The Miller Act and The Little Miller Act: What’s the Difference?
If you’re a general contractor who’s worked on federally owned projects before, you’ve been required to furnish both a performance bond and payment bond. And if you’re a subcontractor or material provider, you may have had to file a bond claim when something’s gone wrong on one of these projects. But what are the laws governing this process? And how do they vary at the state and federal level?
Below, we answer these questions by discussing the differences between The Miller Act and The Little Miller Act. These laws are vital for ensuring that government-owned projects, including critical infrastructure projects, reach completion. For assistance filing a bond claim, consult a construction lawyer in Franklin, TN, with Cotney Attorneys & Consultants.
The Miller Act of 1935
Passed in 1935, The Miller Act applies to all federal construction projects and requires general contractors to furnish a payment bond, a surety bond that guarantees completion of the project even if the general contractor is unable to perform their contractual obligations, and a performance bond, a surety bond that guarantees that subcontractors and material providers are paid for services provided. These bonds are required on federal projects valued in excess of $150,000. Similar payment protections are required for projects valued between $30,000 and $150,000.
When pursuing a bond claim, it’s important to understand the limitations of the Miller Act. The Miller Act does not protect general contractors. General contractors pretty much have to file a lawsuit against the government agency if something goes wrong (consult a construction attorney in Franklin, TN, if this applies to you). Furthermore, payment protections only extend to first- and second-tier subcontractors and some material providers (sorry third-tier subcontractors).
The Little Miller Act
The Little Miller Act isn’t a single act. Little Miller Acts are actually state statutes, meaning that every state has its own version. Tennessee’s Little Miller Act, for instance, has its own set of rules and deadlines that must be adhered to. Unlike its federal counterpart, Tennessee’s Little Miller Act only requires that the bond be at least 25 percent of the contract price on projects in excess of $100,000. Subcontractors and material providers must be mindful of these rules if they want to get paid for work or materials provided.
This is the main difference between the Miller Act and Little Miller Acts: The Miller Act applies to federal projects, whereas Little Miller Acts apply to state-owned projects. In other words, if your project is owned by a Tennessee government agency, consult the Little Miller Act. If your project is owned by the federal government, consult the Miller Act. And if you need to file a claim on either type of project, consult a construction law attorney in Franklin, TN.
Filing a Bond Claim
Now that we’ve covered the general differences between them, it’s time to discuss how to file a claim under these respective acts. A bond claim is a lot like a mechanic’s lien — the key difference being that a lien attaches to the property, whereas a bond claim applies to the bond itself.
Filling a Claim Under the Miller Act
As mentioned, only first- and second-tier subcontractors (and material providers that contract with the general contractor or first-tier subcontractor) are able to file a Miller Act claim. The deadline for filing a claim depends on your tier and could be anywhere from one year to 90 days. For this reason, consult a construction lawyer in Brentwood, TN, for assistance filing a claim as soon as possible. If eligible to file a Miller Act claim, you will have a full year to enforce it. Claims must be sent by certified mail to the general contractor.
Related: The Miller Act: Making a Claim
Filing a Claim Under Tennessee’s Little Miller Act
In the state of Tennessee, the magic number is 90 days. All first- and second-tier subcontractors and material providers have 90 days to file a claim after labor or materials are provided. You will also have 90 days to give written notice by certified mail to the general contractor or public official who awarded the contract. In stark contrast to federal law, you only have six months to enforce a claim under Tennessee law.
Need Assistance Filing a Claim?
At Cotney Attorneys & Consultants, we understand the challenges associated with filing claims under these respective acts. We’ve helped numerous construction entities file bond claims on both federal- and state-owned projects. If you require assistance navigating this complicated process, we suggest partnering with a construction attorney in Brentwood, TN, with our law firm. We also suggest looking into our legal subscription service. With a subscription plan, you can file unlimited bond claims. For a practical solution to a costly problem, consider one of the many subscription options offered by Cotney Attorneys & Consultants.
If you would like to speak with a construction law attorney in Brentwood, TN, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.