Prime contractors on federal construction projects furnish the government with a payment bond known as a Miller Act payment bond.
Subcontractors or suppliers pursuing Miller Act payment bond claims must prove:
- They furnished labor and/or material under a contract (and, particularly, that the subcontractor performed work in furtherance of the prime contractor’s contract with the government);
- They remain unpaid for the labor and/or materials;
- Regarding materials, they had a good faith belief that the materials were for the specified project (or the project in which the Miller Act payment bond was issued for); and
- They properly preserved their rights to sue on the Miller Act payment bond.
As it pertains to a claimant preserving Miller Act payment bond rights:
- Claimants in privity of contract with a subcontractor but not the prime contractor (such as sub-subcontractors and suppliers to subcontractors) must serve a written notice of non-payment on the prime contractor within 90 days from their last furnishing of labor or materials (excluding punchlist or warranty / repair work); and
- Claimants have one year from their last furnishing of labor or materials (excluding punchlist or warranty / repair work) to file a lawsuit on a Miller Act payment bond.
If you are a subcontractor or supplier on a federal construction project, it is imperative that you consult with counsel to ensure you properly understand and preserve your rights to pursue a claim against the Miller Act payment bond. And, once your rights are properly preserved, to make sure you properly prove your claim!
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