[Code of Federal Regulations]
[Title 7, Volume 11, Parts 1600 to 1899]
[Revised as of January 1, 2000]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1753]
[Page 358-396]
PART 1753--TELECOMMUNICATIONS SYSTEM CONSTRUCTION POLICIES AND PROCEDURES
Subpart A--General
Sec.
1753.1 General.
1753.2 Definitions.
1753.3 Preconstruction review.
1753.4 Major and minor construction.
1753.5 Methods of major construction.
1753.6 Standards, specifications, and general requirements.
1753.7 Plans and specifications (P&S).
1753.8 Contract construction procedures.
1753.9 Subcontracts.
1753.10 Preconstruction conference.
1753.11 Contract amendments.
1753.12--1753.14 [Reserved]
Subpart B--Engineering Services
1753.15 General.
1753.16 Architectural services.
1753.17 Engineering services.
1753.18 Engineer and architect contract closeout certifications.
1753.19--1753.20 [Reserved]
Subpart C--[Reserved]
Subpart D--Construction of Buildings
1753.25 General.
1753.26 Plans and specifications (P&S).
1753.27 Bidding procedure.
1753.28 Contract amendments.
1753.29 Force account procedures.
1753.30 Closeout procedures.
1753.31--1753.35 [Reserved]
Subpart E--Purchase and Installation of Central Office Equipment
1753.36 General.
1753.37 Plans and specifications (P&S).
1753.38 Procurement procedures.
1753.39 Closeout documents.
1753.40--1753.45 [Reserved]
Subpart F--Outside Plant Major Construction by Contract
1753.46 General.
1753.47 Plans and specifications (P&S).
1753.48 Procurement procedures.
1753.49 Closeout documents.
1753.50--1753.55 [Reserved]
[[Page 359]]
Subpart G--Outside Plant Major Construction by Force Account
1753.56 General.
1753.57 Procedures.
1753.58 Closeout documents.
1753.59--1753.65 [Reserved]
Subpart H--Purchase and Installation of Special Equipment
1753.66 General.
1753.67 Contracts and specifications.
1753.68 Purchasing special equipment.
1753.69--1753.75 [Reserved]
Subpart I--Minor Construction
1753.76 General.
1753.77 Methods of minor construction.
1753.78 Construction by contract.
1753.79 Construction by force account.
1753.80 Minor construction procedure.
1753.81 Inspection and certification.
1753.82 Minor construction closeout.
1753.83--1753.90 [Reserved]
Subpart J--Construction Certification Program
1753.91 General.
1753.92 Policies and requirements.
1753.93 Responsibilities.
1753.94 Procedures.
1753.95 Advance of loan funds.
1753.96 Certification addendum.
1753.97--1753.99 [Reserved]
Authority: 5 U.S.C. 501, 7 U.S.C. 901 et seq.
Editorial Note: Nomenclature changes to part 1753 appear at 55 FR
39397, Sept. 27, 1990.
Subpart A--General
Source: 54 FR 39267, Sept. 25, 1989, unless otherwise noted.
Redesignated at 55 FR 39396, Sept. 27, 1990.
Sec. 1753.1 General.
(a) The standard RUS Telecommunications Loan Documents contain
provisions regarding procurement of materials and equipment and
construction of telecommunications facilities by telecommunications
borrowers. This part implements certain of the provisions by setting
forth requirements and procedures. Borrowers shall follow these
requirements and procedures whenever using loan funds to purchase
materials and equipment or perform construction, unless they have
received the Administrator's written approval to do otherwise.
(b) The typical procedure followed in constructing a project
financed by an RUS loan begins with the prospective borrower obtaining
the necessary preloan engineering and developing a complete loan
application, including an LD (See 7 CFR part 1737). If a loan is
approved and all prerequisites to advance of funds are satisfied, the
borrower may proceed with the purchase and installation of materials and
equipment and the construction of telephone facilities pursuant to this
part 1753. Subpart A describes
(1) RUS's general requirements with respect to steps to be taken
after the loan is approved and before construction begins (See
Sec. 1753.3),
(2) RUS requirements with respect to methods of construction (See
Secs. 1753.5 and 1753.6),
(3) RUS requirements regarding sealed competitive bidding and
negotiated bidding of construction contracts (See Secs. 1753.6 and
1753.9),
(4) RUS standards for materials, equipment, and construction
financed with loan funds (See Sec. 1753.7), and
(5) RUS requirements for subcontracts and contract amendments
covering construction financed with loan funds (See Secs. 1753.10 and
1753.12).
(c) Each borrower is responsible for the construction of its
facilities and for the procurement of materials and equipment that are
best suited to its needs.
(d) If contracts, P&S, or other methods of procurement are subject
to RUS approval pursuant to the provisions of the loan contract, as
implemented by this part, RUS will review the documents or proposals
submitted and notify the borrower in writing of approval or disapproval.
RUS may withhold approval if, in RUS's judgment:
(1) The P&S or contract will not accomplish loan purposes.
(2) Provisions of the P&S or contract will add unnecessary expense
to the project.
(3) The proposal, method of procurement, or P&S do not conform to
RUS engineering criteria or construction standards, or if they present
unacceptable loan security risks to RUS.
(4) The P&S or contract have been modified.
[[Page 360]]
(e) The requirements and procedures covering procurement of
architectural and engineering services are described in subpart B of
this part.
(f) Single copies of RUS forms cited in this part are available from
Administrative Services Division, Rural Utilities Service, United States
Department of Agriculture, Washington, DC 20250-1500. These RUS forms
may be reproduced.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27,
1990, as amended at 64 FR 16604, Apr. 6, 1999]
Sec. 1753.2 Definitions.
For the purpose of this part 1753:
Alternate-- A solicitation for a bid adjustment for a specified
deviation from the Plans and Specifications.
Architect-- A person registered as an architect in the state where
construction is performed, or a person on the borrower's staff, approved
by RUS, authorized to perform architectural services.
Bid guarantee-- A bid bond or certified check required of
contractors bidding on construction work to ensure that the bidder, if
successful, will furnish a satisfactory performance bond ensuring
completion of work.
Central office building-- The facility housing the central office
equipment.
Central office equipment-- Switching and signaling equipment that
performs call origination and completion functions for subscribers.
Closeout documents-- The documents required to certify satisfactory
completion of all obligations under a contract or force account
proposal.
Construction-- Purchase and installation of telecommunications
facilities in a borrower's system using loan funds.
Contract-- The agreement between the borrower and an independent
contractor covering the purchase, construction, or both of telephone
facilities to be included in the borrower's telephone system.
Contract construction-- Construction and installations performed
using an RUS contract form. See 7 CFR 1755.93.
Engineer-- A person registered as an engineer in the state where
construction is performed, or a person on the borrower's staff, approved
by RUS, authorized to perform engineering services.
FAP (force account proposal)--The borrower's detailed plans
submitted to RUS for force account construction.
Force account construction--Construction performed by the borrower's
employees under an RUS approved FAP, with the borrower furnishing all
materials, equipment, tools, and transportation.
FRS--RUS Form 481 (OMB control number 0572-0023), Financial
Requirement Statement.
GFR--RUS General Field Representative.
Installation--The act of setting up or placing in position equipment
for service or use in the borrower's system.
Interim construction--The purchase of equipment or the conduct of
construction under an RUS-approved plan of interim financing. See 7 CFR
part 1737.
Interim financing--Funding for a project which RUS has acknowledged
may be included in a loan, should said loan be approved, but for which
RUS loan funds have not yet been made available.
Labor and materials--All the labor and materials required for
construction.
LD (loan design)--Supporting data for a loan application. See 7 CFR
part 1737.
Loan--Any loan made or guaranteed by RUS. See 7 CFR part 1735.
Loan funds--Funds provided by RUS through direct or guaranteed
loans. See 7 CFR part 1744 subpart C.
Loan purposes--The high level objectives of the loan are to fund the
construction. These purposes are first stated in the characteristics
letter described in 7 CFR 1737.80, which is sent to the applicant to
offer a loan after RUS has completed its preloan studies.
Major construction--A telecommunications plant project estimated to
cost more than $250,000, including all labor and materials.
Minor construction--A telecommunications plant project estimated to
cost $250,000 or less, including all labor and materials.
Minor errors or irregularities--A defect or variation in a seller's
bid that is a matter of form and not of substance. Errors or
irregularities are ``minor'' if
[[Page 361]]
they can be corrected or waived without being prejudicial to other
bidders and when they do not affect the price, quantity, quality, or
timeliness of construction. Unless otherwise noted, the borrower
determines whether an error or irregularity is ``minor.''
Modernization plan--A State plan, which has been approved by RUS,
for improving the telecommunications network of those Telecommunications
Providers covered by the plan. A Modernization Plan must conform to the
provisions of 7 CFR part 1751, subpart B.
Negotiation--Any form of purchasing or contracting other than sealed
competitive bidding. Any contract awarded without using the sealed
competitive bidding procedure is a negotiated contract.
Outside plant--The facilities that conduct electrical or optical
signals between the central office and the subscriber's network
interface or between central offices.
Performance bond--A surety bond on a form satisfactory to RUS
guaranteeing the contractor's faithful performance of a contract.
P&S (plans and specifications)--An RUS contract form, the
appropriate specifications, and such additional information and
documents needed to provide a clear, accurate, and complete
understanding of the installations to be made or construction to be
performed.
Project--The construction or installation described in the P&S.
Responsive bid--A bid that complies with the requirements of the
plans and specifications.
RTB--the Rural Telephone Bank, established as a body corporate and
an instrumentality of the United States, to obtain supplemental funds
from non-Federal sources and utilize them in making loans, for the
purposes of financing, or refinancing, the construction, improvement,
expansion, acquisition, and operation of telephone lines, facilities, or
systems, for RUS borrowers financed under sections 201 and 408 of the
Act.
RUS--the Rural Utilities Service, an agency of the United States
Department of Agriculture established pursuant to Section 232 of the
Federal Crop Insurance and Reform and Department of Agriculture
Reorganization Act of 1994 (Pub. L. 103-354, 108 Stat. 3178), successor
to Rural Electrification Administration with respect to administering
certain electric and telecommunications program. See 7 CFR 1700.1.
Sealed competitive bidding--A method of contracting that employs
sealed competitive bids, public opening of bids, and award of the
contract to the bidder submitting the lowest responsive bid. See
Sec. 1753.8.
Single source negotiation--Negotiating with a single source
(contractor or seller).
Special equipment--Equipment used primarily for the transmission and
enhancement of voice, data, carrier, radio and light signals, and other
equipment and facilities, including incidental cable and other
transmission equipment.
Subcontract--A secondary contract undertaking some of the
obligations of a primary contract. Under all RUS forms of contract, the
primary contractor bears full responsibility for the performance of the
subcontractor.
Unbalanced bid--A bid which contains pricing for a task or material
that is significantly higher or lower than pricing for similar tasks or
materials.
Work order construction--Minor construction performed by the
borrower's employees, pursuant to its work order procedure, with the
borrower furnishing all materials, equipment, tools, and transportation.
[54 FR 39267, Sept. 25, 1989, unless otherwise noted. Redesignated at 55
FR 39396, Sept. 27, 1990, and amended at 58 FR 66259, Dec. 20, 1993; 59
FR 17464, Apr. 13, 1994; 64 FR 16604, Apr. 6, 1999]
Sec. 1753.3 Preconstruction review.
(a) Advance RUS approval must be obtained for any construction that
does not conform to RUS standards and specifications or the approved LD,
such as construction of extensions to serve subscribers in areas not
included in the LD (See 7 CFR part 1737). For loans approved after RUS
approval of the modernization plan in the borrower's state, the proposed
construction must conform to the modernization plan, as required by 7
CFR part 1751, subpart B.
[[Page 362]]
To obtain approval, the borrower shall submit a written proposal
containing:
(1) A description of the work, indicating any deviations from the
approved LD or RUS standards and specifications.
(2) An engineering study covering the deviations if there are
changes in the design.
(3) A cost estimate for labor, engineering, materials, and
overheads.
(4) If applicable, a brief analysis from the borrower demonstrating
that the proposed changes conform to the modernization plan.
(b) Before any construction, including interim construction, is
initiated, the GFR shall meet with the borrower to review the LD to
determine if any significant changes have occurred since its approval by
RUS. It is important that the design and construction of the proposed
facilities be based on the latest information on subscriber needs.
(c) If the borrower and GFR agree that there have been no
significant changes, the borrower may proceed.
(d) If the GFR finds that the LD is no longer satisfactory, the
borrower shall prepare an amendment to the LD incorporating the
necessary revisions (See 7 CFR part 1737). The borrower must obtain RUS
approval of the LD amendment before proceeding with engineering
activities on any project to be financed with loan funds.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27,
1990, and amended at 58 FR 66259, Dec. 20, 1993; 59 FR 17464, Apr. 13,
1994; 64 FR 16604, Apr. 6, 1999]
Sec. 1753.4 Major and minor construction.
RUS's general requirements for construction are set forth in this
subpart A. Additional requirements and procedures for different types of
major construction are presented in subparts D, E, F, G, and H (OMB
control number 0572-0062). The requirements and procedures for minor
construction are presented in subpart I. Borrowers may, at their option,
follow the procedures in subparts D, E, F, G, and H for any minor
construction.
Sec. 1753.5 Methods of major construction.
(a) All major construction projects financed by loan funds shall be
performed pursuant to a contract approved by RUS and awarded through
sealed competitive bidding unless
(1) A specific exception is granted in subparts D, E, F, G, or H, or
(2) Written RUS approval is obtained.
(b) Contract construction. (1) RUS approval of the borrower's award
of the contract is not required if the contractor is selected through
sealed competitive bidding, the bid amount is $500,000 or less and the
contractor is not a company or organization affiliated with the
borrower. This does not relieve the borrower of the requirements of
bidding or bid evaluation set contained in this part.
(2) RUS approval of the borrower's award of the contract is required
for all other competitively-bid and for negotiated major construction
contracts.
(3) The requirements and procedures for sealed competitive bidding
are presented in Sec. 1753.8(a). The requirements and procedures for
negotiation are presented in Sec. 1753.8(b).
(c) Force account construction. To obtain RUS approval of the force
account method for major construction the borrower must demonstrate its
ability to perform major construction based on past force account
construction which fully met RUS construction standards and was as cost-
effective as contract construction in the area. If the borrower has no
record of past performance to support its request, but has adequate
equipment and experienced personnel to perform the proposed
construction, RUS may approve a small trial project. The requirements
and procedures for force account construction are presented in subparts
D, E, G, and H.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27,
1990, and amended at 59 FR 43716, Aug. 25, 1994; 64 FR 16604, Apr. 6,
1999]
Sec. 1753.6 Standards, specifications, and general requirements.
(a) Materials, equipment, and construction financed with loan funds
must meet the standards and specifications established by RUS. 7 CFR
part 1755 lists the RUS Bulletins containing the standards and
specifications for telephone facilities. Materials and equipment meeting
these standards are
[[Page 363]]
included on the List of Material Acceptable for Use on
Telecommunications Systems of RUS Borrowers, I.P. 300-4. This bulletin
may be obtained by subscription from the Superintendent of Documents,
Government Printing Office, Washington, DC 20402.
(b) The borrower may use RUS loan funds to finance nonstandard
construction materials or equipment only if approved by RUS in writing
prior to purchase or commencement of construction.
(c) Only new materials and equipment may be financed with loan
funds, unless otherwise approved by RUS. The materials and equipment
must be year 2000 compliant, as defined in 7 CFR 1735.22(e).
(d) All materials and equipment financed with loan funds are subject
to the ``Buy American'' provision (7 U.S.C. 901 et seq. as amended in
1938).
(e) All software, software systems, and firmware financed with loan
funds must be year 2000 compliant, as defined in 7 CFR 1732.22(e).
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27,
1990, and amended at 59 FR 43716, Aug. 25, 1994; 63 FR 45679, Aug. 27,
1998; 64 FR 16605, Apr. 6, 1999]
Sec. 1753.7 Plans and specifications (P&S).
(a) The P&S consist of an RUS contract form, the appropriate RUS
specifications, and such additional information and documents needed to
provide a clear, accurate, and complete understanding of what is
included in the construction.
(b) 7 CFR 1755.93 provides a list of the RUS forms of
telecommunications contracts for use in purchasing telephone materials
and equipment and for constructing telephone facilities with loan funds.
Also listed is the source where copies may be obtained.
(c) The appropriate standards and specifications listed in 7 CFR
part 1755 shall be included in the P&S. When RUS has not prepared
standards and specifications, the borrower shall use general engineering
requirements and specifications prepared by the borrower's engineer. The
specifications prepared by the borrower's engineer and based on general
engineering requirements shall be subject to review and approval by RUS
for all major construction, including major projects which would be
exempted from RUS approval under paragraph (e) of this section.
(d) The P&S shall be based on the LD approved by RUS. Section 1753.3
presents the requirements and procedures for obtaining RUS approval for
construction that does not conform to the LD approved by RUS.
(e) RUS approval of P&S is required for construction that is
estimated to cost over $500,000 or 25% of the total loan, whichever is
less, and for all building construction. P&S for all other construction
are exempt from RUS review and approval except that, at the time of
contract approval, RUS will examine the plans and specifications for
conformity with the loan purposes and to determine that they comply with
other requirements of this part.
(f) RUS will approve only contracts that will provide for at least
the following requirements.
(1) Equal employment opportunity provision. If this provision is not
already in the contract, RUS Contract Form 270, Equal Opportunity
Addendum, shall be attached and made a part of the contract.
(2) Liquidated damages provision. (i) If not covered by the
contract, an appropriate liquidated damages provision, in a form
prescribed by RUS, shall be included and made a part of the contract
(ii) The liquidated damages must be based upon the borrower's best
estimate of the damages it would incur as a result of the contractor's
default.
(3) Insurance and bond requirements. (i) The insurance provision
shall provide coverage as required by 7 CFR 1788.
(ii) A contractor's bond shall be furnished as required by 7 CFR
part 1788.
(iii) The borrower is responsible for ensuring that its contractor
complies with the insurance and bond requirements.
(4) Telecommunications software license provision. If the borrower
is required to enter into a software license agreement in order to use
the equipment, the contract must contain the
[[Page 364]]
RUS prepared Software License Agreement as an Addendum.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27,
1990, and amended at 59 FR 17679, Apr. 14, 1994; 64 FR 16605, Apr. 6,
1999]
Sec. 1753.8 Contract construction procedures.
(a) Sealed, competitive bidding--(1) Bid opening date. The borrower
is responsible for scheduling the bid opening date. If RUS review of P&S
is required by Sec. 1753.7, the borrower shall wait until approval has
been received before setting the date. In setting the date, sufficient
time should be allowed for the bidders to examine the project site and
prepare their bids. The borrower shall notify GFR of the bid date and
invite GFR to attend.
(2) Invitations to bid. The borrower is responsible for sending
invitations to prospective bidders and taking any other action necessary
to procure full, free, and competitive bidding. The borrower should
obtain from its engineer a list of prospective bidders and a
recommendation indicating which bidders are considered qualified. The
minimum number of contractors to be invited to bid on contracts for
various types of facilities is set forth in subparts D, E, F, or H.
(3) Qualifying bidders. If the notice and instructions to bidders
require that bidders show evidence of meeting certain requirements, the
borrower shall qualify bidders before issuing P&S to them. Procedures
for qualifying bidders are contained in subparts D, E, and F.
(4) Receipt of bids. The borrower shall write on the outside
envelope of any bid or bid amendment, the date and time the bid was
received. Any bid received from an unqualified bidder or after the time
specified for opening shall be returned promptly to the bidder unopened.
(5) Procedure when fewer than three bids are received. If fewer than
three valid bids are received, the borrower shall consult with RUS to
determine whether the bids are to be opened or returned unopened. RUS
requires that the project be rebid if fewer than three bids are received
and RUS determines that one or more other bidders with an express
interest in bidding is available and could meet the bid requirements,
but was not invited to bid. RUS shall also require rebidding if it is
found that qualified bidders were discouraged from bidding by
unreasonable bid requirements (such as late notification to bidders) or
if the borrower fails to follow the bid procedure.
(6) Conduct of bid openings. The borrower shall conduct bid openings
open to the public. The borrower should be able to contact its attorney
for immediate consultation.
(7) Review of bids. The borrower shall review all bids prior to
reading any bid results to determine that:
(i) The bid guarantees are adequate.
(ii) All minor errors or irregularities made through inadvertence
are corrected or waived. Failing this, the bid shall be rejected as
nonresponsive.
(iii) In the event of non-minor errors or irregularities, the bid is
rejected and the bid price not disclosed.
(8) Reading of bids. Bid prices shall not be read until the borrower
has reviewed all bids to determine if there are any minor errors or
irregularities that may affect the recommendation as to award. These
shall be made public at the same time the bid price is announced.
(9) Evaluating bids. The borrower shall consider the same alternates
in all bids in determining the low bid.
(10) Rejection. The borrower shall reject:
(i) All bids if quoted prices are not acceptable or if the
specifications were ambiguous and resulted in bidders having different
interpretations of the requirements.
(ii) Any bid that is not responsive, or is incomplete, or submitted
by an unqualified bidder, or unbalanced between labor and materials or
other respects.
(11) Award of contract. (i) The borrower shall obtain from the
engineer the determination of the lowest responsive bid, a tabulation of
all bids and the engineer's recommendation for award of the contract.
Contract award is subject to RUS approval if either the cost of the
project is over $500,000 or the contract is with an organization
affiliated with the borrower. Contract
[[Page 365]]
award of all other projects is not subject to RUS approval.
(ii) If an award is made, the borrower shall award the contract to
the lowest responsive bidder. The borrower may award the contract
immediately upon determination of the lowest responsive bidder if the
following conditions are met:
(A) The project is included in an approved loan and adequate funds
were budgeted in the loan and are available.
(B) All applicable RUS procedures were followed, including those in
the Notice and Instructions to Bid in the standard forms of contract.
(iii) If RUS approval of the award of contract is required under
this paragraph (a)(11), the borrower shall send to RUS for consideration
of approval of the award:
(A) Two copies of the low bid.
(B) The engineer's recommendation and the tabulation of all bids.
(C) Evidence of acceptance of the low bid by the borrower, such as:
(1) Certified copy of board resolution or
(2) letter or telegram to RUS signed by a properly authorized
corporate official.
(iv) If RUS approval of the award of contract is not required under
this paragraph (a)(11), the borrower shall keep a file available for
inspection by RUS. The file shall be kept for at least two years and
shall include:
(A) One copy of all received bids.
(B) The engineer's recommendation and tabulation of all bids
including ``Buy American'' evaluations, if any, and all other
evaluations required by law.
(C) Evidence of acceptance of the low bid by the borrower, such as a
copy of the board resolution certified by the Secretary of the board.
(12) Execution of contract. (i) The borrower shall submit to RUS
three original counterparts of the contract executed by the contractor
and borrower.
(ii) If RUS approves the contract, it shall return one copy to the
borrower and send one copy to the contractor.
(b) Negotiated construction contracts. (1) For the construction of
certain facilities the borrower may negotiate a contract rather than
solicit sealed competitive bids. Refer to the appropriate subparts E, F,
or H for specific requirements and procedures.
(2) For negotiated purchases, borrowers shall use RUS contract
forms, standards, and specifications.
(3) For all contract forms except RUS Form 773:
(i) After a satisfactory negotiated proposal has been obtained, the
borrower shall submit it to RUS for approval, along with the engineer's
recommendation, and evidence of acceptance by the borrower.
(ii) If RUS approves the negotiated proposal, the borrower shall
submit three copies of the contract, executed by the contractor and
borrower, to RUS for approval.
(iii) If RUS approves the contract, RUS shall return one copy of the
contract to the borrower and one copy to the contractor.
(4) For RUS Form 773, the borrower is responsible for negotiating a
satisfactory proposal, executing contracts, and closing the contract.
See subparts F and I of this part for requirements for major and minor
construction, respectively, on Form 773.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27,
1990, as amended at 59 FR 43716, Aug. 25, 1994; 64 FR 16605, Apr. 6,
1999]
Sec. 1753.9 Subcontracts.
(a) RUS construction contract Forms 257, 397, 515, and 525 contain
provisions for subcontracting. Reference should be made to the
individual contracts for the amounts and conditions under which a
contractor may subcontract work under the contract.
(b) RUS Form 282, Subcontract, shall be used for subcontracts under
construction and installation contracts.
(1) Minor modifications or additions may be made to the subcontract
form, as long as they do not change the intent of the primary contract.
Any alterations to the subcontract shall be initialed and dated by the
persons executing the subcontract.
(2) Subcontracts shall be prepared in quadruplicate and all copies
executed by the contractor and subcontractor and consented to by the
borrower and surety, if any.
(3) Four executed copies of the subcontract shall be forwarded to
RUS for
[[Page 366]]
approval. Upon approval, one copy each will be sent to the borrower,
contractor, and subcontractor.
(c) As stated in contract Forms 257, 397, 515, and 525, the
contractor shall bear full responsibility for the acts and omissions of
the subcontractor and is not relieved of any obligations to the borrower
and to the Government under the contract.
(d) As stated in the contract, construction shall not be performed
by the subcontractor before approval of the subcontract by RUS.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27,
1990, and amended at 59 FR 43716, Aug. 25, 1994]
Sec. 1753.10 Preconstruction conference.
The borrower shall conduct a conference, attended by the borrower,
contractor, and resident engineer prior to the beginning of construction
to provide an opportunity to discuss and agree on responsibilities,
procedures, practices, and methods before the work begins. The borrower
shall provide each participant with a copy of the conference results.
The GFR shall be invited to attend this conference.
Sec. 1753.11 Contract amendments.
(a) The borrower must obtain RUS approval before execution of any
amendment to a contract if
(1) The amendment alters the terms and conditions of the contract or
changes the scope of the project covered by the contract regardless of
the amount of the contract before amendment,
(2) The amendment increases the amount to be paid under the contract
by 20% or more, or
(3) The amendment causes an unbonded contract to require a
contractor's performance bond. This would occur when a contract that is
executed in an amount below that requiring a performance bond by 7 CFR
part 1788, subpart C, is amended to an amount above that amount.
(b) Advance RUS approval to execute other contract amendments is not
required. These amendments may be submitted to RUS at any time prior to
closeout. If a borrower wishes to receive an advance of funds based on
an amended contract amount (i.e., amendments that increase a contract by
less than 20%), the borrower may initiate an increase in the amount
approved for advance by submitting three copies of the amendment to RUS
for approval.
(c) For each amendment executed, the borrower shall make certain
that:
(1) The contractor's bond covers the additional work to be
performed. If the amendment by itself (or together with preceding
amendments) increases the original contract price by 20% or more, a bond
extension will be required to bring the penal sum of the bond to the
total amended contract price.
(2) If an amendment covers construction in a county or state not
included in the original contract, the borrower and contractor are
licensed to do business in that location.
(d) Upon execution of any amendment that causes the amended contract
amount to exceed the original contract amount by 20% or more, three
copies of the amendment shall be submitted to RUS for approval.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27,
1990, as amended at 64 FR 16605, Apr. 6, 1999]
Secs. 1753.12--1753.14 [Reserved]
Subpart B--Engineering Services
Source: 54 FR 3984, Jan. 27, 1989, unless otherwise noted.
Redesignated at 55 FR 39397, Sept. 27, 1990.
Sec. 1753.15 General.
(a)(1) The standard RUS loan documents contain provisions regarding
engineering and architectural services performed by or for RUS
telecommunications borrowers. This part implements certain of the
provisions by setting forth the requirements and procedures to be
followed by borrowers in selecting architects and engineers and
obtaining architectural and engineering services by contract or by force
account.
(2) Borrowers shall obtain architectural and engineering services
only from persons or firms which are not affiliated with, and have not
represented, a contractor, vendor or manufacturer who may provide labor,
materials, or equipment to the borrower under any current loan.
[[Page 367]]
(3) Preloan architectural and engineering services may be provided
by qualified personnel on the borrower's staff or by consultants.
Neither the selection of a preloan architect or engineer by a borrower,
nor the contractual arrangements with them, requires RUS approval.
(4) Postloan architectural and engineering services shall be
obtained by borrowers from registered architects and engineers licensed
in the State in which the facilities will be located, except where RUS
has approved the borrower to provide these services by the force account
method. When the extent of the proposed major or minor construction is
such that the postloan engineering involved is within the capabilities
of employees on the borrower's staff, the borrower may request RUS
approval to provide such services. This method of providing engineering
services is referred to as force account engineering. Refer to
Sec. 1753.17(c).
(5)(i) For major construction, services provided by architects and
engineers not on the borrower's staff must be provided under Form 220,
Architectural Service Contract, or Form 217, Postloan Engineering
Service Contract--Telecommunications. These contracts require RUS
approval.
(ii) For minor construction, borrowers may use the contracts in
paragraph (a)(5)(i) of this section for postloan architectural or
engineering services or any other form of contract, such as Form 245,
Engineering Service Contract, Special Services--Telephone. RUS approval
of contracts for postloan architectural or engineering services
associated with minor construction, except for buildings covered in
paragraph (a)(6) of this section, is not required.
(6) For buildings to be constructed with RUS funds, postloan
architectural or engineering services shall be obtained if (1) the
construction cost exceeds $50,000 (prefab buildings using manufacturer's
specifications approved by RUS are exempt from this requirement) or (2)
soil or seismic conditions require special design considerations.
(b) For the purpose of this subpart B:
(1) Contract--The services contract between the borrower and its
architect or engineer.
(2) Force Account Engineering--Any preloan or postloan engineering
services performed by the borrower's staff.
(3) Postloan engineering services--The design, procurement, and
inspection of construction to accomplish the objectives of a loan as
stated in a LD approved by RUS.
(4) Preloan engineering services--The planning and design work
performed in preparing a LD. This consists of helping the borrower
determine the objectives for a loan, including consideration of RUS's
requirements relating to the modernization plan, selecting the most
effective and efficient methods of meeting loan objectives, and
preparing the LD which describes the objectives and presents the method
selected to meet them.
(c) Single copies of RUS forms and publications cited in this part
are available free from Administrative Services Division, Rural
Utilities Service, United States Department of Agriculture, Washington,
DC 20250-1500. These forms and publications may be reproduced.
(d)(1) All outside architects and engineers employed by RUS
telephone borrowers shall have insurance coverage as required by 7 CFR
part 1788.
(2) Borrowers shall ensure that their architects and engineers
comply with the insurance requirements of their contracts. See 7 CFR
1788.54.
(e)(1) Borrowers shall make prompt payments to architects and
engineers as required by the contract.
(2) RUS shall not make loan funds available for late payment
interest charges.
[54 FR 3984, Jan. 27, 1989. Redesignated at 55 FR 39397, Sept. 27, 1990,
as amended at 58 FR 66259, Dec. 20, 1993; 59 FR 17464, Apr. 13, 1994; 64
FR 16605, Apr. 6, 1999]
Sec. 1753.16 Architectural services.
(a) The borrower shall be responsible for selecting an architect to
perform the architectural services required in the design and
construction of buildings.
(b)(1) The borrower shall use Form 220 when contracting for
architectural services for major construction, except that the borrower
may use either Form 220 or Form 217 if the building is an unattended
central office building.
[[Page 368]]
(2) The borrower and the architect negotiate the fees for services
under Form 220.
(3) Reasonable modifications or additions to the terms and
provisions in Form 220 may be made, subject to RUS approval, to obtain
the specific services needed for a building.
(4)(i) Three copies of Form 220, executed by the borrower and the
architect, shall be sent to GFR to be forwarded to RUS for approval. RUS
will review the contract terms and conditions. RUS will not approve the
contract if, in RUS's judgment:
(A) Unacceptable modifications have been made to the contract form.
(B) The contract will not accomplish loan purposes.
(C) The architectural service fees are unreasonable.
(D) The contract presents unacceptable loan security risk to RUS.
(ii) If RUS approves the contract, RUS will send one copy to the
architect and one copy to the borrower.
(5) Loan funds will not be available to pay for the preliminary
architectural services if a loan is not made for the construction
project, or if the construction project is abandoned.
(6) Subpart D of 7 CFR part 1753 sets forth the requirements and
procedures to be followed by borrowers constructing central office,
warehouse, and garage buildings with RUS loan funds.
(c)(1) RUS telephone borrowers shall obtain two copies of a
completed Form 284, Final Statement of Architect's Fees, when all
services and obligations required under the architectural services
contract have been completed. All fees shown on the statement shall be
supported by detailed information where appropriate. For example: out-
of-pocket expense, cost plus, and per diem types of compensation shall
be listed separately with labor, transportation, etc., itemized for each
service involving these types of compensation.
(2) If Form 284 and supporting data are satisfactory, the borrower
shall approve the statement, sign both copies, and send one copy to the
GFR.
(3) Upon approval of Form 284 by RUS, the borrower shall promptly
make final payment to the architect.
[54 FR 3984, Jan. 27, 1989. Redesignated at 55 FR 39397, Sept. 27, 1990,
as amended at 59 FR 43717, Aug. 25, 1994; 64 FR 16606, Apr. 6, 1999]
Sec. 1753.17 Engineering services.
(a)(1) All engineering services required by a borrower to support
its application for a loan shall be rendered by a qualified engineer
selected by the borrower or by qualified employees on the borrower's
staff. The selection of the preloan engineer, the form of preloan
engineering service contract, and the contract itself, are not subject
to RUS approval. Borrowers, however, should discuss their proposed
method of obtaining preloan engineering services with the GFR before
proceeding with any arrangements.
(2) Form 835, Preloan Engineering Service Contract, Telephone System
Design, is a suggested form of preloan engineering service contract.
While use of this form of contract is not required, it will be helpful
in determining the tasks to be performed. Any form of contract used
shall specify that preloan engineering services conform to RUS
requirements for preloan studies. See subpart D of 7 CFR part 1737.
(b)(1) Major construction. (i) Three copies of Form 217 executed by
the borrower and the engineer shall be sent to the GFR to forward to RUS
for approval. The engineer's estimate of the engineering fees, on Form
506, shall be included.
(ii) RUS will review the contract terms and conditions. RUS will not
approve the contract if, in RUS's judgement:
(A) Unacceptable modifications have been made to the contract form.
(B) The contract will not accomplish loan purposes.
(C) The engineering service fees are unreasonable.
(D) The contract presents unacceptable loan security risk to RUS.
(E) The consulting engineering firm is affiliated with or has
represented a contractor, vendor, or manufacturer who may provide labor,
materials, or equipment to the borrower under any current loan.
[[Page 369]]
(2) Minor construction. When a borrower contracts for an engineering
firm to inspect and certify construction accounted for under the work
order procedure or the Contract for Miscellaneous Construction Work and
Maintenance Services, Form 773 (See 7 CFR part 1753 subpart I), the
borrower shall require that the certification be signed by a licensed
engineer.
(c)(1) Major construction. When the extent and complexity of the
proposed construction is such that the engineering involved is within
the capabilities of employees on the borrower's staff, borrowers may
request RUS approval to provide such services.
(i) The request shall include:
(A) A description of services to be performed.
(B) The name and qualifications of the employee to be in charge. RUS
requires this employee to meet the State experience requirements for
registered engineers. In the absence of specific State experience
requirements, the employee must have at least eight years experience in
the design and construction of telecommunication facilities, with at
least two years of the work experience at a supervisory level. RUS does
not require professional registration of this employee, but this does
not relieve the borrower from compliance with applicable State
registration requirements which may require a licensed individual to
perform such services.
(C) The names, qualifications, and responsibilities of other
principal employees who will be associated with providing the
engineering services.
(D) A letter signed by an authorized representative of the borrower
authorizing the engineering services to be performed by force account
and certifying the information supporting the request.
(ii) RUS shall notify the borrower by letter of approval or
disapproval to perform force account engineering. The letter shall set
forth any conditions associated with an approval or the reasons for
disapproval.
(iii) RUS's approval of force account engineering for major
construction shall be only for the specific projects named in the notice
of approval.
(2) Minor construction. (i) When the borrower proposes to perform
the inspection and certification of minor construction, the following
shall be submitted to the RUS:
(A) A copy of the employee's qualifications and experience record,
unless previously submitted. RUS requires a minimum of four years of
construction and inspection experience. The employee cannot be engaged
in the actual construction.
(B) A letter signed by an authorized representative of the borrower
authorizing the performance of these services by the employee, subject
to RUS approval, and certifying the supporting information.
(ii) RUS shall notify the borrower by letter of approval or
disapproval of the borrower's staff employee to perform the inspection
and certification of construction. The approval shall be limited to the
employee's area of expertise.
(d)(1) Subject to the requirements of this part and other applicable
regulations, RUS will make loan funds available for the architectural
and engineering services up to the amounts included in the approved
loan.
(2) Advance of funds shall be requested on an FRS as set forth in 7
CFR part 1744 subpart C.
(e) The borrower shall obtain status of contract and force account
proposal reports from the engineer once each month. The report shall
show for each contract or FAP the approved contract or FAP amount, the
date of approval, the scheduled date construction was to begin and the
actual date construction began, the scheduled completion date, the
estimated or actual completion date, the estimated or actual date of
submission of closeout documents, and an explanation of delays or other
pertinent data relative to progress of the project. One copy of this
report shall be submitted to the GFR.
(f)(1) Upon completion of all services required under the
engineering service contract Form 217, the borrower shall obtain from
the engineer four copies of the Final Statement of Engineering Fee, Form
506.
(2) If the statement is satisfactory, the borrower shall sign all
copies and send three to the GFR.
[[Page 370]]
(3) After RUS approval of Form 506, one copy shall be sent to the
borrower and one copy sent to the engineer.
(4) The borrower shall promptly make final payment to the engineer.
[54 FR 3984, Jan. 27, 1989. Redesignated at 55 FR 39397, Sept. 27, 1990,
and amended at 59 FR 43717, Aug. 25, 1994; 64 FR 16606, Apr. 6, 1999]
Sec. 1753.18 Engineer and architect contract closeout certifications.
A certification of completion and inspection of construction signed
by the borrower and countersigned in accordance with accepted
professional engineering and architectural practice, by the engineer or
architect, shall be prepared as evidence of completion of a major
construction project. This certification shall make reference to the
contract number and contract amount, and shall include the following:
(a) A statement that the construction is complete and was done in
accordance with the RUS approved system design or layout or subsequent
RUS approved changes.
(b) A statement that the construction was for loan purposes.
(c) A statement that construction used RUS-accepted materials and
was in accordance with specifications published by RUS covering the
construction which were in effect when the contract was executed, or in
the absence of such specifications, that it meets other applicable
specifications and standards (specify), and that it meets all applicable
national and local code requirements as to strength and safety.
(d) A statement that the construction complies with the ``Buy
American'' provision (7 U.S.C. 903 note) of the Rural Electrification
Act of 1936 (7 U.S.C. 901 et seq.).
(e) A statement that all necessary approvals have been obtained from
regulatory bodies and other entities with jurisdiction over the project.
(f) A statement that all closeout documents required by this part
have been examined and found complete such that the Contractor has
fulfilled all obligations under the contract except for warranty
coverage.
(g) A statement that the engineer or architect is not affiliated
with and does not represent the contractor, vendor, or manufacturer who
is a participant in the contract.
[64 FR 16606, Apr. 6, 1999]
Secs. 1753.19--1753.20 [Reserved]
Subpart C [Reserved]
Subpart D--Construction of Buildings
Source: 54 FR 39267, Sept. 25, 1989, unless otherwise noted.
Redesignated at 55 FR 39396, Sept. 27, 1990.
Sec. 1753.25 General.
(a) This subpart implements and explains the provisions of the Loan
Documents setting forth the requirements and the procedures to be
followed by borrowers in constructing headquarters, commercial office,
central office, warehouse, and garage buildings with loan funds.
(b) Terms used in this subpart are defined in Sec. 1753.2.
(c) All plans and specifications for buildings to be constructed
with loan funds are subject to the approval of RUS. In addition,
preliminary plans and specifications for headquarters and commercial
office buildings to be constructed with loan funds are subject to RUS
approval.
(d) RUS Form 257, Contract to Construct Buildings, shall be used for
the construction of all headquarters, commercial office, central office,
warehouse, and garage buildings with loan funds. Refer to Sec. 1753.26
for further instructions.
(e) The borrower shall use the sealed competitive bid procedure for
all building construction, except for:
(1) Minor construction using subpart I procedures.
(2) Major construction, where the borrower has received advanced
approval to perform the construction by force account.
Refer to Secs. 1753.27 and 1753.29 for further instructions.
(f) The site location, design, and construction of the facilities
must comply with all applicable laws and regulations, including:
(1) Pub. L. 90-480 (42 U.S.C. 4151) (Access to Physically
Handicapped), which
[[Page 371]]
requires certain buildings financed with Federal funds be designed and
constructed to be accessible to the physically handicapped.
(2) Pub. L. 91-596 (29 U.S.C. 651) the Occupational Safety and
Health Act of 1970. OSHA issues rules and regulations covering
occupational safety and health standards for buildings. These
regulations are codified in 29 CFR chapter XVII.
(3) 7 CFR part 1794, which provides for compliance with the National
Environmental Policy Act (NEPA) and Council on Environmental Quality
(CEQ) regulations (40 CFR parts 1500-1508) implementing the procedural
provisions of NEPA, as well as RUS's conformance with other laws,
regulations, and Executive Orders regarding environmental protection.
(4) 7 CFR part 1792, subpart C, which requires that the building
design comply with applicable seismic design criteria. Prior to the
design of buildings, borrowers shall submit to RUS a written
acknowledgement from the architect or engineer that the design will
comply.
(g) All construction pertaining to the building structure shall be
performed under one contract. Separate contracts may be used for
planting shrubbery, surfacing of roads and parking areas, and other
identifiable parts of the project not pertaining to the building
structure. These separate contracts shall also be subject to RUS
approval as described in this subpart D.
(h) The borrower is responsible for submitting evidence,
satisfactory to RUS, establishing that clear title to the building site
has been obtained. RUS will not approve the construction contract until
it has given title clearance.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27,
1990, and amended at 59 FR 43717, Aug. 25, 1994; 64 FR 16606, Apr. 6,
1999]
Sec. 1753.26 Plans and specifications (P&S).
(a) For headquarters and commercial office buildings only, the
borrower shall prepare preliminary P&S showing the floor plan and
general architectural details of the building to be constructed using
loan funds. In particular, the preliminary P&S shall address the
requirements of Sec. 1753.25(f) and the Uniform Relocation Assistance
and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et
seq.). The P&S shall be submitted to the GFR and are subject to RUS
approval.
(b) The borrower shall prepare P&S for construction of all
buildings. Each set of P&S shall include:
(1) RUS Contract Form 257, Contract to Construct Buildings,
completed to the extent explained in (c) of this section.
(2) Complete and detailed specifications covering materials and
workmanship.
(3) A detailed building plan. Where the building is to house
electronic apparatus, the detailed plan or specifications shall include
the equipment environmental requirements and special equipment required.
(4) A site plan for each building showing the building location and
giving the legal description of the site. Sufficient information must be
provided for the site so that it can be identified as the same property
on which title opinion was submitted to RUS. The legal description shall
be typed on the site plan. The borrower shall also furnish topographical
information and a description of any proposed site development work and
show proposed connections for public utilities.
(c) RUS Contract Form 257 shall be completed as follows:
(1) List of names or kinds of buildings and locations--Site plan and
specifications must be identified with the appropriate building.
(2) Alternates--The borrower shall keep the number of alternates to
a minimum. Items for which alternates are to be taken shall be fully
described on a separate sheet in the specifications and the details
shown on the plans, when necessary, and identified by the alternate
number. The Notice and Instructions to Bidders shall explain how bids
will be evaluated with respect to alternates.
(3) Time for construction--A reasonable time for completion of
construction, considering local conditions, shall be determined by the
borrower and inserted in the space provided. Too short a construction
period may discourage
[[Page 372]]
bidders or influence their bids. Completion of the building, where
central office equipment is involved, shall be coordinated with delivery
of the equipment. The time of completion shall allow adequate drying
time before the central office equipment is stored or installed in the
building.
(d) The plans and specifications shall show the identification and
date of the model code used for seismic safety design considerations,
and the seismic factor used. See 7 CFR part 1792, subpart C.
(e) Two sets of the building plans and specifications shall be
prepared and submitted to the GFR.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27,
1990, as amended at 59 FR 43717, Aug. 25, 1994; 64 FR 16606, Apr. 6,
1999]
Sec. 1753.27 Bidding procedure.
Upon RUS approval of the P&S, the borrower shall proceed as follows:
(a) Bid documents shall consist of a copy of the approved P&S,
including RUS Contract Form 257, completed in accordance with the
instructions on the cover of the form and the plot plans showing site
development details. For contracts in amounts of $100,000 or less, the
borrower must specify in the Notice and Instructions to Bidders whether
the contractor will be required to furnish a performance bond or a
builder's risk policy.
(b) The borrower shall determine that title to the real estate has
been approved by RUS before the invitations to bid are released.
(c) The borrower shall set the time for opening of bids, allowing
ample time for bidders to prepare bids.
(d) The borrower shall solicit bids as set forth in
Sec. 1753.8(a)(2). Invitations shall be sent to at least six prospective
bidders.
(e) The borrower shall conduct bid opening and award of contract in
accordance with the procedure set forth in Sec. 1753.8(a).
Sec. 1753.28 Contract amendments.
(a) The general requirements for contract amendments are set forth
in Sec. 1753.11.
(b) The borrower shall prepare construction contract amendments on
RUS Contract Form 238, Construction or Equipment Contract Amendments.
See 7 CFR 1755.93 to obtain copies of Form 238.
Sec. 1753.29 Force account procedures.
(a) The borrower must obtain RUS approval of the force account
method of construction of buildings in advance in order to obtain RUS
financing.
(b) The borrower shall prepare the P&S in accordance with
Sec. 1753.26.
(c) Prior to any construction activity or the purchase of materials
or equipment, the borrower shall submit the FAP in duplicate to RUS,
accompanied by a resolution indicating approval of the board of
directors of the borrower or a letter signed by an authorized corporate
official. The proposal shall include:
(1) A Copy of the P&S.
(2) An itemized list of all items of materials required for
construction.
(3) A construction schedule showing the estimated construction
period for each major construction item.
(4) An estimate of the material and labor and other costs for any
construction item not provided for in the approved loan.
(d) Force Account construction to be financed with loan funds shall
not be started until RUS approval has been received by the borrower.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27,
1990, and amended at 59 FR 43717, Aug. 25, 1994]
Sec. 1753.30 Closeout procedures.
(a) This section outlines the procedure to be followed to close out
RUS Contract Form 257 (Contract to Construct Buildings) and construction
or rehabilitation performed by the force account method.
(b) RUS Form 257 Contract. (1) Whenever changes were made in the
plans and specifications which did not require immediate submission to
RUS of an amendment under Sec. 1753.11, a final contract amendment
showing the changes shall be prepared.
(2) Upon completion of the project, the borrower shall obtain
certifications from the architect or engineer that the project and all
required documentation
[[Page 373]]
are satisfactory and complete. The requirements for this certification
are contained in Sec. 1753.18.
(3) The engineer's or architect's contract closeout certification
and the final amendment shall be submitted to RUS as a basis for the
final advance of funds for the contract.
(4) After all required RUS approvals are obtained, final payment is
made in accordance with article III of RUS Form 257 once the borrower
has received the architect's or engineer's certifications regarding
satisfactory completion of the project.
(c) Upon completion of force account construction, the borrower
shall:
(1) Arrange with its architect or engineer and the GFR for final
inspection of the project.
(2) Complete, with the assistance of its architect or engineer, the
documents listed in the following table that are required for the
closeout of force account construction.
Documents Required To Closeout Construction of Buildings
----------------------------------------------------------------------------------------------------------------
Use with No. of copies prepared Distribution
------------------- by ---------------------
RUS Form No. Description ------------------------
Contract Force Architect/ Borrower Contractor
account Contractor engineer
----------------------------------------------------------------------------------------------------------------
238.......................... Construction or X ....... .......... (3) (to RUS) (to RUS)
Equipment
Contract
Amendment (if
not previously
submitted, send
to RUS for
approval).
181.......................... Certificate of X ....... .......... 2 1 1
Completion
(contract
construction) \
1\.
231.......................... Certificate of X ....... 1 .......... 1 ..........
Contractor.
224.......................... Waiver and X ....... 1 .......... 1 ..........
Release of Lien
From Each
Supplier.
213.......................... Certificate (buy X ....... 1 .......... 1 ..........
American).
None \2\..................... ``As Built'' X X .......... 1 1 ..........
Plans and
Specifications.
None......................... Guarantees, X ....... 1 .......... 1 ..........
Warranties,
Bonds,
Operating or
Maintenance
Instructions,
etc.
None......................... Architect/ X X .......... 2 1 1
Engineer
seismic safety
certification.
----------------------------------------------------------------------------------------------------------------
\1\ Cost of materials and services furnished by borrower are not to be included in Total Cost on RUS Form 181.
\2\ When only minor changes were made during construction, two copies of a statement to that effect from the
Architect will be accepted instead of the ``as built'' Plans and Specifications.
(3) Make distribution of the completed documents as indicated in the
table in this section.
(d) Final payment shall not be made until RUS has approved the
closeout documents.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27,
1990, as amended at 59 FR 43717, Aug. 25, 1994; 64 FR 16606, Apr. 6,
1999]
Secs. 1753.31--1753.35 [Reserved]
Subpart E--Purchase and Installation of Central Office Equipment
Source: 54 FR 39267, Sept. 25, 1989, unless otherwise noted.
Redesignated at 55 FR 39397, Sept. 27, 1990.
Sec. 1753.36 General.
(a) This subpart implements and explains the provisions of the Loan
Documents setting forth the requirements and the procedures to be
followed by borrowers in purchasing and installing central office
equipment financed with loan funds.
(b) Terms used in this subpart are defined in Sec. 1753.2 and RUS
Contract Forms 525 and 545.
(c) Borrowers shall use RUS Contract Form 525, Central Office
Equipment Contract (Including Installation), when the firm supplying the
equipment will install it and RUS Contract Form 545, Central Office
Equipment Contract (Not Including Installation) when the supplier of the
equipment will not be installing it. In either case the appropriate
specifications shall be included in the contract.
(d) Alternates, if any, specified in the P&S shall be kept to a
minimum.
(e) The borrower shall take sealed competitive bids for all central
office equipment to be purchased under RUS Contract Form 525 or 545
using the procedure set forth in Sec. 1753.38(a), unless RUS approval to
negotiate is obtained.
(f) The borrower may request permission to negotiate with a single
supplier
[[Page 374]]
for additional central offices to standardize equipment on a system
basis. RUS approval to negotiate must be obtained before release of the
plans and specifications to the supplier. Except for remote switching
terminals associated with an existing central office, RUS will not
approve negotiation with a non-domestic manufacturer for the purpose of
standardization because such a purchase does not meet the RE Act ``Buy
American'' provisions.
(g) Materials and equipment must meet the standards and general
specifications approved by RUS. Materials and equipment included in I.P.
300-4, ``List of Materials Acceptable for Use on Telecommunications
Systems of RUS Borrowers'', have been accepted as meeting these
requirements. If the equipment is not included in the ``List of
Materials'' but has been approved for field trial installation, the
borrower must in each instance obtain field trial approval from RUS
prior to entering into any agreement with a supplier.
(h) Only new equipment shall be purchased unless otherwise approved
by RUS.
(i) All purchases of materials and equipment are subject to the
``Buy American'' requirements.
(j) If the sealed competitive bid procedure is followed, negotiation
after bid opening will not be permitted.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27,
1990, as amended at 64 FR 16607, Apr. 6, 1999]
Sec. 1753.37 Plans and specifications (P&S).
(a) General. (1) Prior to the preparation of P&S, the borrower shall
review with the GFR the current and future requirements for central
office equipment.
(2) The P&S shall specify the delivery and completion time required
for each exchange.
(3) The P&S shall provide for a complement of spare parts to be
provided to the borrower. The quantity and type of spare parts shall be
determined in accordance with the provisions in RUS Form 522 ``General
Specification for Digital, Stored Program Controlled Central Office
Equipment.''
(4) P&S for equipment to be provided under a Form 545 contract shall
require the supplier to provide specific installation information and a
detailed bonding and grounding plan to be utilized by the engineer.
borrower, and others responsible for the installation of the equipment.
(b) Preparation of P&S. (1) The P&S shall include RUS Contract Form
525 or 545, Notice and Instructions to Bidders, specifications for the
required equipment for each exchange, provision for spare parts, and all
other pertinent data needed by the bidder to complete its proposal.
(2) Guidelines for the preparation of the detailed equipment
specifications are contained in the Telecommunications Engineering and
Construction Manual (TE&CM), which is available from RUS.
(c) RUS review of P&S is required for construction estimated to cost
over $500,000 total or estimated to cost more than 25% of the total
loan, whichever is less.
(1) If RUS review is required, the borrower shall submit one copy of
the P&S to the GFR for RUS review.
(2) RUS will review the P&S and notify the borrower in writing of
approval or disapproval.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27,
1990, as amended at 64 FR 16607, Apr. 6, 1999]
Sec. 1753.38 Procurement procedures.
(a) Sealed competitive bidding. Sealed competitive bidding of
central office equipment shall be in two steps: presentation and
evaluation of suppliers' technical proposals, and compliance with the
sealed competitive bidding procedure set forth in Sec. 1753.8(a). The
procedure is as follows:
(1) Solicitation of bids. (i) After RUS approval of the
specifications and equipment requirements (required only for projects
expected to exceed $500,000 or 25% of the loan, whichever is less), the
borrower shall send ``Notice and Instructions to Bidders'' to suppliers
with central office equipment included in the current Informational
Publication (I.P.) 300-4, ``List of Materials Acceptable for Use on
Telecommunications Systems of RUS Borrowers.''
[[Page 375]]
I.P. 300-4 is a subscription item available from the Superintendent of
Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh,
PA 15250-7954. This ``Notice'' may also be sent to suppliers of non-
domestic equipment currently accepted by RUS as meeting RUS technical
standards. The ``Notice'' may also be sent to suppliers of central
office equipment accepted for field trial.
(ii) The ``Notice'' must set forth the method of evaluating bids and
must require the submission of equipment lists and traffic calculations
with the bids.
(iii) RUS Contract Forms 525 or 545 shall be used, except that the
``Notice'' shall state that prior to the bid opening a technical session
will be conducted with each supplier to resolve any questions related to
the technical proposal submitted by the supplier. The suppliers'
technical proposals should be requested for presentation 30 days in
advance of the bid opening to enable sufficient time to make the
technical evaluation.
(iv) The borrower shall solicit bids as set forth in
Sec. 1753.8(a)(2). The ``Notice'' shall be sent to at least three
prospective bidders. A copy of the ``Notice'' and a list of such bidders
shall be sent to RUS.
(v) At the request of an invited supplier, the borrower shall
provide two copies of the P&S.
(2) Technical Sessions. (i) The borrower shall schedule individual
technical sessions by the suppliers, notify each supplier of its
scheduled date and time, notify the GFR of all scheduled dates and
times, and request the following be available at the technical session:
(A) Lists of equipment, material and software.
(B) Proposed floor plan.
(C) Power and heat dissipation calculations.
(D) List of exceptions to plans and specifications.
(E) Protection and grounding requirements.
(F) Description of how office administration, maintenance and
traffic collection are handled with step-by-step examples and printouts.
(G) Explanation of processor and/or memory expansion required to
meet ultimate size. This shall include discussions of software,
processor memory, and hardware additions needed for line additions and
the introduction of various future services; the relative costs of
installing the necessary hardware and software initially as compared
with the anticipated cost if installed at the time when the future
services are to be offered.
(H) Description of how special equipment such as loop tests,
volunteer fire alarm circuit, line load control, etc., will function.
(I) Description of method for translating initial office
administration information into machine language, and proposal as to
whether it will be done by the borrower or by the supplier.
(J) A software license agreement (if required by the manufacturer)
in the form indicated in Sec. 1753.38(c).
(K) Any other items pertinent to the technical proposal, such as
information regarding changes that have been made in hardware and
software of the equipment that is of like manufacture to that presently
in operation in the borrower's system. This shall include requirements
for additional spare parts or training which have developed as a result
of significant change in system device technology.
(ii) The borrower shall review in detail all exceptions to the P&S.
No exceptions will be accepted unless all bidders are notified, in
writing, of the change in the specifications and permitted to
incorporate the change in their proposal.
(iii) If the technical proposal is not responsive, the borrower
shall notify the supplier, in writing, that its proposal will not be
given further consideration and why.
(iv) Changes in the P&S resulting from the technical sessions shall
be subject to RUS's review and approval.
(v) After evaluation of the technical proposals and RUS approval of
the changes to P&S (required only for projects that are expected to
exceed $500,000 or 25% of the loan, whichever is less), sealed bids
shall be solicited from only those bidders whose technical proposals
meet P&S requirements. When fewer than three bidders are adjudged
qualified by the borrower to bid, RUS approval must be obtained to
proceed.
[[Page 376]]
Generally, RUS will grant such approval only if the borrower can
demonstrate to the satisfaction of RUS that a good faith effort was made
to obtain at least three competitive bids. This would be demonstrated if
all suppliers currently listed in I.P. 300-4 were invited to submit
technical proposals.
(vi) The borrower shall invite the GFR to attend the technical
sessions.
(3) Bidding and award of contract. (i) All bids must be completed,
dated, and signed prior to submission.
(ii) The bid opening and award of contract shall be conducted in
accordance with the procedure set forth in Sec. 1753.8(a).
(iii) The spare parts bid shall always be priced separately and
added to the base bid when determining the low bidder.
(b) Single source negotiated procurement. If RUS has approved the
borrower's request to procure central office equipment through single
source negotiation in accordance with requirements contained in
Sec. 1753.36(f), the borrower shall proceed in accordance with this
subsection.
(1) After RUS approval of the P&S and equipment requirements
(required only for contracts expected to exceed $500,000 or 25% of the
loan, whichever is less), the borrower shall send two complete copies of
the approved P&S to the supplier an request that a proposal be
submitted.
(2) The borrower shall schedule a time and date for a technical
session by the supplier and request that the items listed in
Sec. 1753.38(a)(2)(i) be available at the technical session. In addition
to these items, the supplier shall be requested to provide a description
of the exact differences in hardware and software between the borrower's
existing equipment and the proposed equipment so that the borrower can
determine spare parts interchangeability, need for retraining, and the
compatibility of administration of the old and new equipment.
(3) If the contract is expected to exceed $500,000 or 25% of the
loan, whichever is less, changes in the P&S resulting from the technical
session shall be subject to RUS review and approval.
(4) The submitted proposal shall be based on the agreed-upon results
of the technical evaluation and must be complete, dated, and signed.
(5) The borrower shall obtain an award recommendation from its
engineer.
(6) The following shall be sent to RUS for review and approval:
(i) A copy of the engineer's recommendation to the borrower, and
(ii) Evidence of acceptance of the proposal by the borrower, such as
(A) A certified copy of the board resolution, or
(B) A letter to RUS signed by an authorized corporate official.
(7) RUS approval of the proposal will be conditioned upon the
borrower obtaining prices that are consistent with current competitive
prices. Upon RUS approval of the proposal, three copies of the contract
shall be prepared with all specifications and proposal documents, and
performance bonds, to be executed by the supplier and borrower.
(8) The three complete, executed contracts shall be sent to the RUS
Area Engineering Branch Chief for approval.
(9) If RUS approves the contract, one copy will be returned to the
borrower and one copy will be sent to the supplier.
(10) Installation of the central office equipment and materials
provided under RUS Contract Form 545 may be made in accordance with
subpart I, if applicable, or by an approved Force Account Proposal
(FAP).
(c) Software license agreement (Addendum 2). The Addendum in this
paragraph to RUS Form 525, Central Office Equipment Contract (Including
Installation), and RUS Form 545, Central Office Equipment Contract (Not
Including Installation), must be used with any central office equipment
contract that requires a software license agreement and for which RUS
financial assistance is to be provided.
Addendum 2--Software License Agreement
(1) Definitions. For the purpose of this Software License
Agreement--
Contract means the RUS Form 525 Central Office Equipment Contract
(Including Installation) or RUS Form 545 Central Office Equipment
Contract (Not Including Installation),
dated____________, between
_______________________________________________________________________
(the Licensee) and______________________________________________________
[[Page 377]]
________________________________________________________________________
(the Licensor).
Days means calendar days.
Licensed Software means the computer programs, furnished for the
operation of the System(s) provided under the Contract, whether
contained on a tape, disc, semiconductor device, or other memory device
or system memory consisting of logic instructions and instruction
sequences in machine-readable object code, which manipulate data in the
central processor, control and perform input/output operations, perform
error diagnostic and recovery routines, control call processing, and
perform peripheral control, administrative and maintenance functions; as
well as Licensor's standard customer documentation, excluding source
code, used to describe, maintain and use the programs provided under the
Contract.
Licensee and Licensor, respectively, mean the parties signing the
software license agreement as the licensee and licensor.
Right-to-Use Fee is defined in section (2).
Specifications means the RUS Form 522, General Specification for
Digital, Stored Program Controlled Central Office Equipment, which is
part of the Contract.
System means the stored program controlled central office and
associated remote switching terminal or terminals which use the Licensed
Software covered by this License.
(2) Software License Provisions. The Licensor may charge a fee,
herein referred to as a Right-to-Use Fee, for use of the Licensed
Software. The Right-to-Use Fee shall be included in the Total Base Bid
as defined in the Contract. In consideration of the Right-to-Use Fee,
the Licensor hereby grants the Licensee the right to use all Licensed
Software, solely in connection with the System provided under this
Contract, so that the System performs in accordance with the Contract
and the Specifications.
(i) The Licensee's right to use the Licensed Software is non-
exclusive and limited to use or operation in the United States of
America, including its Territories, the Federated States of Micronesia,
the Marshall Islands, Palau and the Commonwealth of Puerto Rico, with
the System for which the Licensed Software is provided by the Licensor.
The Licensee may reuse the equipment and its accompanying Licensed
Software at another location within the Licensee's System without
obtaining additional approvals from Licensor, provided, however, that
the Licensee notify the Licensor, within ten (10) days, of the change in
location of the equipment and Licensed Software.
(ii) The Licensee and any successor to the Licensee's title in the
System may, without further consent of the Licensor, transfer the
Licensed Software and all of the Licensee's rights and interests under
this Software License to any transferee who acquires legal title to the
System, provided that such transferee first agrees in writing to the
Licensor to abide by all of the terms and conditions of this License
including, without limitation, the territorial limitation stated in
section (2)(i) and the restrictions on decompiling or reverse assembly
stated in section (2)(iii). Licensee shall give Licensor written notice
thirty (30) days prior to any transfer. The Licensor shall not place any
additional conditions on the transferee's use of the System or the
Licensed Software. If the provisions of this section (2)(ii) are
satisfied, thereafter the Licensee shall bear no responsibility for
transferee's failure to abide by the terms and conditions of this
License.
(iii) The Licensee shall take reasonable steps to protect the
confidentiality of the Licensed Software and shall not decompile or
reverse assemble all or any part of the Licensed Software to generate
source code. The Licensee shall not make the Licensed Software available
to any person except on a need to know basis. The obligations of the
Licensee hereunder shall not extend to any information or data relating
to the Licensed Software which is now available to the general public or
becomes available by reason of the acts of the Licensor or third
parties.
(iv) The Licensee may reproduce or copy the Licensed Software and
related materials solely for the purpose of archival backup, in-house
training and operating, maintaining, and administering the System
provided under this Contract. In such reproduction, the Licensee shall
include, upon all such copies of the Licensed Software, all proprietary
notices, including the copyright notice within the Licensed Software
program and related documentation in the form in which it is received
from the Licensor.
(v) The Licensee acknowledges that the Licensed Software program is
the property of the Licensor, and shall not do, or cause to be done,
anything to activate any of the subsisting nonactivated computer
instruction steps therein unless authorized in writing by the Licensor.
The Licensor shall have the exclusive right to activate, or authorize
the activation of, the subsisting nonactivated program instruction steps
in the Licensed Software. In this event Licensee shall pay any
additional Right-To-Use Fee(s) agreed to by Licensee and Licensor.
(vi) In the event the Licensor develops significant improvements to
the Licensed Software, the Licensor may market the improvements as a
separate offering requiring payment of an additional Right-to-Use Fee.
(vii) The Licensee shall not modify or otherwise change the Licensed
Software other than at the direction of the Licensor. This provision
shall not apply to:
(A) Changes to the Licensed Software which are necessary to preserve
or restore service. Licensee shall use all reasonable efforts to contact
Licensor before making any such changes. If the Licensor is unable to
[[Page 378]]
make the necessary changes promptly to the Licensed Software to preserve
or restore service, then the Licensee may make only such changes to the
Licensed Software as are necessary to preserve or restore service. In
such event, Licensee shall promptly notify Licensor of the changes made
by Licensee.
(B) Changes made by the Licensee to its own database; and
(C) Changes made by the Licensee in connection with the exercise of
its rights under section (2)(xi).
(viii) Within thirty (30) days after written notice that a program
or a release thereof has been discontinued and is no longer required for
the operation of the System and the Licensor has furnished the Licensee
with a new program that is fully satisfactory to the Licensee, the
Licensee agrees to return the original and all copies of the
discontinued program and specified related documents. If such return is
impossible or impractical, the Licensee shall destroy said program and
documents and provide the Licensor with a written notice of such
destruction.
(ix) The Licensor warrants to the Licensee that any Software
licensed under this Software License shall function for a period of five
(5) years from the warranty start date defined in the Contract in
accordance with the Specifications and any written or printed technical
material provided by the Licensor to explain the operation of the
Licensed Software and aid in its use. The Licensor shall correct all
deficiencies within thirty (30) days from the date of receipt by the
Licensor of written notice of such deficiencies from the Licensee. An
extension of this thirty (30) day period may be allowed only if agreed
upon by the Licensee and RUS. It shall be the Licensor's obligation to
insert and thoroughly test, at no charge to the Licensee, any software
amendment or alteration provided to satisfy the obligations of this
section (2)(ix). If a deficiency is detected or a correction made within
the final ninety (90) days of the warranty, the warranty shall be
extended to a date ninety (90) days after the deficiency has been
corrected.
(x) The Licensor shall hold harmless and indemnify the Licensee from
any and all claims, suits, and proceedings for the infringement of any
patent, copyright, trademark, or violation of trade secrets covering any
Licensed Software used with the System, except for items of the
Licensee's design or selection. If the Licensee's use of the Licensed
Software is enjoined, the Licensor shall promptly, at its own expense,
place the Licensee in a position where it is able to use the System in
accordance with the Specifications, whether by:
(A) Modifying the Licensed Software or portion thereof so that it no
longer infringes but remains functionally equivalent,
(B) Replacing the Licensed Software with noninfringing equivalent
software,
(C) Obtaining for the Licensee a license or other right to use, or
(D) Such other actions as may be required. This shall be in addition
to any other rights or claims which the Licensee may have. The Licensor
shall, at its own expense, (and the Licensee agrees to permit the
Licensor to do so) defend any suits which may be instituted by any party
against the Licensee for alleged infringement of patents, copyright,
trademark, or violation of trade secrets relative to the Licensor's
performance hereunder. Either party shall notify the other promptly of
any such claims, and the Licensee shall give to the Licensor full
authority and opportunity to settle such claims, and shall reasonably
cooperate with the Licensor in obtaining information relative to such
claims.
(xi) In the event the Licensor becomes unwilling or unable to
furnish support required by the Contract for the Licensed Software, the
Licensor shall, upon written request of the Licensee, provide with the
greatest possible dispatch all Licensed Software back-up documentation
including proprietary information other than agreed excluded
documentation. In this event, (1) the Licensee shall be permitted full
use of all Licensed Software and documentation as long as the System is
operational and (2) the Licensee may modify, or have modified, the
Licensed Software for feature enhancement or proper equipment operation
and becomes the owner of such modifications for all purposes, including
patenting, copywriting, sale, or license thereof. Agreed excluded
documentation is Licensed Software back-up documentation described in
the first sentence of this section (2)(xi) which (A) is proprietary
information of a third party, (B) was specifically described at the pre-
bid technical session and individually identified in an attachment to
the Bid, and (C) RUS and the Licensee agree, before bids are opened, may
be excluded from the requirements of this section (2)(xi). In the event
the Licensor furnishes agreed excluded documentation and the Licensee
exercises its rights under this section (2)(xi), the Licensor shall use
its best efforts to provide such agreed excluded information to the
Licensee, or obtain continuing support agreements from the parties
retaining legal rights to the excluded documentation. Licensor agrees
that certain Licensed Software cannot be excluded from the requirements
of this section (2)(xi) including, but not limited to, software, the
absence or improper operation of which would significantly impair the
operation of the System, would significantly impair the ability of the
Licensee to generate revenue, or would pose a risk to RUS loan security.
(xii) A breach of this License by the Licensor is a breach of the
Contract. Therefore,
[[Page 379]]
the remedies specified in the Contract shall apply.
(xiii) The Licensee shall have thirty (30) days after receipt of
written notice from the Licensor to correct any breach of this License.
Damages payable by the Licensee for its breach of this License shall not
exceed the total Contract price. The Licensor shall not terminate this
License unless:
(A) The Licensor has given RUS sixty (60) days notice before
termination; and
(B) RUS agrees with the Licensor that termination is the only method
available to prevent significant harm to the Licensor from additional
Licensee defaults.
(xiv) The obligations of Licensee and Licensor and any successors in
title under this Agreement shall survive the termination of this
Agreement and continue after any termination of rights granted
hereunder.
(xv) Licensee and Licensor agree that it will not, without the prior
written permission of the other party, use in advertising, publicity,
packaging, labeling, or otherwise, any trade name, trademark, trade
device, service mark, symbol, or any other identification or any
abbreviation, contraction, or simulation thereof owned by the other
party or any of its affiliates or used by the other party or any of its
affiliates to identify any of their products or services, unless
otherwise agreed by the parties.
(xvi) This Software License Agreement shall prevail notwithstanding
any conflicting terms or legends which may appear on or in the Licensed
Software.
(xvii) If any Section or part thereof, in this Agreement shall be
held to be invalid or unenforceable in any jurisdiction in which this
Agreement is being performed, then the meaning of such section or part
shall be construed so as to render it enforceable, to the extent
feasible; and if no feasible interpretation would save such section or
part, it shall be severed from this Agreement and the remainder shall
remain in full force and effect. However, in the event such section or
part is considered an essential element of this Agreement, the parties
shall promptly negotiate a replacement therefor.
(xviii) This Software License and any amendments thereto, or
revisions thereof, are subject to RUS approval.
Licensor
Company
Name____________________________________________________________________
By______________________________________________________________________
Title___________________________________________________________________
Date____________________________________________________________________
Licensee
Company
Name____________________________________________________________________
By______________________________________________________________________
Title___________________________________________________________________
Date____________________________________________________________________
[End of clause]
(d) Contract amendments. (1) The general requirements for contract
amendments are set forth in Sec. 1753.11.
(2) Equipment contract amendments shall be prepared on RUS Contract
Form 238, Construction or Equipment Contract Amendments.
(e) Additions. When additions to existing central office equipment
are required:
(1) A proposal shall be requested from the supplier.
(2) The borrower shall prepare a plan containing an outline of the
proposed use of the equipment, the proposal from the supplier and an
estimate of the installation cost. If the total cost exceeds $500,000,
RUS approval of the award of contract is required. The borrower shall in
this case submit its plan and the supplier's proposal to GFR. If the
cost does not exceed $500,000, the borrower's award of contract is not
subject to RUS approval.
(3) If RUS approval was required by paragraph (e)(2) of this
section, upon RUS approval the purchase may be made using RUS Contract
Form 525, or 545, or when applicable, the procedures contained in
subpart I of this part.
(4) If the purchase is to be made by contract, three executed copies
of the contract with attachments are to be submitted to the RUS.
(5) Installation of the central office equipment and materials
procured by RUS Contract Form 545 may be made in accordance with subpart
I, if applicable, or by an approved FAP.
(f) Preinstallation conference. RUS recommends, but does not
require, that the borrower hold a preinstallation conference, attended
by the borrower, its engineer, equipment installers, and if possible the
GFR, prior to the beginning of the installation of the central office
equipment.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27,
1990, as amended at 59 FR 17679, Apr. 14, 1994; 64 FR 16607, Apr. 6,
1999]
[[Page 380]]
Sec. 1753.39 Closeout documents.
Closeout of RUS Contract Form 525, Central Office Equipment Contract
(Including Installation), and RUS Contract Form 545, Central Office
Equipment Contract (Not Including Installation), shall be conducted as
follows:
(a) Contract amendments. Amendments that must be submitted to RUS
for approval, as required by Sec. 1753.11, shall be submitted promptly.
All other amendments may be submitted to RUS with the engineer's
contract closeout certification.
(b) Taxes. Under the terms of RUS Contract Forms 525 and 545, the
bid prices do not include any amounts which are or may be payable by the
bidder or the borrower on account of taxes imposed upon the sale,
purchase or use of equipment, material and software covered by the
contracts. If any such tax is paid by the bidder, the contract requires
that the amount is to be stated separately on all invoices and paid by
the borrower.
(c) Acceptance tests. The borrower will perform acceptance tests as
part of the partial closeout and final closeout of RUS Contract Form
525. Tests that will demonstrate compliance with the requirements of 7
CFR 1755.522 are contained in RUS Bulletin 1753E-201. Other tests
demonstrating compliance will be acceptable. RUS Bulletin 1753E-201 is
available from RUS, Program Support and Regulatory Analysis, STOP 1522,
1400 Independence Ave., SW., Washington, DC 20250-1522.
(d) Grounding system audit. A grounding system audit shall be
performed and found acceptable for equipment provided under Form 525 and
545 Contracts, prior to placing a central office or remote switching
terminal into full service operation. The audits are to be conducted in
accordance with guidelines contained in the applicable sections of RUS
Form 522 ``General Specification for Digital, Stored Program Controlled
Central Office Equipment.'' The audits shall be performed by the
contractor and borrower for Form 525 equipment and by the borrower for
Form 545 equipment.
(e) Partial Closeout Procedure. Under conditions set forth in RUS
Contract Form 525, a contractor may, when approved by the borrower,
receive payment in full for central offices and their respective
associated remote switching terminals upon completion of the
installation without awaiting completion of the project where the
contractor is to receive such payment, the procedure contained in the
applicable sections of RUS Contract Form 525 shall be followed. In
addition to complying with the appropriate partial closeout procedure
contained in RUS Contract Form 525, the borrower shall:
(1) Obtain from the engineer a certification of partial closeout.
(2) Submit one copy of the summary to RUS with an FRS.
(f) Final contract closeout procedure. The documents required for
the final closeout of the central office equipment contract, RUS
Contract Forms 525 and 545, are listed in the following table, which
also indicates the number of copies and their distribution. The
procedure to be followed is as follows:
Documents Required To Closeout Central Office Equipment Contract
----------------------------------------------------------------------------------------------------------------
Use with Prepared by Distribution
-----------------------------------------------------------------------------
RUS Form No. Description RUS Form RUS Form
525 545 Contractor Engineer Borrower Contractor
----------------------------------------------------------------------------------------------------------------
238............ Construction or X X ........... (3) (to RUS) (to RUS)
Equipment
Contract
Amendment (if
not previously
submitted, send
to RUS for
approval).
754............ Certificate of X ........... 3 3 2 1
Completion and
Certificate of
Contractor and
Indemnity
Agreement (if
submitted, Form
744 is not
required).
[[Page 381]]
517............ Results of X ........... ........... 2 1 1
Acceptance Tests
(prepare and
distribute
copies
immediately upon
completion of
the acceptance
tests of each
central office).
752a........... Certificate of ........... X ........... 2 1 1
Completion--Not
Including
Installation.
224............ Waiver and X ........... 1 ........... 1 ...........
Release of Lien
(from each
supplier).
231............ Certificate of X ........... 1 ........... 1 ...........
Contractor.
213............ Certificate (Buy X X 1 ........... 1 ...........
American).
None........... Switching X X 2 ........... 2 ...........
Diagram, as
installed.
None........... Set of Drawings X X 2 ........... 2 ...........
(each set to
include all the
drawings
required under
the
Specification,
RUS Form 522).
----------------------------------------------------------------------------------------------------------------
(1) The borrower shall:
(i) Immediately following completion of the last central office
equipment installation, arrange with the contractor's installer,
connecting company (where necessary), and the GFR for performance of the
acceptance tests of offices not previously tested. The date for testing
should be established so that the installer will not be required to
return to the site for the sole purpose of assisting in these tests.
Acceptance tests shall be performed within 30 days of completion of the
installation, unless otherwise requested in writing by the contractor
and approved in writing by the borrower.
(ii) When the acceptance tests have been satisfactorily completed
and the contractor has corrected all the discrepancies:
(A) Prepare and assemble the documents listed in the table in this
section, Documents Required to Close Out Central Office Equipment
Contracts.
(B) Notify the GFR that the project is ready for final RUS
inspection.
(iii) Make the documents listed in the table available for GFR
review on the date of final inspection.
(iv) Distribute the documents as indicated in the table. The
documents listed for RUS shall be retained by the borrower for
inspection by RUS for at least two years from the date of the engineer's
contract closeout certificate.
(2) The documents required and the procedure to be used for
equipment purchased and/or installations made using the method of minor
construction are set forth in subpart I.
(g) Once RUS approval has been obtained for any required amendments,
the borrower shall obtain certifications from the engineer that the
project and all required documentation are satisfactory and complete.
The requirements for the final contract certification are contained in
Sec. 1753.18.
(h) Once these certifications have been received, final payment
shall be made according to the payment terms of the contract. Copies of
the certifications shall be submitted with the FRS, requesting the
remaining funds on the contract.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27,
1990, and amended at 59 FR 31126, June 17, 1994; 59 FR 43717, Aug. 25,
1994; 62 FR 32477, June 16, 1997; 64 FR 16608, Apr. 6, 1999]
[[Page 382]]
Secs. 1753.40--1753.45 [Reserved]
Subpart F--Outside Plant Major Construction by Contract
Source: 54 FR 39267, Sept. 25, 1989, unless otherwise noted.
Redesignated at 55 FR 39397, Sept. 27, 1990.
Sec. 1753.46 General.
(a) This subpart implements and explains the provisions of the loan
documents setting forth the requirements and procedures to be followed
by borrowers when outside plant major construction by contract is
financed by loan funds. Terms used in this subpart are defined in
Sec. 1753.2 and RUS Contract Form 515.
(b) The contract method for major construction is described in
Sec. 1753.5(b).
(c) The two contract forms which may be used for major outside plant
construction are Form 515 and Form 773. Limitations on the applicability
of these forms shall be as follows:
(1) Form 515 shall be used for major outside plant construction
projects which will be competitively bid. The contract contains plans
and specifications and has no dollar limitation. See Secs. 1753.47,
1753.48 and 1753.49.
(2) Contract Form 515, which is for $250,000 or less, may, at the
borrower's option, be negotiated. See Sec. 1753.48(b).
(3) RUS Form 773 may be used for minor outside plant projects which
are not competitively bid because they cannot be designed and staked at
the time of contract execution. Projects of this nature include routine
line extensions and placement of subscriber drops. See subpart I of this
part.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27,
1990, and amended at 59 FR 43717, Aug. 25, 1994; 64 FR 16608, Apr. 6,
1999]
Sec. 1753.47 Plans and specifications (P&S).
(a) General. (1) Prior to the preparation of P&S for the
construction project:
(i) A review shall be made of the outside plant requirements, and
the Loan Design (LD) shall be revised to reflect any needed changes (See
Sec. 1753.3).
(ii) Deviations from the approved LD (7 CFR part 1737) must be
approved by RUS (See Sec. 1753.3).
(2) The standard RUS specifications required for construction of
outside plant facilities are:
(i) RUS Form 515a (Bulletin 345-150)--Specifications and Drawings
for Construction of Direct Buried Plant.
(ii) RUS Form 515c (Bulletin 345-151)--Specifications and Drawings
for Conduit and Manhole Construction.
(iii) RUS Form 515d (Bulletin 345-152)--Specifications and Drawings
for Underground Cable Installation.
(iv) RUS Form 515f (Bulletin 345-153)--Specifications and Drawings
for Construction of Pole Lines and Aerial Cables.
(v) RUS Form 515g (Bulletin 345-154)--Specifications and Drawings
for Service Entrance and Station Protector Installation.
(b) Preparation of plans and specifications. Each set of plans and
specifications shall include:
(1) RUS Contract Form 515, ``Telephone System Construction Contract
(Labor and Materials).''
(2) The specifications described in paragraph (a)(2) of this section
as specified by the borrower in the RUS Contract Form 515.
(3) Description of special assembly units and guide drawings, if
any.
(4) Key, detail, and cable layout maps.
(5) RUS Contract Form 787, ``Supplement A to Construction Contract,
RUS Contract Form 515,'' when the borrower proposes to provide any
materials to the contractor. The borrower shall not order materials for
a contractor without RUS approval. In such cases the borrower must
attach Form 787 and a ``List of Owner's Materials on Hand'' and/or a
``List of Materials Ordered by Owner but Not Delivered'' to contract
Form 515 (See Sec. 1753.48(f) of this part). Any materials furnished
under Supplement A shall be listed in RUS Bulletin 344-2 unless special
RUS approval has been received by the borrower to use unlisted
materials.
(c) Submission of plans and specifications to RUS. (1) If the
project does not exceed $500,000 or 25% of the loan, whichever is less,
the borrower shall
[[Page 383]]
furnish GFR one set of P&S. The borrower may then proceed with
procurement in accordance with Sec. 1753.48.
(2) If the project exceeds $500,000 or 25% of the loan, whichever is
less, RUS approval of P&S is required. Two sets of P&S shall be
furnished to GFR. RUS will return one set to the borrower upon notice of
approval. The borrower may then proceed with procurement in accordance
with Sec. 1753.48.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27,
1990, 55 FR 53488, Dec. 31, 1990; 64 FR 16609, Apr. 6, 1999]
Sec. 1753.48 Procurement procedures.
(a) Sealed competitive bidding--(1) Qualifying bidders. (i) The
borrower is responsible for selecting qualified contractors to bid on
the project. See Sec. 1753.8(a)(3). Questions relating to bidders'
qualifications shall be resolved prior to the pre-bid conference.
(ii) RUS Form 274 or its equivalent, supplemented by RUS Form 276,
shall be used for the submission of bidders' qualifications for all
types of construction and for the required information on the bidder and
subcontractors.
(2) Invitations to bid-- The borrower shall solicit bids as set
forth in Sec. 1753.8(a)(2). Invitations shall be sent to at least 6
prospective bidders.
(3) Pre-bid conference. (i) Representatives of the borrower and its
engineer shall be present at the pre-bid conference at the time and
place designated in the Notice to Bidders. The borrower shall invite the
GFR to attend the pre-bid conference.
(ii) The purpose of the pre-bid conference is to acquaint the
bidders with the scope and special considerations of the project and to
clarify any concerns the bidders may have.
(iii) No proposals shall be considered from bidders that do not
attend the pre-bid conference unless the bidder has been notified by the
engineer that such bidder's attendance has been waived. Attendance can
be waived if, in the judgment of the engineer, the bidder would gain no
additional understanding of the construction project by attending the
pre-bid conference.
(iv) The borrower shall obtain from the engineer the minutes of the
pre-bid conference and shall distribute them to all potential bidders.
(v) When fewer than three bidders have been qualified to submit
bids, RUS written approval must be obtained to proceed with requesting
bids.
(4) Bid openings. (i) Bid openings and award of the contract shall
be conducted in accordance with Secs. 1753.5(b)(1) and 1753.8(a).
(ii) If Sec. 1753.8 requires RUS approval of award of the bid, the
borrower shall submit to RUS two copies of the assembly unit sections of
the apparent lowest responsive bid accepted by the borrower.
(b) Negotiated procurement. (1) Competitive bids are not required
for outside plant construction that is estimated to cost $250,000, or
less, inclusive of labor and materials.
(2) The procedures to be followed are contained in Sec. 1753.8(b)
and paragraphs (3) and (4) of this section.
(3) Negotiation conference. (i) The borrower shall schedule a
conference to be attended by representatives of the engineer, the
borrower and the contractor selected for negotiations. The borrower
shall invite the GFR to attend this conference.
(ii) The purpose of the negotiation conference is to acquaint the
contractor with the scope and special considerations of the project and
to answer any questions.
(iii) The borrower shall obtain from the engineer notes covering the
negotiation conference and shall distribute them to all attendees.
(4) Two copies of the assembly unit sections of the negotiated
contractor's proposal shall be sent to the GFR for approval.
(c) Contract amendments. The borrower shall prepare contract
amendments in accordance with Sec. 1753.11 on RUS Contract Form 526,
Construction Contract Amendment.
(d) Subcontracts. The RUS requirements for subcontracts and the
procedures to be followed are set forth in Sec. 1753.9.
(e) Preconstruction conference. The borrower shall conduct a
conference, attended by the borrower, contractor, subcontractors,
resident engineer, and the GFR, prior to the beginning of cable
placement, to resolve any questions pertaining to the construction.
[[Page 384]]
Results of the conference shall be provided to each conference
participant (See Sec. 1753.10).
(f) Owner-furnished materials. When the borrower furnishes materials
under RUS Contract Form 787, Supplement A to Construction Contract,
these steps shall be followed:
(1) Materials on hand to be furnished by the borrower shall be
released to the contractor at the start of construction. Materials on
order but not received shall be provided to the contractor as they
become available. The borrower shall obtain from the contractor a
written receipt for all such materials delivered.
(2) Materials on hand, until released to the contractor, shall be
covered by fire and either wind-storm or extended coverage insurance,
exclusive of materials stored in the open and not within 100 feet of any
building. Poles, wherever stored, shall be covered by fire insurance.
All insured values must be at least 80 percent of the cash value of the
property insured.
(3) Subject to adjustment at the time of final settlement, the
borrower shall obtain from the contractor monthly invoices that show
credit to the borrower, at the prices quoted in Form 787, Supplement A,
for all materials furnished by the borrower and installed by the
contractor during the preceding month.
(4) Any materials furnished by the borrower remaining as surplus at
the completion of construction shall be returned to the borrower. For
such materials, the borrower shall furnish a written receipt to the
contractor and credit the contractor at the prices quoted in Supplement
A.
(g) Changes or corrections in construction. (1) When changes or
corrections in construction are necessary, and the cost of such changes
or corrections is properly chargeable to the borrower, the borrower
shall have its engineer prepare and sign four copies of a Construction
Change Order, RUS Form 216, obtain borrower's approval and forward the
four copies to the contractor. Receipt of the executed Construction
Change Order by the contractor will constitute authorization to proceed
with the changes or corrections.
(2) When the changes or corrections have been made, the borrower
shall have the contractor complete the form, itemizing the costs in
accordance with the terms of the contract, and return three copies to
the borrower's engineer. A copy of each change order shall be attached
to each copy of the construction inventory required to close out the
contract.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27,
1990, as amended at 64 FR 16609, Apr. 6, 1999]
Sec. 1753.49 Closeout documents.
(a) General. The borrower shall be responsible for preparing the
closeout documents with, if necessary, the assistance of the GFR.
(b) Documents required. The following table lists the documents
required to closeout the RUS contract Form 515.
Documents Required To Closeout Construction Contract
[RUS Form 515]
----------------------------------------------------------------------------------------------------------------
No. of copies prepared Distribution
by -------------------------
RUS Form No. Description --------------------------
Contractor Engineer Borrower Contractor
----------------------------------------------------------------------------------------------------------------
724......................... Final Inventory--Certificate ........... 2 1 1
of Completion.
724a........................ Final Inventory--Assembly ........... 2 1 1
Units.
None........................ Contractor's Bond Extension (3) ........... (to RUS) (to RUS)
(send to RUS when required).
281......................... Tabulation of Materials 2 ........... 1 1
Furnished by Borrower.
213......................... Certificate--``Buy American''. 1 ........... 1 ...........
None........................ Listing of Construction Change ........... 1 1 ...........
Orders.
224......................... Waiver and Release of Lien 1 ........... 1 ...........
(from each supplier).
231......................... Certificate of Contractor..... 1 ........... 1 ...........
527......................... Final Statement of ........... 2 1 1
Construction.
None........................ Reports on Results of ........... 1 1 1
Acceptance Tests.
None........................ Set of Final Staking Sheets... ........... 1 1 ...........
None........................ Tabulation of Staking Sheets.. ........... 1 1 ...........
None........................ Correction Summary (legible ........... 1 1 ...........
copy).
[[Page 385]]
None........................ Treated Forest Products ........... ........... 1 ...........
Inspection Reports or
Certificates of Compliance
(prepared by inspection
company or supplier).
None........................ Final Key Map (when ........... 1 1 ...........
applicable).
None........................ Final Central Office Area and ........... 1 1 ...........
Town Maps.
----------------------------------------------------------------------------------------------------------------
(c) Closeout procedure. (1) After construction has been completed in
accordance with the plans and specifications, and acceptance tests have
been made, the borrower shall arrange the time for a final inspection to
be made by the borrower's engineer, the contractor, the GFR and a
representative of the borrower.
(2) Final inventory documents. (i) The borrower shall obtain
certifications from the engineer that the project and all required
documentation are satisfactory and complete. Requirements for these
contract closeout certifications are contained in Sec. 1753.18.
(ii) The borrower shall prepare and distribute the final inventory
documents in accordance with the tables contained in this section. The
documents listed for RUS shall be retained by the borrower for
inspection by RUS for at least two years from the date of the engineer's
contract closeout certification.
Step-by-Step Procedure for Closeout of Construction Contract
[RUS Form 515]
----------------------------------------------------------------------------------------------------------------
Sequence
---------------------------------------------------- By Procedure
Step No. When
----------------------------------------------------------------------------------------------------------------
1...................... Upon Completion of Borrower's Engineer.. Prepares the following: a set of
Construction. Detail Maps and a set (when
applicable) of Key Maps which show
in red the work done under the 515
contract; a Tabulation of Staking
Sheet; and a tentative Final
Inventory, RUS Forms 724 and 724a.
2...................... After acceptance tests Borrower's Engineer.. Forwards letter to the borrower with
made. copies to the GFR stating that the
project is ready for final
inspection. Schedules inspection
date.
3...................... Upon receipt of letter GFR.................. Advises borrower whether attending
from Borrower's Engineer. the final inspection will be
possible.
4...................... By inspection date........ Borrower's Engineer.. Obtains and makes available the
following documents: a set of ``as
constructed'' detail maps and (when
applicable) ``as built'' key maps;
a list of construction change
orders; the final staking sheets;
the tabulation staking sheets; the
treated forest products inspection
reports or certificates of
compliance; the tentative final
inventory, RUS Forms 724 and 724a;
the tentative tabulation, RUS Form
231 (if borrower furnished part of
material); and, a report of results
of acceptance tests.
5...................... During inspection......... Borrower's Engineer.. Issues instructions to contractor
covering corrections to be made in
construction as a result of
inspection.
6...................... During inspection......... Contractor........... Corrects construction on basis of
instructions from the borrower's
engineer. The corrections should
proceed closely behind the
inspection in order that the
borrower's engineer can check the
corrections before leaving the
system.
7...................... During inspection......... Borrower's Engineer.. Inspects and approves corrected
construction. Marks inspected areas
on the key map, if available,
otherwise on the detail maps.
8...................... Upon completion of Borrower's Engineer.. Prepares or obtains all the closeout
inspection. documents listed in Table 3.
9...................... After signing final Borrower............. Prepares and submits to RUS the
inventory. engineer's certifications of
completion and a Financial
Requirement Statement, RUS Form
481, requesting amount necessary to
make final payment due under
contract.
[[Page 386]]
10..................... On receipt of final Borrower............. Promptly forwards check for final
advance. payment to contractor.
11..................... During subsequent loan RUS Field Accountant. Examines borrower's construction
fund audit review records for compliance with the
following final payment. construction contract and Subpart
F, and examines RUS Form 281
(Tabulation of Materials Furnished
by Borrower) if any, for
appropriate costs.
----------------------------------------------------------------------------------------------------------------
(iii) When the total inventory price exceeds the maximum contract by
more than 20 percent, an extension to the contractor's bond is required.
(iv) The borrower shall submit the engineer's contract closeout
certification with FRS for the final advance of funds.
(3) Final payment shall be made according to the payment provisions
of article III of RUS Form 515, except that certificates and other
documents required to be submitted to or approved by the Administrator
shall be submitted to and approved by the Owner.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27,
1990, and amended at 59 FR 43717, Aug. 25, 1994; 64 FR 16609, Apr. 6,
1999]
Secs. 1753.50--1753.55 [Reserved]
Subpart G--Outside Plant Major Construction by Force Account
Source: 55 FR 3572, Feb. 2, 1990, unless otherwise noted.
Redesignated at 55 FR 39397, Sept. 27, 1990.
Sec. 1753.56 General.
(a) This subpart implements and explains the provisions of the loan
documents setting forth the requirements and the procedures to be
followed by borrowers for outside plant major construction by the force
account method with RUS loan funds. Terms used in this subpart are
defined in Sec. 1753.2 and RUS Contract Form 515.
(b) A borrower shall not use the force account method for
construction financed with loan funds unless prior RUS approval has been
obtained.
(c) Generally, RUS will not approve the force account method for
major outside plant construction for the initial loan to a borrower.
(d) The Force Account Proposals (FAPs) are subject to review and
approval by RUS.
(e) The FAP is approved by RUS on the basis of estimated labor and
material costs. The FAP is closed based on the borrower's actual cost of
performing the construction. RUS will provide loan funds only up to the
amount determined by the completed assembly units priced at the unit
prices in the approved FAP.
(Approved by the Office of Management and Budget under control number
0572-0062)
Sec. 1753.57 Procedures.
(a) The request. (1) The borrower shall submit to RUS a certified
copy of the board resolution or a letter signed by an authorized
corporate official requesting approval to use the force account method
of construction. The request shall state the advantages of the force
account method of construction and provide the following information:
(i) The scope of the construction to be undertaken, stating briefly
the facilities and equipment to be installed and other pertinent data.
(ii) The name and qualifications of the construction supervisor who
will be directly in charge of construction, the names and qualifications
of the construction foremen, and the availability of qualified
construction personnel. The construction supervisor must have at least 5
years outside plant construction experience with at least 2 years at the
supervisory level on RUS financed projects. Construction foremen must
have at least 3 years of outside plant construction experience.
(iii) The availability of equipment for construction, exclusive of
equipment
[[Page 387]]
needed for normal operation and maintenance.
(2) [Reserved]
(b) Force Account Proposal (FAP). Upon receiving RUS approval to use
the force account method, the borrower, prior to any construction
activity or the purchase of materials or equipment, shall submit to RUS
two copies of its FAP. The FAP shall consist of:
(1) The RUS Contract Form 515 and appropriate supporting attachments
that normally would be provided as plans and specifications for contract
construction. See Sec. 1753.47.
(2) The cost estimate, using Form 515 as a convenient means of
showing the following:
(i) The quantity and cost estimates of the various assembly units
required. ``Labor and other'' cost will not include the cost of
engineering, legal, and other professional services, interest during
construction, preliminary survey and investigation charges, and right-
of-way easement procurement costs.
(ii) A list identifying materials or construction for which loan
funds will not be requested.
(3) The estimated completion time.
(c) Storage of materials. All materials ordered for the construction
shall be stored separate from normal maintenance materials.
(d) Construction--(1) Preconstruction conference. The borrower shall
arrange a conference, attended by the manager, construction supervisor,
construction foremen, resident engineer and the GFR prior to the
beginning of construction to clarify any questions pertaining to the
construction. Notes of the conference shall be provided to each
conference participant.
(2) Construction schedule and progress reports. The borrower shall
obtain from the engineer a construction schedule and submit one copy to
the GFR. The schedule shall include the starting date and a statement
indicating that materials are either delivered or deliveries are assured
to permit construction to proceed in accordance with the construction
schedule. The borrower shall obtain from the engineer progress reports
and submit one copy of each to the GFR. RUS Form 521 may be used for the
construction schedule and the progress report.
(3) Borrower's management responsibilities. (i) Obtain all right-of-
way easements, permits, etc., prior to construction.
(ii) Maintain records on all expenditures for materials, labor,
transportation, and other costs of construction, in order that all costs
may be fully accounted for upon completion of construction.
(iii) Ensure that all the required inspections and tests are made.
(4) Engineer's responsibilities. (i) Inspect and inventory
construction as completed.
(ii) Require timely corrections and cleanup.
(iii) Perform acceptance tests as construction is completed.
(iv) Provide ``as built'' staking sheets of completed construction
when the final inspections are made.
(v) Maintain accurate and current inventories of completed
construction.
(5) Construction supervisor's responsibilities. (i) Correct
construction errors as construction progresses.
(ii) Maintain an accurate inventory of completed construction.
(iii) Perform cleanup as construction is completed.
(iv) Perform all the inspections and acceptance tests a contractor
would be required to make under the construction contract.
(v) Promptly perform cleanup required after final inspection.
Sec. 1753.58 Closeout documents.
(a) General. (1) This section outlines the procedure to be followed
in the preparation of closeout documents for the FAP.
(2) The period between the completion of construction and submission
of the closeout documents to RUS should not exceed 60 days.
(b) Documents. The documents required to close the FAP are listed in
the following table. The following is a brief description of the
closeout documents:
[[Page 388]]
Documents Required To Close Out Force Account Outside Plant Construction
------------------------------------------------------------------------
RUS Form No. Description
------------------------------------------------------------------------
817, 817a, 817b.............. Final Inventory Force Account
Construction and Certificate of
Engineer. Submit one copy to RUS, if
required \1\
213.......................... Certificate--``Buy American'' (as
applicable from each supplier).
None......................... Detail Maps.
None......................... Key map, if applicable.
None......................... Staking Sheets.
None......................... Tabulation of staking sheets.
None......................... Treated Forest Products Inspection
Reports or Certificates of Compliance
(prepared by inspection company or
supplier).
------------------------------------------------------------------------
\1\ RUS Forms 817, 817a, and 817b are to be submitted to GFR only if
required in paragraph (c)(5) of this section. Otherwise, the final
inventory documents are to be assembed and retained by the borrower
for at least two years.
(c) Closeout procedures. (1) The borrower shall notify the GFR when
the project is ready for final inspection.
(2) The GFR shall be invited to make the final inspection
accompanied by the engineer and the borrower.
(3) The borrower shall correct all deficiencies found during the
final inspection.
(4) The borrower may request the assistance of an RUS field
accountant to review the borrower's record of construction expenditures
and assist the borrower with any accounting problems in connection with
construction expenditures.
(5) After inspection, the final inventory documents shall be
assembled as indicated in the table in this section. RUS Forms 817,
817a, and 817b are to be submitted to GFR only if the amount of the
closeout exceeds the original force account proposal by 20% or more.
Otherwise, the final inventory documents are to be assembed and retained
by the borrower for at least two years.
(6) Upon approval of the closeout documents, RUS will notify the
borrower of approval and of any adjustments to be made in funds advanced
in connection with the construction.
(d) The above are not intended to be a complete description of the
requirements of the documents relating to RUS's closeout procedure.
Refer to the documents for additional requirements.
[55 FR 3572, Feb. 2, 1990. Redesignated at 55 FR 39397, Sept. 27, 1990,
as amended at 64 FR 16610, Apr. 6, 1999]
Secs. 1753.59--1753.65 [Reserved]
Subpart H--Purchase and Installation of Special Equipment
Source: 54 FR 39267, Sept. 25, 1989, unless otherwise noted.
Redesignated at 55 FR 39397, Sept. 27, 1990.
Sec. 1753.66 General.
(a) This subpart implements and explains the provisions of the Loan
Documents setting forth the requirements and the procedures to be
followed by borrowers in purchasing and installing special equipment
financed with loan funds.
(b) Terms used in this subpart are defined in Sec. 1753.2 and RUS
Contract Forms 397 and 398.
(c) Special equipment purchased with loan funds must be included in
the List of Materials Acceptable for Use on Telephone Systems of RUS
Borrowers (See Bulletin 344-2) and meet RUS's standards and
specifications (See 7 CFR part 1755) unless otherwise approved by RUS.
(d) Borrowers must obtain RUS review and approval of the LD for
their telephone systems. Applications of special equipment not included
in an approved LD must conform to the modernization plan as required by
7 CFR part 1751, subpart B, and must be submitted to RUS for review and
approval.
(e) RUS Form 397 and applicable specifications shall be used for the
purchase of special equipment for major construction on a furnish and
install basis.
[[Page 389]]
(f) RUS Form 398 and applicable specifications shall be used for the
purchase of equipment for major construction on a furnish only basis.
The procedures provided in subpart I, if applicable, or a FAP approved
by RUS may be used for the installation of special equipment purchased
with a Form 398 contract.
(g) For special equipment purchases for minor construction, the
borrower may at its option use the Methods of Minor Construction
procedures contained in subpart I or the purchase procedures contained
in this subpart H.
(h) Some types of special equipment contain software. See subpart E
for RUS software licensing requirements.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27,
1990, and amended at 58 FR 66259, Dec. 20, 1993; 59 FR 17464, Apr. 13,
1994]
Sec. 1753.67 Contracts and specifications.
(a) Special Equipment Contract, RUS Form 397 shall be used to
purchase equipment on a furnish and install basis.
(b) Special Equipment Contract, RUS Form 398 shall be used to
purchase equipment on a furnish only basis.
(c) The equipment specifications must accompany the selected
contract form.
(1) Each specification consists of performance specifications,
installation requirements (if applicable) and application engineering
requirements.
(2) RUS specifications for the Special Equipment Contract are listed
in 7 CFR part 1755.
Sec. 1753.68 Purchasing special equipment.
(a) General. (1) Equipment purchases are categorized as initial
equipment purchase, equipment additions to existing systems and new
system additions.
(i) An initial equipment purchase is a first time purchase by a
borrower of a complete system of special equipment.
(ii) Equipment additions to existing systems are additions of
components to complete operating systems to increase system capacity
that require components made by the manufacturer of the existing system.
(iii) New system additions are purchases of complete systems of
special equipment when the purpose can be accomplished either with
equipment of the same type and manufacture as other complete operating
systems in the borrower's system, or with complete systems of special
equipment from other manufacturers.
(iv) Where equipment is obtained under a Form 398 Contract, the
borrower shall require the supplier to provide a detailed proposed
bonding and grounding plan and detailed installation information. The
installation information is to enable acceptance testing by the borrower
upon completion of the installation.
(2) For initial equipment purchases that qualify as major
construction, the borrower shall obtain proposals from at least three
suppliers of equipment of different manufacturers.
(3) For equipment additions to increase the capacity of existing
systems, the borrower may negotiate for equipment of a specific type and
manufacture. RUS approval to negotiate in this instance is not required
if these additions were specifically described in the LD approved by RUS
(4) For new system additions, the borrower may request RUS approval
to negotiate for additional equipment for the purpose of standardization
on a system basis, provided RUS approved the procurement method used for
the initial equipment purchase. RUS approval to negotiate must be
obtained before release of the P&S to the seller.
(5) RUS will not approve negotiation with a seller of non-domestic
equipment for the purpose of standardization, because such a purchase
does not meet the ``Buy American'' provision.
(6) RUS recommends, but does not require, that borrowers include
installation by the seller for initial installations of special
equipment that qualify as major construction.
(7) Special equipment may be installed by the borrower if it has
qualified personnel and test equipment available to install the
equipment and make the required acceptance tests, and written approval
is given by RUS.
(8) Installations, whether by the borrower or the seller, must meet
the installation requirements of Form 397 specifications. A copy of the
acceptance tests results must be attached to
[[Page 390]]
the closeout documents or work order summary.
(9) Detailed considerations and guidelines for the preparation of
the specifications for the various applications of special equipment can
be found in RUS Telecommunications Engineering and Construction Manuals.
(10) The borrower must obtain authorization from the Federal
Communications Commission (FCC) to construct and operate radio
transmitting equipment. Evidence of FCC authorization is required for
RUS contract approval. Where required, the borrower must obtain approval
of state regulatory bodies regarding tariffs and related matters.
(b) Procurement procedures--(1) General. The following are the
procurement procedure steps required for the purchase of special
equipment by borrowers.
(2) Initial equipment purchase. (i) The borrower prepares P&S and,
for projects estimated to exceed $500,000 or 25% of the loan, whichever
is less, sends two copies to GFR for approval.
(ii) For projects estimated to exceed $500,000 or 25% of the loan,
whichever is less, RUS will either approve P&S in writing or notify the
borrower of the reasons for withholding approval.
(iii) For projects estimated to cost less than $500,000 or 25% of
the loan, whichever is less, the borrower may proceed with procurement
upon completion of the P&S.
(iv) If the borrower has employed full competitive bidding in the
selection, a contract may be executed with the successful bidder and the
borrower may proceed to paragraph (b)(2)(vi) of this section.
(v) If the borrower did not follow a fully competitive bidding
process as described in Sec. 1753.8, the selection, along with a summary
of all proposals and an engineer's recommendation, shall be sent to RUS.
RUS shall approve the proposal selection in writing or notify the
borrower of any reason for withholding approval.
(vi) The borrower sends three executed contracts including
specifications to RUS for approval.
(vii) After RUS approval of the contract, one copy will be returned
to the borrower and one copy will be sent to the seller.
(3) Equipment additions to existing systems. Purchase procedures for
equipment additions to existing systems are the same as for initial
system purchase except that the borrower may negotiate for equipment of
a specific type and manufacture instead of obtaining proposals from
three or more sellers.
(4) New system additions. (i) The borrower prepares the P&S and, if
the project is estimated to exceed $500,000 or 25% of the loan,
whichever is less, sends two copies to the GFR for approval. The
borrower may request RUS approval to negotiate for the purpose of
standardization on a system basis prior to preparing the P&S.
(ii) RUS notifies the borrower in writing as to whether the borrower
may negotiate for specific equipment. If P&S were required to be
submitted to RUS under paragraph (b)(4)(i) of this section, RUS notifies
the borrower in writing of P&S approval (or notifies the borrower of the
reasons for withholding approval).
(iii) The remainder of the purchase procedure for new system
additions is the same as for initial equipment purchase.
(c) Contract amendments. (1) The general requirements for contract
amendments are set forth in Sec. 1753.11.
(2) The borrower shall prepare any required amendments to the
special equipment contract, arrange for the execution by all parties,
and submit these amendments to RUS in accordance with Sec. 1753.11(d).
RUS Form 238, Construction or Equipment Contract Amendment, shall be
used for this purpose.
(d) Closeout procedures--(1) Acceptance tests for Form 397. (i)
Immediately upon completion of the installation and alignment of the
equipment, the borrower shall arrange with the contractor's installer
and the GFR for acceptance tests.
(ii) The borrower shall obtain from the contractor, in writing, the
results of all inspections and tests made by the contractor as required
in the specifications. The borrower will analyze the test results and
determine whether the performance of the equipment meets the contract
specifications.
[[Page 391]]
(2) Acceptance tests for Form 398. (i) Upon completion of the
installation and alignment of the equipment (under this contract the
installation alignment will be by other than the seller) the borrower
shall perform all the inspections and tests outlined in the
specifications.
(3) Closeout documents. When the acceptance tests have been
completed and all deficiencies have been corrected, the borrower:
(i) Assembles and distributes the documents listed in the following
table that are required for the closeout of the special equipment
contract. The documents listed for RUS shall be retained by the borrower
for inspection by RUS for at least two years from the date of the
engineer's contract closeout certification.
Documents Required To Close Out Special Equipment Contracts
[RUS Forms 397 and 398]
----------------------------------------------------------------------------------------------------------------
No. of copies prepared by Distribution
RUS Form No. Description --------------------------------------- Engineer -------------------------
Form 397 Form 398 Contractor Borrower Contractor
----------------------------------------------------------------------------------------------------------------
238 Construction or ........... (3) ........... (3) (to RUS) (to RUS)
Equipment
Contract
Amendment (if
not previously
submitted, send
to RUS for
approval).
396 Certificate of ........... 2 ........... ........... 1 1
Completion--Spec
ial Equipment
Contract
(Including
Installation).
396a Certificate of ........... ........... ........... 2 1 1
Completion--Spec
ial Equipment
Contract (Not
Including
Installation).
744 Certificate of 1 ........... ........... ........... 1 ...........
Contractor and
Indemnity
Agreement.
213 Certificate (Buy 1 ........... 1 ........... 1 ...........
American).
None Report in 1 ........... ........... 1 1 ...........
writing,
including all
measurements and
other
information
required under
Part II of the
applicable
specifications.
None Set of 1 ........... 1 ........... 1 ...........
maintenance
recommendations
for all
equipment
furnished under
the contract.
----------------------------------------------------------------------------------------------------------------
(ii) Obtains certifications from the engineer that the project and
all required documentation are satisfactory and complete. Requirements
for this contract closeout certification are contained in Sec. 1753.18.
(iii) Submits copies of the engineer's certifications to RUS with
the FRS requesting the remaining funds on the contract.
(iv) Makes final payment in accordance with the payment terms of the
contract.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27,
1990, and amended at 59 FR 43718, Aug. 25, 1994; 64 FR 16611, Apr. 6,
1999]
[[Page 392]]
Secs. 1753.69--1753.75 [Reserved]
Subpart I--Minor Construction
Source: 55 FR 3573, Feb. 2, 1990, unless otherwise noted.
Redesignated at 55 FR 39397, Sept. 27, 1990.
Sec. 1753.76 General.
(a) This subpart implements and explains the provisions of the Loan
Documents containing the requirements and procedures to be followed by
borrowers for minor construction of telecommunications facilities using
RUS loan funds. Terms used in this subpart are defined in Sec. 1753.2.
(b) [Reserved]
(Approved by the Office of Management and Budget under control number
0572-0062)
[55 FR 3573, Feb. 2, 1990. Redesignated at 55 FR 39397, Sept. 27, 1990,
as amended at 64 FR 16611, Apr. 6, 1999]
Sec. 1753.77 Methods of minor construction.
Minor construction may be performed by contract using RUS Contract
Form 773, ``Miscellaneous Construction Work and Maintenance Services'',
by RUS Contract Form 515, or by work order construction. The rules for
using Form 515 for minor construction are contained in subpart F of this
part.
[64 FR 16612, Apr. 6, 1999]
Sec. 1753.78 Construction by contract.
(a) RUS Form 773 shall be used for minor construction by contract.
Compensation may be based upon unit prices, hourly rates, or another
basis agreed to in advance by the borrower and the contractor. A single
work project may require more than one contractor.
(b) The borrower shall prepare the contract form and attach any
diagrams, sketches and tabulations necessary to specify clearly the work
to be performed and who shall provide which materials. Neither the
selection of the contractor nor the contract requires RUS approval.
(c) Borrowers are urged to obtain quotations from several
contractors before entering into a contract to be assured of obtaining
the lowest cost. The borrower must ensure that the contractor selected
meets all Federal and State licensing and bonding requirements, and that
the contractor maintains the insurance coverage required by the contract
for the duration of the work. (See 7 part CFR 1788)
(d) Upon completion and final inspection of the construction the
borrower shall obtain from the Contractor a final invoice and an
executed copy of RUS Form 743, Certificate of Contractor and Indemnity
Agreement.
(e) RUS Contract Form 773 may also be used to contract for the
maintenance and repair of telephone equipment and facilities. Generally,
RUS will not finance maintenance and repair contracts.
[55 FR 3573, Feb. 2, 1990. Redesignated at 55 FR 39397, Sept. 27, 1990,
and amended at 59 FR 43718, Aug. 25, 1994]
Sec. 1753.79 Construction by force account.
The borrower shall require that:
(a) Minor construction by the force account method be supervised by
a competent foreman. The work shall be performed in accordance with all
regulatory and safety codes.
(b) Daily time and material reports, referenced by the work project
number, shall be kept to record labor and materials used as construction
is performed.
(c) The construction foreman shall maintain a tabulation of all
construction units installed.
Sec. 1753.80 Minor construction procedure.
(a) If the borrower performs minor construction financed with loan
funds, the borrower's regular work order procedure shall be used to
administer construction activities that may be performed entirely by a
contractor under Form 773 contract, by work order, or jointly by work
order and one or more contractors under Form 773 contracts.
(b) RUS financing under Form 773 contracts dated in the same
calendar year is limited to the following amounts for the following
discrete categories of minor construction. The date of the Form 773
contract is the date the Form 773 contract is executed.
(1) For outside plant construction, the limit is $500,000 or ten per
cent
[[Page 393]]
(10%) of the borrower's previous calendar year's outside plant total
construction, whichever is greater.
(2) For central office equipment, the limit is $500,000.
(3) For special equipment and buildings, the limit is $250,000 in
each category.
(c) A single minor construction project may be a discrete element of
a somewhat larger overall project, such as the provision and
installation of a standby power generator or heating/air conditioning
equipment in connection with a building modification or expansion
project or the splicing on a major cable placement project. It cannot be
a portion, by dividing into smaller segments, of a discrete major
construction project, such as the placement of a continuous cable
facility.
(d) RUS approval must be obtained in advance for minor construction
unless all of the following conditions are met:
(1) RUS has approved the engineering design.
(2) All standard RUS procedures are followed, including use of new
materials listed in the List of Materials for Use on Telephone Systems
of RUS Borrowers (Bul. 344-2) and the application of RUS construction
practices. (See Sec. 1753.6)
(3) The Standard Form 773 contract is used without modification.
(e) The borrower shall determine the scope of each proposed
construction project and decide how it will be constructed. A work
project number shall be assigned to which all charges for that project
are referenced.
(f) The borrower shall maintain accounting and plant records
sufficient to document the cost and location of all construction and to
support loan fund advances and disbursements.
(g) Normally the borrower will finance minor construction with
general funds and obtain reimbursement with loan funds when construction
is completed and executed Form 771 has been submitted to RUS. If a
borrower satisfies RUS of its inability to finance the construction
temporarily with general funds, RUS may establish, on a case by case
basis, a work order fund for specific construction projects. The work
order fund will be closed upon receipt of an FRS and the executed Forms
771 for the specific projects for which the work order fund was
established.
(h) RUS will advance funds to finance minor construction work
projects only if all necessary documents, including an FRS and
supporting data covering the project, are received within one year of
the date construction of the project is completed.
[55 FR 3573, Feb. 2, 1990. Redesignated at 55 FR 39397, Sept. 27, 1990,
and amended at 59 FR 43718, Aug. 25, 1994; 64 FR 16612, Apr. 6, 1999]
Sec. 1753.81 Inspection and certification.
(a) Upon completion and prior to closeout, minor construction must
be inspected and certified to be in compliance with RUS construction
standards, to be reasonable in cost, and to meet applicable codes. The
certification is made by an experienced telephone engineer who is either
licensed in the state where the inspection will be performed, or is a
borrower's staff engineer, who meets the requirements of the ``employee
in charge'' of force account engineering as described in subpart B of
this part. The GFR will periodically audit the inspection of minor
construction to ensure integrity of the procedure. RUS borrowers with
less than 2000 subscribers may use the above procedure or have
construction inspection performed by the GFR.
(b) Engineering services for minor construction may be contracted
using RUS Form 245, Engineering Service Contract--Special Services.
Costs for these services may be included in the costs for construction
on the Form 771. (See subpart B of this part.
(c) Upon completion of construction, the borrower shall obtain the
engineer's certification on RUS Form 771. An official of the borrower,
designated by the board of directors, shall also execute the borrower's
certification on Form 771.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27,
1990, and amended at 55 FR 53488, Dec. 31, 1990]
Sec. 1753.82 Minor construction closeout.
(a) For minor construction inspected by the borrower's engineer, an
original and two copies of Form 771 shall be sent to the GFR. The GFR
will initial and return the original and one copy.
[[Page 394]]
(b) When funds are requested for minor construction, the original
Form 771 signed or initialed by the GFR, shall be submitted with the
FRS. Forms 771 should be submitted only with the FRS which they support.
RUS does not encumber funds pursuant to Forms 771 unless an advance is
made to the borrower. (See 7 CFR part 1744 subpart C).
Secs. 1753.83--1753.90 [Reserved]
Subpart J--Construction Certification Program
Source: 55 FR 3574, Feb. 2, 1990, unless otherwise noted.
Redesignated at 55 FR 39397, Sept. 27, 1990.
Sec. 1753.91 General.
(a) This subpart implements and explains the provisions of the loan
documents setting forth the requirements and procedures to be followed
by borrowers accepting nomination for the construction certification
program. Terms used in this subpart are defined in Sec. 1753.2.
(b) [Reserved]
(Approved by the Office of Management and Budget under control number
0572-0062)
Sec. 1753.92 Policies and requirements.
(a) It is RUS policy that, as borrowers gain in experience and
maturity, the advice and assistance rendered by RUS shall progressively
diminish. Prior to approval of a loan, RUS may nominate certain
borrowers to fulfill the responsibilities for administration and
construction of projects financed with RUS loans. Borrowers who accept
this nomination will be known as ``certification borrowers,'' and the
program in which they participate will be known as the ``certification
program.''
(b) Generally, initial loan borrowers are not eligible for the
certification program.
(c) Generally, the factors which RUS will consider in selecting
borrowers for the certification program will include:
(1) The experience of the staff of the borrower.
(2) The RUS assessment of the borrower's ability to handle the
certification program requirements considering the size and complexity
of the proposed construction in the LD.
(3) The history of the borrower in following RUS's policies and
procedures.
(4) Other factors deemed relevant by RUS.
(d) Except as specifically stated in this subpart, certification
borrowers must comply with all requirements applicable to other
borrowers.
(e) RUS reserves the right at any time to require submission of
construction documents or to remove the borrower from the certification
program.
Sec. 1753.93 Responsibilities.
(a) Responsibilities transferred to certification borrowers. (1)
Approval of engineering and architectural service contracts.
(2) Approval of P&S.
(3) Approval of price quotations and bids, except where the low
price bid is not accepted.
(4) Approval of award of construction contracts and amendments.
(5) Approval of FAP's if RUS has approved the force account method
of construction for the construction project.
(6) Inspection and certification of construction.
(7) Approval of closeout documents.
(8) Other responsibilities as may be specifically granted in writing
by RUS.
(b) Responsibilities retained by RUS. (1) Approval to deviate from
RUS requirements, except as provided in (a) above.
(2) Approval of use of loan funds for projects other than those
included in the loan construction budget. See 7 CFR part 1744 subpart C.
(3) Approval of use of loan funds in excess of amounts included in
the loan budget.
(4) Approval of force account methods of engineering and
construction.
(5) Approval to make significant deviations from the work plan
approved by RUS.
(6) Approval of interim construction.
(7) Approval to use materials not listed in the List of Materials
Acceptable for Use on Telephone Systems of RUS Borrowers.
(8) Approval of field trials.
(9) Approval to modify or alter standard forms and contracts.
[[Page 395]]
(10) Approval to open bids when fewer than the required number have
been received.
(11) Approval of outside plant layouts.
(12) ``Buy American'' determinations.
(13) Other responsibilities not specifically transferred by this
subpart or in writing by RUS.
Sec. 1753.94 Procedures.
(a) Certification borrowers shall appoint three certification
officials. These appointments shall be subject to RUS approval.
(1) The ``Certifying Officer'' shall be an officer or employee of
the borrower who is authorized to execute binding agreements. This
officer shall sign all contracts, amendments, closeout documents and the
certification on RUS Form 158, Certification of Contract or Force
Account Proposal Approval, and RUS Form 159, Summary of Completed
Construction.
(2) The ``Construction Certifier'' shall be an experienced telephone
engineer who is either licensed in the state where the inspection will
be performed, or is a borrower's staff engineer who meets the
requirements of the ``employee in charge'' of force account engineering
as described in subpart B of this part. RUS may determine that it will
accept the certification only for matters within the staff engineer's
area of specialization. In such cases the position of ``Construction
Certifier'' shall be filled by more than one engineer. This official is
responsible for certifying that the construction complies with all
technical and code requirements.
(3) The ``Certification Coordinator'' shall administer the
certification program and serve as the official point of contact for
RUS. The certifying officer or construction certifier may also serve as
the certification coordinator.
(b) Certification borrowers, shall submit and obtain RUS approval of
a work plan before construction and related engineering begin.
(1) The work plan shall provide a description of the proposed
construction and methods of purchasing in such detail as to enable RUS
to monitor the construction program to ensure to its satisfaction that
loan purposes are accomplished in an organized construction program.
(2) The work plan shall include the following:
(i) The names and qualifications of the proposed certification
officials defined in Sec. 1753.94(a).
(ii) A listing of the proposed work projects to accomplish the loan
purposes showing the estimated cost, method of performing the
construction, and the proposed commencement and completion dates for
each work project. The proposed work projects shall be summarized on RUS
Form 157, Construction Work Plan and Cost Distribution, or a form
providing essentially the same information.
(iii) The proposed source of funds for meeting cost overruns if the
total estimated cost of work projects exceeds the loan budget.
(iv) A statement signed by the borrower's certification officials
and the GFR that the work plan is accurate and complete.
(c) Under the certification program, the borrower shall follow all
standard RUS postloan engineering and construction procedures except
that the approvals shown in Sec. 1753.93(a) will be made by
certification officials rather than RUS. The approvals noted in
Sec. 1753.93(a)(1), (4) and (5) will be reported immediately to RUS
using RUS Form 158. Approval of closeouts, Sec. 1753.93(a) (6) and (7),
will be reported immediately on RUS Form 159.
(d) As the construction program progresses, the certification
borrower shall request, by letter, RUS approval of any significant
changes in work plan schedules and budgets and in certification
officials.
Sec. 1753.95 Advance of loan funds.
Advance of loan funds needed to meet the certification borrower's
current financial obligations are to be requested on RUS Form 481 for
construction and engineering items supported by appropriate RUS Forms
158 and 159. For items other than construction or engineering, other
supporting data shall be submitted. (See 7 CFR part 1744 subpart C.)
[[Page 396]]
Sec. 1753.96 Certification addendum.
The certification borrower shall modify standard RUS forms of
contract for use under the certification program by inserting an
executed copy of the following certification addendum in each copy of
the contract.
Certification Addendum
Permission has been obtained by the Owner to proceed with this
contract under 7 CFR part 1753 subpart J, pursuant to which the
references in the RUS construction document requiring approvals and
other actions of the RUS Administrator will not apply unless RUS gives
specific notice in writing to the affected parties that designated
approval(s) or action(s) will be required. Certifications by the
Contractor of amounts due and certifications of completions of work
under the contract are to be construed to be rendered for the purpose of
inducing the Rural Utilities Service or Rural Telephone Bank to advance
funds to the Owner to make, or reimburse the Owner for, payments under
this contract.
Date
_______________________________________________________________________
Owner
By______________________________________________________________________
Certifying Officer
Date____________________________________________________________________
_______________________________________________________________________
Contractor
By______________________________________________________________________
_______________________________________________________________________
Title
Secs. 1753.97--1753.99 [Reserved]