J.H. Lynch & Sons, a subcontractor on a Navy project, sued the general contractor's surety for unpaid work totaling over $575,000. The general contractor had included a pay-when-paid clause in the subcontract, which the surety argued blocked Lynch's claim. The court rejected this argument and ruled that pay-when-paid clauses cannot prevent subcontractors from pursuing Miller Act claims against sureties. This decision protects subcontractors' federal payment bond rights regardless of what their subcontracts say.
Pay-when-paid clauses in your subcontract cannot stop you from suing the payment bond surety under the Miller Act—your federal rights override contract language
If you work on a federal project and don't get paid, pursue the surety directly; don't let the general contractor hide behind contract terms
Document all work completion dates and unpaid invoices carefully, as these are critical to proving your Miller Act claim against the surety