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[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: 7CFR1724]

[Page 236-250]
 
PART 1724--ELECTRIC ENGINEERING, ARCHITECTURAL SERVICES AND DESIGN POLICIES AND PROCEDURES

                           Subpart A--General

Sec.
1724.1  Introduction.
1724.2  Waivers.
1724.3  Definitions.
1724.4  Qualifications.
1724.5  Submission of documents to RUS.
1724.6  Insurance requirements.
1724.7  Debarment and suspension.
1724.8  Restrictions on lobbying.
1724.9  Environmental compliance.
1724.10  Standard forms of contracts for borrowers.
1724.11-1724.19  [Reserved]

                    Subpart B--Architectural Services

1724.20  Borrowers' requirements--architectural services.
1724.21  Architectural services contracts.
1724.22-1724.29  [Reserved]

                     Subpart C--Engineering Services

1724.30  Borrowers' requirements--engineering services.
1724.31  Engineering services contracts.
1724.32  Inspection and certification of work order construction.
1724.33-1724.39  [Reserved]

                   Subpart D--Electric System Planning

1724.40  General.
1724.41-1724.49  [Reserved]

                    Subpart E--Electric System Design

1724.50  Compliance with National Electrical Safety Code (NESC).
1724.51  Design requirements.
1724.52  Permitted deviations from RUS construction standards.
1724.53  Preparation of plans and specifications.
1724.54  Requirements for RUS approval of plans and specifications.
1724.55  Dam safety.
1724.56-1724.69  [Reserved]

Appendix A to Subpart E to Part 1724--Hazard Potential Classification 
          for Civil Works Projects

                      Subpart F--RUS Contract Forms

1724.70  Standard forms of contracts for borrowers.
1724.71  Borrower contractual obligations.
1724.72  Notice and publication of listed contract forms.
1724.73  Promulgation of new or revised contract forms.
1724.74  List of electric program standard contract forms.
1724.75-1724.99  [Reserved]

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

    Source: 63 FR 35314, June 29, 1998, unless otherwise noted.

                           Subpart A--General

Sec. 1724.1  Introduction.

    (a) The policies, procedures and requirements in this part implement 
certain provisions of the standard form of loan documents between the 
Rural Utilities Service (RUS) and its electric borrowers.
    (b) All borrowers, regardless of the source of financing, shall 
comply with RUS' requirements with respect to design, construction 
standards, and the use of RUS accepted material on their electric 
systems.
    (c) Borrowers are required to use RUS contract forms only if the 
facilities are financed by RUS.

Sec. 1724.2  Waivers.

    The Administrator may waive, for good cause on a case-by-case basis, 
requirements and procedures of this part.

Sec. 1724.3  Definitions.

    Terms used in this part have the meanings set forth in Sec. 1710.2 
of this chapter. References to specific RUS forms and other RUS 
documents, and to specific sections or lines of such forms and 
documents, shall include the corresponding forms, documents, sections 
and lines in any subsequent revisions of these forms and documents. In 
addition to the terms defined in Sec. 1710.2 of this chapter, the 
following terms have the following meanings for the purposes of this 
part:
    Architect means a registered or licensed person employed by the 
borrower to provide architectural services for a project and duly 
authorized assistants and representatives.
    Engineer means a registered or licensed person, who may be a staff 
employee or an outside consultant, to provide engineering services and 
duly authorized assistants and representatives.

[[Page 237]]

    Force account construction means construction performed by the 
borrower's employees.
    GPO means Government Printing Office.
    NESC means the National Electrical Safety Code.
    RE Act means the Rural Electrification Act of 1936 as amended (7 
U.S.C. 901 et seq.).
    Repowering means replacement of the steam generator or the prime 
mover or both at a generating plant.
    RUS means Rural Utilities Service.
    RUS approval means written approval by the Administrator or a 
representative with delegated authority. RUS approval must be in 
writing, except in emergency situations where RUS approval may be given 
orally followed by a confirming letter.
    RUS financed means financed or funded wholly or in part by a loan 
made or guaranteed by RUS, including concurrent supplemental loans 
required by Sec. 1710.110 of this chapter, loans to reimburse funds 
already expended by the borrower, and loans to replace interim 
financing.

[63 FR 35314, June 29, 1998, as amended at 63 FR 58284, Oct. 30, 1998]

Sec. 1724.4  Qualifications.

    The borrower shall ensure that:
    (a) All selected architects and engineers meet the applicable 
registration and licensing requirements of the States in which the 
facilities will be located;
    (b) All selected architects and engineers are familiar with RUS 
standards and requirements; and
    (c) All selected architects and engineers have had satisfactory 
experience with comparable work.

Sec. 1724.5  Submission of documents to RUS.

    (a) Where to send documents. Documents required to be submitted to 
RUS under this part are to be sent to the office of the borrower's 
respective RUS Regional Director, the Power Supply Division Director, or 
such other office of RUS as designated by RUS. (See part 1700 of this 
chapter.)
    (b) Contracts requiring RUS approval. The borrower shall submit to 
RUS three copies of each contract that is subject to RUS approval under 
subparts B and C of this part. At least one copy of each contract must 
be an original signed in ink (i.e., no facsimile signature). Each 
contract submittal must be accompanied by a certified copy of the board 
resolution awarding the contract.
    (c) Contract amendments requiring RUS approval. The borrower shall 
submit to RUS three copies of each contract amendment (at least one copy 
of which must be an original signed in ink) which is subject to RUS 
approval. Each contract amendment submittal to RUS must be accompanied 
by a certified copy of the board resolution approving the amendment.

Sec. 1724.6  Insurance requirements.

    (a) Borrowers shall ensure that all architects and engineers working 
under contract with the borrower have insurance coverage as required by 
part 1788 of this chapter.
    (b) Borrowers shall also ensure that all architects and engineers 
working under contract with the borrower have insurance coverage for 
Errors and Omissions (Professional Liability Insurance) in an amount at 
least as large as the amount of the architectural or engineering 
services contract but not less than $500,000.

Sec. 1724.7  Debarment and suspension.

    Borrowers shall comply with the requirements on debarment and 
suspension in connection with procurement activities as set forth in 
part 3017 of this title, particularly with respect to lower tier 
transactions, e.g., procurement contracts for goods or services.

Sec. 1724.8  Restrictions on lobbying.

    Borrowers shall comply with the restrictions and requirements in 
connection with procurement activities as set forth in part 3018 of this 
title.

Sec. 1724.9  Environmental compliance.

    Borrowers shall comply with the requirements of part 1794 of this 
chapter, Environmental Policies and Procedures for Electric and 
Telephone Borrowers.

[[Page 238]]

Sec. 1724.10  Standard forms of contracts for borrowers.

    The standard loan agreement between RUS and its borrowers provides 
that, in accordance with applicable RUS regulations in this chapter, the 
borrower shall use standard forms of contracts promulgated by RUS for 
construction, procurement, engineering services, and architectural 
services financed by a loan made or guaranteed by RUS. This part 
implements these provisions of the RUS loan agreement. Subparts A 
through E of this part prescribe when and how borrowers are required to 
use RUS standard forms of contracts for engineering and architectural 
services. Subpart F of this part prescribes the procedures that RUS 
follows in promulgating standard contract forms and identifies those 
contract forms that borrowers are required to use for engineering and 
architectural services.

[63 FR 58284, Oct. 30, 1998]

Secs. 1724.11-1724.19  [Reserved]

                    Subpart B--Architectural Services

Sec. 1724.20  Borrowers' requirements--architectural services.

    The provisions of this section apply to all borrower electric system 
facilities regardless of the source of financing.
    (a) Each borrower shall select a qualified architect to perform the 
architectural services required for the design and construction 
management of headquarters facilities. The selection of the architect is 
not subject to RUS approval unless specifically required by RUS on a 
case by case basis. Architect's qualification information need not be 
submitted to RUS unless specifically requested by RUS on a case by case 
basis.
    (b) The architect retained by the borrower shall not be an employee 
of the building supplier or contractor, except in cases where the 
building is prefabricated and pre-engineered.
    (c) The architect's duties are those specified under the 
Architectural Services Contract and under subpart E of this part, and, 
as applicable, those duties assigned to the ``engineer'' for competitive 
procurement procedures in part 1726 of this chapter.
    (d) If the facilities are RUS financed, the borrower shall submit or 
require the architect to submit one copy of each construction progress 
report to RUS upon request.
    (e) Additional information concerning RUS requirements for electric 
borrowers' headquarters facilities are set forth in subpart E of this 
part. See also RUS Bulletin 1724E-400, Guide to Presentation of Building 
Plans and Specifications, for additional guidance. This bulletin is 
available from Program Development and Regulatory Analysis, Rural 
Utilities Service, U.S. Department of Agriculture, Stop 1522, 1400 
Independence Ave., SW., Washington, DC 20250-1522.

Sec. 1724.21  Architectural services contracts.

    The provisions of this section apply only to RUS financed electric 
system facilities.
    (a) RUS Form 220, Architectural Services Contract, must be used by 
electric borrowers when obtaining architectural services.
    (b) The borrower shall ensure that the architect furnishes or 
obtains all architectural services related to the design and 
construction management of the facilities.
    (c) Reasonable modifications or additions to the terms and 
conditions in the RUS contract form may be made to define the exact 
services needed for a specific undertaking. Such modifications or 
additions shall not relieve the architect or the borrower of the basic 
responsibilities required by the RUS contract form, and shall not alter 
any terms and conditions required by law. All substantive changes must 
be approved by RUS prior to execution of the contract.
    (d) Architectural services contracts are not subject to RUS approval 
and need not be submitted to RUS unless specifically requested by RUS on 
a case by case basis.
    (e) Closeout. Upon completion of all services and obligations 
required under each architectural services contract, including, but not 
limited to, submission of final documents, the borrower

[[Page 239]]

must closeout that contract. The borrower shall obtain from the 
architect a final statement of cost, which must be supported by detailed 
information as appropriate. For example, out-of-pocket expense and per 
diem types of compensation should be listed separately with labor, 
transportation, etc., itemized for each service involving these types of 
compensation. RUS Form 284, Final Statement of Cost for Architectural 
Service, may be used. All computations of the compensation must be made 
in accordance with the terms of the architectural services contract. 
Closeout documents need not be submitted to RUS unless specifically 
requested by RUS on a case by case basis.

Secs. 1724.22-1724.29  [Reserved]

                     Subpart C--Engineering Services

Sec. 1724.30  Borrowers' requirements--engineering services.

    The provisions of this section apply to all borrower electric system 
facilities regardless of the source of financing.
    (a) Each borrower shall select one or more qualified persons to 
perform the engineering services involved in the planning, design, and 
construction management of the system.
    (b) Each borrower shall retain or employ one or more qualified 
engineers to inspect and certify all new construction in accordance with 
Sec. 1724.32. The engineer must not be the borrower's manager.
    (c) The selection of the engineer is not subject to RUS approval 
unless specifically required by RUS on a case by case basis. Engineer's 
qualification information need not be submitted to RUS unless 
specifically requested by RUS on a case by case basis.
    (d) The engineer's duties are specified under the Engineering 
Services Contract and under part 1726 of this chapter. The borrower 
shall ensure that the engineer executes all certificates and other 
instruments pertaining to the engineering details required by RUS.
    (e) Additional requirements related to appropriate seismic safety 
measures are contained in part 1792, subpart C, of this chapter, Seismic 
Safety of Federally Assisted New Building Construction.
    (f) If the facilities are RUS financed, the borrower shall submit or 
require the engineer to submit one copy of each construction progress 
report to RUS upon RUS' request.

Sec. 1724.31  Engineering services contracts.

    The provisions of this section apply only to RUS financed electric 
system facilities.
    (a) RUS contract forms for engineering services shall be used. 
Reasonable modifications or additions to the terms and conditions in the 
RUS contract form may be made to define the exact services needed for a 
specific undertaking. Any such modifications or additions shall not 
relieve the engineer or the borrower of the basic responsibilities 
required by the RUS contract form, and shall not alter any terms and 
conditions required by law. All substantive changes to the RUS contract 
form shall be approved by RUS prior to execution of the contract.
    (b) RUS Form 236, Engineering Service Contract--Electric System 
Design and Construction, shall be used for all distribution, 
transmission, substation, and communications and control facilities. 
These contracts are not subject to RUS approval and need not be 
submitted to RUS unless specifically requested by RUS on a case by case 
basis.
    (c) RUS Form 211, Engineering Service Contract for the Design and 
Construction of a Generating Plant, shall be used for all new generating 
units and repowering of existing units. These contracts require RUS 
approval.
    (d) Any amendments to RUS approved engineering services contracts 
require RUS approval.
    (e) Closeout. Upon completion of all services and obligations 
required under each engineering services contract, including, but not 
limited to, submission of final documents, the borrower must closeout 
the contract. The borrower shall obtain from the engineer a completed 
final statement of engineering fees, which must be supported by detailed 
information as appropriate. RUS Form 234, Final Statement of Engineering 
Fee, may be used. All computations of the compensation shall be

[[Page 240]]

made in accordance with the terms of the engineering services contract. 
Closeout documents need not be submitted to RUS unless specifically 
requested by RUS on a case by case basis.

Sec. 1724.32  Inspection and certification of work order construction.

    The provisions of this section apply to all borrower electric system 
facilities regardless of the source of financing.
    (a) The borrower shall ensure that all field inspection and related 
services are performed within 6 months of the completion of 
construction, and are performed by a licensed engineer, except that a 
subordinate of the licensed engineer may make the inspection, provided 
the following conditions are met:
    (1) The inspection by the subordinate is satisfactory to the 
borrower;
    (2) This practice is acceptable under applicable requirements of the 
States in which the facilities are located;
    (3) The subordinate is experienced in making such inspections;
    (4) The name of the person making the inspection is included in the 
certification; and
    (5) The licensed engineer signs such certification which appears on 
the inventory of work orders.
    (b) The inspection shall include a representative and sufficient 
amount of construction listed on each RUS Form 219, Inventory of Work 
Orders (or comparable form), being inspected to assure the engineer that 
the construction is acceptable. Each work order that was field inspected 
shall be indicated on RUS Form 219 (or comparable form.) The inspection 
services shall include, but not be limited to, the following:
    (1) Determination that construction conforms to RUS specifications 
and standards and to the requirements of the National Electrical Safety 
Code (NESC), State codes, and local codes;
    (2) Determination that the staking sheets or as-built drawings 
represent the construction completed and inspected;
    (3) Preparation of a list of construction clean-up notes and staking 
sheet discrepancies to be furnished to the owner to permit correction of 
construction, staking sheets, other records, and work order inventories;
    (4) Reinspection of construction corrected as a result of the 
engineer's report;
    (5) Noting, initialing, and dating the staking or structure sheets 
or as-built drawings and noting the corresponding work order entry for 
line construction; and
    (6) Noting, initialing, and dating the as-built drawings or sketches 
for generating plants, substations, and other major facilities.
    (c) Certification. (1) The following certification must appear on 
all inventories of work orders:

    I hereby certify that sufficient inspection has been made of the 
construction reported by this inventory to give me reasonable assurance 
that the construction complies with applicable specifications and 
standards and meets appropriate code requirements as to strength and 
safety. This certification is in accordance with acceptable engineering 
practice.

    (2) A certification must also include the name of the inspector, 
name of the firm, signature of the licensed engineer, the engineer's 
State license number, and the date of signature.

Secs. 1724.33-1724.39  [Reserved]

                   Subpart D--Electric System Planning

Sec. 1724.40  General.

    Borrowers shall have ongoing, integrated planning to determine their 
short-term and long-term needs for plant additions, improvements, 
replacements, and retirements for their electric systems. The primary 
components of the planning system consist of long-range engineering 
plans and construction work plans. Long-range engineering plans identify 
plant investments required over a long-range period, 10 years or more. 
Construction work plans specify and document plant requirements for a 
shorter term, 2 to 4 years. Long-range engineering plans and 
construction work plans shall be in accordance with part 1710, subpart 
F, of this chapter. See also RUS Bulletins 1724D-101A, Electric System 
Long-Range Planning Guide, and 1724D-101B, System Planning Guide, 
Construction

[[Page 241]]

Work Plans, for additional guidance. These bulletins are available from 
Program Development and Regulatory Analysis, Rural Utilities Service, 
U.S. Department of Agriculture, Stop 1522, 1400 Independence Ave., SW., 
Washington, DC 20250-1522.

Secs. 1724.41-1724.49  [Reserved]

                    Subpart E--Electric System Design

Sec. 1724.50  Compliance with National Electrical Safety Code (NESC).

    The provisions of this section apply to all borrower electric system 
facilities regardless of the source of financing.
    (a) A borrower shall ensure that its electric system, including all 
electric distribution, transmission, and generating facilities, is 
designed, constructed, operated, and maintained in accordance with all 
applicable provisions of the most current and accepted criteria of the 
National Electrical Safety Code (NESC) and all applicable and current 
electrical and safety requirements of any State or local governmental 
entity. Copies of the NESC may be obtained from the Institute of 
Electrical and Electronic Engineers, Inc., 445 Hoes Lane, Piscataway, NJ 
08855. This requirement applies to the borrower's electric system 
regardless of the source of financing.
    (b) Any electrical standard requirements established by RUS are in 
addition to, and not in substitution for or a modification of, the most 
current and accepted criteria of the NESC and any applicable electrical 
or safety requirements of any State or local governmental entity.
    (c) Overhead distribution circuits shall be constructed with not 
less than the Grade C strength requirements as described in Section 26, 
Strength Requirements, of the NESC when subjected to the loads specified 
in NESC Section 25, Loadings for Grades B and C. Overhead transmission 
circuits shall be constructed with not less than the Grade B strength 
requirements as described in NESC Section 26.

Sec. 1724.51  Design requirements.

    The provisions of this section apply to all borrower electric system 
facilities regardless of the source of financing.
    (a) Distribution. All distribution facilities must conform to the 
applicable RUS construction standards and utilize RUS accepted 
materials.
    (b) Transmission lines. (1) All transmission line design data must 
be approved by RUS.
    (2) Design data consists of all significant design features, 
including, but not limited to, transmission line design data summary, 
general description of terrain, right-of-way calculations, discussion 
concerning conductor and structure selection, conductor sag and tension 
information, design clearances, span limitations due to clearances, 
galloping or conductor separation, design loads, structure strength 
limitations, insulator selection and design, guying requirements, and 
vibration considerations. For lines composed of steel or concrete poles, 
or steel towers, in which load information will be used to purchase the 
structures, the design data shall also include loading trees, structure 
configuration and selection, and a discussion concerning foundation 
selection.
    (3) Line design data for uprating transmission lines to higher 
voltage levels or capacity must be approved by RUS.
    (4) Transmission line design data which has received RUS approval in 
connection with a previous transmission line construction project for a 
particular borrower is considered approved by RUS for that borrower, 
provided that:
    (i) The conditions on the project fall within the design data 
previously approved; and
    (ii) No significant NESC revisions have occurred.
    (c) Substations. (1) All substation design data must be approved by 
RUS.
    (2) Design data consists of all significant design features, 
including, but not limited to, a discussion of site considerations, oil 
spill prevention measures, design considerations covering voltage, 
capacity, shielding, clearances, number of low and high voltage phases, 
major equipment, foundation design parameters, design loads for line 
support

[[Page 242]]

structures and the control house, seismic considerations, corrosion, 
grounding, protective relaying, and AC and DC auxiliary systems. 
Reference to applicable safety codes and construction standards are also 
to be included.
    (3) Substation design data which has received RUS approval in 
connection with a previous substation construction project for a 
particular borrower is considered approved by RUS for that borrower, 
provided that:
    (i) The conditions on the project fall within the design data 
previously approved; and
    (ii) No significant NESC revisions have occurred.
    (d) Generating facilities. (1) This section covers all portions of a 
generating plant including plant buildings, the generator step-up 
transformer, and the transmission switchyard at a generating plant. 
Warehouses and equipment service buildings not associated with 
generation plants are covered under paragraph (e) of this section. 
Generation plant buildings must meet the requirements of paragraph 
(e)(1) of this section.
    (2) For all new generation units and for all repowering projects, 
the design outline shall be approved by RUS, unless RUS determines that 
a design outline is not needed for a particular project.
    (3) The design outline will include all significant design criteria. 
During the early stages of the project, RUS will, in consultation with 
the borrower and its consulting engineer, identify the specific items 
which are to be included in the design outline.
    (e) Headquarters--(1) Applicable laws. The design and construction 
of headquarters facilities shall comply with all applicable Federal, 
State, and local laws and regulations, including, but not limited to:
    (i) Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. 794), 
which states that no qualified individual with a handicap shall, solely 
by reason of their handicap, be excluded from participation in, be 
denied the benefits of, or be subject to discrimination under any 
program or activity receiving Federal financial assistance. The Uniform 
Federal Accessibility Standards (41 CFR part 101-19, subpart 101-19.6, 
appendix A) are the applicable standards for all new or altered borrower 
buildings, regardless of the source of financing.
    (ii) The Architectural Barriers Act of 1968 (42 U.S.C. 4151), which 
requires that buildings financed with Federal funds are designed and 
constructed to be accessible to the physically handicapped.
    (iii) The Earthquake Hazards Reduction Act of 1977 (42 U.S.C. 7701 
et seq.), and Executive Order 12699, Seismic Safety of Federal and 
Federally Assisted or Regulated New Building Construction (3 CFR 1990 
Comp., p. 269). Appropriate seismic safety provisions are required for 
new buildings for which RUS provides financial assistance. (See part 
1792, subpart C, of this chapter.)
    (2) The borrower shall provide evidence, satisfactory in form and 
substance to the Administrator, that each building will be designed and 
built in compliance with all Federal, State, and local requirements.
    (f) Communications and control. (1) This section covers microwave 
and powerline carrier communications systems, load control, and 
supervisory control and data acquisition (SCADA) systems.
    (2) The performance considerations for a new or replacement master 
system must be approved by RUS. A master system includes the main 
controller and related equipment at the main control point. Performance 
considerations include all major system features and their 
justification, including, but not limited to, the objectives of the 
system, the types of parameters to be controlled or monitored, the 
communication media, alternatives considered, and provisions for future 
needs.

Sec. 1724.52  Permitted deviations from RUS construction standards.

    The provisions of this section apply to all borrower electric system 
facilities regardless of the source of financing.
    (a) Structures for raptor protection. (1) RUS standard distribution 
line structures may not have the extra measure of protection needed in 
areas frequented by eagles and other large

[[Page 243]]

raptors to protect such birds from electric shock due to physical 
contact with energized wires. Where raptor protection in the design of 
overhead line structures is required by RUS; a Federal, State or local 
authority with permit or license authority over the proposed 
construction; or where the borrower voluntarily elects to comply with 
the recommendations of the U.S. Fish and Wildlife Service or State 
wildlife agency, borrowers are permitted to deviate from RUS 
construction standards, provided:
    (i) Structures are designed and constructed in accordance with 
``Suggested Practices for Raptor Protection on Powerlines: The State of 
the Art in 1996'' (Suggested Practices for Raptor Protection); and,
    (ii) Structures are in accordance with the NESC and applicable State 
and local regulations.
    (2) Any deviation from the RUS construction standards for the 
purpose of raptor protection, which is not in accordance with the 
Suggested Practices for Raptor Protection, must be approved by RUS prior 
to construction. ``Suggested Practices for Raptor Protection on 
Powerlines: The State of the Art in 1996,'' published by the Edison 
Electric Institute/Raptor Research Foundation, is hereby incorporated by 
reference. This incorporation by reference is approved by the Director 
of the Office of the Federal Register in accordance with 5 U.S.C. 552(a) 
and 1 CFR part 51. Copies of this publication may be obtained from the 
Raptor Research Foundation, Inc., c/o Jim Fitzpatrick, Treasurer, 
Carpenter Nature Center, 12805 St. Croix Trail South, Hastings, 
Minnesota 55033. It is also available for inspection during normal 
business hours at RUS, Electric Staff Division, 1400 Independence 
Avenue, SW., Washington, DC, Room 1246-S, and at the Office of the 
Federal Register, 800 North Capitol Street, NW., Suite 700, Washington, 
DC.
    (b) Transformer neutral connections. Where it is necessary to 
separate the primary and secondary neutrals to provide the required 
electric service to a consumer, the RUS standard transformer secondary 
neutral connections may be modified in accordance with Rule 97D2 of the 
NESC.
    (c) Lowering of neutral conductor on overhead distribution lines. 
(1) It is permissible to lower the neutral attachment on standard 
construction pole-top assemblies an additional distance not exceeding 
two feet (0.6 m) for the purpose of economically meeting the clearance 
requirements of the NESC.
    (2) It is permissible to lower the transformer and associated 
neutral attachment up to two feet (0.6 m) to provide adequate clearance 
between the cutouts and single-phase, conventional distribution 
transformers.
    (3) It is permissible to lower the neutral attachment on standard 
construction pole-top assemblies an additional distance of up to six 
feet (2 m) for the purpose of performing construction and future line 
maintenance on these assemblies from bucket trucks designed for such 
work.

Sec. 1724.53  Preparation of plans and specifications.

    The provisions of this section apply to all borrower electric system 
facilities regardless of the source of financing.
    (a) General. (1) The borrower (acting through the engineer, if 
applicable) shall prepare plans and specifications that adequately 
represent the construction to be performed.
    (2) Plans and specifications for distribution, transmission, or 
generating facilities must be based on a construction work plan (as 
amended, if applicable), engineering study or construction program which 
has been approved by RUS if financing for the facilities will at any 
time be requested from RUS.
    (b) Composition of plans and specifications package. (1) Whether 
built by force account or contract, each set of plans and specifications 
must include:
    (i) Distribution lines. Specifications and drawings, staking sheets, 
key map and appropriate detail maps;
    (ii) Transmission lines. Specifications and drawings, transmission 
line design data manual, vicinity maps of the project, a one-line 
diagram, and plan and profile sheets;
    (iii) Substations. Specifications and drawings, including a one-line 
diagram, plot and foundation plan, grounding plan, and plans and 
elevations of structure and equipment, as well as all

[[Page 244]]

other necessary construction drawings, in sufficient detail to show 
phase spacing and ground clearances of live parts;
    (iv) Headquarters. Specifications and drawings, including:
    (A) A plot plan showing the location of the proposed building plus 
paving and site development;
    (B) A one line drawing (floor plan and elevation view), to scale, of 
the proposed building with overall dimensions shown; and
    (C) An outline specification including materials to be used (type of 
frame, exterior finish, foundation, insulation, etc.); and
    (v) Other facilities (e.g., generation and communications and 
control facilities). Specifications and drawings, as necessary and in 
sufficient detail to accurately define the scope and quality of work 
required.
    (2) For contract work, the appropriate standard RUS construction 
contract form shall be used as required by part 1726 of this chapter.

Sec. 1724.54  Requirements for RUS approval of plans and specifications.

    The provisions of this section apply only to RUS financed electric 
system facilities.
    (a) For any contract subject to RUS approval in accordance with part 
1726 of this chapter, the borrower shall obtain RUS approval of the 
plans and specifications, as part of the proposed bid package, prior to 
requesting bids. RUS may require approval of other plans and 
specifications on a case by case basis.
    (b) Distribution lines. RUS approval of the plans and specifications 
for distribution line construction is not required if standard RUS 
drawings, specifications, RUS accepted material, and standard RUS 
contract forms (as required by part 1726 of this chapter) are used. 
Drawings, plans and specifications for nonstandard distribution 
construction must be submitted to RUS and receive approval prior to 
requesting bids on contracts or commencement of force account 
construction.
    (c) Transmission lines. (1) Plans and specifications for 
transmission construction projects which are not based on RUS approved 
line design data or do not use RUS standard structures must receive RUS 
approval prior to requesting bids on contracts or commencement of force 
account construction.
    (2) Unless RUS approval is required by paragraph (a) of this 
section, plans and specifications for transmission construction which 
use previously approved design data and standard structures do not 
require RUS approval. Plans and specifications for related work, such as 
right-of-way clearing, equipment, and materials, do not require RUS 
approval unless required by paragraph (a) of this section.
    (d) Substations. (1)(i) Plans and specifications for all new 
substations must receive RUS approval prior to requesting bids on 
contracts or commencement of force account construction, unless:
    (A) The substation design has been previously approved by RUS; and
    (B) No significant NESC revisions have occurred.
    (ii) The borrower shall notify RUS in writing that a previously 
approved design will be used, including identification of the previously 
approved design.
    (2) Unless RUS approval is required by paragraph (a) of this 
section, plans and specifications for substation modifications and for 
substations using previously approved designs do not require RUS 
approval.
    (e) Generation facilities. (1) This paragraph (e) covers all 
portions of a generating plant including plant buildings, the generator 
step-up transformer, and the transmission switchyard at a generating 
plant. Warehouses and equipment service buildings not associated with 
generation plants are covered under paragraph (f) of this section.
    (2) The borrower shall obtain RUS approval, prior to issuing 
invitations to bid, of the terms and conditions for all generating plant 
equipment or construction contracts which will cost $1,500,000 or more. 
Unless RUS approval is required by paragraph (a) of this section, plans 
and specifications for generating plant equipment and construction do 
not require RUS approval.
    (f) Headquarters buildings. (1) This paragraph (f) covers office 
buildings, warehouses, and equipment service buildings. Generating plant 
buildings are covered under paragraph (e) of this section.

[[Page 245]]

    (2) The borrower shall obtain RUS approval of the plans and 
specifications for all headquarters buildings prior to issuing 
invitations to bid. The borrower shall also submit two copies of RUS 
Form 740g, Application for Headquarters Facilities. The application must 
show surface area and estimated cost breakdown between office building 
space and space for equipment warehousing and service facilities. This 
form is available from Program Development and Regulatory Analysis, 
Rural Utilities Service, U.S. Department of Agriculture, Stop 1522, 1400 
Independence Ave., SW., Washington, DC 20250-1522.
    (g) Communications and control facilities. (1) This paragraph (g) 
covers microwave and powerline carrier communications systems, load 
control, and supervisory control and data acquisition (SCADA) systems.
    (2) The borrower shall obtain RUS approval, prior to issuing 
invitations to bid, of the terms and conditions for communications and 
control facilities contracts which will cost $500,000 or more. Unless 
RUS approval is required by paragraph (a) of this section, plans and 
specifications for communications and control facilities do not require 
RUS approval.
    (h) Terms and conditions include the RUS standard form of contract, 
general and special conditions, and any other non-technical provisions 
of the contract. Terms and conditions which have received RUS approval 
in connection with a previous contract for a particular borrower are 
considered approved by RUS for that borrower.

Sec. 1724.55  Dam safety.

    (a) The provisions of this section apply only to RUS financed 
electric system facilities.
    (1)(i) Any borrower that owns or operates a RUS financed dam must 
utilize the``Federal Guidelines for Dam Safety,''(Guidelines), as 
applicable. A dam, as more fully defined in the Guidelines, is generally 
any artificial barrier which either:
    (A) Is 25 feet (8 m) or more in height; or
    (B) Has an impounding capacity at maximum water storage elevation of 
55 acre-feet (68,000 m<SUP>3</SUP>) or more.
    (ii) The``Federal Guidelines for Dam Safety,''FEMA 93, June, 1979, 
published by the Federal Emergency Management Agency (FEMA), is hereby 
incorporated by reference. This incorporation by reference is approved 
by the Director of the Office of the Federal Register in accordance with 
5 U.S.C. 552(a) and 1 CFR part 51. Copies of the``Federal Guidelines for 
Dam Safety''may be obtained from the Federal Emergency Management 
Agency, Mitigation Directorate, PO Box 2012, Jessup, MD 20794. It is 
also available for inspection during normal business hours at RUS, 
Electric Staff Division, 1400 Independence Avenue, SW., Washington, DC, 
Room 1246-S, and at the Office of the Federal Register, 800 North 
Capitol Street, NW., Suite 700, Washington, DC.
    (2) The borrower shall evaluate the hazard potential of its dams in 
accordance with Appendix E of the U.S. Army Corps of Engineers 
Engineering and Design Dam Safety Assurance Program, ER 1110-2-1155, 
July 31, 1995. A summary of the hazard potential criteria is included 
for information as Appendix A to this subpart. The U.S. Army Corps of 
Engineers Engineering and Design Dam Safety Assurance Program, ER 1110-
2-1155, July 31, 1995, published by the United States Army Corps of 
Engineers, is hereby incorporated by reference. This incorporation by 
reference is approved by the Director of the Office of the Federal 
Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies of 
the U. S. Army Corps of Engineers Engineering and Design Dam Safety 
Assurance Program may be obtained from the U. S. Army Corps of 
Engineers, Publications Depot, 2803 52nd Ave., Hyattsville, MD 20781. It 
is also available for inspection during normal business hours at RUS, 
Electric Staff Division, 1400 Independence Avenue, SW., Washington, DC, 
Room 1246-S, and at the Office of the Federal Register, 800 North 
Capitol Street, NW., Suite 700, Washington, DC.
    (3) For high hazard potential dams, the borrower must obtain an 
independent review of the design and critical features of construction. 
The reviewer must have demonstrated experience in the design and 
construction of dams of a similar size and nature. The

[[Page 246]]

reviewer must be a qualified engineer not involved in the original 
design of the dam or a Federal or State agency responsible for dam 
safety. The reviewer must be approved by RUS.
    (4) The independent review of design must include, but not 
necessarily be limited to, plans, specifications, design calculations, 
subsurface investigation reports, hydrology reports, and redesigns which 
result from encountering unanticipated or unusual conditions during 
construction.
    (5) The independent review of construction shall include:
    (i) Foundation preparation and treatment. When the foundation has 
been excavated and exposed, and before critical structures such as earth 
embankments or concrete structures are placed thereon, the borrower 
shall require the reviewer to conduct an independent examination of the 
foundation to ensure that suitable foundation material has been reached 
and that the measures proposed for treatment of the foundation are 
adequate. This examination must extend to the preparation and treatment 
of the foundation for the abutments.
    (ii) Fill placement. During initial placement of compacted fill 
materials, the borrower shall require the reviewer to conduct an 
independent examination to ensure that the materials being used in the 
various zones are suitable and that the placement and compaction 
procedures being used by the contractor will result in a properly 
constructed embankment.
    (6) If the reviewer disagrees with any aspect of the design or 
construction which could affect the safety of the dam, then the borrower 
must meet with the design engineer and the reviewer to resolve the 
disagreements.
    (7) Emergency action plan. For high hazard potential dams, the 
borrower must develop an emergency action plan incorporating preplanned 
emergency measures to be taken prior to and following a potential dam 
failure. The plan should be coordinated with local government and other 
authorities involved with the public safety and be approved by the 
borrower's board of directors.
    (b)(1) For more information and guidance, the following publications 
regarding dam safety are available from FEMA:
    (i)``Emergency Action Planning Guidelines for Dams,''FEMA 64.
    (ii)``Federal Guidelines for Earthquake Analysis and Design of 
Dams,''FEMA 65.
    (iii)``Federal Guidelines for Selecting and Accommodating Inflow 
Design Floods for Dams,''FEMA 94.
    (iv)``Dam Safety: An Owner's Guidance Manual,''FEMA 145, August, 
1987.
    (2) These publications may be obtained from the Federal Emergency 
Management Agency, Mitigation Directorate, PO Box 2012, Jessup, MD 
20794.

Secs. 1724.56--1724.69  [Reserved]

 Appendix A to Subpart E to Part 1724--Hazard Potential Classification 
                        for Civil Works Projects

    The source for this appendix is U.S. Army Corps of Engineers 
Engineering and Design Dam Safety Assurance Program, ER 1110-2-1155, 
Appendix E. Appendix E is available from the address listed in 
Sec. 1724.55(a)(2).

[[Page 247]]



--------------------------------------------------------------------------------------------------------------------------------------------------------
                 Category <INF>1</INF>                                   Low                             Significant                            High
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Loss of Life <INF>2</INF>.......................         None expected (due to rural  Uncertain (rural location with few      Certain (one or more extensive
                                                      location with no permanent    residences and only transient or          residential, commercial or
                                                structures for human habitation)             industrial development)            industrial development).
Lifeline Losses <INF>3</INF>...........................  No disruption of services--repairs  Disruption of essential facilities   Disruption of critical facilities
                                              are cosmetic or rapidly repairable                          and access                         and access.
                                                                          damage
Property Losses <INF>4</INF>...........................         Private agricultural lands,            Major public and private        Extensive public and private
                                                equipment and isolated buildings                          facilities                         facilities.
Environmental Losses <INF>5</INF>......................          Minimal incremental damage           Major mitigation required        Extensive mitigation cost or
                                                                                                                                 impossible to mitigate.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
<INF>1</INF> Categories are based upon project performance and do not apply to individual structures within a project.
<INF>2</INF> Loss of life potential based upon inundation mapping of area downstream of the project. Analysis of loss of life potential should take into account
  the extent of development and associated population at risk, time of flood wave travel and warning time.
<INF>3</INF> Indirect threats to life caused by the interruption of lifeline services due to project failure, or operation, i.e., direct loss of (or access to)
  critical medical facilities or loss of water or power supply, communications, power supply, etc.
<INF>4</INF> Direct economic impact of value of property damages to project facilities and down stream property and indirect economic impact due to loss of project
  services, i.e., impact on navigation industry of the loss of a dam and navigation pool, or impact upon a community of the loss of water or power
  supply.
<INF>5</INF> Environmental impact downstream caused by the incremental flood wave produced by the project failure, beyond which would normally be expected for the
  magnitude flood event under a without project conditions.


[[Page 248]]

                      Subpart F--RUS Contract Forms

Sec. 1724.70  Standard forms of contracts for borrowers.

    (a) General. The standard loan agreement between RUS and its 
borrowers provides that, in accordance with applicable RUS regulations 
in this chapter, the borrower shall use standard forms of contract 
promulgated by RUS for construction, procurement, engineering services, 
and architectural services financed by a loan made or guaranteed by RUS. 
(See section 5.16 of appendix A to subpart C of part 1718 of this 
chapter.) This subpart prescribes RUS procedures in promulgating 
electric program standard contract forms and identifies those forms that 
borrowers are required to use.
    (b) Contract forms. RUS promulgates standard contract forms, 
identified in the List of Required Contract Forms, Sec. 1724.74(c), that 
borrowers are required to use in accordance with the provisions of this 
part. In addition, RUS promulgates standard contract forms identified in 
the List of Guidance Contract Forms contained in Sec. 1724.74(c) that 
the borrowers may but are not required to use in the planning, design, 
and construction of their electric systems. Borrowers are not required 
to use these guidance contract forms in the absence of an agreement to 
do so.

[63 FR 58284, Oct. 30, 1998]

Sec. 1724.71  Borrower contractual obligations.

    (a) Loan agreement. As a condition of a loan or loan guarantee under 
the RE Act, borrowers are normally required to enter into RUS loan 
agreements pursuant to which the borrower agrees to use RUS standard 
forms of contracts for construction, procurement, engineering services 
and architectural services financed in whole or in part by the RUS loan. 
Normally, this obligation is contained in section 5.16 of the loan 
contract. To comply with the provisions of the loan agreements as 
implemented by this part, borrowers must use those forms of contract 
(hereinafter sometimes called``listed contract forms'') identified in 
the List of Required Standard Contract Forms contained in 
Sec. 1724.74(c).
    (b) Compliance. If a borrower is required by this part to use a 
listed contract form, the borrower shall use the listed contract form in 
the format available from RUS. The forms shall not be retyped, changed, 
modified, or altered in any manner not specifically authorized in this 
part or approved by RUS in writing. Any modifications approved by RUS 
must be clearly shown so as to indicate the difference from the listed 
contract form. Electronic reproduction is not acceptable.
    (c) Amendment. Where a borrower has entered into a contract in the 
form required by this part, no change may be made in the terms of the 
contract, by amendment, waiver or otherwise, without the prior written 
approval of RUS.
    (d) Waiver. RUS may waive for good cause, on a case by case basis, 
the requirements imposed on a borrower pursuant to this part. Borrowers 
seeking a waiver by RUS must provide RUS with a written request 
explaining the need for the waiver.
    (e) Violations. A failure on the part of the borrower to use listed 
contracts as prescribed in this part is a violation of the terms of its 
loan agreement with RUS and RUS may exercise any and all remedies 
available under the terms of the agreement or otherwise.

[63 FR 58285, Oct. 30, 1998]

Sec. 1724.72  Notice and publication of listed contract forms.

    (a) Notice. Upon initially entering into a loan agreement with RUS, 
borrowers will be provided with all listed contract forms. Thereafter, 
new or revised listed contract forms promulgated by RUS, including RUS 
approved exceptions and alternatives, will be sent by regular or 
electronic mail to the address of the borrower as identified in its loan 
agreement with RUS.
    (b) Availability. Listed contract forms are published by RUS. 
Interested parties may obtain the forms from: Rural Utilities Service, 
Program Development and Regulatory Analysis, U.S. Department of 
Agriculture, Stop 1522, 1400 Independence Avenue, SW., Stop 1522, 
Washington, DC 20250-1522, telephone number (202) 720-8674. The list of 
contract forms can be found in

[[Page 249]]

Sec. 1724.74(c), List of Required Contract Forms.

[63 FR 58285, Oct. 30, 1998]

Sec. 1724.73  Promulgation of new or revised contract forms.

    RUS may, from time to time, undertake to promulgate new contract 
forms or revise or eliminate existing contract forms. In so doing, RUS 
shall publish notice of rulemaking in the Federal Register announcing, 
as appropriate, a revision in, or a proposal to amend Sec. 1724.74, List 
of Electric Program Standard Contract Forms. The amendment may change 
the existing identification of a listed contract form; for example, 
changing the issuance date of a listed contract form or by identifying a 
new required contract form. The notice of rulemaking will describe the 
new standard contract form or the substantive change in the listed 
contract form, as the case may be, and the issues involved. The standard 
contract form or relevant portions thereof may be appended to the 
supplementary information section of the notice of rulemaking. As 
appropriate, the notice of rulemaking shall provide an opportunity for 
interested persons to provide comments. A copy of each such Federal 
Register document shall be sent by regular or electronic mail to all 
borrowers.

[63 FR 58285, Oct. 30, 1998]

Sec. 1724.74  List of electric program standard contract forms.

    (a) General. The following is a list of RUS electric program 
standard contract forms for architectural and engineering services. 
Paragraph (c) of this section contains the list of required contract 
forms, i.e., those forms of contracts that borrowers are required to use 
by the terms of their RUS loan agreements as implemented by the 
provisions of this part. Paragraph (d) of this section contains the list 
of guidance contract forms, i.e., those forms of contracts provided as 
guidance to borrowers in the planning, design, and construction of their 
systems. All of these forms are available from RUS. See Sec. 1724.72(b) 
for availability of these forms.
    (b) Issuance date. Where required by this part to use a standard 
form of contract in connection with RUS financing, the borrower shall 
use that form identified by issuance date in the List of Required 
Contract Forms in paragraph (c) of this section, as most recently 
published as of the date the borrower executes the contract.
    (c) List of required contract forms. (1) RUS Form 211, Rev. 6-98, 
Engineering Service Contract for the Design and Construction of a 
Generating Plant. This form is used for engineering services for 
generating plant construction.
    (2) RUS Form 220, Rev. 6-98, Architectural Services Contract. This 
form is used for architectural services for building construction.
    (3) RUS Form 236, Rev. 6-98, Engineering Service Contract--Electric 
System Design and Construction. This form is used for engineering 
services for distribution, transmission, substation, and communications 
and control facilities.
    (d) List of guidance contract forms. (1) RUS Form 179, Rev. 9-66, 
Architects and Engineers Qualifications. This form is used to document 
architects and engineers qualifications.
    (2) RUS Form 215, Rev. 5-67, Engineering Service Contract--System 
Planning. This form is used for engineering services for system 
planning.
    (3) RUS Form 234, Rev. 3-57, Final Statement of Engineering Fee. 
This form is used for the closeout of engineering services contracts.
    (4) RUS Form 241, Rev. 3-56, Amendment of Engineering Service 
Contract. This form is used for amending engineering service contracts.
    (5) RUS Form 244, Rev. 12-55, Engineering Service Contract--Special 
Services. This form is used for miscellaneous engineering services.
    (6) RUS Form 258, Rev. 4-58, Amendment of Engineering Service 
Contract--Additional Project. This form is used for amending engineering 
service contracts to add an additional project.
    (7) RUS Form 284, Rev. 2-84, Final Statement of Cost for 
Architectural Service. This form is used for the closeout of 
architectural services contracts.
    (8) RUS Form 297, Rev. 12-55, Engineering Service Contract--Retainer 
for Consultation Service. This form is used

[[Page 250]]

for engineering services for consultation service on a retainer basis.
    (9) RUS Form 459, Rev. 9-58, Engineering Service Contract--Power 
Study. This form is used for engineering services for power studies.

[63 FR 58285, Oct. 30, 1998]

Secs. 1724.75-1724.99  [Reserved]
```