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Miller Act Notice question

Our company recently completed a federal project and we have been paid 90% by the general contractor but we still have a 10% left unpaid. The general contractor isn't expecting retainer until June at best. Should I file a claim under the Miller Act Notice? How do I know the contractor posted a bond for this project?

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Mar 25, 2020

The Miller Act requires that GC's on all federal construction projects provide a payment bond for the protection of subs and suppliers working on the job. So, if the project is federal and the price of the project exceeds $100,000 - chances are, a payment bond is present. Further, all subcontractors, suppliers, and others providing labor or materials to a federal project are entitled to a copy of the bond. So, you can always request a copy of the bond from the public agency in charge of the project, and if one is present, they'll be required to provide it to you. Finally, if you have a good relationship with your GC, then asking them about the bond may be a straightforward option, too. They may be willing to provide that info, or that may at least work to let them know you're serious about getting paid (and so could a Notice of Intent).

Deciding whether or not to make a Miller Act claim

There are a lot of different factors that should be taken into account when deciding on whether or not to make a Miller Act claim. And, ultimately, that calculation is up to each individual business and their particular circumstances. One of the key considerations when deciding on how to proceed with recovering a debt will be to look at the deadline for making a claim. If you were hired directly by the GC, then there a "claim" isn't actually required. Instead, a claimant can jump straight to filing a lawsuit against the bond - and that must be done within 1 year from last furnishing. If you were hired by someone other than the GC, then a claim would be necessary before filing suit - and that claim must be made within 90 days of last furnishing. So, knowing those deadlines, it's easier to decide whether it's time to make a claim or to file a lawsuit, or whether some other recovery options might be in order. You can learn more about making a Miller Act claim here: (1) Federal Miller Act Guide, Forms, & FAQs; and (2) The Miller Act Claims: What You Need to Know to Make a Claim.

Other recovery tools before pursuing a bond claim or lawsuit

If there's time, keep in mind that other recovery tools can work to get you paid. For one, sending regular invoice reminders may be enough to prod your customer into paying what's owed. Further, turning up the heat with a payment demand letter can let them know you're serious and willing to do what it takes if payment isn't made. And, as discussed above, sending a Notice of Intent to Make a Bond Claim to the GC, the surety, and/or to any other project participants could help to speed things along.

Key considerations when payment is being withheld on a federal project

Keep in mind that retainage can generally only be withheld on a federal project if the contract actually allows for retainage. Plus, note that pay when paid and pay if paid clauses don't do particularly well on federal jobs - so a customer arguing that they don't have to make payment because they haven't been paid might not carry much weight, either.

Using potential claims as leverage can help to find a solution

Keep in mind that talking it out is almost always the best option for resolving construction payment disputes. And, if other parties aren't being receptive, leveraging potential claims can speed things along. Plus, as long as you're keeping an eye on the deadline, a claim can always be made later on.

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