If you are a third tier subcontractor (a sub-sub-subcontractor) on a federal construction project, you do not have Miller Act payment bond rights.
If you are a supplier to a second tier subcontractor (a supplier to a sub-subcontractor) on a federal construction project, you do not have Miller Act payment bond rights.
Rather, Miller Act payment bond rights extend to subcontractors of prime contractors and those having a direct contractual relationship with a subcontractor (provided those in privity with subcontractors properly preserve their payment bond rights).
For example, a third tier subcontractor argued that it should have Miller Act payment bond rights because it should be treated as a second tier subcontractor. In making this argument, the third tier subcontractor argued that the prime contractor and first tier subcontractor were really the same entity since the prime contractor was a joint venture and the subcontractor was a contractor-partner of the joint venture. Thus, if the prime contractor and subcontractor were treated as one in the same, then the third tier subcontractor’s status would be changed to a second tier subcontractor having Miller Act payment bond rights. Albeit creative, the court did not buy this argument meaning that while the third tier subcontractor potentially had a breach of contract action against the second tier subcontractor that hired it, the third tier subcontractor did not have Miller Act payment bond rights.
Please contact David Adelstein at firstname.lastname@example.org or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.