Toolkit · Insurance

The Surety Bond, Miller Act, and Construction Claim Toolkit

40 U.S.C. § 3133

Type
Toolkit
Jurisdiction
National
Date
2025-09-18
Topic
Insurance

This toolkit collects the working documents used to preserve, prosecute, and defend construction bond claims. It contains a project intake form capturing the two dates that control everything, a bond request letter, a tier analysis worksheet, a ninety-day notice template with a service protocol, a deadline calculator, a proof of claim index, a Miller Act complaint outline, an owner's performance bond default letter, a surety demand response protocol, an indemnity agreement negotiation checklist, a Little Miller Act comparison worksheet, and a subrogation priority reference. Each is drafted to be adapted to the project and jurisdiction. A related materials index maps each tool to the guides, articles, and checklists that explain it.

The Surety Bond, Miller Act, and Construction Claim Toolkit

Insurance > Surety Bonds and Construction Payment Security | Published 18 September 2025 - Updated 12 August 2026 | UpLaw - uplaw.us

Tool 1 belongs in every project file at mobilization. Tool 4 costs nine dollars and preserves the entire claim.

Tool 1 — Project Intake Form

Complete at mobilization, not when payment is late.

Field Entry
Project name and location
Owner type: ☐ federal ☐ state/municipal ☐ private
Prime contractor legal name
Party we contracted with (exact legal name)
Our tier: ☐ first ☐ second ☐ third ☐ uncertain
Contract / purchase order number and amount
Payment bond exists? ☐ yes ☐ no ☐ requested [date]
Bond number / surety / penal sum
Governing statute: ☐ 40 U.S.C. § 3133 ☐ [State] Little Miller Act ☐ common law bond ☐ lien only
Attorney's fee clause in our subcontract? ☐ yes ☐ no
Mobilization date
★ LAST DAY LABOR OR MATERIAL FURNISHED ★
★ NOTICE DEADLINE (last work + 90, or state period) ★
★ SUIT DEADLINE (last work + 1 year, or state period) ★

⚠ The two starred date fields are the entire claim. Companies that collect on bonds have them on the intake form; companies that rely on the relationship do not.

📌 There is no fee-shifting under the Miller Act — F.D. Rich Co. v. United States ex rel. Industrial Lumber Co., 417 U.S. 116. Negotiate the fee clause into the subcontract before signing.

Tool 2 — Bond Request Letter

[Date] · [Contracting Officer / Awarding Authority]

Re: Request for copy of payment bond and contract — [Project], Contract No. ______

The undersigned is furnishing [labor / material / both] for the prosecution of the work under the above contract, as a [subcontractor to / supplier to] [name].

Pursuant to 40 U.S.C. § 3133 [or: State Code § ______], we request a certified copy of the payment bond furnished for this contract, together with a copy of the contract and any modifications.

Our contract or purchase order number is ______, dated , in the amount of $.

[Signature · Company · Address · Phone]

Record from the bond: surety legal name and address · bond number · penal sum · obligee · principal's exact legal name · any notice provisions the bond itself imposes.

Verify federal surety qualification: 31 U.S.C. § 9304 (conditions) · 31 U.S.C. § 9305 (certificate of authority) · 31 U.S.C. § 9306 (obligations in the district) · 31 U.S.C. § 9309 (priority).

Confirm no alternative or waiver applies: 40 U.S.C. § 3132 · 40 U.S.C. § 3134.

Tool 3 — Tier Analysis Worksheet

Map the chain, in exact legal names:

Owner ______ └ Prime contractor ______ ← bond principal; bond required by 40 U.S.C. § 3131 └ ______ (subcontractor ☐ / materialman ☐) └ ______ (subcontractor ☐ / materialman ☐) └ US ______

Our counterparty is Our tier Protected? Notice required
The prime contractor first yes no
A subcontractor second yes yes — 90 days
A materialman or sub-subcontractor third generally no n/a

Characterizing each intermediate party — the question that decides the case:

☐ Did it perform a definable part of the prime contract? → subcontractor ☐ Did it merely sell goods? → materialman ☐ How substantial was its scope relative to the prime contract? ☐ Did the prime rely on it to perform, or merely to deliver? ☐ Was there a written subcontract, a schedule of values, retainage, and lien waivers? → subcontractor indicators

⚠ Clifford F. MacEvoy Co. v. United States ex rel. Calvin Tomkins Co., 322 U.S. 102 — a materialman supplying a materialman is outside the Act. J.W. Bateson Co. v. United States ex rel. Board of Trustees, 434 U.S. 586 — the tier limitation applies regardless of the claimant's identity, including benefit fund trustees.

📌 Watch for joint ventures and affiliates that obscure the chain. A nominal second-tier position sometimes turns out to be third.

Tool 4 — Ninety-Day Notice and Service Protocol

[Date] · Certified mail, return receipt requested, AND [courier with delivery verification]

[PRIME CONTRACTOR legal name and address — not the surety, not the owner]

Re: Notice of claim under 40 U.S.C. § 3133 — [Project], Contract No. ______

1. Claimant: [legal name, address] 2. Party to whom labor or material was furnished: [exact legal name] 3. Labor and material furnished: [describe] 4. Last date labor performed or material supplied: ______ 5. Amount claimed: $______, unpaid

More than ninety days have elapsed since the undersigned last furnished labor or material, and payment has not been made in full.

Our standard practice is to preserve payment bond rights on every public project. This notice is not intended as a dispute, and we remain available to resolve the balance.

[Signature · Title · Phone · Email] cc: [Surety] · [Contracting Officer]

Service protocol: ☐ Addressed to the prime contractor at its residence or place of business ☐ Sent by a means producing written third-party verification of delivery, or in a manner in which a United States marshal may serve summons ☐ Sent within ninety days of the last-work date ☐ Delivery confirmation retained permanently — it is an element of the claim

Content requirements — all four must appear: ☐ Amount claimed, with substantial accuracy ☐ Name of the party to whom the labor or material was furnished ☐ Project and contract identification ☐ Statement that payment has not been made

⚠ A pre-work waiver of bond rights is void. A waiver is enforceable only in writing, signed by the claimant, and executed after the labor or material was furnished.

Tool 5 — Deadline Calculator

Input Value
Last day labor performed or material supplied ______
Project type ☐ federal ☐ state ☐ private
Our tier ☐ first ☐ second ☐ third
Deadline Federal Fill in
Right to sue accrues last work + 90 days unpaid ______
Notice to prime (second tier only) last work + 90 days ______
Suit on the bond last work + 1 year ______
State project — notice per Little Miller Act (60/75/90/120) ______
State project — suit per Little Miller Act (6 mo / 1 yr / 2 yr) ______
Mechanic's lien (private) per state lien statute ______
Bond's own limitation (common law bond) per the bond's text ______

What counts as "last work": substantial work under the contract, including authorized change order work; delivery of material incorporated in or specially fabricated for the project.

⚠ What does NOT extend the clock: punch list · warranty callbacks · corrective work on defective installation · inspection visits · replacement parts for defective goods · work performed solely to extend the deadline.

Set two calendar entries at project closeout: day sixty (prepare notice) and month ten (prepare suit).

Tool 6 — Proof of Claim Index

# Item Obtained Notes
1 Payment bond (certified copy) ☐ penal sum, surety, principal
2 Prime contract and modifications ☐
3 Our subcontract or purchase order ☐ check for fee clause
4 Agreement between our counterparty and the prime ☐ establishes tier
5 Signed delivery tickets / bills of lading ☐ establishes last work
6 Daily reports, sign-in logs, photographs ☐
7 Invoices and account ledger ☐
8 Payments received, with dates ☐
9 Change orders and written authorizations ☐
10 Correspondence — every promise to pay ☐
11 Retainage withheld ☐ recoverable
12 Fringe benefit / trust fund records ☐ Sherman v. Carter, 353 U.S. 210
13 Ninety-day notice + delivery verification ☐ element of the claim
14 Segregation of bonded vs. unbonded work ☐

Recoverable: sums justly due; retainage; fringe benefit contributions; interest per the subcontract or applicable law. Fees only if the subcontract provides them — F.D. Rich Co., 417 U.S. 116.

Tool 7 — Miller Act Complaint Outline

UNITED STATES OF AMERICA for the use and benefit of [CLAIMANT] v. [PRIME CONTRACTOR] and [SURETY] United States District Court for the ______ District of ______

I. Jurisdiction and venue. 40 U.S.C. § 3133; the district in which the contract was performed; without regard to amount in controversy.

II. Parties. Claimant; prime contractor (principal); surety.

III. The contract and the bond. Award date; the payment bond furnished under 40 U.S.C. § 3131; bond number and penal sum.

IV. Claimant's tier. The contract chain, and that claimant had a direct contractual relationship with [the prime / a subcontractor], placing it within the Act. Clifford F. MacEvoy Co., 322 U.S. 102.

V. Labor and material furnished. Description; dates; the last day furnished.

VI. Nonpayment. Amount due; more than ninety days elapsed.

VII. Notice (second-tier claimants — plead affirmatively). Date sent; addressed to the prime; contents (amount with substantial accuracy; party supplied); manner of service; date of delivery verification.

VIII. Timeliness. Suit filed within one year of the last-work date.

IX. Claim on the payment bond. Sums justly due, including [retainage / fringe benefits / interest].

X. Prayer. Judgment against the surety and principal; interest; costs; fees pursuant to the subcontract [there is no statutory fee-shifting].

Plead notice and tier first — the surety will raise both. Federal law governs construction: F.D. Rich Co., 417 U.S. 116; Clearfield Trust Co. v. United States, 318 U.S. 363.

Anticipated defenses: wrong tier · late or defective notice · suit beyond one year · defective work, backcharges, prior payment · material furnished for a different contract.

Tool 8 — Owner's Performance Bond Default Letter

[Date] · Certified mail and email · [Surety, claims department] · cc: [Principal]

Re: Declaration of default and demand — [Project], Contract No. ______; Performance Bond No. ______

1. Notice of default. [Owner] previously notified [Principal] and the Surety of performance deficiencies by letters dated ______ [attach].

2. Declaration. [Principal] is hereby declared in default under the Contract, effective ______, for [state grounds with contract citations].

3. Termination. The Contract is terminated pursuant to Section ______, effective ______.

4. Demand. [Owner] demands that the Surety perform its obligations under the Performance Bond and elect among its options — financing the Principal, tendering a completion contractor, taking over and completing, or paying [Owner]'s damages up to the penal sum.

5. Contract balance. The remaining balance of $______ is being retained and has not been disbursed, and will be made available to the Surety in accordance with the Bond.

6. Access. [Owner] will make the site, drawings, and records available for the Surety's investigation and requests a response by ______.

[Signature]

⚠ Owner errors that discharge or reduce the surety's obligation: terminating without required notice · never formally declaring default · disbursing the contract balance · overpaying against the schedule of values · materially altering the contract without consent · failing to give the surety its election · delaying notice until costs escalate.

📌 The contract balance is the surety's collateral. Prairie State Bank v. United States, 164 U.S. 227 (subrogation relates back to the date of the bond); Henningsen v. United States Fidelity & Guaranty Co., 208 U.S. 404 (extends to a surety paying laborers and materialmen).

Tool 9 — Surety Demand Response Protocol

For the contractor whose surety has paid or demands collateral. Treat as a solvency event.

Step 1 — Read the general indemnity agreement. Locate and quote: ☐ Indemnity scope ☐ Personal indemnitors (who signed, including spouses) ☐ Collateral on demand ☐ Assignment of contract balances and receivables ☐ Right to settle ☐ Conclusive-evidence / voucher clause ☐ Access and takeover ☐ Waiver of defenses

Step 2 — Demand the surety's documentation, in writing:

"Please provide, for each claim paid or reserved: the claimant's identity and tier; the date and content of any ninety-day notice and proof of its service; the date suit was filed, if any; proof of actual payment; the invoices supporting the amount; and the calculation supporting the collateral demand."

Step 3 — Audit every claim the surety paid:

Claimant Tier Notice date Within 90 days of last work? Suit within 1 yr? Amount Was the surety obligated?
☐ ☐ ☐

⚠ A surety that paid a THIRD-TIER claimant, or one whose notice was untimely, paid a claim it did not owe. Clifford F. MacEvoy Co., 322 U.S. 102. This is the principal's real leverage.

Step 4 — Identify offsets: contract balances the surety collected · salvage · recoveries from others · amounts within the penal sum already satisfied.

Step 5 — Assess the collateral demand. Reasoned exposure calculation, or reflexive? Some jurisdictions require good faith.

Step 6 — Preserve the bad faith settlement theory where the principal disputed a claim in writing before payment.

Step 7 — Understand the posture honestly. The conclusive-evidence clause makes this uphill, and the principal's belief that a claim was defensible is generally not a defense.

Step 8 — If insolvency follows, know that the surety generally takes retainage ahead of the trustee — Pearlman v. Reliance Insurance Co., 371 U.S. 132 — subject to the government's prior setoff, United States v. Munsey Trust Co., 332 U.S. 234, with statutory priority at 31 U.S.C. § 9309.

Tool 10 — Indemnity Agreement Negotiation Checklist

Obtainable at inception for established contractors. Unobtainable afterward.

# Term Ask for Got it
1 Collateral on demand Cap, or a reasoned exposure calculation rather than a bare demand ☐
2 Reimbursement trigger Actual payment, not reserves ☐
3 Notice and cure Written notice and an opportunity to resolve before any demand ☐
4 Spousal indemnity Carve-out ☐
5 Personal indemnity Sunset after a defined period of clean performance ☐
6 Conclusive-evidence clause Inapplicable where the principal disputed the claim in writing before payment ☐
7 Duty of good faith Express, in settling claims ☐
8 Definition of "loss" Exclude costs incurred unreasonably ☐
9 Consultant and fee recovery Reasonableness standard ☐
10 Assignment trigger On default only, not on the surety's subjective belief ☐

⚠ The sentence to say out loud before signing: "This is not insurance. If the surety pays a dollar, I owe it a dollar plus fees, and my house is collateral."

Tool 11 — Little Miller Act Comparison Worksheet

Complete once per state and keep it. Never carry federal habits into a state project.

Item Federal [State]
Bond threshold statutory
Notice deadline 90 days from last work
Notice runs from last labor/material
Notice recipients prime only (many states add owner)
Notice contents amount + party supplied
Notice service method third-party verified delivery
Limitations period 1 year from last work
Tier coverage first and second (some states broader)
Attorney's fees none — F.D. Rich (many states allow)
Prompt payment act interest —
Trust fund statute —
Retainage limits —

Tool 12 — Subrogation and Priority Reference

Who gets the retained contract funds when the contractor fails:

Rank Claimant Authority
1 The United States, by setoff for debts the contractor owes it United States v. Munsey Trust Co., 332 U.S. 234
2 The surety, by subrogation to the rights of those it paid and of the obligee Pearlman v. Reliance Insurance Co., 371 U.S. 132
3 Assignees and secured lenders taking after the bond date subordinate under Prairie State Bank, 164 U.S. 227
4 The bankruptcy trustee and unsecured creditors funds were never property of the estate — Pearlman

Key principles: the surety's equity relates back to the date of the bond (Prairie State Bank); it extends to a surety that paid laborers and materialmen, not only one that completed (Henningsen, 208 U.S. 404); and federal law governs (Clearfield Trust Co., 318 U.S. 363).

Surety practice: perfect the assignment under the indemnity agreement · notify the obligee immediately · assert subrogation expressly in any bankruptcy · object to turnover of contract funds.

Lender practice: a blanket lien on a contractor's receivables is likely subordinate as to bonded contract funds. Price accordingly.

Tool 13 — Related Materials Index

If you need to Read
Understand the whole field the comprehensive guide
Explain suretyship to a client the article
Work a live claim the checklist
Handle a private project Mechanics Liens · The Paper That Beats Everyone Else · Secured Transactions and Liens
Understand federal contracting Selling to the Government
Collect a judgment Judgment Enforcement and Debtor Exemptions · Filing, Trying, and Collecting a Small Claims Judgment · Small Claims and Self-Representation · Justice Without a Lawyer
Handle the contractor's insolvency Chapter 11 Reorganization · Filing a Proof of Claim · Restructuring a Business or Filing a Business Bankruptcy
Handle the title and closing side Title, Survey, and Closing Problems
Compare to a first-party insurance claim Property Insurance Claims
Handle another possessory lien problem Towing, Impoundment, and Vehicle Repair · Moving Companies and Self-Storage · The Moving, Storage, and Household Goods Claim Toolkit
Choose the entity Business Taxation

Tool 14 — Authority Quick Reference

Miller Act: 40 U.S.C. § 3131 (bond required) · § 3132 (alternatives) · § 3133 (the claim, notice, and limitations) · § 3134 (waiver) Surety qualification and priority: 31 U.S.C. § 9304 · § 9305 · § 9306 · § 9309 Tier and coverage: Clifford F. MacEvoy Co. v. United States ex rel. Calvin Tomkins Co., 322 U.S. 102 · J.W. Bateson Co. v. United States ex rel. Board of Trustees, 434 U.S. 586 Recovery: United States ex rel. Sherman v. Carter, 353 U.S. 210 (fringe benefits) · F.D. Rich Co. v. United States ex rel. Industrial Lumber Co., 417 U.S. 116 (no fee-shifting; federal law governs) Subrogation and priority: Prairie State Bank v. United States, 164 U.S. 227 · Henningsen v. United States Fidelity & Guaranty Co., 208 U.S. 404 · Pearlman v. Reliance Insurance Co., 371 U.S. 132 · United States v. Munsey Trust Co., 332 U.S. 234 Federal common law: Clearfield Trust Co. v. United States, 318 U.S. 363

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