Preserving Miller Act Rights to Obtain Payment on Federal Construction Projects

Unlike private construction projects, construction professionals may not file or enforce mechanic’s lien rights on public construction projects. The Miller Act is a federal law designed to afford certain subcontractors and suppliers rights to obtain payment on a federal construction project when the prime contractor fails to pay them. The mechanism to recover payment is the prime contractor’s payment bond which is required on federal construction projects that exceed $100,000. The VA hospital in Aurora is an example of a federal construction project in the Denver area where subcontractors availed themselves of their Miller Act rights.

The Miller Act only provides remedies to certain subcontractors or suppliers depending on their position in the interrelated network of construction contracts. First-tier subcontractors and second-tier subcontractors and material suppliers may make a Miller Act claim. First-tier subcontractors and material suppliers are parties who have contracts directly with the prime contractor. Second-tier subcontractors and material suppliers are parties who have contracts directly with first-tier subcontractors. Lower tiered subcontractors and suppliers cannot assert a Miller Act Claim.

Miller Act Claims may be waived only in a writing signed by the party waiving its rights and only after the party waiving the right has provided labor or furnished material in the performance of the construction contract.

A Miller Act claim is governed by specific notice, timing and perfection requirements and if not followed strictly, can work to prevent a recovery and payment. However, when the requirements are met, the Miller Act can serve as an excellent method to obtain payment on a federal construction project. An experienced construction lawyer can assist in evaluating the validity and viability of a Miller Act Claim.

For more information, contact Miller Kabler, P.C.