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Can a GC file a claim on a subcontractors Bond

Good afternoon We were subcontracted by a General Contractor to work on a government project in which my company ended up having to secure a bond on because our GC was not able to. The GC did end up obtaining their own bond for this project after the fact. We ended up having to file a claim against their bond in November for unpaid invoices. The GC is now saying that they are going to file a claim against our bond for liquidated damages they were assessed by the Government. Can the General Contractor file a claim against our bond? Thank you for your help

1 reply

Dec 13, 2019

First, note that whether or not a claim might be made will likely be dependent on the terms of the bond, itself. It's easier to determine whether a bond claim might be made when a bond is made pursuant to statute - like the Texas Little Miller Act. But if a non-statutory bond is given, the terms of that bond should be binding in regards to who can make a claim and for what purpose. With that being said, note that a contractor could likely not create an issue on the one hand, causing a claim to be made against their bond then recoup damages for that same issue by making a claim against their subcontractor's bond. For more clarity, it might be helpful to reach out to the surety bond provider who issued the bond. They should be intimately familiar with the product they've offered and be able to determine what class of claimants may look to the bond for recovery. Alternatively, or additionally, it might be helpful to consult a local Texas construction attorney and have them review the bond and the relevant circumstances.

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