To the Department of Veterans Affairs (VA) Heads of the Contracting Activities (HCA) and all VA acquisition professionals:
The Miller Act (40 U.S.C. Section 3131 to 3134) requires contract surety bonds on federal construction projects. The Miller Act also requires every contractor bidding on a federal project to post a performance bond and a payment bond covering all labor and material. The law applies to contracts exceeding $100,000 that involve any level of work on any building or property of the United States.
Many construction project solicitations include bonding requirements. This is to ensure that bidders will honor their bids for the construction project if they are selected for award of the contract. It is very important that the bonding requirements do not limit competition by setting bonding amounts and/or percentage requirements that would prove difficult for small businesses to meet.
Here at VA we value greatly our small business community; particularly Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) and Veteran-Owned Small Businesses (VOSBs). We recognize that Bond requirements as well as bond percentages and amounts are set at the discretion of the Contracting Officer (CO). However, we would like to reemphasize to our acquisition community their responsibility to ensure that SDVOSBs and VOSBs are being adequately considered for all construction solicitations and that we are assisting them in understanding bid requirements. You are also encouraged to ensure that the bonding requirements that are established for VA’s construction solicitations are fair and reasonable.
Thank you for your continuing support of our mission and our Nation’s Veterans.