Can company JKL put a claim or lien on a bond for payment on a government job, if the bond was taken out by principal company?

Asked over 1 year ago - Sanford, FL

Government Job XYZ hired company ABC (the principal on the Payment bond) which hired General Contractor DEF (the obligee on payment bond) in which hired subcontractors GHI and JKL. Can subcontractor JKL put a claim or lien on the bond that is taken out by company ABC (Principal) to insure payment? If yes how can JKL enter the claim?

Attorney answers (2)

  1. Donald A. Niesen

    Contributor Level 11

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    Answered . Subcontractor JKL can make a claim on the payment bond, if it does it correctly and takes all the proper legal steps, sometimes called "conditions precedent", so as to preserve their claim and file their claim in the proper way. On government owned jobs, a payment bond is normally required as part of the GC's contract with the public owner. You facts suggest subcontractor JKL may even be a "sub-sub-contractor", but that is still a proper claimant under the payment bond laws.
    How can JKL make their claim? It depends. Is the public owner part of the Federal government or part of the State government? The type of owner dictates which law controls. For state projects, the procedures are found in Fla. Stat. 255.05. For a Federal project, they are in the "Miller Act", part of the Federal Statutes. JKL needs to find a construction lawyer who is familiar with these laws and can advise them on how to make their claim. I do not suggest contractors try to make their bond claims without a lawyer. It is too complicated and has too many places where a non-lawyer can easily mess it up.

  2. Howard A Wolf-Rodda

    Contributor Level 4

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    Answered . I agree with the response of Mr. Niesen - the ability and manner of submitting a claim on a payment bond for a public project requires the review of the bond and the laws that relate to the bond in question. In addition, it is crucial that you act quickly to protect your rights because notice periods, if applicable, can be quite short - particularly for lower tier subcontractors. Bear in mind also, your claim does not end with providing proper notice. This may sound obvious, but you must actually be entitled to payment. For example, if the failure to pay arises because the bond principal claims you shouldn't be paid, the surety may assert any defenses to payment that the defaulting principal could assert. All of this depends on the circumstances in a specific case. So, hiring an attorney to assist you in your individual situation could be well worth the expense - particularly if the amounts owed are significant.

    This response to the posted question is provided for general informational purposes only. None of this information... more

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