Similar to State-owned property, Federally-owned property are prohibited from being subject to mechanic’s liens from subcontractors and/or material suppliers. However, similar to state-owned property, federally-owned property may be subject to bond claims from subcontractors and/or material suppliers. The process for enforcing subcontractor and/or material suppliers bond claims on federal construction projects is governed by the Miller Act (40 U.S.C. §§ 3131-3134). The Miller Act requires that prime contractors for the construction, alteration, or repair of Federal buildings furnish a payment bond for contracts in excess of $100,000. The payment bond is required as security for the protection of those supplying labor and/or materials in the construction of federal public buildings. Failure by a contractor to pay material suppliers and/or subcontractors gives such suppliers and subcontractors the right to file suit against the contractor in U.S. District Court in the name of the United States.
First tier subcontractors and suppliers may bring a civil action in U.S. District Court for the amount unpaid at the time the action is brought on the payment bond provided by the prime contractor. The case may be filed 90 days after, but no later than one year after, the last labor was furnished or materials supplied. First tier subcontractors and suppliers do not need to provide any notice to the prime contractor prior to filing such a suit.
When a lawsuit is filed by first tier subcontractors in U.S. District Court for the amount owed them, their second tier subcontractors and the second tier subcontractor’s suppliers may also bring a lawsuit for the amount owed them on the payment bond provided by the prime contractor. However, prior to bringing an action in U. S. District Court, a second tier subcontractor or their supplier must provide written notice to the prime contractor of its claim within 90 days from the date when the last labor was furnished or materials supplied. After providing notice, a second tier subcontractor or supplier may file a suit no later than one year after, the last labor was furnished or materials supplied.
The Miller Act does not provide protection for any other tiers of subcontractors or material suppliers outside of the above-mentioned tiers.