[House Report 106-277]
[From the U.S. Government Publishing Office]
106th Congress Rept. 106-277
HOUSE OF REPRESENTATIVES
1st Session Part 1
======================================================================
CONSTRUCTION INDUSTRY PAYMENT PROTECTION ACT OF 1999
_______
July 30, 1999.--Ordered to be printed
_______
Mr. Burton of Indiana, from the Committee on Government Reform,
submitted the following
R E P O R T
[To accompany 1219]
[Including cost estimate of the Congressional Budget Office]
The Committee on Government Reform, to whom was referred the
bill (H.R. 1219) to amend the Office of Federal Procurement
Policy Act and the Miller Act, relating to payment protections
for persons providing labor and materials for Federal
construction projects, having considered the same, report
favorably thereon with amendments and recommend that the bill
as amended do pass.
CONTENTS
Page
I. Background and Need for the Legislation..........................2
II. Legislative Hearings and Committee Actions.......................5
III. Committee Hearings and Written Testimony.........................6
IV. Explanation of the Bill..........................................7
V. Committee Oversight Findings.....................................7
VI. Budget Analysis and Projections..................................8
VII. Cost Estimate of the Congressional Budget Office.................8
VIII.Statement of Constitutional Authority............................9
IX. Committee Recommendation.........................................9
X. Congressional Accountability Act; P.L. 104-1.....................9
XI. Unfunded Mandates Reform Act; P.L. 104-4, Section 423............9
XII. Federal Advisory Committee Act (5 U.S.C. App.) Section 5(b)......9
XIII.Changes in Existing Law.........................................10
The amendments are as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Construction Industry Payment
Protection Act of 1999''.
SEC. 2. AMENDMENTS TO THE MILLER ACT.
(a) Enhancement of Payment Bond Protection.--Subsection (a)(2) of
the first section of the Miller Act (40 U.S.C. 270a(a)(2)) is amended
by striking the second, third, and fourth sentences and inserting in
lieu thereof the following: ``The amount of the payment bond shall be
equal to the total amount payable by the terms of the contract unless
the contracting officer awarding the contract makes a written
determination supported by specific findings that a payment bond in
that amount is impractical, in which case the amount of the payment
bond shall be set by the contracting officer. In no case shall the
amount of the payment bond be less than the amount of the performance
bond.''.
(b) Modernization of Delivery of Notice.--Section 2(a) of the
Miller Act (40 U.S.C. 270b(a)) is amended in the last sentence by
striking ``mailing the same by registered mail, postage prepaid, in an
envelop addressed'' and inserting ``any means which provides written,
third-party verification of delivery.''.
(c) Nonwaiver of Rights.--The second section of the Miller Act (40
U.S.C. 270b) is amended by adding at the end the following new
subsection:
``(c) Any waiver of the right to sue on the payment bond required
by this Act shall be void unless it is in writing, signed by the person
whose right is waived, and executed after such person has first
furnished labor or material for use in the performance of the
contract''.
SEC. 3. IMPLEMENTATION THROUGH THE GOVERNMENT-WIDE PROCUREMENT
REGULATIONS.
(a) Proposed Regulations.--Proposed revisions to the Government-
wide Federal Acquisition Regulation to implement the amendments made by
this Act shall be published not later than 120 days after the date of
the enactment of this Act and provide not less than 60 days for public
comment.
(b) Final Regulations.--Final regulations shall be published not
less than 180 days after the date of the enactment of this Act and
shall be effective on the date that is 30 days after the date of
publication.
Amend the title so as to read:
A bill to amend the Miller Act, relating to payment
protections for persons providing labor and materials for
Federal construction projects.
I. Background and Need for Legislation
A. Purpose for the Bill
H.R. 1219, the Construction Industry Payment Protection Act
of 1999, amends and updates the 1935 Miller Act (40 U.S.C. 270a
et seq.). Under the Miller Act, contractors performing work on
any Federal Government public works projects costing in excess
of $100,000 are required to provide a payment bond. The payment
bond is intended to protect subcontractors and suppliers of
materials against the risk of nonpayment when working on
Federal construction projects. The Miller Act also requires the
prime contractor to provide a performance bond for the
protection of the Government.
The purpose of H.R. 1219 is to improve payment bond
protections for persons who furnish labor or material for use
on Federal construction projects. The bill would achieve this
objective in a manner that does not unreasonably increase the
financial exposure or other burdens placed on the prime
contractor, usually a general contractor, or on the surety bond
producers and corporate sureties that provide the Miller Act
payment bonds.
The bill makes a number of targeted amendments to the
Miller Act. First, the bill would increase the amount of the
payment bond from a level that has remained unchanged since the
law was enacted in 1935. The bill would require that the amount
of the payment bond be equal to the contract price. Second, the
bill would modernize the methods by which notices required
under the Act may be transmitted, but with the safeguard of
requiring that the methods of notice generate a written third-
party confirmation of receipt. Third, the bill would void
waivers of Miller Act payment bond protections prior to
commencing the work.
B. Background
1. Surety Bonding Requirements Under the Miller Act
The 1935 Miller Act requires a contractor who is awarded a
Federal construction contract in excess of $100,000 to furnish
two surety bonds to the Government--a performance bond and a
payment bond. The 1935 Act authorizes payment bond claimants to
file suits in U.S. District Courts and specifies the procedural
requirements relating to such suits.
A surety bond is a promise to be liable for the debt,
default or failure of another. Contract surety bonds are three-
party instruments in which one party (the surety) guarantees or
promises a second party (the project owner) the successful
performance of a contract by a third party (the prime
contractor). The Federal Government also uses surety bonds on
construction projects as a way to pre-qualify prospective
construction firms. A surety's underwriting process consists of
an extensive pre-qualification process in order to guarantee to
the project owner that the principal will fulfill the terms of
the contract. Before issuing a bond, a surety will evaluate a
contractor firm's ability to perform the job for which the bond
is being sought. A surety will evaluate a contractor's past
performance, including its financial and management
capabilities and its payment of subcontractors and suppliers.
The performance bond protects the Government in the event
the prime contractor fails to perform its obligations under the
contract. The performance bond assures that the contractor will
complete the job and satisfy other obligations under the
construction contract. The Miller Act gives the Federal
contracting officer the discretion to specify the dollar amount
of the performance bond. The government-wide Federal
Acquisition Regulation (FAR), calls for a performance bond to
be 100 percent of the award value of the construction contract,
``unless the contracting officer determines that a lesser
amount would be adequate for the protection of the
Government.''
The payment bond assures that certain suppliers of labor
and materials on the project will be paid subject to
restrictions and limitations imposed by statute, the contract
or the bond. Coverage under the Miller Act extends to those
persons in a direct contractual relationship with the prime
contractor, and to those who have a direct contractual
relationship with a first-tier subcontractor, but have no
relationship with the prime contractor.
The Miller Act also sets a payment bond amount as follows:
50 percent of the contract price if the award price is not more
than $1 million; 40 percent of the contract price if the award
price is more than $1 million but not more than $5 million; or
$2.5 million, if the award price of the contract exceeds $5
million. While these amounts may have been appropriate in 1935,
in some cases they no longer provide subcontractors with
adequate protection. The $2.5 million payment bond amount could
deprive some subcontractors and suppliers on large Federal
construction projects of payment protection.
Bonds are priced on the basis of a percentage of the
contract amount. Market conditions and prevailing industry
practices set the percentage. A single premium is typically
charged for both the performance bond and the payment bond. A
separate premium is charged for a payment bond when one is
provided without an attendant performance bond. It is the
Committee's understanding that an increase in the size of the
Miller Act payment bond, beyond the current amount, will not
increase costs to the Federal Government. Surety bond premiums
are calculated based on the contract amount. A significant
portion of a surety company's total cost involves the
underwriting costs. An increase or decrease to the payment bond
penalty does not significantly affect the underwriting process
and, consequently, the underwriting cost.
2. Enhancement of payment bond protection
H.R. 1219 would increase the amount of the payment bond to
the total amount payable under the terms of the construction
contract, unless the Federal department or agency contracting
officer makes a written determination, supported by specific
findings, that a payment bond in that amount is impractical. If
the contracting officer finds that it would be impractical to
set the payment bond in an amount that is equal to the contract
price, the contracting officer can set a different amount;
however in no case can the payment bond be less than the
performance bond. It is the Committee's expectation that the
revisions to the Federal Acquisition Regulation, implementing
this legislation, will require that a contracting officer's
written determinations supported by specific findings, be made
part of the contract file relating to the construction
procurement.
Even if there were no performance bonds the contracting
officer must be certain to specify a payment bond amount
sufficient to fully protect the aggregate dollar value of the
performance expected to be undertaken by all covered
subcontractors and their direct suppliers.
3. Methods of providing notice under the Miller Act
H.R. 1219 includes a provision that would modernize the
Miller Act's requirements for the methods of providing notice
to the prime contractor of the intent of a claimant not in
privity with the prime contractor to seek payment from the
prime contractor's bond. The Miller Act currently allows a
notice to be sent by the U.S. Postal Service's registered mail
service. H.R. 1219 would permit notice by any means, including
registered mail and private delivery service that provides
written third-party verification of delivery. Anticipating the
expansion of electronic commerce, the proposed amendment would
accord recognition of a notice provided by electronic means, if
such electronic method can provide written third-party
verification of receipt.
4. Waivers
The bill also specifies workable limitations on the
conditions under which the Act's payment protections could be
waived by an intended beneficiary of those protections. The
bill would require that any waiver must be in writing and may
be made only after a subcontractor or supplier has first
furnished labor or materials for use in performance of the
contract. This provision is designed to eliminate waivers from
subcontractors or suppliers prior to their commencing work on a
project. At the same time, the bill would preserve the right of
a subcontractor or supplier to waive its Miller Act right under
the payment bond once it has commenced performance under the
contract.
This bill does not void subcontract provisions requiring
arbitration or other alternative methods of resolving disputes.
Such provisions would remain enforceable with a claimant's
Miller Act rights preserved by a timely suit that can be stayed
pending the outcome of the subcontract dispute resolution
procedure. The bill respects the freedom of the parties to the
subcontract to specify means to resolve their disputes and the
exclusive jurisdiction of the district court to decide issues
arising under the Miller Act.
5. Construction task order contracts
The Committee notes that Federal departments and agencies
are making use of task-order type contracts. Such contracts,
also referred to as ``task and delivery order contracts'' or
``indefinite delivery/indefinite quantity contracts,'' may be
awarded to a single prime contractor or to multiple prime
contractors, as determined by regulatory requirements or the
business judgment of the contracting officer. When such a task-
order type contract is used to provide construction-type
services, such as maintenance of real property, the Committee
believes that the amount of the payment bond should be
determined by the amount of each task order made, rather than
by the potential total value of the contract. Otherwise,
construction contractors would be required to tie-up valuable
bonding capacity based only on an expectation that the buying
agency will place orders above any contractually-specified
minimum order value, or that the same contractor would win each
competition for each separate task order.
II. Legislative Hearing and Committee Actions
H.R. 1219, the ``Construction Industry Payment Protection
Act of 1999,'' was introduced on March 23, 1999, by
Representative Carolyn Maloney (NY) and was co-sponsored by
Representative Stephen Horn (CA), Chairman of the Subcommittee
on Government Management, Information, and Technology. The bill
was also co-sponsored by Representative George Gekas (PA),
Chairman of the Subcommittee on Commercial and Administrative
Law, Committee on the Judiciary. The bill was referred to the
Committee on the Judiciary and the Committee on Government
Reform. The bill was considered by the Government Management
Subcommittee on May 13, 1999, and passed unanimously by voice
vote. An amendment in the nature of a substitute was offered by
RepresentativeMaloney and was adopted unanimously by a voice
vote. Representative Maloney's amendment deleted Section 1 of the
introduced version of the bill. The bill was considered by the
Committee on Government Reform on May 19, 1999, and passed by a voice
vote.
III. Committee Hearing and Written Testimony
No hearings were held specifically on H.R. 1219 during the
106th Congress. The Committee relied on the extensive record
generated during the second session of the 105th Congress with
respect to predecessor legislation, H.R. 3032, the
``Construction Subcontractors Payment Protection Enhancement
Act of 1998.'' The Committee had the benefit of the
administration's views on the bill, provided in the form of a
letter from the Administrator for Federal Procurement Policy,
Office of Management and Budget, on May 17, 1999. H.R. 1219
contains proposals to amend the Miller Act that address the
concerns of a variety of associations representing essentially
every segment of the construction and surety industries.
The Committee received the views from the following
organizations, each of which expressed support for the bill:
The Air Conditioning Contractors Association, American
Insurance Association, American Subcontractors Association,
Associated General Contractors of America, Mechanical
Contractors Association of America, National Association of
Plumbing-Heating-Cooling Contractors, National Association of
Surety Bond Producers, National Electrical Contractors
Association, Painting and Decorating Contractors of America,
Sheet Metal and Air Conditioning Contractors National
Association, Surety Association of America, American Fire
Sprinkler Association, Architectural Woodwork Institute,
Association of the Wall and Ceiling Industries--International,
Automatic Fire Alarm Association, Independent Electrical
Contractors, Mason Contractors Association of America, National
Association of Credit Management, National Ground Water
Association, National Insulation Association, and the World
Floor Covering Association.
The Subcommittee on Government Management, Information, and
Technology and the Subcommittee on Commercial and
Administrative Law of the Committee on the Judiciary held a
joint hearing on H.R. 3032, the ``Construction Subcontractors
Payment Protection Enhancement Act of 1998,'' on September 11,
1998. Testimony was received from representatives of the
American Subcontractors Association, the Associated General
Contractors of America, and the Surety Association of America.
The subcommittees also heard from two subcontractors with
direct experiences relating to the need to modernize the Miller
Act. The Honorable Deidre A. Lee, Administrator for Federal
Procurement Policy, testified on behalf of the Administration.
Mr. Robert E. Lee, the President of Lee Masonry in
Nashville, Tennessee, testified on behalf of the American
Subcontractors Association. Mr. Lee supported H.R. 3032 and
testified about the need to modernize the Miller Act, including
the provision for providing notice of Miller Act lawsuits. Mr.
Fred Levinson, president of Levinson & Santoro Electric
Corporation, testified in support of the bill and the need to
update the Miller Act. Ms. Micki Weaver, the owner of Weaver
Glass in Harrisburg, Pennsylvania, testified that neither the
bond cost nor the construction cost would increase if the
amount of the payment bond were increased. According to Ms.
Weaver, bond prices are based on the value of the contract and
the rating of the general contractor. Ms. Weaver expressed
concern that specialty subcontractors were not bidding on
Federal jobs because of the lack of payment protection.
Mr. Andrew Stephenson, a partner at the law firm of Holland
& Knight, represented the Associated General Contractors. Mr.
Stephenson testified in opposition to the provision of H.R.
3032 that requires general contractors to extend payment bond
protections to all levels of subcontractors and suppliers. Ms.
Lynn M. Schubert, president of the Surety Association of
America, also representing the American Insurance Association
and the National Association of Surety Bond Producers,
testified in support of subcontractor payment provisions. Ms.
Schubert also objected to certain provisions of the bill
including the extension of payment bond protection to all
levels of subcontractors and suppliers and a change to the
American Rule governing the award of attorneys fees.
IV. Explanation of the Bill
A. OVERVIEW
H.R. 1219, the Construction Industry Payment Protection Act
of 1999, includes provisions that seek to modernize the 1935
Miller Act.
B. SECTION-BY-SECTION ANALYSIS
Section 1. Short title
The Act shall be known as the ``Construction Industry
Payment Protection Act of 1999.''
Section 2. Amendments to the Miller Act
This Section makes the following amendments to the Miller
Act:
(a) requires a general contractor to furnish a
payment bond in an amount equal to the total value of
the contract, unless the contracting officer makes a
written determination that a payment bond in that
amount is impractical;
(b) permits notification of payment bond claims by
any means that provides for written third-party
verification of delivery. Current law specifies
notification only by registered United States mail; and
(c) provides that a waiver of the right to sue on the
payment bond is void, unless such waiver is in writing
and is executed after the work on the contract is
commenced.
Section 3: Implementation through the governmentwide procurement
regulations
This Section requires that proposed regulations regarding
implementation of the provisions of this Act be published not
later than 120 days after enactment. The bill provides not less
than 60 days for public comment on these proposed regulations
and requires that final regulations be published not less than
180 days after enactment of this Act.
V. Committee Oversight Findings
Pursuant to rule XIII, clause 3(c)(1), of the Rules of the
House of Representatives, the results and findings for those
oversight activities are incorporated in the recommendations
found in the bill and in this report.
VI. Budget Analysis and Protections
Clause 3(c)(2) of rule XIII, of the Rules of the House of
Representatives, is inapplicable because the bill does not
provide new budget authority, new spending authority, new
credit authority, or an increase or decrease in revenues or tax
expenditures.
VII. Cost Estimate of the Congressional Budget Office
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 9, 1999.
Hon. Dan Burton,
Chairman, Committee on Government Reform,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1219, the
Construction Industry Payment Protection Act of 1999.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is John R.
Righter.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
H.R. 1219--Construction Industry Payment Protection Act of 1999
H.R. 1219 would make several amendments to the Miller Act
of 1935, which governs the bonding requirements for federal
construction projects. CBO estimates that enacting the bill
would not have any significant impact on the federal budget.
The bill would (1) require that a general contractor of a
project generally obtain a payment bond in an amount that is
equal to the total value of the federal contract, (2) permit
subcontractors to notify contractors of an intent to sue by
means other than registered mail, and (3) require that any
waiver of a subcontractor's right to sue on a payment bond be
in writing, signed, and executed after the subcontractor has
furnished labor or materials for use in the project. The Office
of Management and Budget would have 180 days to develop and
publish final regulations for implementing the bill's
provisions.
The Miller Act requires that general contractors of federal
projects provide both a performance bond and a payment bond. A
performance bond is a guarantee to the government that the
contractor will complete a contract within its time frame and
conditions. The amount of the performance bond is generally
equal to the price of the contract. A payment bond is a
guarantee to subcontractors and suppliers that they will be
paid for work they perform properly under the contract. With
some exceptions, the amount of a payment bond for a federal
project cannot exceed $2.5 million. The Administration,
however, has proposed a rule that would lift that ceiling and
instead require contractors to provide payment bonds in amounts
that are equal to 40 percent of the value of any contract that
exceeds $6.25 million (Federal Register, December 29, 1998).
CBO estimates that implementing H.R. 1219 would not
significantly affect the costs of federal construction, because
the surety industry, which issues the payment and performance
bonds, generally charges one premium for both bonds. As such,
the surety premium--including the cost for issuing the payment
bond--for a federal project is already calculated based on the
higher contract price. Because it appears the Administration
will adopt its proposed rule on payment bonds, it is even less
likely that implementing the bill would appreciably affect such
costs. To the extent that implementing H.R. 1219 would increase
bonding costs for federal projects, CBO expects that
contractors would pass through such costs to the federal
government. However, by reducing the risks of nonpayment for
subcontractors, H.R. 1219 could also result in some savings if
subcontractors were to reduce any risk-related premiums
currently charged for working on federal projects. CBO,
however, has no basis for estimating the amount of such
potential savings.
Because enacting the bill would not affect direct spending
or receipts, pay-as-you-go procedures would not apply. H.R.
1219 contains no intergovernmental or private-sector mandates
as defined in the Unfunded Mandates Reform Act and would impose
no costs on the budgets of state, local, or tribal governments.
The CBO staff contact is John R. Righter. This estimate was
approved by Paul N. Van de Water, Assistant Director for Budget
Analysis.
VIII. Statement of Constitutional Authority
Pursuant to rule XIII, clause 3(d)(1), the Committee finds
that clauses 14 and 18 of Article I, Section 8 of the U.S.
Constitution grant Congress the power to enact this law.
IX. Committee Recommendation
On May 19, 1999, a quorum being present, the Committee
ordered the bill favorably reported to the House for
consideration by voice vote.
X. Congressional Accountability Act; Public Law 104-1
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(B)(3) of the Congressional Accountability Act (P.L. 104-1).
XI. Unfunded Mandates Reform Act; Public Law 104-4, Section 423
The Committee finds that the legislation does not impose
any Federal mandates within the meaning of section 423 of the
Unfunded Mandates Reform Act (P.L. 104-4).
XII. Federal Advisory Committee Act (5 U.S.C. APP.) Section 5(b)
The Committee finds that the legislation does not establish
or authorize establishment of an advisory committee within the
definition of 5 U.S.C. App., Section 5(b).
committee correspondence
House of Representatives,
Committee on the Judiciary,
Washington, DC, June 18, 1999.
Hon. Dennis Hastert,
The Speaker, House of Representatives,
Washington, DC.
Dear Mr. Speaker: I understand that the Government Reform
Committee desires to take H.R. 1219, the ``Construction
Industry Payment Protection Act,'' to the floor without this
committee reporting the bill. The bill contains certain matters
within the Rule X jurisdiction of the Judiciary Committee which
were the basis of your referral of the bill to us. Such matters
include amendments to the Miller Act made by section 3 and
procedural rules for promulgating revisions to the Federal
Acquisition Regulation established by section 4.
In the interest of moving this non-controversial bill
forward expeditiously, I will agree to the Judiciary Committee
being discharged from further consideration of H.R. 1219.
However, this should not be construed as a relinquishment of
the Committee's Rule X jurisdiction as to the matters addressed
by the bill or any further amendments relating to it. I also
request that the Committee's rights to have our Members named
to any conference committee on the bill or any similar bill be
protected.
Sincerely,
Henry J. Hyde, Chairman.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
THE MILLER ACT
That (a) before any contract for the construction, alteration,
or repair of any public building or public work of the United
States is awarded to any person, such person shall furnish to
the United States the following bonds, which shall become
binding upon the award of the contract to such person, who is
hereinafter designated as ``contractor'':
(1) A performance bond with a surety or sureties satisfactory
to the officer awarding such contract, and in such amount as he
shall deem adequate, for the protection of the United States.
(2) A payment bond with a surety or sureties satisfactory to
such officer for the protection of all persons supplying labor
and material in the prosecution of the work provided for in
said contract for the use of each such person. [Whenever the
total amount payable by the terms of the contract shall be not
more than $1,000,000 the said payment bond shall be in a sum of
one-half the total amount payable by the terms of the contract.
Whenever the total amount payable by the terms of the contract
shall be more than $1,000,000 and not more than $5,000,000, the
said payment bond shall be in a sum of 40 per centum of the
total amount payable by the terms of the contract. Whenever the
total amount payable by the terms of the contract shall be more
than $5,000,000 the said payment bond shall be in the sum of
$2,500,000.] The amount of the payment bond shall be equal to
the total amount payable by the terms of the contract unless
the contracting officer awarding the contract makes a written
determination supported by specific findings that a payment
bond in that amount is impractical, in which case the amount of
the payment bond shall be set by the contracting officer. In no
case shall the amount of the payment bond be less than the
amount of the performance bond.
Sec. 2. (a) Every person who has furnished labor or material
in the prosecution of the work provided for in such contract,
in respect of which a payment bond is furnished under this Act
and who has not been paid in full therefor before the
expiration of a period of ninety days after the day on which
the last of the labor was done or performed by him or material
was furnished or supplied by him for which such claim is made,
shall have the right to sue on such payment bond for the
amount, or the balance thereof, unpaid at the time of
institution of such suit and to prosecute said action to final
execution and judgment for the sum or sums justly due him:
Provided, however, That any person having direct contractual
relationship with a subcontractor but no contractual
relationship express or implied with the contractor furnishing
said payment bond shall have a right of action upon the said
payment bond upon giving written notice to said contractor
within ninety days from the date on which such person did or
performed the last of the labor or furnished or supplied the
last of the material for which such claim is made, stating with
substantial accuracy the amount claimed and the name of the
party to whom the material was furnished or supplied or for
whom the labor was done or performed. Such notice shall be
served by [mailing the same by registered mail, postage
prepaid, in an envelop addressed] any means which provides
written, third-party verification of delivery to the contractor
at any place he maintains an office or conducts his business,
or his residence, or in any manner in which the United States
marshal of the district in which the public improvement is
situated is authorized by law to serve summons.
* * * * * * *
(c) Any waiver of the right to sue on the payment bond
required by this Act shall be void unless it is in writing,
signed by the person whose right is waived, and executed after
such person has first furnished labor or material for use in
the performance of the contract.
* * * * * * *