New Hampshire Construction Bonds

n New Hampshire, certain types of specialty contractors are licensed at the state level. There is no statewide licensing of general contractors. But general contractors may have to obtain a local license or permit, which may require the purchase of a contractor license bond.

New Hampshire’s “Little Miller Act,” the state’s version of the federal Miller Act, requires contractors awarded state-funded projects with a value in excess of $200,000 to furnish both performance bonds and payment bonds.

Private construction projects aren’t subject to the Little Miller Act. Nonetheless, private project owners also can require performance and payment bonds from their contractors. And both private and construction project owners may make the provision of a bid bond by each contractor a condition for bidding on a job.

Other construction bonds that contractors operating in New Hampshire may need include:

• Maintenance bonds
• Subdivision/site improvement bonds
• Supply bonds
• Solar decommissioning bonds
• Right of Way bonds

Every construction bond is a legally binding agreement among three parties referred to as the:

• obligee—the project owner requiring the bond,
• principal—the contractor purchasing the bond, and
• surety—the party guaranteeing the bond.

The surety will investigate claims upon receipt and determine their legitimacy. If a claim is found to be valid, the principal is legally obligated to pay it. At the time a construction bond is purchased, the surety agrees to extend credit to the principal if it becomes necessary to pay a claim. In fact, the surety will actually pay the claimant on the principal’s behalf. The principal then must repay the resulting debt. Not doing so will most likely cause the surety to take legal action to recover the debt.