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Miller Act: when you need payment and performance bonds

Bonds

By the Public Works Desk Team · Last verified · How we check every number · Corrections

Source: FAR 28.102-1 General. (48 CFR) (eCFR, current as of 2026-11-10)

Federal construction contracts over $150,000 require both a performance bond and a payment bond.

For contracts over $35,000 up to $150,000, the contracting officer selects two or more payment protections (payment

bond,

irrevocable letter of credit, tripartite escrow agreement, certificates of deposit, or other listed security).

  • Official text quoted word for word
  • eCFR as of 2026-11-10
An electrician carrying a coil of cable and a field inspector with a tablet walk past a multi-story federal building under construction, with guardrails on every floor and a tower crane above.

What the rule says

“requires performance and payment bonds for any construction contract exceeding $150,000”

FAR 28.102-1 General. (48 CFR) · eCFR, current as of 2026-11-10

“for construction contracts greater than $35,000, but not greater than $150,000,

the contracting officer shall select two or more of the following payment protections”

FAR 28.102-1 General. (48 CFR) · eCFR, current as of 2026-11-10

Step by step

  1. Size the contractOver $150,000: both bonds. $35,000-$150,000: alternatives chosen by the contracting officer.
  2. Line up surety capacity earlyBond capacity limits how many jobs you can bid at once.
  3. Check state jobs separatelyState and local public works use the state's 'Little Miller Act', with different thresholds.

Worked example: three contract sizes

$1,200,000 federal construction contractPerformance bond + payment bond
$90,000Two or more payment protections chosen by the contracting officer
$30,000Not covered by these bond rules
Common mistakes
  • Assuming state thresholds match the federal $150,000 line.
On state-funded jobs. State and local jobs follow "Little Miller Acts", with their own lines: Texas requires a performance bond over $100,000 and a payment bond over $25,000 (Government Code ch. 2253); Pennsylvania local governments require bonds from $10,000 (Act 86 of 2020), and Commonwealth agencies use $70,318 and $281,273 (62 Pa.C.S. § 903, as adjusted January 1, 2026).
Limits. This guide — Miller Act: when you need payment and performance bonds — quotes the federal rule from the sources below. It is not a substitute for the wage determination or the clause in your contract. State law can be stricter; see the note on state-funded jobs. Worked examples and calculator defaults use the wage determination named on the page, as of the date shown there.

Related

Sources