Payment Bond Claims on Public Works Projects in Georgia

The pundits continue to debate the state of the economy, but since we represent so many construction professionals, we are able to notice trends pretty quickly ourselves.  To no one’s surprise, government contracting work has increased, and this has given much-needed work to subcontractors, and suppliers in Georgia.  Many clients who had stayed away from public works projects have since embraced them.

Unfortunately, we have noticed that government contract jobs in Georgia have been “slow pay”.  What does that mean for those working and supplying on government jobs?  Practically speaking, it means that our clients’ cash flow is interrupted–usually for no reason.  It also means that they are having to enforce their payment bond claim rights in Georgia.

Almost every day, we receive a telephone call from a specialty subcontractor or a supplier who is not getting paid for their work and materials on a government project.  Fortunately, if a payment bond claim is timely filed, then their likelihood of recovery is very good.  Here are some important points to keep in mind if you are working on a government project.

• Know Whether the Project Owner is a Governmental Entity: Be very careful to identify the owner of the public works project on which you are working.  Some projects may look like they are owned by the Federal, state or local government, but, in fact, they are owned by a private entity.  Public or military housing projects can be owned by a private corporate and then leased back to the government.  Determining the owner helps determine which set of requirements apply in your particular situation.  Development Authorities, Housing Authorities, and similar “government” organization can blur the distinction between owners.  (Remember, just because there is a payment bond covering the project does not mean that it is a government project–payment bonds may be found on private projects too!)

• Know the Government Entity Layer: If you know that your project is a government contract, then you must determine for which governmental layer the project belongs.  Generally speaking, your government project may be Federal, State of Georgia, or a local municipality (such as a county or city government).  Each of these three layers of government are covered by their own statutes and requirements for payment bond enforcement.  All Federal projects are covered by The Miller Act; all State of Georgia projects are coverer by The Little Miller Act so it is vital to apply the proper rules to your slow-pay issue.

• Meet the Deadline for Filing a Payment Bond Claim in Georgia: Typically, you must file a claim within 90 days of the last day in which you worked on the governmental project.

• Get a copy of the Payment Bond: The surety issuing the payment bond covering your project will have certain requirements and can help identify owners, general contractors and addresses.  Some general contractors make obtaining copies of the payment bond available, some do not.

• Make Sure that You Sent A Notice to Owner/Notice to Contractor: If you are a third tier supplier or subcontractor then you must send a Georgia Notice to Owner (“NTO”) and a Georgia Notice to Contractor (“NTC”) on all projects owned by the State of Georgia or any local municipality.  These NTO’s and NTC’s must be sent within thirty days of the first day in which you began working on the government project or you began supplying on the government project.  If you fail to do this, you may be prohibited from filing a claim against the payment bond.

If you have any questions about contractor rights or suppliers’ rights regarding government bond claims on projects located anywhere in Georgia, please contact us.

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.