It's Miller Act Time: Making a contract claim on a federal project

A subcontractor working on a project should be concerned about getting paid. For a commercial project, a subcontractor has the right to file a construction lien to assure payment. However, on a federal government project, whether it is for the Air Force, Navy, Department of Defense, or any other of the myriad of federal agencies, a subcontractor is not allowed to file any kind of lien on the project. Instead, the contractor's rights are governed by the "Miller Act."

The Miller Act covers projects where the work or materials are furnished to buildings or land owned by the federal government. In our area, most work performed at Elgin, Hurlburt, Duke, Whiting, Pensacola NAS, or the federal courthouse in Pensacola would be covered by the Miller Act.

Instead of lien rights, the Act requires general contractors to provide a payment bond. If a subcontractor is not paid, it can then assert a claim against the payment bond. Generally, federal jobs over $100,000 must be bonded. However, the Miller Act exempts certain jobs, including, for example, certain Army, Navy, and Air Force projects. Thus, it is crucial to determine whether a federal job that you are subcontracting for is covered by a payment bond and whether you qualify to make a claim against the bond

Also, subcontractors making claims against payment bonds must comply with strict filing and notice requirements. Since applicable deadlines can be as short as 90 days, anyone bidding on or entering into a subcontract on a federal job should consult with an attorney before committing to the subcontract. Prior to submitting your bid, you should determine whether the prime contractor furnished a payment bond for the job.

Projects owned by a Florida government agency are governed by Florida’s Little Miller Act, which has requirements similar to those on federal government projects.

Bill Martin formerly served as a senior attorney in the FDIC’s Professional Liability and Financial Crimes Section. He is currently associated with Crew & Crew, P.A. where he practices corporate, banking, real estate, construction, government, and commercial law. Prior to becoming a lawyer, Bill was an Air Force officer and a B-52 and B-1B pilot.