Public projects tend to be a lucrative option for most construction companies. Whether federal, state or local; public projects have specific bonding requirements. When things take a turn towards non-payment, it may be time to make a claim on the bond. The way to do this is by sending notice to the GC and the surety. But how do you know who the surety is? What is the best way to get a copy of the payment bond when a GC is being uncooperative?
Payment bond claims
Anyone who has worked on a public project should be familiar with the Miller Act. This act requires general contractors on any federal construction project over $100,000 to obtain both a performance and payment surety bond. Consequently, each state has also incorporated these requirements into their laws as well. These are known as Little Miller Acts. The point is, since public property can’t be subject to lien rights, these bonds are meant to provide security in case of non-payment issues.
In order to make a valid claim against a bond, most Little Miller Acts state that the claim must be delivered to both the general contractor and the surety. So how do you know who the surety is? The simple answer is just to ask the GC for a copy. But rarely are things that simple.
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The trouble with getting a copy of the bond.
General contractors are the ones who are required to post these bonds. Legally, you are entitled to a copy of the payment bond as long as you ask. Some states are very explicit in protecting this right. For example, in Texas, the statute requires that the prime contractor provide a copy within a reasonable time, but no later than the 10th day after receipt of the request. Conversely, the Florida statute simply states that the contractor shall furnish a copy of the bond to any lienor demanding it.
Just because it’s required, doesn’t mean it’s going to happen. Therein lies the rub! Contractor’s don’t want their bond lines and reputations tarnished. Also, if a sub or supplier isn’t getting paid, then there’s clearly something going wrong on the project. So what better time to request a bond claim? Your request will likely be delayed or even outright ignored.
That’s not very helpful, is it? There is one other alternative, cue the Freedom of Information Act!
Making a Freedom of Information Act request
The Freedom of Information Act (or FOIA) states that everyone has the right to request access to federal agency records or information. Obviously, there are exemptions and limitations to this right. And, not unlike the Miller Act, most states have incorporated this into their own laws. Submitting an FOIA request on the state and local level is relatively simple. It merely requires a formal written request with information regarding the project and the labor or materials provided. However, there are a few things that should be kept in mind.
Who to send a request to?
First and foremost, be sure that the request is sent to the proper party. State and local agencies will typically have their own FOIA officers assigned to them. Contacting the contracting agency directly can usually result in getting the information needed to make a request to the proper person.
When to send a request?
The FOIA is an effective means of getting bonding and contract information. The problem, as with most government dealings, is that this can take a while. Ideally, this request should be sent as early as possible. It’s nice to know what security rights are available before the project begins. Waiting until a payment issue arises to make a request can be a risky proposition.
How to send a request?
Lastly, the best way to get your request approved as quickly as possible is to be as specific as possible. Overly broad requests such as “all relevant documents regarding the project” will likely be denied; which can delay the request even longer. The request should be short and to the point. Request a copy of the payment bond, and the contract, with a description of the project stating the labor and materials provided to the project.
- Government Construction Contracts | Guide to Bids, Bonds and Payments
- The Difference Between Public and Private Projects
- Construction Payment Bonds- What Contractors and Suppliers Must Know