what is a payment bond?
For payment bonds on U.S. Government construction contracts, see Miller Act. For payment bonds on state government construction contracts, see Little Miller Act. A payment bond is a surety bond posted by a contractor to guarantee that its subcontractors and material suppliers on the project will be paid. They are required in contracts over $35,000 with the Federal Government and must be 100% of the contract value. They are often required in conjunction with performance bonds.