Reviewed by the Contracts Connected team. Our co-founder ran a large federal general contracting firm for 15 years, about 100,000 documents a year.
The federal Miller Act baseline, a 50-state and DC threshold table checked against each state’s statute, and what happens the day a subcontractor misses a bond claim deadline.
What is a payment bond, and why does public construction require one?
A payment bond is a three-party guarantee, prime contractor, surety company, and public owner, that the subcontractors, laborers, and suppliers on a public construction project get paid even if the prime contractor defaults or refuses to pay. It exists because of a legal gap: on private construction, an unpaid subcontractor can file a mechanic’s lien against the property to force payment. On public work, contractors generally cannot lien government-owned property. A payment bond is the substitute remedy that federal law and the states built to fill that gap.
The mechanics are straightforward. The prime contractor buys a bond from a surety before the contract is awarded. If a sub or supplier goes unpaid, they file a claim against that bond instead of against the building or the land under it. The surety investigates and, if the claim holds up, pays out up to the bond’s penal sum, then pursues the prime contractor to recover what it paid. The bond does not replace the underlying contract, it backstops it. Without one, the only recourse for an unpaid sub on a federal or state job is to sue the prime contractor directly and hope the money is still there by the time a judgment lands.
What is the federal Miller Act, and when does it apply?
The Miller Act, codified at 40 U.S.C. §§ 3131 to 3134, requires a performance bond and a payment bond on federal construction contracts once the contract crosses a dollar threshold. The statute’s own text sets that trigger at contracts of more than $100,000, but the Federal Acquisition Regulation, at FAR 28.102-1, raises the operative bonding threshold to construction contracts exceeding $150,000. Above that line, the prime contractor must furnish both bonds, each generally equal to 100 percent of the contract price, before the government will award the work.
The performance bond protects the government, guaranteeing the job gets finished if the contractor defaults. The payment bond protects the subs, laborers, and material suppliers downstream of the prime who never signed a contract with the government and have no lien rights against it. Under the Miller Act that protection reaches two tiers: those who contract with the prime, and those who contract with one of the prime’s subcontractors. That second bond is the one this guide is about. If your firm bids a federal construction contract north of $150,000, the payment bond is not optional. It is required by 40 U.S.C. § 3131(b) and FAR 28.102-1.
What happens on federal contracts between $35,000 and $150,000?
Between $35,000 and $150,000, the Miller Act’s bonding rule steps down, but the payment protection itself does not disappear. FAR 28.102-1(b) requires the contracting officer to pick two or more payment protections from a menu, and the contractor furnishes one of them. The menu is a payment bond, an irrevocable letter of credit (which the contracting officer must give particular consideration), a tripartite escrow agreement, certificates of deposit held by the contracting officer, or a deposit of U.S. bonds or notes, certified or cashier’s checks, bank drafts, money orders, or currency. Whichever form it takes, the point is the same: labor and material suppliers on a mid-size federal job are still owed a payment guarantee, just not necessarily a bond specifically.
At $35,000 or less, the Miller Act’s bonding scheme generally does not apply, and the contracting officer has more discretion over what, if anything, is required. If your firm is bidding federal work in this lower range, do not assume there is no payment protection requirement at all. Confirm what the specific solicitation actually requires before you price the job, because the absence of a Miller Act mandate is not the same thing as the absence of any requirement.
What is a Little Miller Act, and why does the threshold change by state?
A Little Miller Act is a state’s own version of the federal statute, requiring a payment bond on state and local public construction contracts, usually above a dollar threshold the state sets. Every state but Vermont has one that covers public work generally, and Vermont’s covers its transportation projects. A few use the federal $150,000 line for at least some contracts, among them Colorado for state contracts, Illinois until 2029, Rhode Island for DOT road and bridge contracts, and Wyoming. Several set no dollar floor at all and require a bond on every covered contract. Others set the bar high enough that only larger contracts trigger the requirement.
That variation exists because each state legislature wrote its own statute, on its own timeline, adjusted for its own budget realities and construction market, sometimes decades apart from the last revision. A contractor who only knows the federal $150,000 number and assumes every job under that figure is bond-free will get surprised the first time they bid a $60,000 renovation for a county government in a state where the local threshold is a fraction of that. The practical rule: check the state and the specific awarding authority, state agency, county, municipality, or school district, separately, because a number of states set a different threshold for local subdivisions than they do for state-level contracts.
What are the payment bond thresholds in every state?
The table below gives each state’s payment bond threshold as its statutes set it, the point at which a public construction contract requires a payment bond from the prime contractor, with the sections that set it.
Every row was checked in October 2026 against the state’s statute text and its 2025 and 2026 session laws, and against the administrative rule where the statute leaves the figure to one. Rows marked ‡ were read from a published reproduction of the code, because those states publish their official code only through a commercial provider. “Over” means the bond starts above the figure, and “or more” means it starts at the figure. A statute sets the minimum. An agency’s solicitation can require a bond on a smaller job, so confirm the requirement with the awarding body, your surety agent, or counsel before a bid decision.
| State | Payment bond threshold (public construction) | Statute |
|---|---|---|
| Alabama | $100,000 or more (state and local awarding authorities); payment bond of at least 50% of the contract price | Ala. Code § 39-1-1(a), (e) |
| Alaska | Over $100,000 (state and political subdivisions); a municipality may exempt qualifying contractors by ordinance on projects up to $400,000 | Alaska Stat. §§ 36.25.010(a), 36.25.025 |
| Arizona | Required on every contract for counties, cities, towns and districts unless a statute exempts it; over $100,000 for state agencies under the procurement code | Ariz. Rev. Stat. §§ 34-222(A), 41-2574(A), 41-2535 |
| Arkansas | Over $50,000 (state and local); payment bond equal to the full contract amount | Ark. Code Ann. § 18-44-503(a) ‡ |
| California | Over $25,000 (state and local public entities) | Cal. Civ. Code § 9550; Cal. Pub. Cont. Code § 7103 |
| Colorado | Over $150,000 (state); over $50,000 (counties, cities, school districts and other political subdivisions) | Colo. Rev. Stat. §§ 24-105-202(1), 38-26-105(1), 38-26-106(3) |
| Connecticut | Over $100,000 (state and municipalities) | Conn. Gen. Stat. § 49-41(a) |
| Delaware | No dollar figure in statute; a 100% bond covering labor and materials is required on large state agency public works contracts, above a threshold the state procurement council sets; a letter of credit may substitute | Del. Code Ann. tit. 29, §§ 6962(d)(9), 6913(d)(4) |
| District of Columbia | Over $100,000 (District agencies under the procurement code); a separate bonding statute still in the Code sets over $25,000 and lets the Mayor waive bonds | D.C. Code §§ 2-357.02(a), 2-201.01 |
| Florida | Over $100,000 (state; agencies may be allowed to exempt contracts under $200,000); local bodies may exempt contracts of $200,000 or less; FDOT may waive noncritical contracts of $250,000 or less | Fla. Stat. §§ 255.05(1)(d), 337.18(1)(a) |
| Georgia | Over $100,000 (state agencies and GDOT); $250,000 or more (counties, cities, school boards and other local bodies, since July 1, 2025); county and city road contracts: $5,000 or more | O.C.G.A. §§ 13-10-60, 32-2-70(a), 36-91-22(a), 36-91-90, 32-4-69, 32-4-119 ‡ |
| Hawaii | Over $25,000 by statute; small-purchase construction under $250,000 needs bonds only over $50,000; same rule for state and counties | Haw. Rev. Stat. §§ 103D-324(a), 103D-305(b); Haw. Code R. § 3-122-224(a) |
| Idaho | $50,000 or more (state and local); payment bond of at least 85% of the contract amount | Idaho Code § 54-1926 |
| Illinois | Over $150,000 (state and local; local governments may require one below); over $500,000 for IDOT and the Tollway; all return to over $50,000 on January 1, 2029 | 30 ILCS 550/1 |
| Indiana | Over $200,000 estimated cost (state, local and INDOT); may be required at $200,000 or less | Ind. Code §§ 4-13.6-7-6, 36-1-12-13.1, 8-23-9-8 |
| Iowa | $25,000 or more (state and local); may be required below; state agencies must waive it for qualifying targeted small businesses on projects of $50,000 or less | Iowa Code §§ 573.2(1), 573.6, 12.44(1) |
| Kansas | Over $100,000 (state and local); KDOT highway contracts over $1,000 need a bond under a separate statute | Kan. Stat. Ann. §§ 60-1111(a), 68-410 |
| Kentucky | Over $100,000 (state agencies, and local public agencies that adopt the Model Procurement Code) | Ky. Rev. Stat. §§ 45A.190(2), 45A.435(1) |
| Louisiana | Over $25,000 per project; over $50,000 (DOTD contracts); over $250,000 (Ascension Parish); bond of at least 50% of the contract price | La. R.S. 38:2241(A)(2), (A)(3); La. R.S. 48:256.3(A)(1) |
| Maine | Over $125,000 (state and local, including highways); an irrevocable letter of credit may substitute | 14 M.R.S. § 871(3), (3-A) |
| Maryland | Over the small procurement amount for construction (since October 1, 2025): $200,000 for DGS, MDOT and DNR capital projects, $100,000 for most other state units; local bodies may also require one over $100,000 | Md. Code, State Fin. &; Proc. §§ 17-103, 13-109(a) |
| Massachusetts | Over $25,000 (state and local); bond of at least half the contract price | Mass. Gen. Laws ch. 149, § 29 |
| Michigan | Over $50,000 (state and local) | Mich. Comp. Laws § 129.201 |
| Minnesota | $175,000 or more (state and local, tied to the sealed-bid threshold in § 471.345); MnDOT may exempt certain projects; not required for routine town road maintenance | Minn. Stat. §§ 574.26, subds. 1a, 2; 471.345, subd. 3 |
| Mississippi | Required on every formal public works contract (state and local); not required under $25,000 if the owner elects one lump-sum payment at completion | Miss. Code Ann. § 31-5-51(1), (5) ‡ |
| Missouri | Over $50,000 estimated cost; not required where a political subdivision has recorded consent to mechanic’s liens under § 513.455 | Mo. Rev. Stat. § 107.170(2), (6) |
| Montana | Required on every public works contract; may be waived for projects under $150,000 (school districts: under $7,500) | Mont. Code Ann. § 18-2-201(1), (4), (5) |
| Nebraska | Over $15,000 (state agencies); over $10,000 (counties, cities, villages, school districts and other public boards); may be required below | Neb. Rev. Stat. § 52-118 |
| Nevada | Over $100,000; payment bond of at least 50% of the contract amount; NDOT highway contracts fall under a separate statute that requires a bond on every contract but not necessarily a payment bond | Nev. Rev. Stat. §§ 339.025, 408.357 |
| New Hampshire | $75,000 or more (state); $125,000 or more (political subdivisions); may be required below | N.H. Rev. Stat. Ann. § 447:16 |
| New Jersey | Required on every public works contract; may be waived at $200,000 or less (state contracts let by the Division of Building and Construction) or $100,000 or less (local units and school districts) | N.J. Stat. Ann. § 2A:44-143(a) |
| New Mexico | Over $25,000; may be required below; subcontractors on public works building projects must bond subcontracts of $125,000 or more | N.M. Stat. Ann. §§ 13-4-18, 13-1-148.1 |
| New York | No fixed minimum; municipal corporations, public benefit corporations and commissions must require one on every public improvement contract; state contracts may skip bonds under $100,000 (or $200,000 with a public-interest finding) | N.Y. State Fin. Law § 137(1) |
| North Carolina | Contracts over $50,000 on projects whose total construction contracts exceed $300,000 ($500,000 for state departments, state agencies and UNC); may be required on any contract | N.C. Gen. Stat. § 44A-26(a) |
| North Dakota | Over $250,000 (state agencies and political subdivisions, since July 1, 2025); over $20,000 (DOT state highway contracts) | N.D. Cent. Code §§ 48-01.2-10, 24-02-17, 24-02-23 |
| Ohio | No dollar figure in the bond law; a 100% bond is required on every competitively bid state or local public improvement (bidding starts at $250,000 for the state and over $79,568 in 2026 for most local governments) | Ohio Rev. Code §§ 153.54, 153.57, 153.01, 9.17; Ohio Adm. Code 153:1-9-01 |
| Oklahoma | Over $100,000; construction management trade contracts or subcontracts over $50,000 | Okla. Stat. tit. 61, §§ 1, 113(B) |
| Oregon | Over $100,000; over $50,000 for highway, bridge and other transportation projects; agencies may exempt classes of contracts | Or. Rev. Stat. §§ 279C.380(1)(b), (5); 279C.390 |
| Pennsylvania | Over $10,000 (counties, municipalities, school districts, municipal authorities); over $5,000 (other public bodies under the Bond Law); over $281,273 in 2026 (Commonwealth agencies, indexed yearly) | 8 P.S. §§ 193, 193.1; 62 Pa.C.S. § 903 |
| Rhode Island | Over $50,000 (state, cities, towns and agencies, road and bridge work included); a separate section for DOT road and bridge contracts says over $150,000; bond of 50% to 100% of the contract price | R.I. Gen. Laws §§ 37-13-14, 37-12-1 |
| South Carolina | Over $50,000 (state and local; full contract amount); state agencies may waive only at $50,000 or less; SCDOT highway contracts over $10,000 (bond of at least 50%) | S.C. Code Ann. §§ 29-6-250, 11-35-3030(2)(a), 57-5-1660(a) |
| South Dakota | Required on every public improvement contract; may be waived when the bid is $100,000 or less; county and township road contracts excepted | S.D. Codified Laws §§ 5-21-1, 5-21-1.1, 5-18A-14, 31-12-15 |
| Tennessee | Over $100,000; bond of at least 25% of the contract price; transportation department contracts: bond in an amount the department sets | Tenn. Code Ann. §§ 12-4-201(a)(1), 54-5-119(a) ‡ |
| Texas | Over $25,000; over $50,000 when the owner is a municipality or a joint airport board; performance bond required over $100,000 | Tex. Gov’t Code § 2253.021(a) |
| Utah | No dollar figure in statute; required on every construction contract unless waived by rule; the state purchasing rule sets over $50,000; DFCM contracts need one only if the division requires it (since May 6, 2026) | Utah Code §§ 63G-6a-1103, 14-1-18; Utah Admin. Code R33-111-303 |
| Vermont | Agency of Transportation projects: payment bond required, may be waived at $250,000 or less (was $100,000 before July 1, 2026); no general payment bond statute found for other state or local work | 19 V.S.A. § 10(9); 2026 Vt. Acts No. 168, § 16 |
| Virginia | Over $500,000 (non-transportation construction); over $350,000 (state-funded transportation projects); any public body may require bonds below these amounts | Va. Code § 2.2-4337(A), (E) |
| Washington | No dollar minimum; required on every public works contract; on contracts of $150,000 or less the contractor may choose 10% retainage instead | RCW 39.08.010(1), (3) |
| West Virginia | No dollar minimum; required on every contract for a public building or other structure | W. Va. Code § 38-2-39 |
| Wisconsin | Over $148,000 (state) and over $74,000 (local governments), unless the awarding body approves another payment assurance; no substitute allowed over $369,000 (state) or $148,000 (local) | Wis. Stat. § 779.14(1m)(c), (d) |
| Wyoming | Over $150,000; at $150,000 or less the public entity may require another approved guarantee instead | Wyo. Stat. Ann. § 16-6-112(a) |
Why older charts show different numbers. Many thresholds have moved, and compilations still circulate the old figures. Alabama went from $50,000 to $100,000 in 2023. Arkansas went from $20,000 to $35,000 in 2019 and to $50,000 in 2021. Colorado’s state figure of $150,000 and Missouri’s $50,000 both date from 2014. Wyoming went to $150,000 in 2020, Oklahoma to $100,000 in 2022, and Illinois to $150,000 in 2024, with a return to $50,000 scheduled for January 1, 2029. Kentucky reached $100,000 for local agencies in 2019 and for the state in 2024. In 2025, Georgia raised its local figure to $250,000, North Dakota went to $250,000, and Maryland tied its figure to the small procurement amount. Vermont raised its transportation waiver ceiling to $250,000 on July 1, 2026. Virginia’s non-transportation threshold rose from $100,000 to $500,000 effective July 1, 2011, under Va. Code § 2.2-4337.
Other gaps come from states whose bond statute sets no dollar trigger. Mississippi, Montana, New Jersey, New York, South Dakota, Utah, Washington, and West Virginia require a bond on covered contracts of any size unless a waiver or exception applies, and Arizona does the same for local governments. Ohio ties the bond to competitive bidding, and Delaware leaves the figure to a state council. A single number shown for these states elsewhere is usually a waiver ceiling, a bidding threshold, or a figure set by rule or council. Florida and several other states also set different figures for state and local contracts, which the table shows separately.
What happens if a subcontractor misses a bond-claim notice deadline?
Miss the deadline and the bond claim is generally gone, regardless of whether the underlying debt is real. Under the federal Miller Act, a subcontractor or supplier who has a direct contract with the prime contractor can sue the payment bond without any preliminary notice once 90 days have passed since their last work or delivery without full payment, but must file suit within one year of the last day they furnished labor or material. A second-tier claimant, someone who contracted with a subcontractor rather than the prime, has an extra step: they must send written notice to the prime contractor within 90 days of their last work or delivery, stating the amount claimed and identifying who the work was performed for. The notice must be served by a method that provides written, third-party verification of delivery to the prime’s office, place of business, or residence, or in any manner the U.S. marshal for the project’s district may serve a summons. Skip that 90-day notice and the second-tier claimant loses the right to sue the payment bond at all. The one-year suit deadline still applies on top of it, for every claimant, first-tier or second-tier.
State Little Miller Acts generally pair a notice window with a separate suit deadline, and some also require an early notice soon after work starts. The exact number of days, the required delivery method, and who needs to send notice to whom vary by state and are not part of the table above. If you are chasing a bond claim on a state or local job, confirm your state’s specific notice and suit deadlines the day you realize you have not been paid, not after the clock has already run.
How does payment bond tracking fit into the rest of your compliance chain?
It fits the same way every other compliance document does: it needs to be ingested when the contract is awarded, validated against the contract’s actual bonding requirement, flagged before a deadline passes, and archived where it can be found the day a claim question comes up.
A payment bond is not a document you file once and forget. It has a penal sum that needs to match the amount the governing statute requires, generally 100 percent of the contract price on federal work, a surety whose standing is worth periodic reconfirmation, and, for any unpaid sub or supplier, a notice clock and a suit clock that start on their last day of work and do not pause for anyone. Firms that already track certificates of insurance, certified payroll, W-9s, and licenses in one place have the muscle memory for this. The same ingest, validate, flag, route, and archive sequence that catches an expiring certificate of insurance or a missing certified payroll is the sequence that should be watching bond thresholds, penal sums, and claim deadlines too. A bond sitting in a folder that nobody checks against the actual contract value, until a sub calls asking where their money went, is the same chain-of-custody gap that causes every other compliance miss on a federal or state job.
Related reading and resources
- Best AI tools for federal government contractors
- Best AI for construction: the honest comparison
- Certified payroll automation software
- Subcontractor prequalification forms
- Free payment bond requirements checklist
Primary sources: 40 U.S.C. § 3131 · 40 U.S.C. § 3133 · FAR 28.102-1
Frequently asked questions
What is a payment bond in construction?
A payment bond is a guarantee, backed by a surety company, that subcontractors, laborers, and material suppliers on a public construction project get paid if the prime contractor does not pay them. It exists because liens generally cannot be filed against government-owned property, so the bond is the substitute remedy. The prime buys it before the contract is awarded, and an unpaid sub files a claim against the bond instead of against the building.
Does the Miller Act require a payment bond on every federal construction contract?
No. The Miller Act’s bonding requirement, as implemented through FAR 28.102-1, applies to federal construction contracts exceeding $150,000. For contracts over $35,000 and up to $150,000, the contracting officer must select two or more payment protections, such as a payment bond, an irrevocable letter of credit, or an escrow agreement, and the contractor furnishes one of them. At $35,000 or less, the Miller Act’s bonding scheme generally does not apply, though a specific solicitation may still require one.
What is a Little Miller Act, and does every state have one?
A Little Miller Act is a state law modeled on the federal Miller Act, requiring a payment bond on state or local public construction contracts, usually above a dollar threshold the state sets. Every state has some version of one, though Vermont’s covers only state transportation projects. Thresholds vary widely from state to state and often between state, local, and transportation contracts within the same state.
How much does a payment bond threshold vary from state to state?
Quite a bit. Several states, including New York, Washington, and West Virginia, require a bond on covered public contracts with no dollar floor. Where a statute does set a trigger, it runs from $5,000 or less on some road and local contracts to over $500,000 for Virginia non-transportation work. Many states also set different figures for state agencies, local governments, and transportation projects, so confirm the exact number in the awarding state’s current statute before relying on it for a bid decision.
What happens if a subcontractor misses the payment bond claim notice deadline?
The claim is generally lost, even if the underlying debt is real. Under the federal Miller Act, a second-tier claimant who does not send written notice to the prime contractor within 90 days of last furnishing labor or material forfeits the right to sue the payment bond. A one-year deadline to file suit also applies to every claimant. State Little Miller Acts impose similar deadlines with their own specific windows, and some add an early notice soon after work starts.
Can a subcontractor file a mechanic’s lien instead of a payment bond claim on a public project?
Generally no. Most states bar liens against publicly owned property, which is the entire reason payment bonds exist on public work. A subcontractor’s main remedy for nonpayment on a public job is the payment bond claim process, not a lien on the property (some states, such as California, also allow a claim against the unpaid contract funds), so knowing the applicable notice and suit deadlines matters more on public work than it does on private work.
Bond deadlines don’t send themselves a reminder.
If bond thresholds, penal sums, and claim deadlines live in a folder instead of a system, a demo is the fastest way to see how the same document chain that tracks your COIs and certified payroll can track this too. Our co-founder ran a large federal general contracting firm for 15 years, about 100,000 documents a year.