Government Construction Contracting Part #3 – The Miller Act – Rights of Sub-Subcontracting Entities on Federal Public Projects

By James M. Gonzalez March 10, 2022 Posted in Construction Law Share

In the previous segment, we discussed rights of a person or entity that contracted directly with the prime contractor on government project (i.e. a subcontractor). Contractors that have provided labor or materials on a federal project that is bonded pursuant to 40 U.S.C. 3131 (i.e. is a public building or works project in excess of $100,000.00) but are not in contractual privity with the prime contractor (i.e. sub-subcontractors) also have protections under the Miller Act. In this Miller Act segment, we will dive into the rights and protections afforded to sub-subcontractors under the Miller Act.

 

Under the Miller Act, persons having a direct contract with a subcontractor, but no direct contract with the prime contractor that furnished the payment bond (i.e. the sub-subcontractor or a material supplier to the subcontractor), may bring a civil action on the payment bond by giving written notice to the prime contractor that furnished the payment bond as follows:

1. Give written notice within 90 days from the date on which the sub-subcontractor did or performed the last of the labor or furnished or supplied the last of the material for which the claim is made.
   1. Notice can be completed in any way that provides written, third-party verification of delivery to the prime contractorat any place the prime contractor maintains an office or conducts business or at the contractor’s residence; or
   2. in any manner in which the United States marshal of the district in which the public improvement is situated by law may serve summons.

40 U.S.C. 3133(b)(2).

However, it is imperative that a sub-subcontractor (performing work under a contract with a subcontractor) bring a civil action no later than one year from the last day it performed labor or supplied materials for the subject federal works or building project. Failure to do so will bar the subcontractor or sub-subcontractor from such a claim. 40 U.S.C. 3133(b)(4).

Lastly, the aforementioned civil action must be brought in the name of the United States and in the U.S. District Court where the contract was to be performed. 40 U.S.C. 3133(b)(3).

In this blog, we discussed protections afforded to sub-subcontractors under the Miller Act. Given their importance, the following is a recap of the timelines for sub-subcontractors seeking recovery via civil action under a prime contractor’s payment bond:

Sub-Subcontractors:

1. Must provide written notice to the prime contractor within 90 days from final furnishing of labor or materials; and then
2. File a civil action after 90 days but before 1 year from final furnishing of labor or materials.

Be sure to check back for our final Miller Act segment. In it, we will dive into government public works and building projects taking place at the state level. Navigating the “who” and the “when” under the Miller Act can be complex. For more information on bonded federal government projects and how to properly protect your interest in such projects, do not hesitate to contact us via the link below.

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