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MILLER ACT CLAIMS FOR NONPAYMENT

OF FEDERAL GOVERNMENT PROJECTS

Introduction Because liens cannot attach to property owned by the government, Congress enacted the

Miller Act to provide a substitute to guarantee payment to subcontractors and material suppliers

working on government projects. Codified at 40 U.S.C. §§ 3131-3134, the Miller Act mandates the

furnishing of payment bonds by prime contractors and defines and limits where and when a claim

may be brought by unpaid subcontractors and suppliers. Because these limitations, particularly the

time to bring a claim, may differ from the local statute of limitations in the roofing contractor’s

home state, roofing contractors must familiarize themselves with the Miller Act’s applicability and

requirements to minimize the risk of losing their rights to bring valid claims.

The Miller Act Applies to Which Projects?

The Miller Act applies to all projects for the construction, alteration or repair of any public

building or public work of the federal government where the prime contract exceeds $100,000. The

prime contractor is obligated to obtain a payment bond, and it is this payment bond that governs the

roofing contractor’s recovery. Anyone who has not been paid and who has the right to bring a claim

under the Miller Act can obtain a certified copy of the payment bond and the contract for which it

was given by submitting an affidavit and request, along with any required fees, to the department

secretary or agency head of the contracting agency.

Every state, the District of Columbia and Puerto Rico have adopted statutes based upon the

Miller Act—known as “Little Miller Act” statutes—requiring prime contractors working on state

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construction projects to post bonds guaranteeing payment to certain subcontractors and suppliers.

These requirements may vary from the Miller Act and should be reviewed independently in the

event of nonpayment from a state construction project.

Who Has the Right to Bring a Claim Under the Miller Act?

A claim may be brought by a “first-tier claimant” or “second-tier claimant” who has not

been paid in full within 90 days after the date they last performed labor or furnished material. A

first-tier claimant is anyone having a direct contractual relationship with the contractor furnishing

the bond. A second-tier claimant is anyone having a direct contractual relationship with a

subcontractor to the contractor furnishing the bond. Courts have strictly interpreted the word

“subcontractor” when defining a second-tier claimant, and parties having a direct contractual

relationship with a supplier to the contractor furnishing the bond have been denied a Miller Act

remedy. Subcontractors to a second-tier claimant, and any other parties farther down the line, are

not covered by the Miller Act and are not able to prosecute a claim on the payment bond.

Notice Requirements Applicable Only to Second-Tier Claimants

In order to preserve its claim, a roofing contractor having a direct contractual relationship

with a subcontractor, but no contractual relationship with the contractor furnishing the payment

bond (i.e., a second-tier claimant) must provide written notice to the contractor furnishing the

payment bond within 90 days from the date the roofing contractor last performed labor or furnished

material. The 90-day timeframe does not include warranty work and usually does not include

punch-list work. The best practice for a claimant providing notice is to measure the time from the

date of substantial completion. The notice should accurately describe the dollar amount claimed and

the name of the party to whom the labor or material was provided, and it must be served in the

statutorily mandated fashion. Certified mail or other means providing written third-party

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verification of delivery to the contractor’s place of business is sufficient. Other acceptable means

vary state to state, and a claimant should follow local rules for serving summons.

What is the Deadline to File a Miller Act Claim? An action under the Miller Act must be brought no later than one year after the last day

labor was performed or material supplied by the party bringing the action. It is not necessary that

the particular labor or materials at issue be performed within one year of filing, only that the last

furnishing was within one year. As with the 90-day timeframe discussed above, the one-year

timeframe to file will not be extended by warranty work. Because punch-list work usually will not

extend the time to bring a claim, the best practice is to measure the time to bring the action from the

date of substantial completion.

What if My Contract Waives the Right to File a Miller Act Claim?

The right to bring a civil action on a payment bond cannot be waived until after the party

whose right is waived has furnished labor or material for use in the performance of the contract.

Thus, a blanket waiver in your contract is not enforceable, but a properly worded release document

may be enforceable and as such the roofing contractor must remain vigilant and careful when

executing releases in order to obtain partial payment for federal government projects.

Conclusion The Miller Act provides substantial protection for roofing contractors, but it is one that may

be lost by the unwary. Particularly for unpaid second-tier claimants, failure to preserve rights under

the Miller Act risks the roofing contractor being left without a remedy, thus it is important to

comply with the requirements. The timing requirement of the Miller Act, similar to the timing

requirement of many state lien statutes, requires the unpaid roofing contractor to act quickly,

particularly if he or she is a second-tier claimant subject to the 90-day notice rule. In the event of

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nonpayment, a roofing contractor should immediately consult with an attorney to ensure timely

notice is given in the manner required by the Miller Act, and there is ample time to prepare and file

a complaint within the one-year window.

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