Chapter 24 - § 24.8 • FEDERAL CONSTRUCTION CLAIMS

• Jurisdiction: Colorado

§ 24.8 • FEDERAL CONSTRUCTION CLAIMS

See generally § 24.4.3, "Exhaustion of Administrative Remedies."

§ 24.8.1-Miller Act Claims

The Miller Act provides a mechanism by which a subcontractor or supplier may recover under a payment bond in the event of the insolvency of or non-payment by the contractor.²⁵⁴

To maintain a claim under the Miller Act, the subcontractor or materialman must provide notice within 90 days to the contractor, stating with "substantial accuracy" the amount claimed and to whom the materials or work was given.²⁵⁵ The claim must be filed no later than one year after the last date of work or last date of material supply to the prime contractor.²⁵⁶ Subject matter jurisdiction in a Miller Act claim is proper in federal district court under federal question jurisdiction, and venue is proper in "any district in which the contract was to be performed."²⁵⁷ However, it is now "quite settled" that the venue provision in the Miller Act is not a jurisdictional requirement.²⁵⁸ Therefore, a plaintiff cannot avoid the enforcement of an arbitration agreement it voluntarily entered into by arguing that it is bound by the Miller Act's venue requirement, and arbitration agreements will be enforced in Miller Act claims.²⁵⁹

To protect a Miller Act claim under a subcontract containing an arbitration clause, the subcontractor should file the lawsuit within the time constraints and then file a motion to stay the proceeding pending the outcome of arbitration (possibly in conjunction with a motion to compel arbitration).²⁶⁰

See Chapter 21 for further information on arbitration of mechanics' lien and Miller Act claims.

§ 24.8.2-Federal False Claims Act

In an effort to combat fraud within the construction sector, Congress enacted the Federal False Claims Act (FCA). This act contains a qui tam provision (commonly known as a "whistleblower" provision) that allows any person who is not affiliated with the government to institute a civil action on behalf of the government to uncover fraud or abuse in a contract with the government.²⁶¹ While courts are split on the particularity or specificity needed in pleading an FCA claim, the FCA allows an action against any person who knowingly makes a fraudulent claim, produces or uses a false record, or acts in any fraudulent way in receiving business from the federal government.²⁶²

§ 24.8.3-Federal Contracts

This subject is outside the scope of this chapter, but practitioners should be aware that unique federal regulations...