What is the Little Miller Act?
You’ve likely heard about the Miller Act, a commonly cited piece of legislation that requires a general contractor to obtain a performance bond and a payment bond before they can be awarded a federal contract in excess of $100,000. This act helps bolster the quality of work in construction by ensuring project completion and payment.
Florida’s Little Miller Act is an extension of the Miller Act. Are you familiar with this little-known piece of legislation? A Ft. Myers construction lawyer can guide you through the process of producing performance bonds and payment bonds and help you understand how the Little Miller Act protects you.
The Little Miller Act was implemented to help fulfill two functions. First, the Little Miller Act helps guarantee payment by allowing workers, suppliers, designers, and other relevant parties to file a claim under the payment bond in the instance of nonpayment. Second, the Little Miller Act ensures that the agreed upon project is completed. The Little Miller Act capably protects both parties from a dispute as long as both parties fulfill their duties.
When a contractor abandons a project prematurely, they risk severely delaying the project’s progress and accumulating additional expenses. Performance bonds are an important tool to help eliminate unreliable contractors from the bidding process. The bond surety’s right to sue the contractor for indemnification helps prevent underperformance. It’s not uncommon for the bond surety to require ancillary security, such as personal guarantees by principals of the prime contractor, to safeguard themselves from a prime contractor’s sudden departure. These measures incentivize the contractor’s principals to ensure the completion of the project.
No one wants to work on a project if they aren’t going to be paid afterwards. Subcontractors and material suppliers are less reluctant to work when payment bonds are involved. Payment bonds ensure the timely delivery of payments. Violating a payment bond allows subcontractors and material suppliers to file a claim against the debtor. Payment bonds provide a perfect complement to performance bonds. Payment bonds promise that workers will be paid, while performance bonds promise that workers will work.
The Little Miller Act is an important tool for ensuring payment after a project is completed, but it is also an important tool for ensuring high-quality, timely construction development. Navigating the nuances of the Little Miller Act can be difficult on your own. Luckily, our Ft. Myers construction attorneys can help you understand the technical requirements of establishing a strong Little Miller Act claim or defending against one.
If you would like to speak with a Ft. Myers construction attorney, 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.