Examining The Miller Act – When It Applies And When You’re Qualified To Make A Claim

Examining The Miller Act   When It Applies And When Youre Qualified To Make A Claim

If you’re unpaid for labor or materials furnished to a federal construction project, you probably have the right to file a “Miller Act Claim” to secure payment. These claims are filed pursuant to the United States Miller Act, and they allow claimants to make a claim for payment directly to the surety company that has bonded the project. The Miller Act applies to a substantial majority of federal construction projects, but before a project is protected by the Miller Act, it must qualify for that protection.

Miller Act Only Applies When Contracts Are Greater Than $100,000

40 USC 3131(b) provides that the Miller Act only requires a payment bond be issued if the contract is “more than $100,000.”  It’s pretty rare that the federal government undertakes a construction project for less than $100,000, but there are instances when federal buildings require small renovation or repair work. In these instances, the Miller Act is not likely to be applicable.

When determining whether the Miller Act applies, remember that the $100k figure does not regard the value of your specific work.  The $100k figure contemplates the value of the entire project, or more exactly, the value of the contract between the federal government department and the selected prime contractor.  If that amount is over $100,000, the Miller Act will apply and will require a bond.

Miller Act Only Applies For Certain Contract Types

Just because you’re furnishing labor or materials to a federal project does not mean you’re going to have a claim under the Miller Act.  The Miller Act does not apply to every single federal contract.  It only applies to federal construction contracts.

Specifically, 40 USC 3131(b) provides that the Miller Act applies to contracts “awarded for the construction, alteration, or repair of any public building or public work of the Federal Government.”

For the Miller Act to apply, therefore, there must be construction, alteration or repair of a public building or a public work.

Some Projects May Be Exempt From The Miller Act

Once you’ve determined that the project work is of the character protected by the Miller Act and is valuable enough to be protected by the Miller Act, you must look ato 40 USC 3134 to see whether the project is exempted from the Act.

The Miller Acts § 3134 provides that certain Military and Transportation projects may be exempt from the Miller Act Requirements. It’s tough to draw a bright line rule here, however, because not every Military and Transportation project is exempt from the Miller Act.  Only those projects that fit within the statutory exemption are qualified for exemption, and then, if so qualified, they are only exempt if the appropriate officer “waives” the Act’s applicability.

If you’re performing work on a federal military public building or public work, or if you’re working on a vessel for the Department of Transportation, you may very well have rights to file a client under the Miller Act…but, be careful, that these rights may have been waived as per the Act’s exemption.  Read 40 USC § 3134 here.

What should you do if your working on a project that is qualified for exemption under the Miller Act?

Well, it’s difficult for subcontractors, suppliers and other lower tiered project participants to know whether the department waived the Act’s applicability or not. In fact, it’s likely that this information will not be readily available.  As a result, I usually recommend to people that they file the Miller Act Claim regardless. The worst that can happen is that they get notified of the Miller Act exemption. But, at least the claim is filed in case the project is not exempt (which is far more likely).

Scott Wolfe Jr

About Scott Wolfe Jr

Scott Wolfe Jr. is the CEO of zlien, a company that provides software and services to help building material supply and construction companies reduce their credit risk and default receivables through the management of mechanics lien and bond claim compliance. He is also the founding author of The Lien and Credit Journal, a leading online publication about liens, security instruments and getting paid on every account. Scott is a licensed attorney in six states with extensive experience in corporate credit management and collections law, with a specific emphasis on utilizing mechanic liens, UCC filings and other security instruments to protect and manage receivables. You can connect with him via Twitter, LinkedIn and Google+.