Miller Act

The Miller Act (ch. 642, Sec. 1-3, 49 stat. 793,794, codified as amended in Title 40 of the United States Code) requires prime contractors on some government construction contracts to post bonds guaranteeing both the performance of their contractual duties and the payment of their subcontractors and material suppliers.

The Act was originally enacted as the Heard Act in 1894. That act established a single performance and payment bond that "did afford some protection to... unpaid subcontractors and materialmen, but it was fraught with substantive and procedural limitations," and it was superseded by the Miller Act of 1935.

The Miller Act addresses two concerns that would otherwise exist in the performance of federal government construction projects:

The Miller Act applies to contracts awarded for the construction, alteration, or repair of any public building or public work of the United States Federal government. While the Act provides that the bonds must be posted on contracts exceeding $100,000, Federal Acquisition Regulation (FAR) Part 28 requires the bonds only on contracts that exceed $150,000.

The Act requires the Federal Acquisition Regulations to establish alternative payment protections for contracts in excess of $30,000 but not exceeding $150,000, with the contract-specific protection to be determined by the contracting officer. While the Miller Act applies only to federal contracts, state legislatures throughout the United States have enacted "Little Miller Acts" that establish similar requirements for state contracts.

Once contract is awarded, the contractor must furnish the government a performance bond issued by a surety satisfactory to the officer awarding the contract, in an amount the contracting officer considers adequate, for the protection of the Government.

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