Construction Work on Federally-Owned Projects

CONSTRUCTION WORK ON FEDERALLY-OWNED PROJECTS – Summary of Payment Remedy under the Miller Act

Miller Act Remedies. On federally-owned construction projects, Miller Act bonds are usually required to be filed with the Contracting department of the government. Procedures under the Miller Act require that the claimant who DOES NOT have a direct contract with the contractor who furnished the bond, give written notice to the prime contractor by certified or registered mail within ninety (90) days from the date that labor, materials or equipment were last furnished. The right to recover under the Miller Act is lost if the required notice is not given. It should be noted that other jurisdictions have expressly ruled that giving written notice “requires receipt of the notice by the contractor.” This means that the notice should be received by the contractor prior to the ninety days, regardless of whether it was sent by registered mail or not. This issue has not been ruled on in Colorado or in the 10th Circuit, but it is good practice to follow this rule. See, Pepper Burns Insulation, Inc. v. Artco Corp., 970 F.2d 1340, 1343 (C.A.4 (N.C.),1992); U.S. for Use and Ben. of B & R, Inc. v. Donald Lane Const., 19 F.Supp.2d 217, 226 (D.Del.,1998). Only those who have not contracted directly with the contractor providing the bond need give the Miller Act notice. Interest can also be recovered on the bond from the contractor and surety. U.S. for the Use of C.J.C., Inc. v. Western States Mechanical Contractors, Inc., 834 F.2d 1533 (10th Cir. 1987).

Parties who have a contract directly with the general contractor as well as subcontractors and suppliers who have given timely notice by certified or registered mail must commence suit on the Miller Act bond in Federal Court. The suit must be commenced within one (1) year after the date that labor, materials or equipment were last furnished.

Submitted by Jean C. Arnold, Esq.

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