Bond Claims Explained: How to Get Paid on Public Projects
The Cromeens Law Firm
February 26, 2026
If you’ve ever worked on a private commercial job, you know the drill when payment issues arise: you file a mechanics lien. It’s a powerful tool that attaches to the property itself, forcing owners to pay attention to your unpaid invoices.
But what happens when you pour concrete for a new city hall or install HVAC systems at a federal courthouse? What do you do when the general contractor stops paying and you’re waiting on a six-figure invoice?
Suddenly, the rules change. You can’t file a lien against government property.
This realization can be terrifying for contractors and suppliers waiting on a check from a public project. Payment delays on public construction projects are generally significantly longer than private projects, sometimes stretching 60-120 days or more, creating serious cash flow challenges for contractors financing labor and materials.
The good news is that you aren’t left without options. Instead of a mechanic’s lien, you have something just as powerful: a payment bond claim. This guide breaks down exactly how bond claims work, why they exist, and how you can use them to secure your payment on public construction projects.
To understand bond claims, you first need to understand why mechanics liens don’t work on public jobs. The reason lies in a legal concept called “sovereign immunity.”
Essentially, you cannot seize or foreclose on property owned by the government. Imagine if a subcontractor could force the sale of a public high school or a military base just because the general contractor didn’t pay an invoice. It would be chaotic and against the public interest.
Because the government is immune from having its property seized, lawmakers created a substitute system to protect contractors and suppliers. Since you can’t attach your claim to the property, you instead attach your claim to a pile of money set aside specifically for this purpose. That pile of money is called a payment bond. It’s essentially an insurance policy funded by the general contractor and guaranteed by a surety company. If the general contractor doesn’t pay you, the surety company does.
The primary law governing payment protections on federal construction projects is the Miller Act, which replaced the earlier Heard Act.
Previously, contractors and suppliers on federal projects had no meaningful way to secure payment. Many went unpaid when prime contractors failed, and some went bankrupt after completing government work. This made federal construction work extremely risky and expensive.
Enacted in 1935, this act requires general contractors on federal projects meeting these thresholds:
The Miller Act requires prime contractors to post two separate bonds:
1. Performance Bond
Protects:The federal government (the project owner)
Purpose: Ensures the project gets finished even if the contractor defaults.
How It Works: If the prime contractor abandons the project or fails to complete it, the surety company must either:
2. Payment Bond
Protects: You—the subcontractors and suppliers
Purpose:Ensures everyone who provides labor or material gets paid.
How It Works: If the prime contractor doesn’t pay you, you make a claim against the payment bond, and the surety company must pay your valid claim
The payment bond acts as an insurance policy. This is the bond that matters for your payment protection.
Not everyone on a federal construction project has rights under the Miller Act. There is a tiered system of protection.
Who They Are: Contractors or suppliers who have a contract directly with the prime contractor.
Protection: First-tier subs have full Miller Act rights. They can make claims against the payment bond for any unpaid amounts owed under their contract.
Who They Are: Subcontractors or suppliers who have a contract with a first-tier subcontractor.
Protection: Second-tier subs have Miller Act rights if they comply with notice requirements. They must send a written notice to the prime contractor within 90 days of the last date they furnished labor or materials.
Who They Are: Those supplying materials to the prime contractor or a first-tier subcontractor.
Protection: Suppliers to the prime or to first-tier subs have Miller Act rights if they comply with notice requirements. They must send notice to the prime contractor within 90 days of last delivery if supplying to a first-tier sub. Suppliers directly to the prime contractor technically don’t need to send notice, but should anyway.
Who They Are: Subcontractors or suppliers with a contract with a second-tier subcontractor
Protection: Generally, no Miller Act rights. Third-tier subs cannot make claims against the federal payment bond.
If you’re a third-tier sub, you must:
If you’re asked to work as a third-tier sub on a federal project, be very cautious. Consider requiring progress payments, getting personal guarantees, or demanding payment in advance since you won’t have bond rights.
Bond claims are strict. If you miss a deadline, you lose your right to collect from the bond,even if you’re owed hundreds of thousands of dollars for completed work. 90-Day Preliminary Notice Requirement (Second-Tier and Below)If you do not have a direct contract with the prime contractor (i.e., you are a second-tier sub or supplier), you must send a preliminary notice.
Deadline: Within 90 days of the last date you provided labor or materials for the project
To Whom: The prime contractor (the entity that has the direct contract with the federal government)
How: In writing, preferably via certified mail with return receipt requested
What It Must Include:
One-Year Lawsuit Deadline (Everyone with Miller Act rights)
Deadline: If you still haven’t been paid, you must file a lawsuit against the bond surety within one year of your last day of work on the project.
Action Required: File an actual lawsuit in federal court against the payment bond surety
Where to File: The federal court in the district where the project is located
Why It Matters: This is a statute of limitations. After one year, your claim is barred forever. No court has jurisdiction to extend this deadline.
Pro Tip: Even if you have a direct contract with the prime contractor and technically aren’t required to send the 90-day notice, send it anyway. It creates a paper trail and puts pressure on the payer immediately.
The Miller Act only applies to federal construction projects, or those funded by the U.S. government. But what about that state university library or the county road expansion?
These projects also enjoy sovereign immunity protection, so most states have adopted their own versions of these laws, affectionately known as “Little Miller Acts.” While they mirror the federal law in spirit, the specific rules vary by state.
State-by-State Examples
Texas
Law: Texas Government Code Chapter 2253 (formerly Article 5160)
Bond Threshold: Public projects over $100,000 require payment and performance bonds
Who’s Protected:
Key Difference: The monthly “trapping” notice system is unique to Texas. You must send notices throughout the project, not just one notice at the end. Miss a monthly notice, and you lose bond rights for that month’s work.
California
Law: California Civil Code §§ 9550-9566
Bond Threshold: Public projects over $25,000 require payment bonds
Who’s Protected: All contractors and suppliers in the payment chain (very broad)
Key Difference: California requires notice at the start of the project (within 20 days of beginning work), not based on your last day of work. Also, the lawsuit deadline is much shorter.
Has its own specific preliminary notice requirements (20-day notice) that apply to public works.
Florida
Law: Florida Statutes § 255.05
Bond Threshold: Public projects over $200,000 require payment and performance bonds
Who’s Protected:
Key Difference: Similar to California, Florida uses a “Notice to Contractor” that must be sent within 45 days of starting work.
Because these rules vary so wildly, you should never assume the federal deadlines apply to a state job. Always check the specific statutes for the state where the project is located.
Filing a bond claim is less about filing a document with a county clerk (like a lien) and more about notifying the right people and preserving your claim rights.
Before the project even starts, or as soon as you sniff a payment problem, ask for a copy of the payment bond. This document will tell you exactly who the surety company is, the amount of the bond, and what the bond number is. You have a right to this information.
Draft a formal letter often called a “Notice of Claim” or “Notice of Unpaid Balance.” Send this to:
Send this via certified mail with a return receipt requested. This is your proof that you met the deadline.
While pursuing payment, meticulously document:
Work Performed:
Communications:
Proof of Notice:
This documentation will be critical if you have to file a lawsuit.
Often, receiving a formal claim notice is enough to get the surety company moving. They will contact the prime contractor and ask why you haven’t been paid. The surety does not want to pay you; they want the contractor to pay you. This pressure often results in a check.
If preliminary notice and informal collection efforts don’t result in payment, you need to make a formal claim after the preliminary notice period, but before the lawsuit deadline.
Send a demand letter to the surety company and copies to the prime contractor and your customer.
When the surety receives your claim, they will contact the prime contractor and review your documentation to verify your claim is valid. If valid, the prime contractor or the surety will pay you. They may find some issues with your claim and negotiate a settlement, or in the worst case scenario, they deny your claim.
If the surety doesn’t pay your claim, you may need to file a lawsuit to enforce the claim against the bond. Remember the one-year deadline mentioned earlier!
Navigating the transition from private liens to public bond claims can be tricky. The terminology is different, the timelines are strict, and the stakes are high. One missed deadline can mean the difference between getting paid in full and writing off a massive loss.
If you are dealing with unpaid invoices on a public project, or if you are unsure if you have valid bond rights, don’t guess.
Call us today at 713-715-7334. We can review your specific situation, help you understand your options, and ensure you take the right steps to secure the money you’ve earned.
A payment bond protects subcontractors and suppliers, guaranteeing they’ll be paid for their work. A performance bond protects the project owner (the government), guaranteeing the project will be completed even if the contractor defaults. Both are typically required on federal projects over $150,000. You make claims against the payment bond when you’re not paid; the government makes claims against the performance bond if the contractor abandons the project.
No. You cannot file a mechanic’s lien on government-owned property due to sovereign immunity. On public projects, your only security for payment is the payment bond. On private projects that also have voluntary payment bonds (some large commercial projects), you might have both lien rights and bond claim rights, but you typically can’t collect twice—you must choose which remedy to pursue.
If a contractor fails to post a required bond on a federal project, they’ve violated the Miller Act, and the government can terminate their contract. For you, this creates a problem: without a bond, you have no bond claim rights. Your options are limited to: (1) suing the prime contractor for breach of contract (if they have assets), or (2) potentially making a claim directly against the government under certain equitable theories (very difficult). Always verify the bond exists before starting work.
Timeline varies:
The key is acting quickly. The sooner you send notices and make your claim, the sooner you’ll be paid.
Generally, yes. If you sign an unconditional final lien waiver stating you’ve been “paid in full” and release all claims, you may have waived your bond claim rights. However, signing conditional lien waivers (which only take effect when payment clears) or progress payment waivers (for partial payments) typically don’t waive your rights to claim unpaid amounts. Never sign final waivers until you’ve actually been paid in full.
Under the Miller Act, individual laborers working for subcontractors generally don’t have direct bond claim rights. The subcontractor you work for should have bond rights (if they’re first or second-tier and comply with notice requirements), but you’d need to look to them for payment. Some state Little Miller Acts provide broader protection to laborers. If you’re not being paid for labor on a public project, consult with an employment attorney about wage claims.
Karalynn Cromeens is the Owner and Managing Partner of The Cromeens Law Firm, PLLC, with over 17 years of experience in construction, real estate, and business law. A published author and passionate advocate for contractors, she has dedicated her career to protecting the businesses her clients have built. Karalynn is on a mission to educate subcontractors on their legal rights, which inspired her books Quit Getting Screwed and Quit Getting Stiffed, as well as her podcast and The Subcontractor Institute.
