Long Answer: I’ve had a number of folks contact me in the past week or so inquiring as to whether they could file a lien against a federal or state project. While some companies have been doing state and federal works for years and know the claim procedures inside and out, the state of our economy has forced some outfits to experiment with federal and state projects for the first time.  I find that these companies know a good deal about mechanic lien laws as they relate to private projects, but are just uncertain how to file a similar claim on a public work.

By the way, if you’re not sure about whether a project is a state, federal or private project, check out this post:  The Difference Between Public and Private Projects. The Reader’s Digest version of this post however is this: look to who owns the property.  If the property is owned by the state, it’s a state project.  If it’s owned by a private company or person (including non-profits, churches and private schools), then it’s a private project.

If you’re unpaid for labor or materials furnished to a private project, your remedy is to file a mechanics lien against that project. As I posted about in a previous FAQ article, a mechanic lien is filed against the actual property where work or materials were furnished.  It creates a security interest of sorts – similar to a mortgage – in the property itself, and if you remain unpaid, and you file a lawsuit to enforce the lien, the courts may actually order the property sold to pay your debt.

Obviously, if on a state or federal project working on state or federal land, the State or US Government is not going to allow contractors or suppliers to obtain an interest in their land. Therefore, while there are remedies available to you on these projects, the remedy is not exactly like the private mechanics lien.  You’ll never get a piece of the property as compensation for your work.

To accommodate this protection of state and federal land, there are laws that require most state and federal projects to have a payment bond issued.  A payment bond is issued by a surety company and guarantees payment of all subcontractors, suppliers and professionals. A surety company is like an insurance company, and the bond itself acts like an insurance policy for payment of the laborers and materialmen.

So, if you’re unpaid on the project, rather than file a lien against the property itself, on state and federal projects you would file a lien against the payment bond.

While this sounds less secure, it is actually more secure.  A physical property can be over mortgaged, and there are all types of lien priority issues to determine whose claim ranks above the others. Payment bonds have no such problems.  If you timely make your claim, you’ll get paid, and surety bond companies are very,very rarely over leveraged.

These claims against the bond are called “bond claims,” “miller act claims,” and “little miller act claims.”  They are just as frequently referred to as simply state liens or federal liens.

Just like mechanic lien claims, filing a state or federal lien or bond claim is hyper-technical.  You must follow strict deadlines to file the claim, and in many instances, you’re required to deliver a preliminary notice at the start of your job.  The claim itself must contain certain data about your work and the project, and it must be delivered to certain parties in a certain way (i.e. certified mail, registered mail, restricted mail delivery, etc.).  Some states require state liens to be filed with the recorder, while other states don’t require an actual filing with the recorder, and only require filing with the agency commissioning work.

Zlien files state and federal bond and lien claims all across the country, and our LienPilot also manages the lien and notice deadlines and requirements for state and federal projects.  Want to learn more?  Comment below and I’ll be glad to answer any questions.

Instead, potential claimants must understand a completely different set of statutory requirements. If on a federal project, they will look to the “Miller Act.”  If on a state project, they will look to a “Little Miller Act.”

As a resource, Zlien has published a compilation of Little Miller Acts across the nation. The compilation is very easy to navigate, and once viewing a particular state, you are provided a table of contents for that state’s laws and the full text of the statute.

View it Here:  http://www.zlien.com/miller-acts/

What Is A Little Miller Act?

On state and federal projects across the entire United States, prime contractors are required to post bonds guarantying the performance of their contractual duties and/or the payment of their subcontractors and materials suppliers. If unpaid on these projects, the supplier or subcontractor can file a “lien” or “bond claim” against the bond. On federal projects, these bond requirements and claims are governed by the federal Miller Act. Each state has a “Little Miller Act,” which is a state statute based on the federal Miller Act.

Filing A Claim On A State or Federal Project

Now that you have easy access to the statutes, you may still be wondering just how you go about filing a claim against a federal or state project.  As we’ve explained in previous posts, the claim experience is quite different than on a private project.  Instead of actually liening the property, the claimant is making a claim against a project’s bond.

Here are some posts that explain these differences:

- Got A Public Project? Be Sure To Preserve Your Rights To Payment

- Is My Project Private, Federal, State…Or Something Different?

- The Difference Between Public and Private Projects

And remember that Zlien files bond claims on federal and state projects across the United States. For one low flat fee, you provide simple project information and we do all the leg work.  Click here to go through our Wizard and order now.

The good news about the Miller Act’s requirements is that they are the same across the country.   As such, contractors on federal projects need only be familiar with one set of rules.   The bad news, however, is that the requirements are often misstated.

To make things easy, we created this chart.

]]> http://constructionlienblog.com/2010/02/chart-explaining-miller-act-claim-rights-and-deadlines/feed/ 3 http://constructionlienblog.com/2010/01/dont-know-who-bonded-a-state-or-federal-project-just-ask/ http://constructionlienblog.com/2010/01/dont-know-who-bonded-a-state-or-federal-project-just-ask/#comments Tue, 12 Jan 2010 08:30:21 +0000 Scott Wolfe Jr http://constructionlienblog.com/?p=1113 In nearly every circumstance, a general contractor on a federal or state project is required to maintain a bond for the work being performed.   These bonds protect the payment rights of subcontractors, sub-subcontractors and suppliers.    In the event any of these parties are not paid on the project, the unpaid party can typically file a claim against the surety who bonds the project as per the Miller Act or a state’s Little Miller Act.  (Read this great article from Construction Business Owner about bonds, generally).

Claims against sureties are beneficial because:  (1) It can reduce the prevalence of personality conflicts between the unpaid party and the general contractor; and (2) It is a guarantee that at the end of a proceeding, money will be there.

However, you can’t make a claim against a surety if you don’t know who the surety is.   And if you’re not on the best of a terms with a general contractor, you may fear that it won’t reveal the surety to you.

So, this begs the question:  how on earth do you discover the identity of a surety?

The answer is quite simple:  Just ask.  That’s right, just ask for it.

Who To Ask?

Under the Miller Act and most Little Miller Act statutes, the public agency in charge of the project is required to (and quite used to) disclose the identity of the surety to anyone who asks for it.

Using Google, you can generally always find the governing authority.   A governing authority will typically manage its contracts through:

(a) public works department;
(b) new construction department;
(c) purchasing department;
(d) capital projects department; or
(e) facilities department

Most of these governing authorities (almost all) will have a website that gives you some information about their public contracts.   Figuring out which department is in charge of the contract is generally a toss up, so you will likely need to navigate around government websites to find the best possible contact.

How to Ask

As I stated above, agencies are required to disclose the surety on the job….actually getting it, just depends on how difficult the agency will make it for you.

If a governing authority has a website, you will generally be able to find out at least a little bit of information about their projects. If the project is relatively new, they might still have bid postings, pictures, articles and reports posted.

Giving the agency a phone call will usually do the trick, but if you run into trouble, just send a certified letter making the request.  You can even have Zlien send this notice / request for you.   We’ll even figure out who to contact, saving your company valuable time and energy.

The result has meant tons of public work for contractors, who benefit both from Davis-Bacon wages and bonded work, which virtually ensures payment!

Zlien has taken the time to ensure that its clients know the basics of filing and preserving lien rights on the public job. A recent article describes your rights under the Miller Act, a federal series of laws which govern contracts for construction over the amount of $100,000.00.

But, did you also know that each state has what is called a “Little Miller Act.” These collections of laws mirror the purpose and structure of the Miller Act, namely providing rules for payment, security and claims on the public project.

For instance, did you know that every state or locally managed construction contract issued in Louisiana for a total of no less than $100,000.00, requires a performance and payment bond and demands that you file a sworn statement of your unpaid claim within 45 days of completion? (See La. R.S. 38:2241, et seq.) We’ve have reported on this before.

How about the great state of Washington (our home), which requires that a contractor provide 60 day notice of its right to a lien against a public contract’s retainage? (RCW 60.28, et seq.) Failing to timely file could result in forfeiture to timely payment, and your right to proceed in an action against the contractor’s bond.

Its important that contractors understand that it takes more than simple contractual compliance to ensure payment. Having a qualified lien management company on hand makes it all that much easier to feel secured on the jobsite!

Zlien’s $395 flat fee services includes tracking down and obtaining copies of the prime contractor’s bond, noticing the surety and prime contractor, and filing with the appropriate state or federal agency, your claim. Remember that our services also include all mailing and delivery confirmation.

Also, remember that in many cases, suppliers, second-tier subcontractors, and equipment lessors, may be required to issue preliminary notices of the materials they sell or lease, or the work that they will perform on a public project. Zlien’s $35 flat fee notices can save you!

Using Zlien’s Lien Pilot, you could greatly benefit from tracking deadlines and lien obligations. Please be sure to check out Lien Pilot and keep up with ConstructionLienBlog.com, for more information on how to protect your business.

On jobs when the federal government owns the property itself, there is no legal right to lien it.   Instead, unpaid contractors or suppliers must turn to 40 U.S.C. § 3131; commonly referred to as The Miller Act.

Under the Miller Act, before any contract of more than $100,000 is awarded on a federal building or work, the prime contractor must post a bond to protect those supplying labor and/or materials to the project.  The bond is always there to protect qualifying subcontractors and suppliers from non-payment.

Here are five things you should know about the Miller Act:

• Prime Contractors: If you are the prime contractor, you cannot bring a claim under the Miller Act.   Instead, you have a contract claim against the government, and must bring a lawsuit against it.   The Miller Act deadlines are not applicable, and you should consult with an attorney to discuss your claim.

• First Tier Subcontractors and Material Suppliers: If you contracted with the prime contractor to provide labor and/or materials, you can sue the surety on the Miller Act Bond.   Suit must be brought within 1 year from the last date you provided materials or services.   A Miller Act Notice may be provided to the Owner and/or Surety.

• Second Tier Subcontractors and Material Suppliers to First Tier Subcontractors: If you contracted with a first tier subcontractor, within 90 days from the last furnishing of labor and/or materials, you must deliver a Miller Act Notice to the prime contractor.   The law has specific requirements for what must be contained in the notice, and how it must be sent.   You need not deliver it to the surety, but it may be a good idea.   Suit on the bond must be brought within 1 year from the last date you provided materials and/or services.

• Third Tier Subcontractors and Suppliers to Suppliers:   If you contracted with a second tier subcontractor, or if you are a supplier to a supplier, you do not have any rights under the Miller Act.  Instead, you must simply seek payment from the party they contracted with.

• If you aren’t paid on a project, you have a right to see the bond and the contract.   Send an affidavit to to the contracting agency confirming that you both supplied labor and/or materials to the project, and have not been paid.

How Zlien Can Help

• Unsure if your project qualifies as a Miller Act Project?
• Confused about how to actually deliver the notice?
• Not sure who is the contracting agency for your federal project?

Zlien is experienced in preparing and delivering Miller Act Notices on behalf of unpaid contractors and/or suppliers to qualifying federal projects.   We can research your project, find the relevant parties, and help protect your right to files suit on the Miller Act.

Zlien charges $295.00 to research the project, prepare the Miller Act Notice, deliver it according to statute, prepare a proof of delivery, and maintain all the required documents for you in our industry-leading Lien Pilot.

If you’re interested in simply getting a copy of the bond and the contract, Zlien will prepare and send the required request to the contracting agency for just $95.00.

Get Started Now!