We are a material supplier to a sub contractor who is not being paid for material. The Subcontroacto is working under a GC who is employed by the state. We did not supply preliminary notice to the GC. Will our bond claim stand?
Mar 14, 2018
In Michigan, preliminary notice is required on public projects from parties not in direct contract with the general contractor. This notice must be sent within 30 days of the party's first furnishing of labor and/or material to the project. Under the state's Little Miller Act, a claimant not under contract with the principal contractor will not have a right of action against the payment bond if notice was not sent. However, this does not mean a bond claim is not an available option - it just means that, if push comes to shove, the ability to file suit against the bond on the project will likely not be present. A claim may still be made by sending a bond claim to the general contractor and the governmental unit involved (of course, we also recommend sending notice to the surety). Because the ultimate ability to file suit against the bond may not be present, there's a chance that such a claim would not lead to recovery. Still, the cost and risk of making such a claim would seem to be relatively low - plus other options for recovering payment may still be present. Regardless of whether recovery on the bond would be an available option, a claimant will typically have other available potential methods of recovery - such as sending demand for payment through an attorney or initiating a breach of contract claim.