Bond Claims
Public Projects Governed by the Little Miller Act (Georgia)
Essentially, all public projects require the contractor to obtain a payment bond for the benefit of subcontractors, material men and others who provide services, labor materials or equipment on a public construction project. Sometimes private sector owners require the contractor to have a payment bond on the private owner's project. (See O.C.G.A. 13-10-1 et seq., and O.C.G.A. 36-91-1 et seq.
Support for the Bond Claim
Request a copy of the payment bond by way of certified mail from the contractor and owner. A claim must be made on the bond. The subcontractor/material man should provide by certified letter a demand to the bonding company identifying the amount owed, specifically detailing the labor, equipment, material or services provided and a demand of payment. A similar letter should be sent to the owner notifying the public owner that payment is owed. If the claimant is a second tier subcontractor/material man, a certified letter should be sent to the general contractor identifying the subcontractor for which the labor, equipment, services, or material was provided, the amount owed and a demand for payment by the general contractor and its surety to the claimant.
Requirements
Subcontractors and material men with contracts with the general contractor must make their claim and bring suit on the bond within one year of completion of the public project.
Subcontractors and material men without a contract with the contractor (second tier subcontractors/material men must give written notice to the contractor within 90 days of last supplying labor, materials, equipment or service to the project. Failure to provide this notice eliminates the second tier's rights to claim against the payment bond.
The notice must provide the amount owed, identify specifically the labor, material, services or equipment provided and for whom the labor, material, services or equipment was provided and must state that the demand for payment is being made directly to the general contractor and its payment bond surety and payment is sought from them.
Georgia law suggests notice is from the time of receipt not mailing so do not wait until the last day to mail the written notice.
On public projects in the State of Georgia, the statute requires the general contractor to file a Notice of Commencement.
On Georgia public work projects, a subcontractor or supplier who does not have a direct contractual relationship with the general contractor must give notice within ninety days following the last supply of labor and give notice within ninety days following the last supply of labor and materials to the general contractor. This notice must be written and sent by certified or registered mail. The notice must state the party has not been paid and seeks payment from the general contractor as a claim on its payment bond, state the amount owed and state the name of the party that received the labor or materials. There is some suggestion that if a notice of commencement was filed by the general contractor and a notice to contractor correctly provided by the lower tier subcontractor or supplier that this post performance notice is not required. The better policy is always to send out this demand letter to the general contractor. You must submit your own notice letter and may not rely upon the claim of another to preserve your claim.
Under Georgia law, a broader base of suppliers and subcontractors are protected than under the Miller Act. The Georgia Little Miller Act protects subcontractors and suppliers to second tier subcontractors. The Federal Miller Act does not allow bond claims by these entities.
Notice of Commencement
If a notice of commencement was filed by the contractor then the second tier subcontractor/material suppliers must comply with the notice to contractor statutory requirements previously set forth in this outline. If the second tier subcontractor/material man properly responds to the notice of commencement with a notice to contractor, the 90-day notice is not required. It appears that on a public project that the notice to contractor need not be sent to the owner. However, the suggestion is that it be sent anyway.
The Miller Act (Federal projects)
The Miller Act compress the federal statutory provisions requiring contractors to provide payment bonds for the construction, alteration or repair of any public work of the United States. 40 U.S.C. Section 270a et seq. Only those parties have a direct contractual relationship with the general contractor or with a subcontractor who has a contract relation directly with the general contractor are protected by the Miller Act.
On Miller Act projects, those subcontractors and suppliers without a contract with the general contractor must provide by written notice sent by registered mail (the statute specifically states registered mail) a demand for payment to the general contractor. This notice and demand must state the amount owed, identify the party to whom the labor or material was provided and demand payment from the general contractor and its surety. A Miller Act claim must be brought within one year of your providing labor or material to the project.