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Who is Protected Although the payment bond is intended to protect "all persons supplying labor and material in carrying out the work provided for in the contract," 40 U. Further, a second-tier material supplier who supplied a first-tier material supplier and not a first-tier subcontractor, likewise cannot recover under the Miller Act payment bond. Thus, unless the general contractor is or becomes insolvent, it is typically the general contractor that is ultimately liable under a Miller Act payment bond claim, even if it is the surety that initially writes the check to the claiming subcontractor. § 3131(b)(2), the parties that may assert a claim under it are limited to: Third-tier and more remote subcontractors and material suppliers cannot recover against the Miller Act payment bond. For securing a recovery on a public construction project, the unpaid subcontractor must rely on the federal Miller Act (for federal construction projects) or the North Carolina "Little Miller Act" (for State of North Carolina construction projects). What is commonly known as the Miller Act is codified at 40 U. As a matter of terminology, the general contractor obtaining the payment bond is referred to as the "principal," the surety issuing the payment bond is referred to as the "surety," and the owner is referred to as the "obligor." Subcontractor and materialman claimants against the payment bond are typically referred to as "claimants," but could also be considered and are sometimes referred to as "obligees." The primary public policy purpose of the Miller Act payment bond is to replace the security provided by the lien right that would otherwise be available on a non-public or non-government construction project - the payment bond effectively stands in place of the real property for purposes of security. Put simply, the claimant must not only perfect the claim against the payment bond, but also establish that it has improved the project consistent with the prime contract and not been paid for its work performed or materials furnished.
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