It is not surprising that the binding requirements of the Miller Act are rarely dispensed with. According to a recent study conducted by the GAO, neither the Department of Defense, nor the Department of Veterans Affairs, nor the State Department have a tracking mechanism or data source to determine how often bonds are cancelled, but officials from the respective departments noted that waivers from construction contracts are extremely rare. A Corps of Engineers official said when asked by the GAO that he and his colleagues couldn`t even recall a case where binding requirements had been lifted. A VA official said that in his nearly 30 years of construction experience, he could only remember one exemption. For this reason, contractors must assume that otherwise necessary warranties will not be voided. When can the government waive the bonding requirements? The Miller Act and the Little Miller Act are likely important and effective tools available to contractors and suppliers to get paid for public works projects. In order to be able to use these laws, it is important that you know and understand the technical requirements in order to perfect the claim. Otherwise, you may lose your right to assert the claim or recover the deposit. The rules, forms and requirements of Miller`s Law can be confusing. Here are some frequently asked questions to help you. Miller Act payment guarantees provide a powerful payment execution mechanism for qualified subcontractors and first- and second-tier suppliers. Construction lawyers should pay close attention to the notice and filing requirements of the law, which can impact the feasibility of a claim.
In addition, when bringing or defending a civil action to obtain claims under the Miller Act, lawyers must verify that the competency requirements of the Miller Act are met (i.e. Before the Federal District Court), and note that the contractually agreed determination of jurisdiction of the parties may apply. These notification obligations do not apply to new contractors and suppliers directly related to the main contractor, as the prime contractor must already be aware that it has not made payments to its subcontractors and tier one suppliers. In addition, the law does not require notification to the guarantor. A civil action against a plaintiff`s guarantee of payment may not be brought until 90 days after the last day of supply of work or materials. Any civil action under Miller`s Act must be commenced within one year after the last day the plaintiff supplies the work or materials. These deadlines must be strictly adhered to; Failure to comply can be fatal to a claim. Performance and payment guarantees become binding when the order is placed.
For federal contracts, they are required “before a contract of more than $100,000 is awarded for the construction, alteration or repair of a federal public building or public work…”. However, the FAR implements the legal bonding requirements through sections 28.102-3 and 52.228-15, which set the deposit threshold for construction contracts at $150,000 (and provide additional forms of security for contracts between $35,000 and $150,000). And as the U.S. Court of Appeals for the Federal Circuit recently stated in K-Con, Inc. v. Secretary of the Army, regardless of whether or not these clauses have been included in your contract, their requirements are always interpreted in the tender and construction contract according to Christian doctrine. Indeed, the law explicitly states that bonds “shall” be provided, and the FAR requires bonds and orders the insertion of the corresponding clause. The Miller Act sets out certain notification and complaint requirements that must be strictly adhered to. Candidates who are directly associated with the prime contractor are not required to comply with termination obligations. All second-tier subcontractors and suppliers must notify the prime contractor (described below) in writing within 90 days of the last day of supply of the work or materials.
This notice is a legal and mandatory requirement for a valid claim under Miller`s Law. Apart from repayment contracts, there are only a handful of circumstances in which a waiver can be made.