All About the Miller Act: Protections for Subcontractors and Suppliers
What is the Miller Act?
The purpose of the Miller Act is to protect subcontractors and second-tier subcontractors that supply labor and materials for the construction of federal public projects. To accomplish this purpose, it requires general contractors to obtain payment bonds to ensure that subcontractors and second-tier subcontractors get paid. This additional layer of protection helps compensate for the inability to lien federal government land.
What Remedy Can a Subcontractor or Second-tier Subcontractor receive Under the Miller Act?
If the general contractor refuses to pay a subcontractor on a federal government project, and that subcontractor has fully performed under the contract, the Miller Act surety is required to pay the subcontractor pursuant to its subcontract.
What Does a Subcontractor or Supplier Need to Prove in a Miller Act Claim?
To state a claim under the Miller Act, a subcontractor or material supplier must establish that it:
- has supplied labor or materials in the prosecution of work provided for in the prime contract;
- has not been paid;
- believed in good faith that the labor or materials were intended for the specified work; and
- complied with the “jurisdictional prerequisites” to bringing the action.
What are “Jurisdictional Prerequisites?”
A first-tier subcontractor only has to comply with one jurisdictional prerequisite; a second-tier subcontractor has to comply with two. Both need to initiate a lawsuit sometime after 90 days of last providing labor and materials and before one year of last providing labor or materials to the project. The lawsuit must be brought in the name of the United States for the use and benefit of the subcontractor or second-tier subcontractor suing and the suit must filed in the federal district court in which the contract was to be performed. Additionally, a second-tier subcontractor has to provide written notice to the contractor within 90 days from the date on which the person performed the last of the labor, or furnished last of the material for which the claim is made. The notice must state:
- the amount claimed; and
- the name of the party it provided labor or materials to.
How Long Will It Take to Get Paid?
Unfortunately, there is no clear answer. Some cases will resolve before the complaint is filed, others may be stayed pursuant to a pass-through or liquidation agreement, and still others may go to trial. Lawyers are required to represent subcontractors and second-tier subcontractors in Miller Act litigation. It makes sense to speak with a lawyer if the project is over and payment has not been received. An attorney can help ensure that all requirements are met in a timely manner and may be able to help gauge the timing of potential payment with more specific information, such as the general contractor, the amount due, why payment was not made and the judge assigned to the case.