Over the years here at the Construction Finance Journal, we’ve published a number of resources on the Federal Miller Act and States’ Little Miller Acts. Browse the Topic “Miller Act Claims” for a sampling of blog posts on the Act’s requirements, and to just get an understanding about how these laws work. If you like to dig deep into the laws, you can read the federal law and every state’s law in full-text here. If you’re a “big picture” kind of person, take a look at the Miller Act chart we’ve created breaking down who needs to send what and when.
To sum up how these Miller Act & Little Miller Act claims work, when you’re unpaid on a construction project commissioned by the state (including cities, counties and public boards) or federal government, you have a right to make a bond or surety claim under the applicable miller act law.
Make the claim correctly, and there is an insurance policy of sorts – a surety bond – against which you can collect, thus protecting you from a circumstance when someone in the contracting chain misappropriates money or goes belly-up. Make the claim incorrectly, however, and you’re out-of-luck.
Let me say that again – if you make the claim incorrectly, you’ll be unable to recover!
A Story To Illustrate How Miller Act Claims Can Go Wrong
I recently had a client come to me to file a Little Miller Act claim in Washington. Instead of using an attorney or zlien’s service to file the Miller Act Notice, the client tried to do it on their own. They sent the claim notice to the right place, and they sent it through the proper delivery method, and it was very nearly correctly done.
It was not correctly done, however, because it didn’t contain some required information. The notice didn’t identify the party who hired our client, nor did it correctly identify the total claim amount.
The surety received the claim, investigated it for a period of time just long enough to remove my client from the allowed claim period, and then sent a letter of rejection. The claim was rejected because the notice did not meet statutory requirements.
The client came to us to have the claim properly sent, but the unfortunate reality is that it was too little, too late.
It’s Worth The Cost To Let zlien File Your Miller Act Claim
Trying to save a small amount of money by drafting and sending the notice themselves had cost the client thousands and thousands, because their claim period was expired and the party they contracted with bankrupt. And really, how much did they really save even if the claim was properly sent and all worked out?
Someone had to put the claim together, which cost the client labor resources. The person in the company putting the claim together wasn’t familiar with the procedure, and so she spent time researching miller act claims, miller act claim forms and the process of making the claim. All the research and preparation had to take the employee at least 5-6 hours. At $18 an hour, this is $108. The employee probably bought a form online for the Miller Act Claim, which is another $20-30.
When the claim was ready to go out, it was sent to three recipients by certified mail, return receipt requested, which is $6 each, for a total of $18.
And while this process cost about $156 in raw costs, you have to remember about all the negative costs to the company. What could have the employee been doing instead of this miller act claim? If they work in accounting, they might have collected from someone else who owed money. If they work in project management, maybe a project requirement was moved along that could lead to the client’s payment. There could be hundreds or thousands in negative costs.
zlien’s platform is designed to automate and track the process of preparing and delivering Miller Act claims federally, and bond claims in any state. It cost just $295, and our platform empowers you to get the form properly prepared and delivered. We track the certified mail deliveries, and let you manage all the documents and delivery verifications online through out LienPilot manager. And best of all, it takes you under 5 minutes to place an order and get your notice on its way with peace of mind. Get started now.