Subcontractors filing Miller Act lawsuits in the U.S. must generally do so in the federal district court where the contract from which the dispute arose was “performed and executed.” 40 USC §§ 3131-3134 However, on contracts performed outside of the U.S., the court that is the proper venue for a Miller Act lawsuit can be a murky issue. This is, perhaps, one of the reasons why the Miller Act permits a contracting officer to waive the Act’s payment and performance bond requirements on work performed abroad if it is found “impracticable for the contractor to furnish such bonds.” Federal courts have also held that parties may waive the Miller Act venue requirement through a valid forum selection clause in a contract agreement.
Where the contracting officer does not waive the Miller Act requirements and the parties do not agree on a forum selection clause for a contract performed abroad, all federal district courts may have jurisdiction over a Miller Act claim filed by a subcontractor under the federal contract at issue. Determining proper venue in these circumstances requires a more complicated factual analysis of the dispute.
In the past, courts have considered factors such as where the parties executed the contract, where supplies or services were to be delivered, and the site of performance in evaluating whether a “sufficient nexus” existed to satisfy the Miller Act venue requirement. Since the latter two factors would not apply to an overseas project, courts may consider where the contract was executed as a decisive factor in determining venue for a Miller Act suit on the U.S. federal supply or services contract to be performed abroad, but this issue has not been conclusively resolved. By addressing venue concerns during contract negotiations with subcontractors or in discussions with the government, federal contractors may be able to avoid placing the venue determination in the hands of a judge, where the result may be unpredictable and unfavorable.