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Texas Construction Law Blog For Subcontractors & Suppliers

Federal Payment Bond Claims

Posted in Bonds

The Miller Act requires a payment bond on federally owned projects where the prime contract is in excess of $100,000.  If you–a subcontractor or supplier–have a contract or account directly with the general contractor, you are covered.  If you do not have a direct contract with the general contractor, you are protected only if the party with whom you do have a contract with is a “subcontractor” of the general contractor.  The definition of the term subcontractor is the subject of many cases and can be difficult to pin down.  The bottom line is if you do not have a direct contract with either the general contractor or a subcontractor, then you are not covered by the bond.

Perfection is very similar to the Texas public payment requirements.  You perfect your claim by sending a notice with a sworn statement of account.  A subcontractor with a direct contract with a general contractor is not required to send notice, but should do so anyway.  A subcontractor with no direct contractual relationship with the general contractor must notify the general contractor (and should include the surety and first tier subcontractor) within ninety days “from the date on which such person did or performed the last of the labor or furnished or supplied the last of the materials for which such claim is made.”  To be prudent, you should not wait the full ninety days in order to ensure the general contractor receives the notice before the ninetieth day.

You must file suit within one year of the last date you furnished labor or materials on the project, but no sooner than ninety days after you last furnished labor or materials.  This gives the surety and the general contractor a window to investigate and perhaps settle your claim.

The federal governmental agency issuing the contract is required to provide a copy of the payment bond upon the presentation of an affidavit stating you have not been paid for labor or materials furnished for the project.