Surety Bonds

Miller Act Bonding Requirements for Federal Contractors

Miller Act Bonding Requirements for Federal Contractors — everything contractors need to know about surety bonds.

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Federal Law That Requires Performance and Payment Bonds on Government Projects

Surety bonds are a required part of doing business for most licensed contractors. Whether you need a license bond to operate legally, a bid bond to compete for public projects, or a performance bond to secure a major contract — Trade Safe helps contractors get bonded fast at competitive rates.

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What the Miller Act Requires

The federal Miller Act (40 U.S.C. §§ 3131–3134) requires performance bonds and payment bonds on all federal construction contracts exceeding $150,000. The performance bond guarantees project completion; the payment bond protects subcontractors and suppliers. Both bonds equal 100% of the contract value.

Little Miller Acts

Every state has enacted a ‘Little Miller Act’ — state law requiring performance and payment bonds on state-funded construction projects. Thresholds vary by state, typically $25,000–$200,000. The requirements mirror the federal Miller Act at the state level, covering state agencies, counties, and municipalities.

Why the Miller Act Exists

The Miller Act was enacted in 1935 because federal government buildings can’t be liened — unlike private property, there’s no mechanic’s lien right against government property. The payment bond gives subs and suppliers an equivalent remedy when the GC doesn’t pay them.

Who Must Provide the Bonds

The prime contractor (GC) provides both the performance and payment bonds. Subcontractors typically don’t need to provide bonds to the owner unless specifically required by contract — though GCs may require sub bonds in their subcontracts.

Miller Act Claim Requirements

For payment bond claims under the Miller Act: first-tier subs (direct contract with prime) can claim directly without notice requirements. Second-tier subs and suppliers must serve written notice of the claim on the prime contractor within 90 days of last furnishing labor or materials. Missing the notice deadline forfeits claim rights.

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Frequently Asked Questions

What is the threshold for Miller Act bonds?

Federal projects over $150,000 require both performance and payment bonds equal to 100% of the contract value. Projects between $35,000–$150,000 require payment bonds only. Projects under $35,000 have no mandatory bonding requirement.

Do I need Miller Act bonds to bid on federal projects?

You need to be able to provide them when awarded. Most federal solicitations require a bid bond at submission, and performance/payment bonds are required within 10 days of contract award. Establish your surety relationship before bidding, not after winning.

What if my state’s Little Miller Act has a different threshold?

Each state’s threshold controls for state-funded projects. Federal projects always follow the federal Miller Act threshold regardless of state. Check your specific state’s Little Miller Act for state project requirements.

Can a sub enforce a Miller Act payment bond claim without a lawyer?

Technically yes, but the notice requirements and filing procedures are procedural minefields. Missing a deadline or notice requirement forfeits your claim entirely. Most experienced subs use a construction attorney for Miller Act claims.

Are there bonding requirements for federally-funded but locally-administered projects?

Yes — projects receiving federal funding (FHWA, HUD, EPA, etc.) typically require Miller Act-equivalent bonds even if administered by a state or local agency. The federal funding triggers federal bonding requirements.