What types of bonds does the Miller Act require for federal projects exceeding $100,000?

The Miller Act mandates that for federal construction projects exceeding $100,000, contractors are required to provide both performance and payment bonds. The performance bond ensures that the contractor fulfills the terms of the contract, effectively guaranteeing the completion of the project per the agreed specifications. On the other hand, the payment bond assures that the contractor will pay subcontractors and suppliers, thereby protecting those who provide labor and materials for the project.

This dual requirement protects the federal government and the public by ensuring that projects are completed on time and that those who contribute to the project are compensated adequately. This mechanism helps to minimize the risk of default by the contractor, ensuring that both the work and payments are secured. Understanding this requirement is crucial for contractors working on federal projects, highlighting the importance of financial responsibility and trustworthiness in the construction industry.