Federal Lien Law Summary

Prepared by:
Levy · von Beck & Associates, P.S.
600 University Street, Suite 3300
Seattle, WA 98101 (206) 626-5444
www.levy-law.com

The information contained in this document is an interpretive summary of the private and public works construction lien statutes and is subject to change without notice. Levy · von Beck & Associates, P.S. strongly recommends that the user seek legal counsel before relying on this document to confirm that the information is current and accurate. This document is provided as a courtesy and, as such, Levy · von Beck & Associates, P.S. accepts no liability in connection with reliance thereon or any loss sustained by anyone using or relying on the information contained herein. The intended use of this document is to provide a framework for understanding and dealing with the construction lien statutes.

	Miller Act, 40 USC §3131 et seq.
	(As of 11/05)

QUESTIONS	REQUIREMENTS AND CITATIONS

What work is covered?	Al l projects in excess of $100,000, for the construction, alteration or repair of
	any public building or public work of the United States. NOTE that where the
	public body waives the bond requirement, there is no basis for a Miller Act
	claim. NOTE ALSO that claims against Postal Service may be preempted by
	the Contract Disputes Act, and there may not be any Miller Act claims allowed
	in contracts for the Postal Service, so it is best to check for a bond at the outset.
	NOTE that a New York case has interpreted the Miller Act as supporting
	payment bond coverage for wages and benefits of union workers for the time
	spent on strike after their paychecks bounced. [40 USC §3131; Cushman at
	§1.01; Felix Rivera de Leon v. Maxon Eng’g Services, Inc., 283 F. Supp. 2d
	550 (2003); Tradesman International, Inc. v. United States Postal Service and
	Lockheed Martin Corp., 234 F. Supp. 2d 1191 (2002); Morin v. Empiyah &
	Co., LLC, 389 F.Supp. 2d 506 (S.D.N.Y. 2005)]

Who may make a claim?

Subcontractors to the prime contractor, suppliers of labor or material to the prime contractor, and sub-subcontractors and suppliers of labor or materials to first-tier subcontractors. Suppliers to suppliers are not covered. NOTE that where the public body waives the bond requirement, no one can bring a Miller Act claim. NOTE ALSO that where a subcontractor provides on-site project management, supervision, and administrative and oversight services to the government contractor, this work will NOT be covered under a payment bond as labor; according to the court, where the work involves clerical or administrative tasks which do not involve physical toil or manual work, it is not covered by the payment bond. NOTE ALSO that where subcontractor is an insider or alter ego of the general contractor, it will not be entitled to recover from the payment bond. [40 USC §3131; Cushman at §1.01; Felix Rivera de Leon v. Maxon Eng’g Services, Inc., 283 F. Supp. 2d 550 (2003)] [40 USC §3131; Cushman at §§1.03, 1.04, 1.04[B]; U.S. ex rel. Constructors, Inc. v. Gulf Ins. Co., 313 F.Supp.2d 593 (E.D.Va. 2004); U.S. ex rel. Johnson Pugh Mechanical, Inc. v. Landmark Const. Corp., 318 F.Supp.2d 1057 (D.Colo. 2004)]

What is the claim against?	The prime contractor’s payment bond. [40 USC §3133(b); Cushman at §1.01]

Who must give final	All claimants contracting with or supplying to the subcontractor but not the
notice?	prime contractor. [40 USC §3133(b); Cushman at §1.06[A]]

To whom is final notice	Prime contractor. [40 USC §3133(b); Cushman at §1.06[A]]
given?

When must final notice be given?

Within 90 days of claimant’s last delivery to or work on the project. To be safe, notice should be received within 90 days of claimant’s last day. If there is more than 90 days between deliveries, and the deliveries are not clearly part of the same contract, send the notice within 90 days of each delivery. [40 USC §3133(b); Cushman at §1.06[C]; U. S. for Use of General Elec. Co. v. H. I. Lewis Const. Co., 375 F.2d 194 (C.A.2 (Vt.) 1967).]

Contents of final notice?	-Amount claimed
	-Name of the party to whom the material or labor were provided.
	-Statement that the claimant is looking to the prime contractor for payment.
	Per case law, the notice does not need to be signed by the claimant. [40 USC
	§3133(b); Cushman at §1.06[B]; Houston Fire & Cas. Ins. Co. v. U.S. for Use
	and Benefit of Trane Co., 217 F.2d 727 (C.A.5 (Tex.) 1954); U. S. for Use of A.
	& J. Friedman Supply Co. v. M. S. I. Corp., 246 F.Supp. 337 (D.C.N.J.1965)]

How is final notice given?	Any means that provides written, third-party verification of delivery; no longer
	limited to registered or certified mail. Recommend sending it by regular mail
	as well. May also serve in any manner in which the United States marshal of
	the district in which the public improvement is situated by law may serve
	summons. [40 USC §3133(b); Cushman at §1.06[B]]

Time to start suit?	More than 90 days but less than one year after the last day on which the
	claimant provided labor or materials to the project. NOTE that this time period
	begins to run from the time subcontractor claimant last provides labor or
	materials, not the time the subcontractor’s replacement subcontractor last
	delivers labor or materials. [40 USC §3133(b); Cushman at §1.07; GE Supply
	v. C & G Enterprises, Inc., 212 F.3d 14 (C.A.1 [Puerto Rico] 2000; Safe
	Environment of America, Inc. v. Employers Ins. of Wausau, 278 F.Supp.2d 121
	(D.Mass. 2003)]

Are attorney’s fees	Probably not, though they have been allowed where the claimant’s contract
allowed?	specifically provides for attorney’s fees, where the opposing party acts in bad
	faith, and in a recent case in the 5th circuit, because of Texas laws allowing
	attorney’s fees. They will also be allowed if the bond itself provides for them.
	[Cushman at §1.05[F]; North Star Terminal & Stevedore Co. ex rel. v. Nugget
	Const. Inc., 126 Fed.Appx. 348, 2005 WL 487313, Unreported]

Can the claim be waived?	Yes, but only if the waiver is in writing, signed by the person whose right is
	waived, and executed after the claimant has furnished labor or material for use

	in the performance of the contract. [40 USC §3133(c)]

Is interest allowed?	Prejudgment interest is allowed where it is reasonably ascertainable, or where
	the claimant’s contract provides for it, or where state law allows it. [U.S. ex
	rel. Metric Elec., Inc. v. Enviroserve, Inc., 301 F.Supp.2d 56 (D.Mass. 2003);
	Cushman at §1.05[F]] A claimant is not allowed to recover overhead or profit
	for work that was not performed, however. [U.S. ex rel. Metric Elec., Inc. v.
	Enviroserve, Inc., 301 F.Supp.2d 56 (D.Mass. 2003)]

Special Notes	Note that a subcontractor may be allowed to recover delay costs against a
	Miller Act surety, at least when the government or the contractor is responsible
	for the delay. [Consolidated Elec. & Mech., Inc. v. Biggs Gen. Contracting,
	Inc., 167 F.3d 432 (8th Cir. 1999); Lighting & Power Services, Inc. v. Wayne
	M. Roberts, 354 F.3d 817 (8th Cir. 2003)]
	“Pay when paid” or “pay if paid” clauses are generally not valid defenses to a
	valid Miller Act lawsuit and generally are not enforced. [U.S. ex rel. Walton
	Technology, Inc. v. Weststar Engineering, Inc., 290 F.3d 1199 (9th Cir. 2002);
	Moore Brothers Co. v. Brown & Root Inc., 207 F.3d 717 (4th Cir. 2000)]

The information contained in this document is an interpretive summary of the federal Miller Act statutes and is subject to change without notice. Levy · von Beck & Associates, P.S. strongly recommends that the user seek legal counsel before relying on this document to confirm that the information is current and accurate. This document is provided as a courtesy and, as such, Levy · von Beck & Associates, P.S. accepts no liability in connection with reliance thereon or any loss sustained by anyone using or relying on the information contained herein. The intended use of this document is to provide a framework for understanding and dealing with the construction lien statutes.