Since the school projects throughout Georgia are finishing up, we are noticing that some of our clients who furnished labor or materials on Georgia public school projects are calling us to say that they are not being paid. Fortunately for them, there is usually a payment bond covering the school project which helps guarantee that they will get paid. These payment bond statutes are generally found in the O.C.G.A. Section 36-91-90 et seq. and are commonly referred to as Georgia’s Miller Act or Georgia’s Little Miller Act (the Miller Act is the federal government’s version of a similar statute covering federal public works projects in Georgia as well as throughout the entire country.)
Many times, it appears as though our clients are promised payments and our clients feel confident that–if they are patient enough–payment will be forthcoming. Perhaps, for example, the whole project has been “slow pay” or the municipal authority in charge of the project is withholding final payment to the general contractor for some reason unrelated to our client.
Although we hope that our clients are correct and patience will result in payment, it is vital that they make a timely payment bond claim in order to “guarantee” payment. Some clients are concerned about the legal costs associated with making a payment bond claim and enforcing a payment bond claim in Georgia. There are multiple strategies which the Cobb Law Group regularly employs when working with public works collection matters.
And, if the project has been “slow pay” project and the client reasonably believes payment will eventually be made, then we advocate (i) making a timely payment bond claim (which is a relatively simple and cost-effective procedure), and (ii) then advising the surety that, although our client’s rights pursuant to the payment bond have been preserved, we request ample time to allow our client and the obligee opportunity to amicably resolve the matter.
Thus, a specialty subcontractor or supplier has (i) met its minimum obligations under the terms of the payment bond, (ii) has not incurred excessive legal fees, and (iii) has maintained the right to pursue its remedies under the payment bond if necessary.
Regardless, a claimant cannot let any deadline slip away; thus, it is important to review some of the essential deadlines on making timely claims on payment bonds on Georgia public works projects:
Deadline Number 1: If you were a third tier supplier or subcontractor working for any one other than the project’s general contractor or the municipal authority, then you may have had to send a Notice to Owner and a Notice to Contractor within the first 30 days that you began working or supplying to the project.
Deadline Number 2: If did not receive payment in full, then you must make a claim against a Georgia Public Works project within 90 days of the last day in which you were physically on the job or furnished materials to the jobsite.
Deadline Number 3: Generally speaking a payment bond claimant must bring an action against the bond (a civil lawsuit) within one year from the completion of the contract and the acceptance of the public building or public works by the proper public authorities.
If you have provided services, labor or materials on a Georgia public school project (or any federal, state or municipal project) and have not received payment in full, please contact us to discuss your rights under Georgia’s Little Miller Act (or any other construction law or business law matter you may have!)
This is a general information article and should not be construed as legal advice or a legal opinion. The content above has been edited for conciseness and additional relevant points are omitted for space constraints. Readers are encouraged to seek counsel from a construction lawyer for advice on a particular circumstance.