RUS Bulletin 1780-14

Page 1

UNITED STATES DEPARTMENT OF AGRICULTURE

Rural Utilities Service

BULLETIN 1780-14 

RD-GD-1997-24

SUBJECT: Supplemental General Conditions

EFFECTIVE DATE: July 30, 1997. 

OFFICE OF PRIMARY INTEREST: Assistant Administrator, Electric Program.

FILING INSTRUCTIONS:

PURPOSE: This bulletin is issued to 

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 1780-14

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RUS Supplemental General Conditions

The provisions of the Rural Utilities Service (RUS) Supplemental General 

Conditions as described herein change, amend, or supplement the General 

Conditions and shall supersede any conflicting provisions of this 

CONTRACT. All provisions of the General Conditions which are not 

changed, amended, or supplemented, remain in full force.

1. CONTRACT APPROVAL 9. SMALL, MINORITY AND

2. CONTRACT CHANGE ORDERS WOMEN'S BUSINESSES

3. PARTIAL PAYMENT ESTIMATES 10. ANTI-KICKBACK

4. CONFLICT OF INTEREST 11. VIOLATING FACILITIES

5. PROTECTION OF LIVES AND PROPERTY 12. STATE ENERGY POLICY

6. REMEDIES 13. EQUAL OPPORTUNITY

REQUIREMENTS

7. GRATUITIES 14. CERTIFICATE OF

OWNER'S ATTORNEY

8. AUDIT AND ACCESS TO RECORDS 15. RUS CONCURRENCE

1. Contract Approval.

1.1 The OWNER and the CONTRACTOR will furnish the OWNER'S Attorney

such evidence as required so that the OWNER'S Attorney can complete and 

execute "Certificate of Owner's Attorney" (Section 14) before the OWNER 

submits the executed Contract Documents to RUS for approval.

1.2 Concurrence by the State Program Official or designee in the 

award of the CONTRACT is required before it is effective and the "RUS 

Concurrence" (Section 15), shall be attached and made a part of the 

Agreement.

1.3 Surety companies executing BONDS must appear on the Treasury 

Department's most current list (Circular 570 as amended) and be 

authorized to transact business in the State where the project is 

located. [Revision 1, 07/11/1997]

1.4 This CONTRACT is expected to be funded in part with funds from

the RUS. Neither the United States nor any of its departments, 

agencies, or employees is or will be a party to this CONTRACT or any 

SUBCONTRACT.

1.5
RUS Bulletin 1780-14

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2. Contract Change Orders.

2.1 All changes affecting the project's construction cost or 

modifications of the terms or conditions of the contract must be 

authorized by means of a written contract change order which is mutually 

agreed to by the OWNER and CONTRACTOR and is approved by RUS. The 

contract change order will include extra work, work for which quantities 

have been altered from those shown in the bidding schedule, as well as 

decreases or increases in the quantities of installed units which are 

different than those shown in the bidding schedule because of final 

measurements. All changes must be recorded on a contract change order 

before they can be included in a partial payment estimate.

2.2 FORM RD 1924-7, "Contract Change Order" or similar form 

approved by RUS shall be used to record CONTRACT changes.

2.3 When the CONTRACT sum is, in whole or in part, based on unit 

prices, the OWNER reserves the right to increase or decrease a unit 

price quantity as may be deemed reasonable or necessary in order to 

complete the work contemplated by this CONTRACT.

3. Partial Payment Estimates.

3.1 FORM RD 1924-18, "Partial Payment Estimate," or similar form 

approved by RUS shall be used when estimating periodic payments due the 

CONTRACTOR.

3.2 The OWNER may after consultation with the ARCHITECT/ENGINEER 

withhold or, on account of subsequently discovered evidence, nullify the 

whole or part of any approved partial payment estimate to such extent as 

may be necessary to protect the OWNER from loss on account of:

3.2.1 Defective work not remedied.

3.2.2 Claims filed.

3.2.3 Failure of CONTRACTOR to make payments properly to 

subcontractors or suppliers.

3.2.4 A reasonable doubt that the WORK can be completed for the 

balance then unpaid.

3.2.5 Damage to another CONTRACTOR.
RUS Bulletin 1780-14

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3.2.6 Performance of WORK in violation of the terms of the 

CONTRACT DOCUMENTS.

3.3 Where WORK on unit price items is substantially complete but 

lacks testing, clean-up and/or corrections, amounts shall be deducted 

from unit prices in partial payment estimates to amply cover such 

testing, clean-up and/or corrections.

3.4 When the items in 3.2 and 3.3 are cured, payment shall be made 

for amounts withheld because of them.

3.5 Payments will not be made that would deplete the retainage nor 

place in escrow any funds that are required for retainage nor invest the 

retainage for the benefit of the CONTRACTOR.

4. Conflict of Interest.

4.1. Unacceptable bidders. An ENGINEER (individual or firm 

including persons they employ) who has prepared plans and specifications 

will not be considered an acceptable bidder. Any firm or corporation in 

which such ENGINEER (including persons they employ) is an officer, 

employee, or holds or controls a substantial interest will not be 

considered an acceptable bidder. Contracts or purchases by the 

CONTRACTOR shall not be awarded or made to a supplier or manufacturer if 

the ENGINEER (firm or individual) who prepared the plans and 

specifications has a corporate or financial affiliation with the 

supplier or manufacturer. Bids will not be awarded to firms or 

corporations which are owned or controlled wholly or in part by a member 

of the governing body of the OWNER or to an individual who is such a 

member.

4.2. The OWNER'S officers, employees, or agents shall not engage 

in the award or administration of this CONTRACT if a conflict of 

interest, real or apparent, would be involved. Such a conflict would 

arise when: (a) the employee, officer or agent; (b) any member of their 

immediate family; (c) their partner or (d) an organization which 

employs, or is about to employ, any of the above has financial or other 

interest in the CONTRACTOR. The OWNER'S officers, employees, or agents 

shall neither solicit nor accept gratuities, favors or anything of 

monetary value from the CONTRACTOR or subcontractor.

5. Protection of Lives and Property

5.1 In order to protect the lives and health of its employees 

under the CONTRACT, the CONTRACTOR shall comply with all pertinent 

provisions of the Occupational Safety and Health Administration (OSHA) 

and any State Safety and Health agency requirements.
RUS Bulletin 1780-14

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5.2 The CONTRACTOR alone shall be responsible for the safety, 

efficiency, and adequacy of its plant, appliances, and methods, and for 

any damage which may result from their failure or their improper 

construction, maintenance or operation.

6. Remedies. Unless otherwise provided in this CONTRACT, all claims, 

counterclaims, disputes, and other matters in question between the OWNER 

and

the CONTRACTOR arising out of or relating to this CONTRACT or the breach 

thereof will be decided by arbitration if the parties mutually agree, or 

in a court of competent jurisdiction within the State in which the OWNER 

is located.

6.1 The arbitration provisions of this section may be initiated by 

either party to this CONTRACT by filing with the other party and the 

ENGINEER a WRITTEN REQUEST for arbitration.

6.2 Each party to this CONTRACT will appoint one arbitrator; the 

two arbitrators will select a third arbitrator.

6.3 The arbitrators will select a hearing location as close to the 

OWNER'S locale as possible.

6.4 The procedure for conducting the hearings will follow the 

Construction Industry Arbitration Rules of the American Arbitration 

Association.

7. Gratuities.

7.1 If the OWNER finds after a notice and hearing that the 

CONTRACTOR, or any of the CONTRACTOR'S agents or representatives, 

offered or gave gratuities (in the form of entertainment, gifts, or 

otherwise) to any official, employee, or agent of the OWNER, the State, 

or RUS officials in an attempt to secure this CONTRACT or favorable 

treatment in awarding, amending, or making any determinations related to 

the performance of this CONTRACT, the OWNER may, by written notice to 

the CONTRACTOR, terminate this CONTRACT. The OWNER may also pursue 

other rights and remedies that the law or this CONTRACT provides. 

However, the existence of the facts on which the OWNER bases such 

findings shall be an issue and may be reviewed in proceedings under the 

Remedies clause of this CONTRACT.
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7.2 In the event this CONTRACT is terminated as provided in 

paragraph 7.1 the OWNER may pursue the same remedies against the 

CONTRACTOR as it could pursue in the event of a breach of the CONTRACT 

by the CONTRACTOR. As a penalty, in addition to any other damages to 

which it may be entitled by law, the OWNER may pursue exemplary damages 

in an amount (as determined by the OWNER) which shall be not less than 

three nor more than ten times the costs the CONTRACTOR incurs in 

providing any such gratuities to any such officer or employee.

8. Audit and Access to Records. For all negotiated contracts (except 

those of $10,000 or less), the RUS, the Comptroller General, the OWNER 

or any of their duly authorized representatives, shall have access to 

any books, documents, papers, and records of the CONTRACTOR, which are 

pertinent to the CONTRACT, for the purpose of making audits, 

examinations, excerpts and transcriptions. The CONTRACTOR shall 

maintain all required records for three years after final payment is 

made and all other pending matters are closed.

9. Small, Minority and Women's Businesses. If the CONTRACTOR intends 

to let any subcontracts for a portion of the work, the CONTRACTOR shall 

take affirmative steps to assure that small, minority and women's 

businesses are used when possible as sources of supplies, equipment, 

construction, and services.

10. Anti-Kickback. The CONTRACTOR shall comply with the Copeland 

Anti-Kickback Act (18 USC 874) as supplemented in Department of Labor 

regulations (29 CFR, Part 3). This act provides that each CONTRACTOR

shall be prohibited from inducing, by any means, any person employed in

the construction, completion, or repair of public facilities, to give up 

any part of the compensation to which they are otherwise entitled. The 

OWNER shall report all suspected or reported violations to RUS.
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11. Violating Facilities. Where this CONTRACT exceeds $100,000 the 

CONTRACTOR shall comply with all applicable standards, orders or 

requirements issued under section 306 of the Clean Air Act (42 U.S.C. 

1857(h)), section 508 of the Clean Water Act (33 U.S.C. 1368), Executive 

Order 11738, and Environmental Protection Agency regulations 40 CFR Part

15 which prohibit the awarding of non-exempt federal contracts, grants, 

or loans to facilities included on EPA's list of violating facilities. 

The CONTRACTOR will report violations to the EPA.

12. State Energy Policy. The CONTRACTOR shall comply with the Energy 

Policy and Conservation Act (P.L. 94-163). Mandatory standards and 

policies relating to energy efficiency, contained in the State Energy 

Conservation Plan, shall be utilized.

13. Equal Opportunity Requirements. For all contracts in excess of

$10,000, the CONTRACTOR shall comply with Executive Order 11246, 

entitled "Equal Employment Opportunity," as amended by Executive Order 

11375, and as supplemented in Department of Labor regulations (41 CFR 

Part 60).

13.1 If the CONTRACT exceeds $10,000, the CONTRACTOR will execute 

Form RD 400-6, "Compliance Statement."

13.2 The CONTRACTOR'S compliance with Executive Order 11246 shall 

be based on its implementation of the Equal Opportunity Clause, specific 

affirmative action obligations required by the Standard Federal Equal 

Employment Opportunity Construction Contract Specifications, as set 

forth in 41 CFR Part 60-4 and its efforts to meet the goals established 

for the geographical area where the CONTRACT is to be performed. The 

hours of minority and female employment and training must be 

substantially uniform throughout the length of the CONTRACT, and in each 

trade, and the CONTRACTOR shall make a good faith effort to employ 

minorities and women evenly on each of its projects. The transfer of 

minority or female employees or trainees from contractor to contractor 

or from project to project for the sole purpose of meeting the 

CONTRACTOR'S goals shall be a violation of the CONTRACT, the Executive 

Order and the regulations in 41 CFR Part 60-4. Compliance with the 

goals will be measured against the total work hours performed.

13.3 The CONTRACTOR shall provide written notification to the 

Director of the Office of Federal Contract Compliance Programs within 10 

working days of award of any construction subcontract in excess of

$10,000 at any tier for construction work under the CONTRACT resulting 

from this solicitation. The notification shall list the name, address 

and telephone number of the subcontractor; employer identification 

number; estimated dollar amount of subcontract; estimated starting and 

completion dates of the subcontract; and the geographical area in which 

the CONTRACT is to be performed.
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14. Certificate of Owner's Attorney.

I, the undersigned, , the duly authorized 

and acting legal representative

of , do 

hereby certify as follows

I have examined the attached contract(s) and performance and 

payment bond(s) and the manner of execution thereof, and I am of the 

opinion that each of the aforesaid agreements are adequate and have has 

been duly executed by the proper parties thereto acting through their 

duly authorized representatives; that said representatives have full 

power and authority to execute said agreements on behalf of the 

respective parties named thereon; and that the foregoing agreements 

constitute valid and legally binding obligations upon the parties 

executing the same in accordance with terms, conditions, and provisions 

thereof.

Date:

NOTE: Delete phrase "performance and payment bonds" when not 

applicable.
RUS Bulletin 1780-14

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15. RUS Concurrence.

As lender or insurer of funds to defray the costs of this contract, 

and without liability for any payments thereunder, the Rural Utilities 

Service (RUS) hereby concurs in the award of this CONTRACT to

U.S. Department of Agriculture 

Rural Utilities Service

By

Date

Title

This CONTRACT shall not be effective unless and until concurred in 

by the State Program Official of the Rural Utilities Service, U.S. 

Department of Agriculture or a delegated representative.