UNITED STATES DEPARTMENT OF AGRICULTURE

Rural Utilities Service

RUS BULLETIN 1780-24 

RD-GD-2020-112

SUBJECT: Public Works Assisted By An Agency Loan (EDA)

TO: RUS Water and Environmental Programs Staff.

EFFECTIVE DATE: Date of approval.

OFFICE OF PRIMARY INTEREST: Water and Environmental Programs.

INSTRUCTIONS: 

AVAILABILITY: This Bulletin is available on the Internet at

http://www.rurdev.usda.gov/RDU_Bulletins_Water_and_Environmental.html 

PURPOSE: This bulletin is issued to establish a memorandum of 

understanding between the Economic Development Administration, 

Department of Commerce, and Department of Agriculture.

DISCLAIMER: The contents of this guidance document does not have the force and effect of law and is 

not meant to bind the public in any way. This document is intended only to provide clarity to the public 

regarding existing requirements under the law or agency policies. 
RUS Bulletin 1780-24

MEMORANDUM OF UNDERSTANDING 

BETWEEN

THE ECONOMIC DEVELOPMENT ADMINISTRATION - 

DEPARTMENT OF COMMERCE

AND

THE Farmers Home Administration - 

DEPARTMENT OF AGRICULTURE 

PERTAINING TO

EDA PUBLIC WORKS PROJECTS ASSISTED BY AN FHA LOAN

I INTRODUCTION. In order to provide efficient service to Grantee/ Borrowers, eliminate 

duplication of effort, and reduce administrative costs during the construction of projects jointly 

financed by a grant from the Economic Development Administration and a loan from the Farmers 

Home Administration, EDA Area Directors and FHA State Director are authorized to enter into 

Project Management Agreements, as they deem appropriate, covering the project construction 

phase. Projects involving an EDA supplementary grant to an FHA grant are covered under a 

separate Memorandum.

II GENERAL.

A Prior to authorizing advertisement for bids, it is the responsibility of each agency to assure 

the other that all approval conditions have been met.

B The total project cost for the purpose of this Memorandum will include only those costs 

eligible for EDA financial assistance.

C Any changes in location, scope, line items or cost of the project shall be approved by both 

EDA and FHA.

D All construction contracts for project work financed in any part by EDA shall contain 

binding provisions for payment of prevailing wage rates as determined by the Secretary of Labor 

in accordance with the Davis-Bacon Act, as amended (40 USC 267a - 276a-5).

E Certifications:

1. EDA will obtain required certifications from the Federal Water Pollution Control

Administration under Section 106 of Public Law 89-136.
RUS Bulletin 1780-24

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2. FHA will be responsible for assuring that the applicant has obtained the required

certifications from the State Water Pollution Control Agency under Section 306(a) (9&10) of the 

Consolidated Rural Utilities Service Act of 1961 (Public Law 87-128, as amended).

F All bidders and subcontractors must sign certifications of compliance with Executive Order 

11246 (EDA Forms 119 and 120).

III SUGGESTED ITEMS FOR INCLUSION IN A PROJECT MANAGEMENT AGREEMENT.

A EDA will have primary responsibility for managing the project during the construction 

phase.

B The EDA Area Office will notify the FHA State Program Official of the date, time and 

location of the Planning Conference.

C FHA will be represented at the Planning Conference.

D EDA will obtain FHA concurrence of the approval of final plans, specifications and bid 

documents.

E EDA will notify FHA of the date of advertising for construction bids. 

F EDA will notify FHA of the date, time and location of bid opening. 

G FHA will be represented at the bid opening.

H Both EDA and FHA will concur in the awarding of construction contracts.

I EDA will notify FHA of the date, time and location of the Pre Construction Conference. 

J EDA will notify FHA of the date of start of construction.

K EDA will notify FHA of any unusual problems which may be encountered during the 

construction phase.
RUS Bulletin 1780-24

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L FHA will concur on the progress of construction and final inspection. EDA will furnish FHA 

with copies of Progress Reports and will permit FHA to make any additional inspections 

necessary in connection with the FHA loan.

M EDA will advise the State Program Official of the date and time of final inspection. Such 

inspection will be conducted by both EDA and FHA.

N The FHA County Supervisor will establish an FHA Supervised Bank Account for the 

Grantee/Borrower and will be responsible for disbursement of both the EDA grant funds and FHA 

loan funds.

a EDA will be responsible for timely deposits of the grant funds. However, since EDA 

grant funds are not made available until all construction contracts have been awarded, and then 

only for project costs incurred, it is recognized that some, if not all, of the FHA loan funds may be 

disbursed before receipt of any or all of the EDA grant funds.

b Funds will be disbursed only on certification of the EDA field engineer of "Costs 

incurred to date."

O Final determination of the eligibility of costs incurred will be made by EDA after 

completion of the project and final audit. The EDA Area Office will furnish the FHA State 

Program Official a copy of any EDA audit findings.

IV Services performed by either agency for the other shall be without cost to the other agency. 

FOR THE FOR THE

ECONOMIC DEVELOPMENT FARMERS HOME

ADMINISTRATION ADMINISTRATION

/s/ Ross Davis /s/ Howard Bertsch

Assistant Secretary for Administrator 

Economic Development

August 27, 1968 October 11,1968

Date Date