionDisputes.com for advice on your unique situation or to easily file a claim once your eligibility is confirmed.