Preliminary notices are often a requirement to preserve mechanics lien rights on private construction projects, both residential and commercial. But you can’t file a mechanics lien on a public project. So that begs the question: Do you need to send a preliminary notice when working on a public works project?
Just like mechanics lien laws, Little Miller Acts (the laws that govern bond claims on public projects) vary from state to state. Some general guidelines regarding preliminary notice on public projects can be found below.
Notice on Federal Public Works Projects
Federal public works projects, on which the U.S. government or some federal agency is a party, are governed by the Miller Act.
If you are working on a federal project governed by the Miller Act the question of whether a preliminary notice is required is crystal clear: “No.”
Preliminary notice is not required prior to making a claim pursuant to the Miller Act, provided that you are a party protected by the act.
First and second tier subcontractors and suppliers to the GC or a first tier sub are extended protection under the Miller Act, and there are no associated preliminary notice requirements (GCs and third-tier subs and suppliers do not have rights).
While it may not be required to preserve the right to make a valid claim – it is always a good idea to send preliminary notice to promote visibility.
If you experience a payment issue on a federal construction project, be sure to proceed with caution! Even though the Miller Act is available nationwide, utilizing it to remedy a payment issue isn’t always cut and dry. Make sure you know when the Miller Act kicks in, and how to use it correctly.
Direct contractors do not need to send preliminary notice
If you contracted directly with the public entity in charge of the work, your ability to recover earned but unpaid money is likely limited to a lawsuit against the public entity directly.
The GC is generally required to purchase a payment bond for the benefit of the subs and suppliers down the chain. There’s no way for the GC to recover against their own payment bond. Accordingly, there is no preliminary notice requirement for direct contractors on public projects as there is no bond protection. If the GC is struggling to get paid on a public works project, a lawsuit is usually the only way to proceed.
Note, however, that sending a demand letter prior to initiating suit is generally advisable, and a demand letter is really like a preliminary notice before a lawsuit.
Notice on State Public Works Projects
The last general piece of information to look at in determining whether a preliminary notice is required on your public works project is in which state the project is located. As with mechanics liens, each state’s “Little Miller Act” or public works lien statutes (if applicable) are different.
Knowing the notice and bond claim requirements of the states in which you do most of your work (if you do not furnish labor or materials nation-wide) can cut down on the time required to determine whether a prelim is needed.
For example, if your work centers around California and Arizona it’s easy to know that you need to deliver a 20-day preliminary notice on public projects just like on private jobs. However, if you do a lot of work in Illinois, you won’t have preliminary notice requirements for public jobs in that state.
View the interactive map on our Preliminary Notice page to learn more about state-by-state requirements.
Required or not, send notice
Whether or not a preliminary notice is required for a public project can be a state-by-state determination. But, whether or not there is a specific preliminary notice requirement, it’s always a good idea to send one. Promoting visibility, and making yourself known, is the best way to grease the payment wheels and avoid payment issues to begin with.
After all, it’s better to get paid without the necessity of making a bond claim – that way, everybody’s happy.