Is there a law that requires contractors to provide a bond?
The Miller Act of 1935 (originally enacted in 1893 as the Heard Act) is the current federal law mandating performance and payment bonds for all federal public work contracts in excess of $100,000 and payment protection, with payment bonds the preferred method, for contracts in excess of $25,000. Also, almost all 50 states, the District of Columbia, Puerto Rico, and most local jurisdictions have enacted similar legislation requiring surety bonds on public works over certain dollar amounts. These generally are referred to as Little Miller Acts. Many general contractors then require their subcontractors to obtain similar bonds to protect them from contractor default. While most states do not require bonds on private construction projects, many owners do require them to protect their project and assets.
