Construction Law-Federal Projects

If you have a history of contracting on federal projects, then you are probably familiar with the Miller Act. Those looking to work on federal projects should familiarize themselves with the Miller Act.

Work performed on military bases, courthouses, parks, post offices and other federally-owned properties may be lucrative work but follow a different set of rules than North Carolina state projects.

Claims against federally owned projects and land are made under the Miller Act. Like state projects, federal projects involve the issuance of payment and performance bonds to protect owners, contractors, subcontractors and suppliers on the project.

Claimants cannot file liens on federally-owned projects. Instead, claimants must use the Miller Act to make a claim against the payment bond. Bonds are issued by the surety to pay the claims of valid claimants who furnish labor and/or materials to the project.

While the Miller Act and the North Carolina “Little Miller Act” are similar, the federal counterpart covers a smaller pool of claimants. Only those who furnish materials to the prime contractor and first-tier subcontractor are eligible to make claims.

Materials furnished to second-tier subcontractors or other suppliers are not valid claims under the Miller Act. The timing of the notice provisions also varies from the state version. Recent revisions to the North Carolina Act have further separated these two areas of the law.

The Miller Act can be a complex area of the law. Parties looking to enter into contracts on federal projects should gather the relevant information, including a copy of the bond, at the start of the contract.

Do not hesitate to contact an experienced law firm, like Kurtz Law, for advice on avoiding the pitfalls of contracting on federal projects. Claims under the Miller Act can be a very good source of protection for subcontractors and suppliers to federal projects.

As a result, parties should be extremely diligent about protecting their rights to make a claim under the Miller Act and providing all required notices.

 

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