United States of America , for the use v. International Fidelity Insurance Company

*The Honorable David W. McKeague, United States District Judge
for the Western District of Michigan, sitting by designation.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2000 FED App. 0024P (6th Cir.)
File Name: 00a0024p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
UNITED S TATES OF AMERICA ,
for the use and benefit of
Interstate Mechanical
Contractors, Inc.,
Plaintiff-Appellant,
v.
INTERNATIONAL FIDELITY
INSURANCE C OMPANY ,
Defendant-Appellee.
;>

1
No. 96-6013
Appeal from the United States District Court
for the Eastern District of Tennessee at Knoxville.
No. 95-00585—Thomas W. Phillips, Magistrate Judge.
Submitted: August 4, 1999
Decided and Filed: January 14, 2000
Before: NELSON and MOORE, Circuit Judges;
McKEAGUE, District Judge.*

-- 1 of 10 --

2 United States v. Int’l Fidelity Ins. Co. No. 96-6013
_________________
COUNSEL
ON BRIEF: John M. Neal, THE NEAL LAW FIRM,
Knoxville, Tennessee, for Appellant. David R. Duggan,
NICHOLSON, GARNER & DUGGAN, Maryville,
Tennessee, for Appellee.
_________________
OPINION
_________________
McKEAGUE, D. J., delivered the opinion of the court, in
which NELSON, J., joined. MOORE, J. (pp. 11-17),
delivered a separate dissenting opinion.
DAVID W. McKEAGUE, District Judge. Plaintiff
Interstate Mechanical Contractors, Inc. (“Interstate”), a
subcontractor, commenced this action under the Miller Act,
40 U.S.C. § 270a et seq. Interstate seeks to recover against a
payment bond issued by the defendant International Fidelity
Insurance Co. (“Fidelity”), as surety for the prime contractor,
Parmeco, Inc. (“Parmeco”). On cross-motions for summary
judgment, the magistrate judge held that Interstate’s
complaint was not filed within the Miller Act’s one-year
statute of limitations period and granted summary judgment
in favor of Fidelity. This appeal followed, and, for the
reasons set forth below, we AFFIRM the judgment of the
magistrate judge.
I
In November 1993 Interstate contracted with Parmeco to
provide and install heating, ventilating, and air-conditioning
systems at a U.S. Department of Commerce facility located in
Morristown, Tennessee. Pursuant to § 270a of the Miller Act,
Parmeco, as principal, posted a bond to guarantee payment
under the contract with Fidelity as surety.

-- 2 of 10 --

No. 96-6013 United States v. Int’l Fidelity Ins. Co. 3
Under part 3.2 of the contract, Interstate agreed to install
electric duct heaters, to coordinate the heaters’ installation
with other work, and to “[test] operate installed duct heaters
to demonstrate compliance with requirements.” Interstate
further agreed to have substantially completed its work on the
construction project by January 21, 1994, and to have finally
completed all work by February 8, 1994. In fact, Interstate
completed its construction in early June 1994, having
installed two electric duct heaters as part of the heating,
ventilating, and air-conditioning system. On June 17, 1994,
after having been notified that construction was complete, the
government took beneficial occupancy of the facility.
In late September or early October 1994, Sam Neeley, the
subcontractor hired by Interstate to conduct testing of the
system, noticed a discrepancy as he prepared his final reports.
The numbers reported to him by his employees when they
performed initial tests of the system did not satisfy the
contract’s requirements. Assuming that his employees had
inaccurately performed the tests, Neeley went to the facility
to inspect the system. He discovered that the two electric
heaters installed into the ducts did not meet the contract’s
specifications. Although the heaters were the right size, fit
properly into the ducts, and bore labels from the manufacturer
indicating the correct wattage, in fact the heaters’ electrical
output did not conform to the contract’s specifications.
Interstate then replaced the heaters in early October,
necessitating a third round of testing. Consequently, on
October 18, 1994, Neeley returned to the facility and tested
the heaters to confirm that they had been properly installed
and that they were functioning as specified.
Exactly one year after this last test of the heaters, on
October 18, 1996, Interstate filed suit in the Eastern District
of Tennessee to recover the alleged $30, 967.00 that it
claimed it was owed under the contract. Jurisdiction over the
subject matter of the action was provided by 40 U.S.C.
§ 270b(b) and 28 U.S.C. § 1352.

-- 3 of 10 --

4 United States v. Int’l Fidelity Ins. Co. No. 96-6013
The Miller Act requires that suits to recover against a
payment bond be filed no more than “one year after the day
on which the last of the labor was performed . . . .” 40 U.S.C.
§ 270b(b). A magistrate judge heard the case by consent of
the parties, and found that Neeley’s inspection and testing of
the heaters on October 18, 1994 was properly characterized as
a correction or repair to work previously performed by
Interstate. Ruling that testing did not constitute “labor” under
the Miller Act, the magistrate judge found that the statute of
limitations barred Interstate’s claim and awarded summary
judgment to Fidelity. Interstate filed a timely notice of
appeal, and this Court has jurisdiction to hear the appeal
pursuant to 28 U.S.C. § 636(c)(3).
II
This court reviews a district court’s grant of summary
judgment de novo. See Terry Barr Sales Agency, Inc. v. All-
Lock Co., Inc., 96 F.3d 174, 178 (6th Cir. 1996). A motion
for summary judgment should be granted “if the pleadings,
deposition, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.” Fed. R. Civ. P.
56(c). We view the facts and all inferences drawn therefrom
in the light most favorable to the nonmoving party. See
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986).
The Miller Act, 40 U.S.C. § 270a et seq., requires a prime
contractor on a federal construction project to post both a
performance bond and a payment bond. The payment bond
provides security to persons who supply labor or materials for
the project. Such suppliers are precluded from filing liens on
government facilities, and instead are granted a federal cause
of action to satisfy any deficiency in payment by the prime
contractor. Because of the remedial nature of the Act, its
provisions are to be liberally construed. However, recovery
under the Act requires a plaintiff to bring a claim within the
Act’s one-year statute of limitations period. See United States
No. 96-6013 United States v. Int’l Fidelity Ins. Co. 17
purposes of § 270b(b). Rather, a court should determine
whether the work was performed prior to contract completion,
as in the case of a punch list, or was performed after the
project was completed under a warranty.
The record before us is incomplete. Based upon what is
before the court, however, I see no evidence that the work
performed by Interstate and its subcontractor in October 1994
was performed after the contract was completed. Thus, I
would remand the case for further consideration in light of the
foregoing analysis.

-- 4 of 10 --

16 United States v. Int’l Fidelity Ins. Co. No. 96-6013
Furthermore, the circumstances in which the heaters were
reinstalled suggest ongoing contract work rather than
warranty work. Apparently, the original heaters were
installed in April, May, or June 1994. Neeley stated in his
deposition that “[w]e were there probably six or seven times
off and on from then until October the 18th.” J.A. at 42.
Apparently, Neeley discovered the heater installation error in
early October. From what can be gleaned from the record
before the court, it appears that Neeley was on site during this
period performing the balancing and testing required under
Interstate’s contract. Interstate’s contract specified that “[t]est
runs shall be made over the full design load range where
possible and shall continue for as long as necessary to
demonstrate that systems will operate as designed.” J.A. at
37. The contract also specified that “[a]ny piece of equipment
or any item not meeting the system requirements shall be
repaired or replaced and the systems rebalanced until the
performance is confirmed.” Id. (emphasis added).
Apparently, the installation error was discovered in the course
of these tests and the corrections followed in accordance with
the contract. If this is so, this work should be held to
constitute § 270b(b) labor, unless it is shown clearly that the
project was accepted as complete prior to October 1994
despite Interstate’s failure to comply with the testing
requirements of the contract.
Often the final labor performed under a construction
subcontract will be in response to a punch list. The punch list
may include items omitted by the subcontractor or work that
inspection indicates must be repaired or replaced. In either
case, the completion of the punch list work constitutes labor
performed under the contract, and this is well understood
within the construction industry. To hold that corrective work
performed pursuant to such a punch list does not constitute
labor performed within the meaning of § 270b(b) would be
inappropriate and, because contrary to everyday
understanding, would create a trap for the unwary and
undermine the protective effect of the Miller Act.
Accordingly, I believe that the corrective or remedial nature
of the work performed should not be dispositive for the
No. 96-6013 United States v. Int’l Fidelity Ins. Co. 5
ex rel. Consol. Pipe & Supply Co. v. Morrison-Knudsen Co.,
687 F.2d 129, 131 (6th Cir. 1982); United States ex rel.
Martin Steel Constructors Inc. v. Avanti Constructors, Inc.,
750 F.2d 759, 761 (9th Cir. 1984); Canion v. Randall &
Blake, 817 F.2d 1188, 1191 (5th Cir. 1987).
The Act provides a supplier of labor or material who has
not been paid in full a right of action to sue on the payment
bond. See 40 U.S.C. § 270b(a). In order to provide repose,
however, the Act specifies that “no such suit shall be
commenced after the expiration of one year after the day on
which the last of the labor was performed or material was
supplied . . . ” § 270b(b). The meaning of the words “labor”
and “material” is not self-evident from an examination of the
text alone. Unfortunately, turning to the Miller Act’s
legislative history provides no more insight in interpreting
§ 270b(b). Prior to a 1959 amendment, the limitations period
under the Act commenced on the “date of final settlement” of
the contract. See S. Rep. No 86-551 (1959), reprinted in
1959 U.S.C.C.A.N. 1995. In amending the provision,
Congress sought to relieve the government of the burden of
establishing final settlement dates and to provide “those
entitled to sue . . . a simple, fixed, and certain method for
determining the period within which the suit must be filed.”
Id., at 1996. Despite Congress’ stated intention, the courts
that have been called upon to interpret § 270b(b) have not
found the task of establishing the limitations period under the
revised statute to be simple, fixed, or certain.
This Court has not previously considered in a published
opinion exactly when “the last of the labor was performed or
material was supplied” for purposes of § 270b(b). As a
question of statutory interpretation, we consider the issue de
novo. See Vergos v. Gregg’s Enters., Inc., 159 F.3d 989, 990
(6th Cir. 1998). We agree with the majority of courts that
have interpreted the phrase and have concluded it connotes
more than mere substantial completion or substantial
performance of the plaintiff’s obligations under its contract.
See United States ex rel. Austin v. Western Elec. Co., 337
F.2d 568, 572 (9th Cir. 1964). Furthermore, we agree that

-- 5 of 10 --

6 United States v. Int’l Fidelity Ins. Co. No. 96-6013
work done at the request of the government and pursuant to
a warranty, subsequent to final inspection and acceptance of
the project, falls outside the meaning of labor performed as
set forth in § 270b(b). If post-completion work performed
pursuant to a warranty could toll the Miller Act’s statute of
limitations, then the surety would have no repose until all
such warranties expired. The challenge before the Court is to
assess whether tests of replacement components fall between
substantial completion of the project and its final completion,
and are thus included as labor under the Act, or whether such
tests are more properly analogized to warranty work and
excluded.
The majority of circuits that have addressed this issue have
held that remedial or corrective work or materials, or
inspection of work already completed, falls outside the
meaning of “labor” or materials” under § 270b(b). Hence,
performing such work or supplying such materials will not
toll the Miller Act’s one-year statute of limitations. See, e.g.,
United States for the use of Billows Elec. Supply Co. v. E.J.T.
Constr. Co., Inc., 517 F.Supp. 1178, 1181 (E.D. Pa.1981),
aff’d 688 F.2d 827 (3rd Cir.), cert. denied, 459 U.S. 856
(1982); United States for the use of Magna Masonry, Inc., v.
R.T. Woodfield, Inc., 709 F.2d 249, 250 (4th Cir. 1983);
United States ex rel. Austin v. Western Elec. Co., 337 F.2d
568, 572 (9th Cir. 1964); United States for the use of State
Elec. Supply Co. v. Hesselden Constr. Co., 404 F.2d 774, 776
(10th Cir. 1968). The majority rule requires the trier of fact
to distinguish “whether the work was performed . . . as a ‘part
of the original contract’ or for the ‘purpose of correcting
defects, or making repairs following inspection of the
project.’” Austin, 337 F.2d at 572-73 (quoting United States
ex rel. Gen. Elec. Co. v. Gunnar I. Johnson & Son, Inc., 310
F.2d 899, 903 (8th Cir. 1962)).
Although this line of inquiry has received criticism, this
Court concludes the correction-or-repair versus original-
contract test presents a useful framework to determine when
the Miller Act’s statute of limitations begins to run. As set
forth in Austin, the correction-or-repair versus original-
No. 96-6013 United States v. Int’l Fidelity Ins. Co. 15
limitations period.
inquiry, but not an unbounded one. Normally, the inspection
and unconditional acceptance of a project by the government
will indicate project completion. However, acceptance
conditioned on the completion of a punch list does not
constitute completion until the punch list work is
accomplished. Of course the completion date specified in the
contract is not dispositive.
Applying my proposed analysis to the instant case, I would
hold that a material issue of fact exists that precludes the grant
of summary judgment in favor of the defendant. Although the
labor performed in replacing the duct heaters undoubtedly
was corrective, the magistrate judge did not determine
whether this corrective action took place before the contract
was complete or afterwards as warranty work. I believe that
the dispositive question is whether the reinstallation of the
duct heaters at some time before October 18, 1994, occurred
before the contract was complete. If it did, the work of
Interstate’s contractor, Neeley, on October 18, 1994, was
§ 270b(b) labor. The contract contained detailed air balancing
and testing requirements, and the performance of this work
constitutes labor as the term is used in § 270b(b).
It is not at all clear that Interstate’s contract was complete
when the duct heaters were reinstalled in October 1994. In
his deposition, Terry Self, an Interstate official, stated that to
his knowledge the company had never received notice that
Interstate’s work or the building had been accepted. Self did
state in an August 1994 letter that “[t]o our knowledge,
Interstate finished all work on this project in early June,
1994,” but he did so in response to a letter from Parmeco that
apparently asserted that Interstate had not completed its work.
J.A. at 100. Self went on to note that “[i]f any work is
unfinished, it would have to be in the nature of punch list
work. This is the first project on which we have had
difficulty finding out what work remains unfinished.” Id.

-- 6 of 10 --

14 United States v. Int’l Fidelity Ins. Co. No. 96-6013
1Referring back to the widget example, one may ask whether there
is a qualitative difference between the performance of corrective work at
the end of the project pursuant to a punch list and the performance of
corrective work after project completion pursuant to a warranty. For the
purposes of the Miller Act, I believe that the difference is significant. The
obligation to make the final payment under a construction contract
normally commences with the completion of the work, including the
completion of punch list work. Thus, under a more logical approach, i.e.,
one that is based on contract completion, the commencement of the
limitations period for suing to recover on the bond for nonpayment will
coincide with the accrual of the obligation to pay. Remedial work
performed pursuant to a warranty, on the other hand, should have no
bearing on either the obligation to make final payment or on the
government with recognition that deficiencies remain.
Correction of the deficiencies constitutes original contract
work and § 270b(b) labor, however, because payment for the
remaining work has been withheld pending completion. In
speaking of deficiencies, the Comptroller General did not
distinguish between omitted work and unacceptable work, nor
should he have so distinguished, as correction of either
deficiency in this circumstance should constitute § 270b(b)
labor.
Citing this legislative history, the court in Trinity Universal
Insurance Co. v. Girdner, 379 F.2d 317, 318 (5th Cir. 1967),
held “that the ‘last labor or materials’ language [of § 270b(b)]
is broad enough to include work performed upon the demand
of the government to correct defects in the work as originally
completed.” As “[t]here [was] no contention that this work
was a sham to extend the period of limitation,” the court held
that replacement of defective insulation and a seal constituted
the last labor performed. Id.
Following the implication of the legislative history and
agreeing with the Trinity court’s interpretation of the Act and
the history, I would hold that in ascertaining the § 270b(b)
limitations period the dispositive question is whether the
work at issue was performed or materials were supplied
before the project was complete or after completion in
accordance with a warranty.1 This test yields a fact-intensive
No. 96-6013 United States v. Int’l Fidelity Ins. Co. 7
contract test provides a bright-line rule from which each
interested party--the government, contractor, subcontractor,
and surety--can gain a clear understanding of what work
constitutes labor under § 270b(b). Furthermore, the majority
rule induces the parties to structure their contractual
obligations to account for the statute of limitations. Although
the liberal purposes of the Miller Act may not be effectuated
in each and every case, the benefits of certainty and
administrability afforded by a bright-line rule here outweigh
the inherent risk of over or under inclusive results presented
by bright-line rules. See generally Antonin Scalia, The Rule
of Law as a Law of Rules, 56 U.Chi.L.Rev. 1175 (1989).
Hence, for the foregoing reasons, we adopt the majority rule
for our Circuit.
III
Having adopted the correction-or-repair versus original-
contract test, we turn to address Interstate’s particular
contentions. Interstate claims a threshold question exists as
to whether the inspection and testing that Neeley performed
on October 18, 1995, qualifies as “labor” under the Miller
Act. Interstate’s phrasing of the issue, however, begs the
ultimate question before this Court: whether the work
performed by Neeley was pursuant to the original contract, or
performed as a correction or repair.
Interstate argues the inspection and testing of the heaters by
Neeley is “labor” because it was required under the contract,
not performed in response to a government demand for repair.
Fidelity argues in response that the case law clearly
distinguishes between repair or remedial work and work
performed under the contract; thus, inspection, testing and
measurement are by their nature remedial and not “labor.”
Applying the correction-or-repair versus original contract test
to the facts, we hold that the inspection and testing that
Neeley performed on his second trip to the facility on October
18, 1995, were remedial in nature. While the contract
required Interstate to test the heaters it installed, such testing
was performed at least once by Neeley’s employees prior to

-- 7 of 10 --

8 United States v. Int’l Fidelity Ins. Co. No. 96-6013
the discovery of the defect in the heaters’ manufacture and the
government’s beneficial occupancy of the facility. A second
round of testing occurred in early October. Neeley himself
went to the facility and tested the heaters, and discovered they
were not manufactured to the contract’s specifications.
Interstate then replaced the heaters. Subsequently, Neeley
returned to the facility on October 18, 1995, and tested the
replacement heaters. These last tests were of corrective work
performed by Interstate, and were not tests required by the
original contract. Hence, while we do not decide whether
inspection, testing, and measurement are by their nature
remedial, we hold that tests of remedial or corrective work do
not qualify as “labor” for purposes of the Miller Act.
Interstate further contends, however, that the tests Neeley
performed on October 18, 1995, logically qualify as “labor”
because the failure to perform such testing would have
constituted a breach of its contractual obligations. Fidelity
responds that an analogous argument was made and rejected
by the Fifth Circuit in General Insurance Company of
America v. United States for the Use of Audley Moore & Son,
409 F.2d 1326 (5th Cir. 1969). In Audley Moore & Son, the
Fifth Circuit held that “[l]abor furnished in the prosecution of
the work is not coterminous with the outer limits of all duties
provided by the contract.” United States for the Use of
Audley Moore & Son, 409 F.2d at 1327. Although we agree
with the holding in Audley Moore & Son, we are concerned
that its ponderous language obscures its reasoning. A
contractor’s duties under a contract may extend, by virtue of
warranty or other obligation, to a point in time far beyond that
date when the project has been completed and the “last of the
labor was performed or material was supplied” for purposes
of the Miller Act. Interstate’s argument would have this
Court interpret the Miller Act to equate the term “labor” to the
term “contractual duties.” As a result, the statute of
limitations period would commence only after the end of the
warranty period, perhaps many years after the project’s
completion. To interpret the Miller Act as Interstate suggests
would frustrate the policy of repose that the limitations period
serves, and we find no support for such a construction in the
No. 96-6013 United States v. Int’l Fidelity Ins. Co. 13
The Miller Act simply refers to labor performed, and, as
noted above, the language is to be construed liberally.
Although work performed under a warranty subsequent to
project completion has no impact on the running of the
limitations period of § 270b(b), I believe that a court must be
careful to avoid excluding other labor from the protection of
the Act. I would therefore conclude that the proper approach
to the problem is to determine whether the work at issue is
warranty work or work conducted prior to contract
completion. See Johnson Servs. Co. v. Transamerica Ins.
Co., 349 F. Supp. 1220, 1225 (S.D. Tex. 1972) (stating test as
whether the work “was a part of the original contract or was
for the purpose of what is sometimes called warranty work,
that is, correcting defects or making repairs after the job was
complete”), aff’d, 485 F.2d 164 (5th Cir. 1973).
Although determining when the contract has been
completed and the warranty period has begun may be more
difficult than determining whether work is new or repair, the
former approach finds strong support in the legislative
history. In his letter proposing the 1959 amendment that
replaced the “final settlement” language, the Comptroller
General noted that an additional purpose to the amendment
was to extend the protection of the Act beyond the settlement
date of the contract in some instances:
It sometimes happens, also, that a supplier will be called
upon to furnish labor or materials after ‘final settlement,’
or even after the limitation has run, in connection with
the correction of deficiencies after substantial completion
and acceptance of the contract work and ‘final
settlement’ (based upon withholding the value of the
deficiencies). Under the proposed amendment, such
suppliers will not have lost most or all of the protection
intended by the Miller Act but will receive full protection
for 1 year after furnishing labor or material.
S. R EP . NO . 86-551, 1959 U.S.C.C.A.N. at 1999.
The Comptroller General describes a situation in which a
project has been substantially completed and accepted by the

-- 8 of 10 --

12 United States v. Int’l Fidelity Ins. Co. No. 96-6013
the project had been billed as complete before the
replacements were delivered, and the court rejected the
plaintiff’s argument that the government would not accept the
project as finished until the replacement equipment had been
installed. See id. at 776.
The foregoing cases, like the approach taken by the
majority in the present case, could be read as suggesting that
whether remedial work performed constitutes labor performed
for the purposes of the Miller Act limitations period turns on
whether the same work has been done incorrectly in the past
or whether the work has not been done at all. See also Austin,
337 F.2d at 573 & n.15 (“punch list” work comprising sixty
items including painting, “finish plumbing,” and “paving
access road” was required for project completion and
constituted original contract work). I believe, however, that
this approach, which focuses literally upon the distinction
between repair or replacement and the performance of omitted
work, imports a false dichotomy into the analysis. See, e.g.,
Johnson Serv. Co. v. Transamerica Ins. Co., 485 F.2d 164,
173 (5th Cir. 1973) (“[S]weeping rules about ‘repairs’ offer
little help in the necessary analysis.”).
Indeed, a contract is deficient whether a certain widget
specified is missing or is defective; after the contract has been
accepted and the warranty period has begun, the contract is no
more incomplete because of a missing widget than because of
a defective one. Moreover, if a contractor discovers an error
and, as required by its contract, corrects the work at an early
stage of the project, it could not be reasonably maintained that
such corrective work was not performed under the contract.
The work may or may not be reimbursable under the contract,
but it is not warranty work. If such corrective work
constitutes contract work early in the project and midway
through the project, it surely would be anomalous to conclude
that such corrective work is of a different nature simply
because the contractor discovered and corrected the
deficiency at the conclusion of its labors.
No. 96-6013 United States v. Int’l Fidelity Ins. Co. 9
Miller Act’s text, legislative history, or in the applicable case
law. We thus reject Interstate’s proposed construction as
contrary to the Act’s language and underlying policy.
Lastly, Interstate argues that a distinction should be made
between corrective work caused by the contractor’s own error,
and that necessitated by the error of a third party. Interstate
suggests that corrective work caused by third party error
should constitute labor under the Miller Act, because a
contractor who repairs the defective work of others is less
culpable than a contractor who repairs its own defective work.
Fidelity replies that because defective materials are, in most
cases, defective when they are supplied by the manufacturer,
adopting a rule that includes the correction of such defects as
labor performed would create an exception to the correction-
or-repair versus original contract test that would swallow the
rule. We fail to see the significance of the proposed
distinction. Compared with the surety, the contractor who
replaces defective material supplied by a third party is no
more worthy of recovery than a contractor who corrects work
that was initially improperly performed. In either case, the
contractor, and not the surety, should bear the cost of
correcting the defective labor or material. Contractors choose
the manufacturers from whom they purchase their materials,
and can seek to recover against such a supplier in the event
that a manufacturer provides a defective product.
IV
Because the correction-or-repair versus original contract
test first enunciated in United States ex rel. Austin v. Western
Elec. Co. offers predictability and administrability when
applying the Miller Act’s statute of limitations, we adopt it for
our Circuit. Under this majority rule, tests of remedial work,
or tests performed of replacement materials do not constitute
labor under § 270b(b) for purposes of the Miller Act. The
Act’s inquiry focuses on the nature of the work performed,
not its cause. Hence, under § 270b(b), neither repairs
necessitated by work improperly performed by the contractor
nor repairs necessitated by defective material supplied by a

-- 9 of 10 --

10 United States v. Int’l Fidelity Ins. Co. No. 96-6013
manufacturer qualify as “labor performed” or “material
supplied.” For those reasons stated above, we AFFIRM the
order of the district court granting summary judgment to
Fidelity.
No. 96-6013 United States v. Int’l Fidelity Ins. Co. 11
____________________
DISSENT
____________________
KAREN NELSON MOORE, Circuit Judge, dissenting. I
respectfully dissent from the majority’s decision to adopt the
approach articulated in United States ex rel. Austin v. Western
Electric Co., 337 F.2d 568, 572 (9th Cir. 1964), which directs
a court to ask “whether [certain] work was performed . . . as
a ‘part of the original contract’ or for the ‘purpose of
correcting defects, or making repairs following inspection of
the project’” in those cases that involve a dispute over the
statute of limitations contained in the Miller Act. Id. at 572-
73 (quoting United States ex rel. Gen. Elec. Co. v. Gunnar I.
Johnson & Son, Inc., 310 F.2d 899, 903 (8th Cir. 1962)). I
am concerned that this test, as it has been applied, has caused
courts to focus excessively on the question of whether certain
work constitutes a correction or repair and to lose sight of the
more important question – was the project complete at the
time the work in question was performed?
Two cases illustrate my concerns with the majority’s
approach. First, in United States ex rel. Noland Co. v.
Andrews, 406 F.2d 790 (4th Cir. 1969), it was discovered,
after the government had inspected and accepted a
construction project, that two valves that had been required
under the contract had never been furnished or installed. “It
seems plain to us,” the court stated, “that the installation of
the two missing valves cannot be characterized as a mere
correction of a defect.” Id. at 792. Accordingly, the court
held that provision of the missing valves constituted material
supplied for the purposes of 40 U.S.C. § 270b(b).
Second, in United States ex rel. State Electric Supply Co.
v. Hesselden Construction Co., 404 F.2d 774, 777 (10th Cir.
1968), the court held that equipment delivered by the plaintiff
to replace lost or damaged equipment “concerned materials
used for repair or correction and not for the accomplishment
of the original contract.” The court found it significant that

-- 10 of 10 --