When furnishing labor or materials to a federal construction project, your mechanics lien remedy is filing a Miller Act Claim. The claim’s description refers to the federal act that provides the authority for these claims: the US Miller Act, codified in United States Code 40 § 3131 et seq. (Read Full Text of the Miller Act). This is a guide explaining how the Miller Act works, and how to properly file a claim under the Miller Act. Don’t know if your project is a federal project, check out this article: Is My Project Private, Federal, State…or Something Else?
How Miller Act Claims Work
The Miller Act Claim is the lien-like remedy available to contractors, suppliers and other service providers furnishing labor or material to a federal construction project. The federal government does not allow anyone to acquire an interest or claim against federal property, and therefore, a traditional mechanics lien allowing this is not available to contractors and suppliers. Instead, at the beginning of any federal construction project, the prime contractor is mandated to obtain a Miller Act Bond.
The Miller Act Bond stands in the place of the federal property, such that if anyone furnishing to the project goes unpaid, they can make a claim directly against the bond and receive payment from the bonding company.
Typically, an unpaid laborer or materialman will make a claim against the payment bond, the bonding company will investigate the claim and request backup, and thereafter, the claim will be paid either by the prime contractor or the bonding company. We wrote a more comprehensive blog post about how payment bond claims generally work, and that guide is useful to anyone looking to better understand the claim process for a Miller Act Claim.
Step 1: Deliver Miller Act Notice To Prime Contractor
The first step to making a Miller Act Claim against a federal construction project is to deliver your payment claim notice to the prime contractor.
Any party who did not contract with the prime contractor directly is required to deliver this claim notice to the prime contractor within 90 days from their last furnishing of any materials or labor to the project. Those who did contract directly with the prime contractor is not restricted by this deadline, but it is a good practice to deliver a claim notice to the prime contractor within this time period or a reasonable time.
The claim notice should be delivered to the prime contractor by certified mail, return receipt requested, although the law allows the notice to be served “(A) by ny means that provides written, third-party verification of delivery.”
The Miller Act’s § 3133 provides the notice “must state with substantial accuracy the amount claimed and the name of the party to whom the material was furnished or supplied or for whom the labor was done or performed.” The statute does not give any other details about what should be in the Miller Act claim notice, nor does it provide a statutory form. Here is a free Miller Act Claim Notice form available for you to download and use, subject to Zlien’s Terms of Use.
Step 2: Followup To Get Response From The Surety
Interestingly, the US Miller Act does not require that you notify the government organization commissioning the work at the project or the prime contractor’s surety. Instead, claimants are simply required to notify the prime contractor of the claim, and it is the prime contractor’s duty to forward notice of the claim to the bonding company.
The next step in the Miller Act Claim process is to elicit some type of response from the Surety company, because you must provide them with a sworn claim form and claim backup to help them process the claim. You need to make sure the Miller Act Claim Notice gets to the surety as quickly as possible, therefore, to get this ball rolling.
That’s why we’ve previously written that it’s a good idea to send your Miller Act claim to the surety at the same time you deliver it to the prime contractor to ensure maximum attention (and quick attention) to your claim. If you don’t know who the bonding company is, you are authorized by the US Miller Act to ask for this information. Here is an example Request for Miller Act Bond Information.
Step 3: Provide Backup and Sworn Claim Form To Surety
Once you know who the surety is, they should be furnishing to you a “Claim Form,” and they should request from you certain backup information about hte claim which may include copies of your contract, your invoices, emails, communications, change orders, purchase orders, shipping confirmations, etc. The next step in the claims process it to get all of this information collated and sent back to the surety for it to review your claim, and to fill out and return their “sworn” claim form. These claim forms usually require you to have your signature notarized.
Put this information together as quickly as possible to return to the surety. Then, you likely have a 30-45 day waiting period for them to review your claim and make a decision.
Step 4: Get Paid Or Move Forward To Enforce Your Miller Act Claim
After your bond claim notice is sent and your bond claim backup information is returned, the surety should review the claim and get back to you within a reasonable time indicating that they will either pay the claim or reject the claim.
If the surety elects to pay the claim, they will require that you return a lien release and waiver in exchange for the payment. They may also request that you furnish to them a formal “Miller Act Claim Cancellation” to cancel the claim you previously made against the bond.
If the surety rejects the claim, you’re next step is to file a lawsuit to enforce the Miller Act Claim. These lawsuits must be filed in the federal district court where the project is located, and it must include the United States of America as a party! You will likely need a construction attorney to help you with this claim enforcement action, or you can use something like Zlien’s collections service, which will hire an attorney on your behalf.
The lawsuit to enforce your bond claim rights must be filed within 1 year from your last furnishing of labor or materials to the federal construction project.
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