Construction Law: Timing Your Bond Claim

As private construction projects remain scarce, many subcontractors are focusing on public work. While the government will certainly eventually pay its general contractor, delays are likely and you can expect the party with whom you contracted to drag its feet on payment as well. However, you should not let your bond rights slip in trusting that government money is headed downstream soon. Without access to the security provided by a bond, you are left to litigation against the contractor, who may continue to have cash flow or insolvency problems, to collect for the work you performed.

For both federal and state projects, there are specific statutory timeframes to give notice of a bond claim if you do not have a direct contractual relationship with the contractor supplying the bond. Under the Miller Act, 40 U.S.C. § 3131 et seq., and the Maryland Little Miller Act, Md. Code St. Fin. & Procurement Ann. § 17-103 et seq., you have 90 days from your last supply of labor or materials to give notice to the general contractor or upper tier subcontractor supplying the bond that you have not been paid and that you intend to file a bond claim. The Miller Act applies to federal projects over $100,000 and the Little Miller Act covers Maryland projects over $100,000 and some projects between $25,000 and $100,000. If you have a direct contract with the general contractor or a subcontractor supplying a bond, you need not give notice and may bring an action against the bond if you do not receive payment within 90 days.

Punch out and warranty work generally do not qualify as supplying or furnishing labor or materials to extend the time for filing a notice of bond claim. Therefore, you should choose someone on the project to identify and note the last date on which labor or materials is supplied to the project and set a reminder for several days less than 90 days out to check on payment progress and either prepare a notice of bond claim or contact counsel to prepare one for you. To see how the construction law attorneys at Bowie & Jensen can assist you, contact us by clicking here.