Understanding Miller Bond Claims
Lien law is a powerful tool that is in place to protect construction professionals’ right to payment. However, construction professionals unfortunately have little to no lien rights when it comes to public construction projects, which means that you and your roofing attorney in Tennessee will need to pursue other means of collecting. This is where The Miller Act comes into play.
The Miller Act
The Miller Act is the exclusive payment remedy in the event that a contractor or supplier needs to enforce payment for a project involving a federal contract. This can include construction or improvement of a public work. It is codified at 40 U.S.C. §§ 3131-3134.
If you are a general contractor contracting with the federal government (or federal governmental entity) and you have a general contract or a prime contract that is over $100,000, The Miller Act requires you to secure both a payment bond and a performance bond. These are required to come from a surety that is acceptable to the officer awarding the contract.
The Miller Act also mandates that an equal amount to the one payable by the terms of the prime contract must be posted. That said, the contracting officer may reduce the Miller Act payment bond amount; however, it cannot be less than the amount of the performance bond. The performance bond is also set by the contracting officer and will reflect the amount they determine is enough to protect the interest of the federal government.
How Do You Prevail On a Miller Bond Claim?
First and foremost, you must fall under the category of someone for whom a Miller Act payment bond can provide payment. If you are a first or second tier subcontractor or supplier, you are entitled to make a claim. If you are a third-tier contractor or supplier, you do not have the right to make a claim against a Miller Act payment bond.
In order to be successful, you must establish that you furnished labor or material that were used on the project. If you had reasonable belief that your labor or materials would be used in the prosecution of work but they were redirected to a different project, you will still have rights under the Miller Act. However, if you knew or should have reasonably known that your efforts or building materials were actually going to be used on another job, you may not have rights under the Miller Act. If you are working with a skilled roofing lawyer in Tennessee, they will help you ascertain what your rights are—and fight for those rights.
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.