Big news for contractors working on public works projects in Georgia! A new piece of legislation, House Bill 137 (HB 137), has been signed into law, increasing the contract value threshold for payment and performance bonds. This change, effective July 1, 2025, could simplify things for smaller public projects and impact your bid strategies.

Overview of Georgia House Bill 137

What’s Changing with HB 137?Payment bond

Previously, Georgia’s “Little Miller Act” (O.C.G.A. § 13-10-1 et seq.) required payment and performance bonds for public construction contracts valued at $100,000 or more. HB 137 is stepping things up! The new law raises this minimum contract amount from $100,000 to $250,000.

Think of it like this: the Little Miller Act is designed to protect subcontractors, laborers, and material suppliers on public projects, since you can’t typically file a mechanic’s lien against publicly owned property. Payment bonds ensure you get paid for your work, even if the general contractor runs into trouble. Performance bonds guarantee the project gets completed as agreed. HB 137 acknowledges that construction costs have risen significantly, making the old $100,000 threshold trigger bond requirements on many smaller projects that might not need that level of protection.

How Does This Impact You?

This is a win-win for many in the Georgia construction community:

  • For Smaller Projects: If you’re bidding on public projects under $250,000, you might find a bit more flexibility. The increased threshold could mean fewer projects require the costly and time-consuming process of securing a payment and performance bond. This could streamline the bidding process and potentially reduce administrative burdens.
    • However, it’s crucial to understand that for these smaller projects, contractors will not be able look to a payment bond to collect unpaid moneys
  • For Larger Projects: The core protection of the Little Miller Act remains robust for contracts exceeding $250,000. You’ll still need to be diligent in understanding and securing your payment and performance bond rights on these larger projects.
  • Economic Relief for Local Governments: Local municipalities can now undertake smaller improvements without the added expense and complexity of bond requirements, potentially freeing up resources for more community projects

What Should Contractors Do Next?

While this change is generally positive, it’s always a good idea to be prepared. Here’s a quick checklist:

  • Review Your Bidding Strategy: Adjust your approach for public projects, especially those in the $100,000 to $249,999 range.
  • Update Internal Policies: Ensure your internal contract and risk management protocols reflect the new bonding thresholds.
  • Stay Informed: Keep an eye on any further legislative developments or guidance from state agencies regarding these changes.
  • Consult Your Team: Talk to your legal counsel and surety providers to understand the full implications for your specific business.

This updated threshold aims to create a more efficient and responsive environment for public works in Georgia, while still ensuring essential protections are in place. By staying informed, you can make the most of these changes and continue to build successfully in the Peach State!

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