Miller Act

In 1944, in Clifford F. MacEvoy Co. v. United States ex rel. Calvin Tomkins Co., the US Supreme Court denied a materials supplier the benefit of a federal job's payment bond: it had sold to another supplier, not to a subcontractor, and so stood too far down the chain. The whole Miller Act turns on that question of tier. The Act of August 24, 1935, codified at 40 U.S.C. §§ 3131 to 3134, requires the prime contractor on a federal contract for the construction, alteration or repair of a public work to furnish two bonds before award: a performance bond protecting the government, and a payment bond protecting those who supply labor and materials, in practice each at 100% of the contract price. The threshold written in the statute, 100,000 dollars, was raised to 150,000 dollars by the FAR (28.102-1) on October 1, 2010, under the inflation adjustment of federal acquisition thresholds; Congress has since taken Miller Act bonds out of that adjustment (section 861 of the National Defense Authorization Act for Fiscal Year 2022), and the threshold has not moved. The reason for all this fits in a line. On a private job, an unpaid subcontractor files a mechanic's lien on the building; on federal property, sovereign immunity rules that out, and the payment bond stands in for the lien. Claims are open to subcontractors and suppliers with a direct contract with the prime, and to second-tier claimants who gave the prime written notice within 90 days of their last delivery. Suit is brought in the name of the United States, in the federal district court where the contract was performed, no later than one year after the last labor or material was furnished. A waiver of payment bond rights is valid only if it is in writing, signed and executed after the claimant first furnished labor or material, which defeats the waivers buried in subcontract forms. The states copied the scheme for their own public works: these are the Little Miller Acts, whose thresholds, deadlines and protected tiers vary from state to state.