Alabama Performance BondAla. Code § 39-1-1
Alabama's Little Miller Act requires a performance bond, and a payment bond alongside it, on covered public works contracts. The trigger: $100,000 (raised from $50,000, eff. 9/1/2023). The performance bond guarantees the public owner that the job gets finished; the payment bond protects the subcontractors and suppliers who cannot lien public property.
Alabama's $100,000 trigger is lower than the federal Miller Act's $150,000, so state and local jobs need bonds at a size where a federal job would not.
- Who requires it: Alabama public owners awarding covered public works contracts (Ala. Code § 39-1-1).
- Amount: Performance bond: 100% of contract price. Payment bond: Not less than 50% of contract price.
- Typical cost (estimate): about $1,000-$2,000 on a $100,000 contract with excellent credit, up to $5,000-$10,000 below 620. The surety sets the final price.
- Timing: Same-day submission; most quotes within one business day.
Alabama public works bonding at a glance
- Bond threshold
- $100,000 (raised from $50,000, eff. 9/1/2023)
- Controlling statute
- Ala. Code § 39-1-1
- Performance bond amount
- 100% of contract price
- Payment bond amount
- Not less than 50% of contract price
- Claim notice (sub-tier claimants)
- No preliminary notice and no separate notice to the prime contractor required, including for claimants without a direct contract with the prime. The only prerequisite is written notice to the surety of the amount claimed and the nature of the claim at least 45 days before suing. Notice by registered or certified mail to any of the surety's places of business is sufficient.
- Deadline to sue on the payment bond
- Suit must be filed no later than 1 year from the date of final settlement of the contract. It cannot be filed until 45 days after the written notice to the surety.
- Federal jobs in Alabama
- Miller Act (40 U.S.C. § 3131): bonds on federal contracts over $150,000
Source: Ala. Code § 39-1-1 and the claim statutes cited below. Requirements change; confirm the current statute and your contract before bidding.
Getting paid: Alabama payment bond claims
On public work you cannot file a mechanics lien against the property, so the payment bond is the security for unpaid labor and materials. Miss a deadline and the claim can be lost.
Notice
No preliminary notice and no separate notice to the prime contractor required, including for claimants without a direct contract with the prime. The only prerequisite is written notice to the surety of the amount claimed and the nature of the claim at least 45 days before suing. Notice by registered or certified mail to any of the surety's places of business is sufficient.
Lawsuit deadline
Suit must be filed no later than 1 year from the date of final settlement of the contract. It cannot be filed until 45 days after the written notice to the surety.
Statute text: source 1. General information, not legal advice.
What a Alabama performance bond costs
The premium is a percentage of the contract price, and the performance and payment bonds on a public job are usually priced together. Here is the math on a $100,000 contract, the size where Alabama's bond requirement starts:
Alabama performance bond cost by credit profile
Based on a $100,000 Contract bond amount
- Excellent (750+)Rate: 1-2%$1,000-$2,000
- Good (680-749)Rate: 2-3%$2,000-$3,000
- Fair (620-679)Rate: 3-5%$3,000-$5,000
- Below 620Rate: 5-10%$5,000-$10,000
Illustrative ranges. Final pricing is set by the issuing carrier based on credit, financial statements, experience and the job.
How to get bonded for a Alabama public job
- 1.Check the bid documents for the bond forms, amounts and any bid bond the owner requires at bid time.
- 2.Apply once for the program: company financials, work in progress, and the job details. Smaller jobs can often be underwritten on credit alone.
- 3.On award, we place the performance and payment bonds with a Treasury-listed carrier on the owner's form; you pay only when the bonds are issued.
Alabama performance bond questions
Does Alabama require a performance bond on public projects?
Yes. Alabama's Little Miller Act (Ala. Code § 39-1-1) requires contractors on covered public works contracts to post performance and payment bonds. The trigger: $100,000 (raised from $50,000, eff. 9/1/2023). Private owners and lenders can also require one by contract.
What is the Alabama Little Miller Act threshold?
$100,000 (raised from $50,000, eff. 9/1/2023). Alabama's $100,000 trigger is lower than the federal Miller Act's $150,000, so state and local jobs need bonds at a size where a federal job would not.
How much does a performance bond cost in Alabama?
Premiums are a percentage of the contract price and depend mainly on the contractor's credit, financials and experience. On a $100,000 contract, typical ranges run about $1,000-$2,000 for excellent credit up to $5,000-$10,000 below 620. The issuing carrier sets the final price.
What is the deadline to sue on a Alabama payment bond?
Suit must be filed no later than 1 year from the date of final settlement of the contract. It cannot be filed until 45 days after the written notice to the surety. (Ala. Code § 39-1-1). Confirm the deadline against the statute and your contract before relying on it.
Do subcontractors have to give notice before a Alabama payment bond claim?
No preliminary notice and no separate notice to the prime contractor required, including for claimants without a direct contract with the prime. The only prerequisite is written notice to the surety of the amount claimed and the nature of the claim at least 45 days before suing. Notice by registered or certified mail to any of the surety's places of business is sufficient. (Ala. Code § 39-1-1).
Who needs an Alabama performance bond?
Contractors on public works projects in Alabama above the statutory threshold. It is required by Alabama public owners awarding covered public works contracts (Ala. Code § 39-1-1). The bond amount is performance bond: 100% of contract price; payment bond: Not less than 50% of contract price.
How do I get an Alabama performance bond?
Request a quote with the form on this page. A licensed agent submits your application to a Treasury-listed surety carrier; once the carrier issues your bond, file it as the requiring agency directs.
What happens after I apply?
A licensed agent reviews your request and submits it to the carrier; most quotes come back within one business day. The carrier decides approval and the final premium, and you pay only when your bond is issued.
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