The Miller Act

The Miller Act is a federal law that requires contractors on U.S. government construction projects to obtain performance and payment bonds before work begins. It applies to any federal contract over $150,000.

Without the Miller Act, subcontractors and suppliers working on federal jobs would have little recourse if a general contractor failed to pay — they can't lien federal property the way they can on private work. The bonds fill that gap.

What it requires

Two bonds are mandatory on covered federal projects:

• Performance bond — guarantees the contractor will complete the work according to the contract terms. If the contractor defaults, the surety steps in to finish the project or compensate the owner.
• Payment bond — guarantees that subcontractors, suppliers, and laborers get paid. If the GC doesn't pay, the unpaid party can make a claim directly against the bond.

Both bonds must equal 100% of the contract value.

Who the payment bond protects

Anyone who furnishes labor or materials on a Miller Act project has rights against the payment bond — but there are tiers and deadlines.

First-tier claimants (direct subcontractors and suppliers to the GC) can claim directly against the bond. Second-tier claimants (subs to subs, suppliers to subs) also have rights, but they must give written notice to the GC within 90 days of last furnishing labor or materials.

To make a claim, claimants must file suit within one year of the last day they furnished work or materials. Missing that window forfeits the claim entirely.

Little Miller Acts

All 50 states have enacted their own versions — commonly called "Little Miller Acts" — that apply the same bonding requirements to state and local public projects. Thresholds vary by state, typically ranging from $25,000 to $100,000. Most mirror the federal structure closely, though the notice periods and filing deadlines differ.

Private projects are not covered by the Miller Act or Little Miller Acts. On private work, the standard protection mechanism is a mechanics lien.

Why it matters for contractors

For a GC bidding federal or public work, Miller Act compliance is not optional — bonds must be in place before the contract is awarded. That means your surety relationship and bonding capacity are prerequisites to winning the work, not afterthoughts.

For subcontractors, knowing your Miller Act rights is practical risk management. If you're on a federal project and payments stop, you have a direct claim against the payment bond — but only if you act within the statutory deadlines.