In the world of construction, one of the fundamental ways that projects are classified is by project type. Generally speaking, all projects fall into one of two basic categories — a project is either PRIVATE (meaning the work is being done on privately-owned land or property) or PUBLIC (where the project is government-owned).
There are several subcategories within each of those broad segments. (For example, a private project can be commercial, residential, etc.) Typically, the requirements and deadlines are going to be different for each category and subcategory.
This post is going to take a look at the preliminary notice requirements on public projects.
Public Project Subcategories
But first, let’s take a closer look at “Public Projects.” There are two main subcategories for public construction projects:
FEDERAL projects which are “owned” by the federal government, and,
STATE projects which include projects that are “owned” at the state, county, or municipal level.
The Remedy for Payment Issues on Public Projects
For Federal Projects:
Generally speaking, the remedy for a payment issue on a Federal project is going to be a claim against a payment bond as mandated by the Miller Act.
Regarding notice requirements on federal projects, they are none. To repeat: there is NO preliminary notice requirement on a federal construction project.
If you experience a payment issue on a federal construction project, be sure to proceed with caution! Even though the Miller Act is available nationwide, utilizing it to remedy a payment issue isn’t always cut and dried. For more information on what to look for, read the following article:
For State Projects:
Each state has its own law that provides legal tools for construction industry participants to leverage when they encounter payment issues on state-owned (also county and municipal) construction projects. Collectively, these laws are known as the “Little Miller Acts,” and the remedy they provide is the ability to submit a claim against a payment bond if unpaid on a state-owned project.
Preliminary Notice Requirements for Public Projects
As we stated above, there is no preliminary notice requirement for anyone participating on a federal construction project. However, this is not the case with state projects.
In order to retain the right to submit a bond claim on a state-owned construction project, some states do require a project participant to send a preliminary notice prior to submitting a bond claim. Sending this notice is subject to its own set of requirements and deadlines which both vary from state to state.
This notice requirement is extremely important – if notice is required and it’s not sent, then your right to submit a bond claim may be forfeited, leaving you without access to one of the most powerful tools available to remedy payment issues.
And even if your state does not require a preliminary notice, at zlien we believe it is a best practice to send one anyway because it promotes transparency and a good working relationship.
We’ve got a quick 1-pg guide available that shows which shows which states require notice on public, state-owned projects and which don’t. Click on the button below to download your free copy.