Miller Act Bonds: Federal Bonding Requirements Explained

The Miller Act is the reason performance and payment bonds exist on virtually every public construction project in America. Originally passed in 1935, it ensures that taxpayers get completed projects and that the workers and suppliers on those projects get paid. This guide explains the federal law, the dollar thresholds, and how state versions extend it.

These are the bonds covered in construction bonds explained and payment vs. performance bond.

What the Miller Act Requires

For federal construction contracts over $150,000, the prime contractor must furnish:

• A performance bond protecting the federal government if the contractor fails to complete the work. Typically 100% of the contract value.
• A payment bond protecting subcontractors, laborers, and material suppliers. Usually 100% of the contract value.

For contracts between $35,000 and $150,000, the government requires payment protection but may accept alternatives to a payment bond (such as an irrevocable letter of credit). Below $35,000, bonds generally aren’t required.

Why Payment Bonds Matter on Federal Work

You can’t place a mechanic’s lien on federal property — sovereign immunity prevents it. Without the Miller Act, a subcontractor who didn’t get paid on a federal job would have no recourse. The payment bond solves this: unpaid subs and suppliers file a claim against the bond instead of placing a lien.

Little Miller Acts (State & Local)

Every state has enacted its own version of the Miller Act — commonly called a “Little Miller Act” — applying performance and payment bond requirements to state and municipal public works. They vary in:

• Dollar thresholds (some lower than the federal $150,000)
• Bond percentages (most require 100%, some less)
• Notice and claim deadlines (which differ from the federal rules)

Contractors bidding public work must check the specific Little Miller Act in their state, because the thresholds and deadlines can differ significantly from the federal law.

How to Meet Miller Act Requirements

1. 1. Get qualified for bonding. Establish a bonding line with a surety before bidding federal work.
2. 2. Submit a bid bond if required. Many federal solicitations require a bid guarantee.
3. 3. Furnish performance and payment bonds on award. Both at 100% of the contract value for contracts over $150,000.
4. 4. Maintain the bonds through completion. Including any required maintenance/warranty period.

See how to get a bid bond to start the qualifying process.

Cost of Miller Act Bonds

Miller Act performance and payment bonds are priced like any contract bond — about 3% of the contract value combined for qualified contractors, or 3–10% for hard-to-place contractors. For full pricing, see the surety bond cost guide.

Frequently Asked Questions

• What is the Miller Act?
  The Miller Act is a 1935 federal law requiring performance and payment bonds on federal construction contracts over $150,000. The performance bond protects the government from contractor default; the payment bond protects subcontractors and suppliers, who can’t lien federal property.
• What does the Miller Act require?
  For federal contracts over $150,000, the prime contractor must furnish a performance bond and a payment bond, both typically 100% of the contract value. For contracts between $35,000 and $150,000, payment protection is required but alternatives may be accepted. Under $35,000, bonds generally aren’t required.
• What is a Little Miller Act?
  A Little Miller Act is a state-level version of the federal Miller Act, requiring performance and payment bonds on state and municipal public works projects. Every state has one, but thresholds, bond percentages, and claim deadlines vary from the federal law and from state to state.
• Why are payment bonds required on federal projects?
  Because you can’t place a mechanic’s lien on federal property due to sovereign immunity. Without a payment bond, unpaid subcontractors and suppliers on federal jobs would have no recourse. The payment bond gives them a way to recover unpaid amounts by filing a bond claim.
• What is the Miller Act 90-day notice rule?
  Subcontractors and suppliers generally must give notice of a Miller Act payment bond claim within 90 days of last furnishing labor or materials, and file suit within one year. Missing these deadlines can forfeit the claim, so tracking them is critical on federal projects.
• What is the dollar threshold for Miller Act bonds?
  Performance and payment bonds are required on federal construction contracts over $150,000. Between $35,000 and $150,000, payment protection is required but the agency may accept alternatives to a bond. Below $35,000, bonds are generally not required.
• How much do Miller Act bonds cost?
  They’re priced like other contract bonds: 3% of the contract value combined (performance + payment) for qualified contractors, or 3–10% for hard-to-place contractors. The bonds are usually 100% of the contract value, but you pay only the premium percentage.
• Do state projects follow the Miller Act?
  Federal projects follow the Miller Act. State and municipal projects follow that state’s Little Miller Act, which imposes similar performance and payment bond requirements but with its own thresholds and deadlines. Always check the specific state law for public work.

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