Miller Act May Be Reformed

Kegler Brown Construction Newsletter

The Miller Act requires payment bonds on sizable Federal Government projects to ensure that subcontractors and suppliers are paid even in the event there is a financial default by the prime contractor. This important Act has not been revised for decades. However, House Resolution 1219, The Construction Industry Payment Protection Act of 1999, is currently moving through the U.S. House of Representatives. This legislation introduced by Representative Carolyn Maloney of New York would amend the Miller Act to help subcontractors and suppliers by: 1) requiringthe payment bond to equal the contract price; 2) prohibiting the waiver of rights under a payment bond; and 3) allowing notice to a prime contractor by any method that provides sufficient proof of receipt.

This legislation is a result of negotiations between key groups in the construction industry and appears to have the consensus support of the industry, including ASA, AGC, ASC, and the surety industry.