The federal law that governs bonding on public projects has been the foundation of government contracting since 1935. Here's what it means for you — and how to position your company to compete.
If you're pursuing federal construction contracts in Georgia — or working as a sub on them — the Miller Act governs the bonding requirements that determine whether you can bid at all. Understanding it isn't optional. It's the price of entry for serious government work.
Enacted in 1935, the Miller Act requires prime contractors on federal construction projects exceeding $150,000 to obtain both a performance bond and a payment bond before work begins. These bonds protect the federal government and the workers, subcontractors, and suppliers involved in the project.
The law replaced earlier legislation and established the foundation of federal surety requirements that still govern public construction today. Nearly every state — including Georgia — has adopted similar legislation for state and local projects, often called "Little Miller Acts."
The Miller Act applies to federal construction, alteration, or repair contracts exceeding $150,000. For contracts between $35,000 and $150,000, only a payment bond is typically required. Below $35,000, no bonds are required — though agencies may still request them.
A bid bond accompanies your proposal and guarantees that if you're awarded the contract, you'll honor your bid price and provide the required performance and payment bonds. If you win and then fail to follow through, the surety compensates the government for the cost difference between your bid and the next lowest bidder.
Bid bonds are typically issued for 5–10% of the contract amount. They're usually fast to obtain if you have an established bond program — which is one reason having a bond program in place before bid season matters so much.
Once awarded the contract, your bid bond is replaced by a performance bond. This guarantees you'll complete the project according to the contract terms — on time, on spec, and to the required standard. If you default, the surety steps in to either finance your completion or hire another contractor, up to the bond's penal sum (typically 100% of the contract value).
For the surety, this is significant exposure. That's why underwriting is thorough — and why contractors who have invested in their financial presentation earn better terms.
The payment bond protects subcontractors, suppliers, and laborers. On public projects, these parties typically cannot file mechanics liens against government property — the payment bond is their protection. If you fail to pay your subs or material suppliers, they can make a claim against your payment bond.
If you're a sub on a federal project and you haven't been paid, the Miller Act gives you a right of action against the general contractor's payment bond. You must provide written notice to the GC within 90 days of your last furnishing of labor or materials — and file suit within one year. Missing these windows forfeits your rights. Know your deadlines.
Georgia's version of the Miller Act applies to state and local public works contracts. The thresholds and specific requirements differ from the federal law, but the fundamental framework — bid, performance, and payment bonds — is the same.
Most Georgia municipalities and counties have adopted similar requirements for their own procurement. If you're pursuing city of Statesboro, Bulloch County, or any other local government work, expect bond requirements on most contracts above a certain dollar threshold.
You can't bid what you can't bond. If your current single-project limit is $2 million and you want to go after a $4 million road project, you're locked out until you grow your program. This is why building bonding capacity is a proactive strategy, not a reactive one.
Government bid windows can be tight. If you have to start the bonding process from scratch each time you want to bid, you'll miss opportunities. A pre-established bond program with approved limits means bid bonds can be issued in hours, not days.
Two contractors with identical revenues can have dramatically different bonding capacity based on how their financials are structured and presented. CPA-prepared accrual statements, a clean WIP schedule, and strong working capital tell a very different story to an underwriter than compiled cash-basis financials.
| Contract Size | Bonds Required | Notes |
|---|---|---|
| Under $35,000 | None required | Agency may still request bonds |
| $35,000 – $150,000 | Payment bond only | Bid and performance at agency discretion |
| Over $150,000 | Bid + Performance + Payment | Full Miller Act compliance required |
| Over $9M (SBA limit) | Same, but SBA guarantee not available | Must qualify directly with surety |
If you're a smaller contractor building toward Miller Act-eligible projects, the SBA Surety Bond Guarantee Program can provide a path to bonding that commercial sureties might not yet offer independently. The SBA guarantees individual contracts up to $9 million, and up to $14 million for federal contracts when certified by the contracting officer.
This program exists specifically for businesses building their track record. It's worth understanding before you need it — not after you've already been declined.
Federal contracting has specific compliance requirements, tighter underwriting standards, and deadlines that don't move. Working with a bond agent who understands the Miller Act framework — and who has established relationships with surety underwriters experienced in government work — gives you an edge that a generalist agent simply can't provide.
At GA Risk Advisors, we specialize in contractor bonding across Georgia. We understand what federal and state underwriters are looking for, and we help you present your business in the strongest possible light.
Our team works exclusively with Georgia contractors. We'll review your current program and show you exactly where the opportunity is.
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