When it convenes on January 8, 2020 in Annapolis, the first bills to be introduced before the General Assembly aim to complete billions of dollars of school construction projects throughout the state.
House Bill 1 and Senate Bill 1, dubbed the “Built to Learn Act of 2020”, would authorize the Maryland Stadium Authority to issue up to $2.2 billion in revenue bonds for school construction projects over the next several years. The bonds would be backed by an annual payment of $125 million from the Education Trust Fund.
With so much potential revenue for state backed construction projects coming down the pipeline, it is imperative that subcontractors know their rights and obligations under Maryland’s “Little Miller” Act (Md. Code Ann., State Finance and Procurement Art., § 17-101, et seq.).
Some of the important obligations and deadlines to be aware of are:
- Before a contractor receives a progress or final payment under a contract covered by payment security, the contractor must certify in writing that, in accordance with contractual arrangements, suppliers: (1) have been paid from the proceeds of previous progress payments; and (2) will be paid in a timely manner from the proceeds of the progress or final payment currently due. (§17-106).
- Suppliers with direct contracts with the contractor may sue on the payment security if the supplier provided labor or materials under an eligible contract and has not been paid in full within 90 days after the day last labor or materials were supplied (§17-108(a)).
- A supplier who has a direct contractual relationship with a subcontractor or sub-subcontractor of a contractor who has provided payment security but no contractual relationship with the contractor may sue on the security if the supplier gives written notice to the contractor within 90 days after the labor or materials for which the claim is made were last supplied in prosecution of work covered by the security. (§17-108(b)(1)). The notice must include the amount claimed, the person to whom labor or materials were provided, and must be sent by certified mail to the contractor at the contractor’s residence or where the contractor has an office or does business (§17-108(b)(2)).
- An action on a payment bond must be filed within one year after the public body finally accepts the work performed under the contract (§17-109(b)).
If you are planning to participate in any public construction projects, compliance with the Little Miller Act is critical because failure to meet the strict time and notification requirements will result in forfeiture of your right to collect under the payment security. Harrison Law Group has the knowledge and experience to help you ensure that you always have a means of getting paid for your labor and materials. For more information, please contact the Harrison Law Group.