The Miller Act (ch. 642, Sec. 1-3, 49 stat. 793,794, codified as amended in Title 40 of the United States Code) requires prime contractors on some government construction contracts to post bonds guaranteeing both the performance of their contractual duties and the payment of their subcontractors and material suppliers. The Act was originally enacted as the Heard Act in 1894. That act established a single performance and payment bond that "did afford some protection to... unpaid subcontractors and materialmen, but it was fraught with substantive and procedural limitations," and it was superseded by the Miller Act of 1935. Background and purpose The Miller Act addresses two concerns that would otherwise exist in the performance of federal government construction projects: Performance Bonds: The contractor's abandonment or other nonperformance of a government job may cause critical delays and added expense in the government procurement process. The bonding process helps weed out irresponsible contractors who may be unable to obtain bonds, and the bond itself will defray the government's cost of substitute performance in the event of default. The subrogration right of the bond surety against the contractor, i.e., the right of the surety to sue the contractor and any principals who may have guaranteed the bond, is a deterrent to nonperformance. Payment Bonds: Subcontractors and material suppliers would otherwise be reluctant to work on such projects (knowing that sovereign immunity prevents the establishment of a mechanic's lien), diminishing competition and driving up construction costs. Summary Application The Miller Act applies to contracts awarded for the construction, alteration, or repair of any public building or public work of the United States Federal government. While the Act provides that the bonds must be posted on contracts exceeding $100,000, Federal Acquisition Regulation (FAR) Part 28 requires the bonds only on contracts that exceed $150,000. The Act requires the Federal Acquisition Regulations to establish alternative payment protections for contracts in excess of $30,000 but not exceeding $150,000, with the contract-specific protection to be determined by the contracting officer. While the Miller Act applies only to federal contracts, state legislatures throughout the United States have enacted "Little Miller Acts" that establish similar requirements for state contracts. Posting of performance bonds Once contract is awarded, the contractor must furnish the government a performance bond issued by a surety satisfactory to the officer awarding the contract, in an amount the contracting officer considers adequate, for the protection of the