Two numbers circulate for the federal construction bond threshold, and contractors get told, confidently, that each of them is the right one. They are both right. They come from two different documents, they say slightly different things, and knowing which is which is the difference between reading a solicitation correctly and arguing with a contracting officer about a figure that is not in dispute.
What the statute says
The Miller Act is codified at 40 U.S.C. §§ 3131–3134. The threshold sentence is 40 U.S.C. § 3131(b):
“Before any contract of more than $100,000 is awarded for the construction, alteration, or repair of any public building or public work of the Federal Government, a person must furnish to the Government the following bonds, which become binding when the contract is awarded.”
Three things are worth pulling out of that sentence. The trigger is the contract value, not the value of any one part of the work. The bonds are furnished before award, as a condition of it, and they become binding at award. And the subject is a public building or public work of the Federal Government — which is what keeps this statute off state, county, and municipal jobs entirely.
What the FAR says
The Federal Acquisition Regulation states the same requirement at a different figure. FAR 28.102-1(a):
“40 U.S.C. chapter 31, subchapter III, Bonds (formerly known as the Miller Act), requires performance and payment bonds for any construction contract exceeding $150,000.”
That is not a competing rule. It is the same requirement written at the inflation-adjusted acquisition threshold. Congress set a dollar figure in the statute; the acquisition system escalates certain statutory thresholds so they do not shrink in real terms every year, and the FAR states the escalated figure.
Why both numbers are correct
The statute is the authority. The FAR is what the buying activity runs on. Neither is a typo, neither has been repealed, and neither is a rounding of the other — they are separated by the escalation, not by an error.
The practical consequence is small but sharp: if you go looking for the rule and land on the United States Code at 40 U.S.C. § 3131(b), you will read $100,000; if you land on the acquisition regulation at FAR 28.102-1(a), you will read $150,000; and if you land on a bonding company’s marketing page, you will read whichever one the writer found first. Every guide that prints one of these figures without the other is printing half the rule, and it is wrong to whichever reader is holding the other document.
We print both, with the citation next to each, for that reason.
Which number applies to your job
The one in the solicitation. Federal construction is bought under the FAR, so the operative threshold in the contracting officer’s hands is the FAR 28.102-1(a) figure. If your contract exceeds that figure, expect a performance bond and a payment bond as a condition of award.
Below it, the requirement does not simply vanish. FAR 28.102-1(b)(1) puts a band underneath the bond threshold in which the contracting officer must select payment protections from a defined list rather than requiring a payment bond outright, and the statute has its own version of that band at 40 U.S.C. § 3132(a). That band is where most of the confusion about “small federal jobs” actually lives, and it is worth reading separately.
What the bonds have to be worth
The threshold decides whether. A different sentence decides how much, and the two are frequently conflated.
FAR 28.102-2(b) sets the performance bond penal sum at an amount that “must equal 100 percent of the original contract price” unless the contracting officer determines that a lesser amount adequately protects the Government. The payment bond starts from the same figure and can be reduced only on “a written determination supported by specific findings that a payment bond in this amount is impractical,” and in no case may it fall below the performance bond: “the amount of the payment bond must be no less than the amount of the performance bond.”
The statute is looser. 40 U.S.C. § 3131(b)(1) requires a performance bond “in an amount the officer considers adequate” — no percentage appears in the statutory text at all. The 100 percent figure everyone quotes is regulatory, not statutory, and that distinction matters the moment you are reading a state statute instead, where the percentage may be 85, or 50, or absent.
The bid guarantee that travels with them
On federal construction the bid bond is called a bid guarantee, and it is tied directly to the bond requirement above. FAR 28.101-1(a) requires a bid guarantee “whenever a performance bond or a performance and payment bond is required,” waivable only by the chief of the contracting office. FAR 28.101-2(b) sizes it: “The bid guarantee amount shall be at least 20 percent of the bid price but shall not exceed $3 million.”
Read in that order, the bid guarantee is a signal. If a solicitation asks for one, the agency has already decided the job is bonded work — which means your surety needs to be able to write the performance and payment bonds behind it before you bid, not after you win.
Two things the performance bond covers that surprise people
The federal performance bond is not only about finishing the work. 40 U.S.C. § 3131(c) directs that the performance bond specifically covers taxes withheld from the wages of persons employed on the contract, with its own notice rule for the Government and its own one-year limit on that claim. It is a discrete obligation riding on the same instrument.
And the requirement is not absolute. Section 3131(d) allows waiver for work performed in a foreign country where the requirement would be impracticable, and § 3134 permits the service secretaries to waive it for certain cost-type contracts and vessel contracts. These are the exceptions the statute names; there is no general small-business or small-contract exemption hiding among them.
What this rule is not
It is not the rule on your state job. Every state has its own public-works bond statute, and the numbers in them were set by different legislatures at different times for different reasons. Some states set one threshold, several set two doing two different jobs, and the penal sums range from a fixed percentage of the contract to a measure that names no percentage anywhere. If your obligee is a state agency, a county, a school district, or a city, the federal figures above tell you nothing about what you owe.
