Performance and Payment Bonds: The Miller Act and Little Miller Acts

Mechanic's liens attach to private property. Government property generally cannot be liened, which would leave subcontractors on public projects without the security their counterparts have on private work. Bond statutes fill that gap. The federal Miller Act requires prime contractors on most federal construction contracts above a dollar threshold to post a performance bond (protecting the government's completion interest) and a payment bond (protecting subcontractors and suppliers who furnish labor and materials).

The payment bond is the one subcontractors care about most: it is a surety's guarantee that the people who built the project will be paid even if the prime contractor does not pay them.

Every state has enacted its own version — commonly called a Little Miller Act — requiring payment and performance bonds on state and municipal public projects. The structure mirrors the federal law, but thresholds, notice requirements, and deadlines vary by state, and some local agencies layer on additional rules. A subcontractor working across jurisdictions cannot assume the federal deadlines apply to a state job.

The practical takeaway is to identify, at the start of every public project, which statute governs and what its notice and suit deadlines are — because those deadlines are unforgiving.

Bond claims are deadline-driven. Under the federal Miller Act, a subcontractor without a direct contract with the prime contractor must give written notice of its claim to the prime within 90 days of last furnishing labor or materials, and any suit on the bond must be filed within one year of that last date. Miss the notice or the suit deadline and the claim is generally lost, no matter how valid the underlying debt. State acts impose their own, often shorter, windows.

Importantly, a payment-bond claim runs against the surety on the bond, not on the prime's promise to pay. That is why a contingent-payment clause like pay-if-paid does not automatically defeat a bond claim — the surety's obligation is a separate statutory guarantee. Preserve the bond claim independently of any contract dispute.

On any public project, confirm whether bonds are required, request a copy of the payment bond and the surety's information at the outset, and calendar the notice and suit deadlines for the governing statute. Make sure nothing in the subcontract purports to waive your bond rights, and keep your last-furnishing dates well documented.

A first-pass review can flag whether the project is bonded, whether the subcontract tries to limit your bond remedy, and where contingent-payment language might be misread to waive a claim that, by statute, survives against the surety.