[Federal Register Volume 63, Number 124 (Monday, June 29, 1998)]
[Rules and Regulations]
[Pages 35312-35330]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-16792]



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_______________________________________________________________________

Part II





Department of Agriculture





_______________________________________________________________________



Rural Utilities Service



_______________________________________________________________________



7 CFR Part 1724



Electric Engineering, Architectural Services and Design Policies and 
Procedures; Final Rule

Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 /Rules 
and Regulations

[[Page 35312]]



DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1724

RIN 0572-AA48


Electric Engineering, Architectural Services and Design Policies 
and Procedures

AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Rural Utilities Service (RUS) is amending its regulations 
on engineering and architectural services. These policies and 
procedures are presently contained in seven RUS bulletins, which will 
be rescinded after this regulation becomes effective. This rule 
simplifies and codifies RUS policy and procedures to be followed by 
electric borrowers relating to architectural and engineering services. 
This rule also simplifies and codifies RUS requirements for the 
planning and design of electric distribution, transmission, and 
generation systems and facilities owned by RUS borrowers.

DATES: Effective Date: July 29, 1998.
    Incorporation by Reference: Incorporation by reference of certain 
publications listed in this final rule is approved by the Director of 
the Federal Register as of July 29, 1998.

FOR FURTHER INFORMATION CONTACT: Mr. Fred J. Gatchell, Deputy Director, 
Electric Staff Division, Rural Utilities Service, U.S. Department of 
Agriculture, Stop 1569, 1400 Independence Ave., SW., Washington, DC 
20250-1569. Telephone: (202) 720-1398. FAX: (202) 720-7491. E-mail: 
<a href="/cdn-cgi/l/email-protection#86e0e1e7f2e5eee3eac6f4f3f5a8f3f5e2e7a8e1e9f0"><span class="__cf_email__" data-cfemail="98fefff9ecfbf0fdf4d8eaedebb6edebfcf9b6fff7ee">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Executive Order 12372

    This rule is excluded from the scope of Executive Order 12372, 
Intergovernmental Consultation, which may require consultation with 
State and local officials. A Final Rule Related Notice entitled 
``Department Programs and Activities Excluded from Executive Order 
12372,'' (50 FR 47034) exempted RUS loans and loan guarantees from 
coverage under this order.

Executive Order 12866

    This rule has been determined to be not significant for the 
purposes of Executive Order 12866 and, therefore, has not been reviewed 
by the Office of Management and Budget (OMB).

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. RUS has determined that this rule meets the applicable 
standards provided in section 3 of the Executive Order.

Regulatory Flexibility Act Certification

    The Administrator of RUS has determined that a rule relating to the 
RUS electric loan program is not a rule as defined in the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.) and, therefore, the Regulatory 
Flexibility Act does not apply to this rule.

National Environmental Policy Act Certification

    The Administrator of RUS has determined that this rule will not 
significantly affect the quality of the human environment as defined by 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). 
Therefore, this action does not require an environmental impact 
statement or assessment.

Catalog of Federal Domestic Assistance

    The program described by this rule is listed in the Catalog of 
Federal Domestic Assistance programs under No. 10.850, Rural 
Electrification Loans and Loan Guarantees. This catalog is available on 
a subscription basis from the Superintendent of Documents, the United 
States Government Printing Office, Washington, DC 20402-9325.

National Performance Review

    The regulatory action is being taken as part of the National 
Performance Review program to eliminate unnecessary regulations and 
improve those that remain in force.

Information Collection and Recordkeeping Requirements

    The recordkeeping and reporting burdens contained in this rule will 
be submitted to OMB for approval. The paperwork contained in this rule 
will not be effective until approved by OMB.
    Send questions or comments regarding any aspect of this collection 
of information, including suggestions for reducing the burden, to F. 
Lamont Heppe, Jr., Director, Program Development and Regulatory 
Analysis, Rural Utilities Service, U.S. Department of Agriculture, Stop 
1522, 1400 Independence Ave., SW., Washington, DC 20250-1522.

Unfunded Mandates

    This rule contains no Federal mandates (under the regulatory 
provision of Title II of the Unfunded Mandates Reform Act of 1995) for 
State, local, and tribal governments or the private sector. Thus, this 
rule is not subject to the requirements of sections 202 and 205 of the 
Unfunded Mandates Reform Act of 1995.

Background

    RUS has promulgated regulations pertaining to the design and 
construction of RUS electric borrower's systems. These regulations are 
contained in 7 CFR chapter XVII, part 1724, Electric Engineering, 
Architectural Services and Design Policies and Procedures, which 
describes policies and procedures pertaining to RUS electric borrower 
procurement of architectural and engineering services for planning, 
design, and construction management of buildings and electric utility 
plant such as distribution and transmission lines, substations, 
communications and control systems, and generating plants.
    The policies and procedures covered by this rule are presently 
contained in RUS Bulletins 41-1, Engineering Services for Electric 
Borrowers; 42-1, Architectural Services for Electric Borrowers; 60-1, 
Standards for the Preparation of Circuit Diagrams, Electrical Data 
Sheets, and Other Drawings for Systems of Electrical Borrowers; 60-2, 
Electric System Capacity; 80-11, Reports of Progress of Construction 
and Engineering Services; 81-9, Preparation of Plans and Specifications 
for Distribution and Transmission Facilities; and 86-2, Pre-
Construction Activities for Headquarters Facilities for Electric 
Borrowers. The previous policies and procedures are being changed and 
updated by this rule. Upon the effective date of this rule, RUS 
Bulletins 41-1, 42-1, 60-1, 60-2, 80-11, 81-9, and 86-2 will be 
superseded and rescinded.
    The major substantive changes are as follows:
    (a) This rule eliminates the requirement for RUS approval of the 
borrower's selection of the architect and of the engineer.
    (b) This rule eliminates the requirement for RUS approval of 
architectural services contracts and distribution and transmission 
engineering services contracts for all facilities, and generation 
engineering services contracts if the facilities are not financed by 
RUS.
    (c) This rule eliminates the requirement for RUS approval for 
closeout of architectural or engineering services contracts.
    (d) This rule eliminates the requirement for submittal of progress 
reports to RUS for facilities not financed by RUS.
    (e) This rule eliminates the requirement for RUS approval of many

[[Page 35313]]

plans and specifications. However, many requirements, such as the 
National Electrical Safety Code (NESC), Occupational Safety and Health 
Act of 1970 (29 U.S.C. 651 et seq.), building accessibility standards, 
RUS standards, specifications, and use of acceptable materials, etc., 
apply regardless of the source of financing.
    (f) Design data that have been approved by RUS may be used for new 
facilities without further approval.
    (g) This rule will simplify and clarify RUS requirements regarding 
system design.
    (h) This rule combines seven bulletins and three contracting forms.

Comments

    On August 4, 1997, RUS published a proposed rule at 62 FR 41883. 
Comments were received from 13 parties, including one cooperative 
association, 2 engineering associations, 3 distribution borrowers, 3 
power supply borrowers, and 4 engineering firms. RUS considered all 
comments. All substantive comments are addressed herein.
    Some commenters suggested that RUS eliminate the requirement that 
RUS borrowers use RUS standards and RUS accepted materials, especially 
when the project is financed from sources other than RUS, and to 
eliminate all RUS approvals when the project is financed from sources 
other than RUS. RUS disagrees with this approach. Any project that is 
part of a borrower's interrelated electrical system can impact the 
collateral that serves as security for loans and guarantees made by 
RUS. Inadequate design or materials in one part of the system, 
regardless of how financed, can adversely affect the entire system. RUS 
considers the requirements that RUS borrowers use RUS standards and 
accepted materials and for RUS approvals as proposed are in the 
government's best interests as lender.
    One commenter suggested that RUS clarify the applicability of prior 
editions of the National Electrical Safety Code (NESC). Since the NESC 
itself specifically addresses facilities that comply with prior 
editions of the NESC, no change is needed in the rule.
    Some commenters suggested that RUS allow non-licensed engineers to 
do certain work and not require all employed engineers to be 
registered. Nothing in the proposed rule requires each and every person 
doing engineering work to be registered. Generally, the rule allows the 
a borrower to use qualified non-licensed subordinates to do engineering 
work to the same extent as allowed by applicable State engineering 
regulations.
    Several commenters suggested that RUS allow more than 6 months for 
inspection of work order construction. RUS disagrees with this comment. 
Inspection of work order construction is important to the safety of the 
public and the borrower's employees, and should be completed as 
expeditiously as possible. Where special circumstances (e.g., unusual 
weather conditions) preclude inspection within six months, the borrower 
may request a waiver of this time requirement.
    Several commenters suggested that RUS not require that inspected 
work orders be noted and initialed on the RUS Form 219. In response to 
this comment, RUS has eliminated the requirement that the inspected 
work orders be noted and initialed, requiring only that the inspected 
work orders be indicated on the RUS Form 219.
    One commenter suggested that RUS not require RUS Form 219 to be 
used for work on facilities not financed by RUS. It is not RUS' intent 
to require RUS Form 219 for work on facilities not financed by RUS. The 
final rule clarifies this point.
    One commenter suggested that RUS not prohibit the borrower's 
manager from certifying the RUS Form 219. RUS believes that its long-
standing requirement for separation of responsibility continues to have 
merit while causing little borrower inconvenience. No change has been 
made in the final rule.
    One commenter suggested that RUS allow as-built drawings as a 
substitute for staking sheets in connection with work order inspection. 
In response to this comment, RUS has changed the final rule 
accordingly.
    Some commenters suggested that RUS allow borrowers to use either an 
architect or an engineer for the design of buildings and that RUS 
should allow the borrower, instead of the architect or engineer, to do 
the construction management. One commenter noted that RUS Form 220 
requires electrical, mechanical, and structural expertise that an 
architect may not have. It is RUS' intent that all work be done by 
individuals and organizations well qualified to do the work. This could 
include having an engineer design buildings with architectural 
assistance, the borrower doing construction management with engineering 
or architectural assistance, or an architect obtaining additional 
electrical, mechanical, and structural expertise. Since nothing in the 
rule is contrary to this interpretation, no change is needed in the 
rule.
    One commenter suggested that there should be specific time limits 
placed on RUS in connection with the approval process. RUS understands 
the commenter's concern, but disagrees with the commenter's solution. 
While RUS makes every effort to support the borrower's schedule by 
providing timely approvals, an automatic approval after a given period 
of time is not consistent with the purpose of RUS approval. No change 
has been made in the final rule.
    Some commenters suggested that RUS use a standard form of 
engineering services contract based on one prepared by the Engineers 
Joint Contract Documents Committee in lieu of the RUS standard form, 
while another commenter suggested that RUS rewrite the standard form of 
engineering services contract to conform to current business practices. 
Other commenters noted that the proposed rule's requirement that the 
engineer's documents comply with all environmental regulations could be 
construed as a warranty or guarantee of services and RUS should modify 
the proposed rule to eliminate this express warranty or guarantee. 
Other commenters suggested that RUS not require engineers to provide 
construction management services nor to ``supervise'' construction. One 
commenter suggested that RUS not require the engineer to ``inspect'' 
construction, and that the engineer's obligation should be to 
``observe'' construction. RUS believes that the RUS standard form of 
engineering services contract, based on many years of successful use by 
RUS borrowers, is still fundamentally sound. Certain specific comments 
have been addressed and changes made in the standard form of 
engineering services contract to clarify certain provisions of the 
contract.
    One commenter noted that RUS stated that only 3 contract forms are 
required, but Sec. 1724.70 lists 12 forms. The forms listed in 
Sec. 1724.70 are available from RUS, but only those so indicated are 
required to be used. The others forms are available for use by 
borrowers but are not required. The final rule clarifies this point.
    Some commenters suggested that RUS not require borrowers to use the 
standard contract forms for small jobs (e.g., less then $75,000 or 5 
percent of total utility plant.) RUS disagrees with this comment. A 
small engineering job can have a significant impact on a much larger 
project. Also, the standard contract forms are only required for RUS 
financed facilities, which tend to be larger projects. No change has 
been made in the final rule.
    Several commenters suggested that RUS not require professional 
liability insurance of $1, 000,000. In response to

[[Page 35314]]

this comment, RUS has changed the required amount of insurance to 
$500,000.
    One commenter suggested that RUS allow computer generated forms in 
lieu of the standard printed version, since ``reasonable modifications 
and additions'' to the standard forms are permitted. RUS disagrees with 
this. RUS believes that the most effective means of maintaining 
accurate and recognizable forms is to continue to use the preprinted 
version. No change has been made in the final rule.
    One commenter suggested that RUS eliminate the sample compensation 
schedule from the RUS Form 220. RUS has determined that the sample 
compensation schedule is not necessary and has been eliminated.
    One commenter suggested that the RUS Forms 220 and 236 require the 
engineer to get the owner's permission to open bids if three or fewer 
bids are received, as is the case in the RUS Form 211. This commenter 
also suggested that RUS Form 220 should require the architect to 
inspect materials and equipment prior to incorporation into the 
project, and to reject those not in conformance with the specification, 
as is the case in the RUS Forms 211 and 236. RUS agrees that the 
standard forms of contract should be consistent in these areas and has 
modified the forms accordingly.

List of Subjects in 7 CFR Part 1724

    Electric power, Incorporation by reference, Loan programs--energy, 
Reporting and recordkeeping requirements, Rural areas.

    In view of the above, RUS hereby amends 7 CFR chapter XVII by 
revising part 1724 to read as follows:

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.
1724.10-1724.19  [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 of part 1724--Hazard Potential 
Classification for Civil Works Projects

Subpart F--RUS Contract Forms

1724.70  List of RUS contract forms for architectural and 
engineering services.
1724.71  Use of printed forms.
1724.72-1724.73  [Reserved]
1724.74  Engineering service contract for the design and 
construction of a generating plant, RUS Form 211.
1724.75  Architectural service contract, RUS Form 220.
1724.76  Engineering service contract--electric system design and 
construction, RUS Form 236.
1724.77-1724.99  [Reserved]

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

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.
    Force account construction means construction performed by the 
borrower's employees.
    NESC means the National Electrical Safety Code.
    Repowering means replacement of the steam generator or the prime 
mover or both at a generating plant.
    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.


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.)

[[Page 35315]]

    (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.


Secs. 1724.10-1724.19  [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 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

[[Page 35316]]

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 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 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

[[Page 35317]]

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 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 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

[[Page 35318]]

``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 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

[[Page 35319]]

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.
    (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 52<INF>nd</INF> 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 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.

[[Page 35320]]

    (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 of 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).

----------------------------------------------------------------------------------------------------------------
           Category \1\                       Low                    Significant                  High          
----------------------------------------------------------------------------------------------------------------
Direct Loss of Life \2\..........  None expected (due to      Uncertain (rural          Certain (one or more    
                                    rural location with no     location with few         extensive residential, 
                                    permanent structures for   residences and only       commercial or          
                                    human habitation).         transient or industrial   industrial             
                                                               development).             development).          
Lifeline Losses \3\..............  No disruption of           Disruption of essential   Disruption of critical  
                                    services--repairs are      facilities and access.    facilities and access. 
                                    cosmetic or rapidly                                                         
                                    repairable damage.                                                          
Property Losses \4\..............  Private agricultural       Major public and private  Extensive public and    
                                    lands, equipment and       facilities.               private facilities.    
                                    isolated buildings.                                                         
Environmental Losses \5\.........  Minimal incremental        Major mitigation          Extensive mitigation    
                                    damage.                    required.                 cost or impossible to  
                                                                                         mitigate.              
----------------------------------------------------------------------------------------------------------------
Notes:                                                                                                          
\1\ Categories are based upon project performance and do not apply to individual structures within a project.   
\2\ 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.                                                                           
\3\ 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.                                                                            
\4\ 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.                     
\5\ 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.            

Subpart F--RUS Contract Forms


Sec. 1724.70  List of RUS contract forms for architectural and 
engineering services.

    The following RUS contract forms for architectural and engineering 
services are available:
    (a) RUS Form 179, Rev. 9-66, Architects and Engineers 
Qualifications (optional form);
    (b) RUS Form 211, Rev. 6-98, Engineering Service Contract for the 
Design and Construction of a Generating Plant (required form);
    (c) RUS Form 215, Rev. 5-67, Engineering Service Contract--System 
Planning (optional form);
    (d) RUS Form 220, Rev. 6-98, Architectural Services Contract 
(required form);
    (e) RUS Form 234, Rev. 3-57, Final Statement of Engineering Fee 
(optional form);
    (f) RUS Form 236, Rev. 6-98, Engineering Service Contract--Electric 
System Design and Construction (required form);
    (g) RUS Form 241, Rev. 3-56, Amendment of Engineering Service 
Contract (optional form);
    (h) RUS Form 244, Rev. 12-55, Engineering Service Contract--Special 
Services (optional form);
    (i) RUS Form 258, Rev. 4-58, Amendment of Engineering Service 
Contract--Additional Project (optional form);
    (j) RUS Form 284, Rev. 284, Final Statement of Cost for 
Architectural Service (optional form);
    (k) RUS Form 297, Rev. 12-55, Engineering Service Contract--
Retainer for Consultation Service (optional form); and
    (l) RUS Form 459, Rev. 9-58, Engineering Service Contract--Power 
Study (optional form).


Sec. 1724.71  Use of printed forms

    (a) Persons wishing to obtain forms referred to in this part should 
contact: Program Development and Regulatory Analysis, U.S. Department 
of Agriculture, Stop 1522, 1400 Independence Ave., SW., Washington, DC 
20250-1522. These forms may be reproduced as needed.*
    (b) If a RUS contract form is required by this part, the borrower 
shall use the form in the format available from RUS (photocopying or 
other exact reproduction is acceptable.) The RUS contract forms are not 
to 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 indicating that 
they are different from the standard form.


Secs. 1724.72--1724.73  [Reserved]


Sec. 1724.74  Engineering service contract for the design and 
construction of a generating plant, RUS Form 211.

    The contract form in this section shall be used when required by 
this part.
    ENGINEERING SERVICE CONTRACT FOR THE DESIGN AND CONSTRUCTION OF A 
GENERATING PLANT
    AGREEMENT, made ________, ________, between ________ 
(hereinafter called the ``Owner'') and ________ of ________ 
hereinafter called the ``Engineer'').
    Whereas, the Administrator of the Rural Utilities Service 
(hereinafter called the ``Administrator'') of the United States of 
America (hereinafter called the ``Government'') has approved the 
making of a loan or loan guarantee of not in excess of $________ by 
the Government to the Owner pursuant to the Rural Electrification 
Administration Act of 1936, as amended, approximately $________ of 
which is intended to finance, in whole or in part, the construction 
and operation of an electrical generating plant which is estimated 
to cost $________ and consists of ________ in the State of ________, 
having the Rural Utilities Service project designation of ________, 
(hereinafter called the ``Project''), located at such place as the 
Owner with the approval of the Administrator shall designate;
    Now, therefore, in consideration of the mutual undertakings 
herein contained, the parties hereto agree as follows:

[[Page 35321]]

Article I

General Obligation of Engineer

    In accordance with the normal standards and practices used in 
the profession, the Engineer shall diligently and competently render 
all engineering services which shall be necessary or advisable for 
the expeditious, economical, and sound design and construction of 
the Project with due consideration to applicable ecological and 
environmental requirements. The enumeration of specific duties and 
obligations to be performed by the Engineer hereunder shall not be 
construed to limit the general undertakings of the Engineer.

Article II

Design of Project

    Section 1. The Engineer shall prepare and within ________ days 
after the approval hereof by the Administrator submit in duplicate 
to the Owner for approval and to the Administrator for approval, if 
approval of the Administrator is required, a ``Project Design 
Manual'' which shall consist of, but not necessarily be limited to, 
the following items:
    (a) A detailed statement covering the procedures to be followed 
by the Engineer in the performance of this Agreement, including, 
without limitation, such matters as the routing and distribution of 
copies of correspondence and reports, the furnishing of lists of 
plans and specifications, procedures relating to the awarding of 
construction and equipment contracts, identification of persons to 
be called by telephone with respect to various subject matters, 
contract closeouts, and meetings.
    (b) A design outline which includes all design criteria for the 
Project, including, without limitation, plant site, equipment, 
building requirements, environmental equipment and other 
environmental factors, civil, electrical, and mechanical 
requirements. The outline shall comply with the requirements of RUS 
Environmental Policies and Procedures.
    (c) Evaluation studies which support the economic basis for the 
design and selection of equipment, including, without limitation, 
turbine throttle and exhaust conditions, boiler feed pump, air 
quality equipment, and condenser.
    (d) Testing procedures which outline the responsibilities to be 
assumed by the Owner, Engineer, and contractor and include, without 
limitation, acceptance testing, concrete tests, laboratory testing, 
radiographic inspection, electrical checkout, and testing.
    Section 2. In addition, the Engineer shall prepare and within 
________ days after the approval hereof by the Administrator submit 
in duplicate to the Owner for approval and to the Administrator for 
approval, if approval of the Administrator is required, preliminary 
plans (hereinafter called the ``Preliminary Plans'') which shall 
consist of:
    (a) A single-line diagram of proposed main and auxiliary 
electrical connections, including all major equipment, switching and 
substations.
    (b) A single-line flow diagram of proposed steam, water, gas, 
oil, and air connections, including all major equipment.
    (c) A schedule, in a form acceptable to the Owner and 
Administrator, showing by months the estimated time required for 
each major subdivision of the Project for design, fabrication, and 
installation, and the estimated date the project will be available 
for commercial service. Such schedule shall specify, in percentages, 
the portion of the total design performance of the Engineer under 
this Agreement which each item of design represents.
    (d) The Engineer's estimate of the total cost of the completed 
Project, by components, together with the forecast of the amounts of 
money needed by the Owner each month until completion of the 
Project.
    Section 3. Promptly upon receipt of approval by the Owner and by 
the Administrator, if the approval of the Administrator is required, 
of the Project Design Manual and Preliminary Plans, the Engineer 
shall proceed with preparation of and shall submit, in duplicate, to 
the Owner and to the Administrator, if approval of the Administrator 
is required, complete and detailed plans and specifications, 
drawings, maps, and other engineering documents required for the 
construction of the Project (all of the foregoing being hereinafter 
sometimes collectively called the ``Plans and Specifications''). In 
the preparation of the Plans and Specifications, the Engineer shall 
consult with the Owner to the end that the Project shall serve the 
purposes intended by the Owner. The Engineer shall diligently make 
such necessary changes in the Plans and Specifications as may be 
required by the Owner and the Administrator. The Plans and 
Specifications shall include the following:
    (a) Detailed drawings showing the complete design and layout of 
the Project.
    (b) The form of construction contract (hereinafter called the 
``Construction Contract'') to be entered into between the Contractor 
and Owner for the construction of the Project, including forms of 
notice and instructions to bidders, material and construction 
specifications, contractor's proposal, bidder's qualifications, 
contractor's bond, and construction drawings. If the Owner or the 
Administrator shall direct that the Project shall be constructed 
under more than one contract, the Engineer shall submit forms of all 
necessary Construction Contracts and shall also prepare and submit 
in connection with each such contract all that is hereinabove 
required of the Engineer in connection with the Construction 
Contract. All maps, drawings, plans, specifications, estimates, and 
other documents required to be prepared or submitted by the Engineer 
under this section or other sections of the Agreement shall conform 
to applicable environmental requirements related to the project, 
including those commitments contained in the RUS Final Environmental 
Statement, standard specifications, and other forms prescribed by 
the Administrator, unless deviation therefrom shall be permitted by 
the Administrator in writing.
    Section 4. The Engineer shall also proceed to procure and submit 
to the Owner and to the Administrator, if approval of the 
Administrator is required, forms of other contracts and documents 
for the equipment and materials proposed to be purchased by the 
Owner for use in connection with the construction of the Project or 
any services necessary or desirable in connection therewith.
    Section 5. The Engineer, immediately upon receipt of notice from 
the Owner and from the Administrator, if approval of the 
Administrator is required, of their approval for bidding purposes of 
the form of Construction Contract or any contracts for materials, 
equipment, and services, as the case may be, shall, unless otherwise 
instructed by the Owner with the prior approval of the 
Administrator, take all appropriate and necessary action to procure 
full, free, and competitive bidding for the award of such contracts. 
In fulfilling this responsibility, the Engineer shall prepare and 
submit to the Owner for approval a recommended bidders' list. Upon 
approval of such list by the Owner, the Engineer, in collaboration 
with the Owner, shall fix a date for the opening of bids for such 
contracts. The Engineer shall be available to each prospective 
bidder for consultation with respect to the details of the Plans and 
Specifications and all other matters pertaining to the preparation 
of the Proposals for the construction of the Project or the supply 
of materials, equipment, or services therefor.
    Section 6. The Engineer shall attend all openings of bids for 
the construction of the Project, or any part thereof, or for the 
furnishing of materials, equipment, and services therefor. In case 
fewer than three (3) bids are received for the construction of the 
Project or component parts of the Project, the Owner shall be 
notified immediately and such bids shall remain unopened unless 
permission is obtained from the Owner for the opening of such bids. 
If bids are opened, the Engineer shall carefully check and prepare 
tabulations of all bids received and shall render to the Owner all 
such assistance as shall be required in connection with 
consideration of the bids so that contracts may be prudently and 
properly awarded. The Engineer shall submit in writing to the Owner 
its first, second, and third choice of bidders, materials, and 
equipment to be used in each case, with its recommendation and 
reasons for the selection. When the Owner has indicated its choice 
of bidders, materials, and equipment, the Engineer shall forward a 
tabulation of the bids, copies of the recommendation, and the 
Owner's selection to the Administrator, if approval of the 
Administrator is required. If requested by the Administrator, the 
Engineer shall forward one complete copy of all original bids 
received. Upon approval by the Administrator, if approval of the 
Administrator is required, of the selection of a bidder, materials, 
and equipment, the Engineer shall prepare three counterparts of the 
contract to be executed by the Owner and the Contractor and shall 
forward such executed counterparts to the Administrator for 
approval, if approval of the Administrator is required.
    Section 7. The Engineer shall furnish to the Owner all 
engineering information, services, data, and drawings required for 
procuring all necessary or desirable permits, licenses, franchises, 
titles, rights, and authorizations

[[Page 35322]]

and shall cooperate with the Owner's attorney in the procuring 
thereof.

Article III

Construction Management

    Section 1. The Engineer shall supervise the construction of the 
Project and shall make a diligent effort to ensure the expeditious 
and economical construction thereof in accordance with the Plans and 
Specifications and the terms of the Construction Contract and 
equipment or material contracts and the loan contract (hereinafter 
called the ``Loan Contract'') entered into between the Owner and the 
Government or any other lenders specifying the terms upon which the 
Project shall be constructed and financed. The Engineer shall 
carefully inspect all materials and equipment prior to their 
incorporation in the Project and shall promptly reject those not in 
compliance with the Specifications. The Engineer shall also 
supervise and inspect the incorporation of the materials in the 
Project and the workmanship with which such materials are 
incorporated. The Engineer, as representative of the Owner, shall 
have sole responsibility for requiring the Contractor to perform the 
Construction Contract in accordance with its terms and the Plans and 
Specifications, and, in performing the duties incident to such 
responsibility, the Engineer shall issue to the Contractor such 
directives and impose such restrictions as may be required to obtain 
reasonable and proper compliance by the Contractor with the terms of 
the Construction Contract and the Plans and Specifications in the 
construction of the Project; provided that the Engineer shall not be 
required to exercise any actual control over employees of the 
Contractor. The term ``supervise'' when used herein shall not confer 
upon the Engineer responsibility for the Contractor's construction 
means, methods, or techniques. The obligations of the Engineer 
hereunder run to and are for the benefit of only the Owner and the 
Administrator.
    Section 2. If, after the Construction Contract has been approved 
by the Administrator, if approval of the Administrator is required, 
it shall be determined that any change or changes in the Plans and 
Specifications are advisable, the Engineer shall prepare and submit 
to the Owner and the Contractor all necessary details in connection 
with such change or changes. The execution of such changes by the 
Engineer shall be within the intent of the Engineer's general 
undertakings as outlined elsewhere in this contract. Upon approval 
of the change or changes by the Owner and the Contractor, the 
proposed change or changes shall be submitted by the Engineer to the 
Administrator, if approval of the Administrator is required, in the 
form of a contract amendment.
    Section 3. The Engineer shall prepare all estimates, 
certificates, reports, and other documents required to be executed 
by the Engineer pursuant to the terms of the Construction Contract, 
equipment or material contracts, or the Loan Contract. When any bid 
specification is forwarded to RUS for review, an updated cost 
estimate for the proposed contract shall also be included. After all 
major equipment contracts have been awarded and all permits have 
been received, and after approximately forty percent (40%) of the 
project design has been completed and construction has commenced, 
the Engineer shall update, on a quarterly basis, unless more 
frequently requested by the Owner, the information required under 
Article II, Section 2(d) hereof.
    Section 4. The Engineer shall, upon completion of construction 
of component parts of the Project, make a complete inspection and 
conduct, utilizing the Owner's operating personnel and/or the 
manufacturer's representatives, such component and system tests as 
shall be necessary to assure conformance with the Plans and 
Specifications, the standards required by the Construction Contract, 
equipment and materials contracts, and the guarantees given in 
connection therewith.
    Section 5. The Engineer shall schedule and coordinate the start-
up activities for placing the plant in service. This shall include 
preparation of system operating schedules, written system start-up 
procedures, and operating manuals describing the various plant 
systems and operating procedures.
    Section 6. The Engineer shall prepare written procedures for 
final acceptance tests of major equipment, such procedures being 
subject to the Owner's concurrence. Furthermore, the Engineer shall 
conduct, utilizing the Owner's operating personnel, final acceptance 
tests of major equipment. Such tests shall be made in the presence 
of duly qualified representatives of the Owner and the 
Administrator, if the Administrator elects to attend, and the time 
and procedure of such tests shall be agreed upon by the Engineer, 
the Owner, and the Administrator. After completion of each final 
acceptance test, the Engineer shall prepare copies of the test 
results and recommendations as to acceptability of equipment and 
submit them to the Owner for review.
    Section 7. A competent resident engineer with full authority to 
act for the Engineer shall be maintained by the Engineer at the site 
of the Project during the entire period of any construction 
activity. The Engineer shall maintain at the site of the Project and 
under the direct supervision of the resident engineer a sufficient 
number of qualified engineering field inspectors to fully discharge 
the responsibilities of the Engineer pursuant to Article III, 
Section 1 hereof.

Article IV

Final Documents

    The Engineer shall, upon the completion of the inspection and 
tests in respect of the Project provided in Sections 4 and 6 of 
Article III, obtain or prepare and deliver to the Owner the 
following:
    (a) A nameplate inventory and summary in triplicate of all 
equipment and facilities incorporated in the Project together with a 
breakdown of contract costs arranged by Standard List of Retirement 
Units, RUS Bulletin 181-2.
    (b) Two complete sets of final inventory (record) drawings 
showing the location and layout of the Project in accordance with 
revisions to design drawings and field records of construction. All 
information required by this Agreement to be included in the maps 
and drawings shall be included in the record drawings. One complete 
set of the record drawings shall be in reproducible form 
satisfactory to the Owner. The Engineer shall also provide the Owner 
with any other original manufacturer's equipment drawings not 
otherwise available to the Owner.
    (c) An itemized statement in triplicate of the amounts payable 
by the Owner under all contracts for the construction of the Project 
and the furnishing of materials, equipment, and services thereof.
    (d) A certificate in triplicate to the effect that the Project 
has been fully constructed substantially in accordance with the 
Plans and Specifications if and as amended.
    (e) A detailed report in duplicate of all tests, in a form 
satisfactory to the Owner.
    (f) All maps, tracings, and drawings prepared or used by the 
Engineer in connection with the performance of the duties of the 
Engineer under this Agreement.
    (g) Operating and maintenance manuals received from 
manufacturers.
    When the Owner has determined that the Project is available for 
commercial service, the Engineer shall report to the Owner and the 
Administrator, for depreciation purposes, the estimated total 
contract cost of the Project, plus the Owner's other related 
overhead cost, as obtained from the Owner, showing as a separate 
item the cost of land (a non-depreciable item).

Article V

Compensation

    Section 1. The Owner shall pay the Engineer for the services 
performed hereunder as indicated in the attached Schedule A.
    Section 2. The total compensation to be paid in connection with 
this Agreement shall not exceed $________ (________ Dollars.)
    Section 3. The Engineer shall submit to the Owner each month a 
certified statement in duplicate of the amounts due for services 
hereunder, which statement shall be in accordance with the 
applicable reports of engineering progress required by Article VI, 
Section 1 hereof, and shall be in such detail and contain such 
supporting data as the Owner may request. The Owner shall review and 
approve each statement within thirty (30) days or inform the 
Engineer of the reasons the statement cannot be approved. Upon 
approval of each such statement by the Owner, ninety (90) percent of 
the amount thereof shall be due and payable. The balance of the 
compensation payable under Section 1 hereof shall be due and payable 
within thirty (30) days after completion of the Project. The Project 
shall be deemed complete for the purposes of the Agreement when all 
required final documents, including a certificate of completion, 
have been submitted by the Engineer and approved by the Owner and by 
the Administrator, if approval of the Administrator is required.
    Section 4. In the event that this Agreement at any time be 
terminated pursuant to Article VI, Section 2 hereof, the 
compensation which shall be payable by the Owner to the Engineer for 
services rendered prior to such termination shall be computed as 
follows:
    (a) Compensation for services in respect of the Design of the 
Project shall be determined

[[Page 35323]]

in accordance with Section 1 of this Article V, using the final 
report of engineering progress referred to in Article VI, Section 1 
hereof to determine the percentage of completion of the services in 
respect of design of the Project as of the effective date of 
termination.
    (b) Compensation for services in respect of supervision and 
inspection of construction of the Project and all other services 
shall be computed at the rate of $________ per staff hour of 
supervision and inspection of construction performed by the Engineer 
prior to the effective date of termination, but in no event shall 
such compensation exceed an amount computed in accordance with the 
provisions of Section 1 of this Article V. The Engineer shall submit 
to the Owner, in duplicate, a statement of the staff hours of 
supervision and inspection of construction in such detail and with 
such supporting data as may be requested by the Owner.
    Section 5. Compensation payable to the Engineer under any of the 
Articles of this Agreement shall be in addition to taxes or levies 
(excluding Federal, State, and Local Income Taxes) which may be 
assessed against the Engineer by any State or political subdivision 
directly on services performed or payments for services performed by 
the Engineer pursuant to this Agreement. Such taxes or levies which 
the Engineer may be required to collect or pay, shall, in turn, be 
added by the Engineer to invoices submitted to the Owner pursuant to 
this Agreement.
    Section 6. At or prior to the time when any payments shall be 
made to the Engineer pursuant to this Agreement, the Engineer if 
requested by the Owner shall furnish to the Owner, as a condition 
precedent to such payment, a certificate to the effect that all 
salaries or wages earned by the employees of the Engineer in 
connection with the Project have been fully paid by the Engineer up 
to and including a date not more than fifteen (15) days prior to the 
date when such payment shall be made. At or before the time when the 
final payment provided to be made hereunder shall be made to the 
Engineer by the Owner, the Engineer shall also furnish to the Owner, 
as a condition precedent to such payment, a certificate in form 
satisfactory to the Administrator that all the employees of the 
Engineer have been paid for services rendered by them in connection 
with the Project and that all other obligations which might become a 
lien on the Project have been paid.
    Section 7. Interest at the rate of ________ percent ( ________ 
%) per annum [percentage is not to exceed any applicable State usury 
laws] shall be paid by the Owner to the Engineer on all unpaid 
balances due the Engineer, commencing thirty (30) days after the due 
date, provided that the delay in payment beyond the due date shall 
not have been caused by any condition within the control of the 
Engineer. Such compensation shall be paid ten (10) days after the 
amount of the interest has been determined by the Engineer and the 
Owner.

Article VI

Miscellaneous

    Section 1. The Engineer shall prepare and execute in such form 
and detail as the Owner and the Administrator shall direct all 
estimates, certificates, reports, and other documents required to be 
executed by the Engineer pursuant to the Construction Contract or 
the Loan Contract, including, without limitation, a monthly report 
of engineering progress on the form of schedule referred to in 
Article II, Section 2(c) hereof, showing the percentage of 
completion of each of the subdivisions thereof and the overall 
percentage of completion of engineering services in respect of the 
design and construction of the Project as of the date of each such 
report; Monthly Cost Estimates and Forecasts of Cash Requirements in 
the form referred to in Article II, Section 2(d) hereof, which shall 
contain explanations of changes, if any, from prior Monthly Cost 
Estimates and Forecasts of Cash Requirements. From time to time the 
Engineer shall prepare and submit to the Owner for approval and to 
the Administrator for approval, if approval of the Administrator is 
required, all necessary changes in the schedule referred to in 
Article II, Section 2(c) hereof; provided, however, that no changes 
shall be made in the percentages assigned to each item of design in 
the original schedule approved by the Owner and by the 
Administrator, if approval of the Administrator is required, 
pursuant to Article II, Section 2(c) hereof.
    Section 2. The Owner may at any time terminate this Agreement by 
giving notice to the Engineer in writing to that effect, delivered 
or mailed to the Engineer's last known address not less than twelve 
(12) calendar days prior to the effective date of termination 
specified in the notice. From and after the effective date specified 
in such notice, this Agreement shall be terminated, except that the 
Engineer shall be entitled to receive compensation for services 
hereunder as provided in Section 3 of Article V hereof, and the 
Engineer shall be obligated forthwith to deliver to the Owner all 
maps, tracings, and drawings of the Project and all other letters, 
documents, and other material including all records pertaining 
thereto. If this Agreement shall be terminated, the Engineer shall 
prepare and submit to the Owner and the Administrator a final report 
of engineering progress as of the date of termination.
    Section 3. Insurance. The Engineer shall take out and maintain 
throughout the period of this Agreement insurance of the following 
types and minimum amounts:
    (a) Workers' compensation and employers' liability insurance, as 
required by law, covering all of the Engineer's employees who 
perform any of the obligations of the Engineer under the Agreement. 
If any employer or employee is not subject to the workers' 
compensation laws of the governing State, then insurance shall be 
obtained voluntarily to extend to the employer and employee coverage 
to the same extent as though the employer or employee were subject 
to the workers' compensation laws.
    (b) Public liability insurance covering all operations under the 
Agreement shall have limits for bodily injury or death of not less 
than $1 million each occurrence, limits for property damage of not 
less than $1 million each occurrence, and $1 million aggregate for 
accidents during the policy period. A single limit of $1 million of 
bodily injury and property damage is acceptable. This required 
insurance may be in a policy or policies of insurance, primary and 
excess including the umbrella or catastrophe form.
    (c) Automobile liability insurance on all motor vehicles used in 
connection with the Agreement, whether owned, nonowned, or hired, 
shall have limits for bodily injury or death of not less than $1 
million per person and $1 million per occurrence, and property 
damage limits of $1 million for each occurrence. This required 
insurance may be in a policy or policies of insurance, primary and 
excess including the umbrella or catastrophe form.
    (d) Errors and Omissions (Professional Liability) Insurance in 
an amount at least as large as the maximum compensation specified in 
Article V, Section 2, but not less than $500,000.
    The Owner shall have the right at any time to require public 
liability insurance and property damage liability insurance greater 
than those required in subsections ``b'' and ``c'' of this Section. 
In any such event, the additional premium or premiums payable solely 
as the result of such additional insurance shall be added to the 
total compensation to be paid under this Agreement.
    The Owner shall be named as Additional Insured on all policies 
of insurance required in subsections ``b'' and ``c'' of this 
Section.
    The policies of insurance shall be in such form and issued by 
such insurer as shall be satisfactory to the Owner. The Engineer 
shall furnish the Owner a certificate evidencing compliance with the 
foregoing requirements which shall provide not less than thirty (30) 
days prior written notice to the Owner of any cancellation or 
material change in the insurance.
    The Engineer shall also follow the requirements of 7 CFR part 
1788, RUS Fidelity and Insurance Requirements for Electric and 
Telephone Borrowers.
    Section 4. The obligations and duties to be performed by the 
Engineer under this Agreement shall be performed by persons 
qualified to perform such duties efficiently. The Engineer, if the 
Owner shall so direct in writing, shall replace any resident 
engineer or other persons employed by the Engineer in connection 
with the Project. For the information of the Owner and the 
Administrator, the Engineer shall file with the Owner and the 
Administrator a statement, signed by the Engineer, of the 
qualifications, including specific experience of each engineer and 
inspector assigned to the Project and the duties assigned to each.
    Section 5. Approvals, directions, and notices provided to be 
given hereunder by the Administrator to the Engineer or the Owner 
shall be deemed to be properly given if given by the Administrator 
or by any person authorized by the Administrator to give such 
approvals, directions, or notices.
    Section 6. The Engineer shall follow all applicable RUS rules 
and regulations.
    Section 7. This Agreement may be simultaneously executed and 
delivered in three or more counterparts, each of which so executed 
and delivered shall be deemed to be

[[Page 35324]]

an original, and all constitute but one and the same instrument.
    Section 8. The obligations of the Engineer under this Agreement 
shall be assigned without the approval in writing of the Owner and 
of the Administrator.
    Section 9. This Agreement shall be effective only from and after 
the time when it shall be approved by the Administrator in writing. 
Neither this Agreement nor any provision thereof shall be modified, 
amended, rescinded, waived, or terminated without the approval of 
the Administrator.
    Section 10. The Engineer shall comply with applicable statutes 
pertaining to engineering and warrants that ________ (Name of 
Engineer) who will be in responsible charge of the Project possesses 
license number ________ issued by the State of ________ on the 
________ day of ________, ______.
    In witness whereof, the parties hereto have caused this 
Agreement to be duly executed.

________ Owner

By ________ President

ATTEST: ________ Secretary

________ Engineer

________ President, Partner [Strike out inapplicable designation.]

ATTEST: ________ Secretary

Schedule A--Compensation

[End of clause]


Sec. 1724.75  Architectural service contract, RUS Form 220.

    The contract form in this section shall be used when required by 
this part.

ARCHITECTURAL SERVICES CONTRACT

    AGREEMENT, made ________, ________, between ________ 
(hereinafter called the ``Owner'') and ________ of ________ 
(hereinafter called the ``Architect'').
    Whereas, the Owner owns and operates a rural electric or 
telecommunications system, having the Rural Utilities Service 
designation of ________, financed in whole or in part with loans 
made or guaranteed by the United States of America acting through 
the Administrator of the Rural Utilities Service (hereinafter called 
the ``Administrator''). If the project is financed wholly or in part 
by the Rural Telephone Bank, an agency of the United States of 
America, the references in this Agreement to the ``Administrator'' 
shall mean the ``Governor'' of the Rural Telephone Bank as well; and
    Whereas, the Owner desires to ________ (hereinafter called the 
``Project'') at an estimated cost of construction not to exceed: 
________ dollars ($________) for new work, and/or ________ dollars 
($________) for remodeling, which aggregate ________ dollars 
($________), hereinafter called the ``Anticipated Cost,'' is 
exclusive of the cost of land, legal, architectural, accounting, or 
other professional services, or of interest.
    Now, therefore, in consideration of the mutual undertakings 
herein contained, the parties hereto agree as follows:

Article I

General Obligation of Architect

    The Architect shall render, diligently and competently in 
accordance with the normal standards used in the profession, all 
architectural services which shall be necessary or advisable for the 
expeditious, economical, and sound design, construction, and 
satisfactory completion of the Project. The enumeration of specific 
duties and obligations to be performed by the Architect hereunder 
shall not be construed to limit the general undertakings of the 
Architect. The obligations of the Architect hereunder run to, and 
are for the benefit of, only the Owner and the Administrator and 
shall not relieve the Contractor of its own responsibility under its 
agreement with the Owner.

Article II

Preconstruction Period

Section 1.

    (a) The Architect shall prepare: (1) preliminary drawings, (2) a 
general description of materials and types of construction, and (3) 
an overall estimate of the cost of construction (all of the 
foregoing hereinafter collectively called the ``Preliminary 
Documents''), and not later than ________ days after the date of 
execution of this Agreement, shall submit them in triplicate to the 
Owner for approval. Any changes in the Preliminary Documents 
required as a condition of approval shall be promptly made by the 
Architect.
    (b) After receipt of notice of approval of the Preliminary 
Documents from the Owner, the Architect will proceed with the 
preparation of:
    (1) Detailed plans showing the complete design of the Project 
including, but not limited to, architectural, structural, 
electrical, mechanical, and site development features.
    (2) Complete and detailed specifications describing the design 
requirements of the Project, including all matters referred to in 
subparagraph (1) above, and any materials to be incorporated 
therein.
    (3) The Construction Contract, RUS Form 257, ``Contract to 
Construct Buildings,'' (hereinafter called the ``Construction 
Contract''), which includes the Notice and Instructions to Bidders, 
Bid Bond, Bidders' Proposal, Owners' Acceptance, and Contractors' 
Bond, to be entered into between a bidder and the Owner for the 
construction of the Project. (All of the foregoing, including any 
revisions thereof, being hereinafter collectively called the ``Plans 
and Specifications.'')
    Within ________ days after receipt of such approval of the 
Preliminary Documents, the Architect shall prepare and submit to the 
Owner, in duplicate, for its approval, complete and detailed 
``Final'' Plans and Specifications as required for the construction 
of the Project. All documents required to be prepared and submitted 
by the Architect hereunder shall be on the applicable standard forms 
prescribed by the Administrator. In the preparation of the Plans and 
Specifications, the Architect shall consult with the Owner to 
ascertain the requirements of the project. Upon approval by the 
Owner of the Plans and Specifications, such approval being noted 
thereon under the corporate seal of the Owner attesting the approval 
thereof by the Owner, the Architect shall diligently make such 
changes in the Plans and Specifications as may be required as a 
condition of approval thereof.
    Section 2. So far as it shall be necessary in the preparation of 
the Plans and Specifications and in the construction of the Project, 
the Owner shall furnish the Architect information and data in 
respect of the following:
    (a) A complete and accurate survey of the building site, 
including grades and lines of streets, pavements, and adjoining 
properties;
    (b) The rights, restrictions, easements, boundaries, and 
contours of the building site;
    (c) Sewer, water, gas, electric, and telephone service, etc.; 
and
    (d) Test borings and pits, and chemical, mechanical, and other 
tests.
    Section 3. If the Owner shall direct that the Project shall be 
constructed under more than one contract, the Architect shall submit 
all necessary Construction Contract forms and shall also prepare and 
submit in connection with each such contract all of the information 
and documents that shall be required for construction of the 
Project.
    Section 4. Immediately after the Architect has received approval 
of the Plans and Specifications from the Owner, the Architect, 
unless otherwise instructed by the Owner, shall take all appropriate 
and necessary action to procure full, free, and competitive bidding 
for the award of the Construction Contract. Any public notices which 
by law are required of the Owner shall be published at the expense 
of the Owner.
    Section 5. The Architect shall prepare and furnish to each 
qualified bidder requesting them one set of the Plans and 
Specifications together with all necessary forms and other documents 
upon payment of the amount stipulated by the Architect, which 
payment will be refunded to each bona fide bidder within ten (10) 
days after the bid opening. The Architect shall also prepare and 
furnish to bidders requesting them additional sets of the Plans and 
Specifications together with all necessary forms and other documents 
upon payment of an amount stipulated by the Architect, which payment 
will not be subject to refund.
    Section 6. The Architect shall address to each prospective 
bidder a written response to inquiries from any prospective bidder 
with respect to the details of the Plans and Specifications and all 
other matters pertaining to the preparation of proposals for the 
construction of the Project or the furnishing of materials or 
services therefor. Under some circumstances the Architect may 
request that the inquiries from the prospective bidders be submitted 
in writing. The Architect or a competent representative of the 
Architect shall attend all openings of bids for the construction of 
the Project or any part thereof. In case fewer than three (3) bids 
are received for the construction of the Project or component parts 
of the Project, the Owner shall be notified immediately and such 
bids shall remain unopened unless permission is obtained from the 
Owner for the opening of such bids. If bids are opened, the 
Architect shall carefully check and

[[Page 35325]]

prepare tabulations of all bids received and shall render to the 
Owner a recommendation and all such assistance as shall be required 
in connection with consideration of the bids received so that 
contracts may be prudently awarded in accordance with the policy and 
procedure prescribed by the Owner and the Administrator.
    Section 7. The Architect shall furnish to the Owner all 
architectural information, data, and drawings required for procuring 
all necessary or desirable permits, licenses, franchises, and 
authorizations, and shall cooperate with the Owner's attorney in the 
procuring thereof.
    Section 8. If, after the Construction Contract has been 
approved, it shall be determined by the Owner that a change or 
changes in the Plans and Specifications are advisable, the Architect 
shall prepare and submit to the Owner all necessary details in 
connection with such change or changes, the Construction Contract 
shall be amended accordingly, and the Architect shall immediately 
proceed in respect of any construction required thereby in like 
manner as though such construction were originally required under 
the Construction Contract.

Article III

Construction Period

    Section 1. The Architect shall conduct inspection activities, 
and for projects involving multiple construction contracts, shall 
provide project coordination and inspection activities, and shall 
make a diligent effort to secure for the Owner the expeditious and 
economical construction of the Project in accordance with the 
approved Plans and Specifications and the terms of the Construction 
Contract. The Architect, unless otherwise directed in writing by the 
Owner, shall have and exercise sole responsibility for the issuance 
of supplemental directives to the Contractor regarding the 
Contractor's performance in accordance with the terms of the 
Construction Contract. In fulfilling the above responsibility, the 
Architect shall:
    (a) Issue to the Contractor such directives and impose such 
restrictions as may be necessary to obtain reasonable and proper 
compliance by the Contractor with the terms of the Construction 
Contract and the Plans and Specifications.
    (b) Visit the Project site at intervals appropriate to the stage 
of construction, but in no event (except for periods of prolonged 
work stoppage or construction delay) less than once per week, to 
inspect construction of the Project, to inspect excavations prior to 
placing of concrete, and to inspect other work prior to it being 
covered from view.
    (c) Make recommendations to the Owner concerning the selection 
of materials, colors, finishes, designs, or devices for use in the 
Project.
    (d) Periodically inspect materials prior to their incorporation 
into the Project and promptly reject those not in compliance with 
the Specifications.
    (e) Observe the manner of incorporation of materials into the 
Project and the workmanship with which such materials are 
incorporated.
    (f) Review and if acceptable approve material and/or equipment 
substitutions for compliance with contract documents.
    (g) Observe results of specified tests.
    (h) Be available to the Owner and the Contractor during office 
hours for consultation.
    (i) Review completed construction, direct the Contractor to 
correct observed defects, and approve payments to the Contractor for 
correctly completed construction.
    (j) Prepare such change orders as may be required for the 
Project.
    Section 2. The Architect shall review and, if acceptable, 
approve shop drawings, samples, schedules, and other submissions of 
the Contractor for conformance with the design concept of the 
Project and for compliance with requirements of the Plans and 
Specifications.
    Section 3. The Architect shall prepare and execute all 
estimates, certificates, and other documents required to be executed 
by the Architect pursuant to the Construction Contract. Unless 
otherwise provided in the Construction Contract, the Architect will 
furnish to the Contractor, free of charge, copies of the Plans and 
Specifications as may be reasonably necessary for the execution of 
the work.
    Section 4. The Architect shall prepare and submit to the Owner 
monthly construction progress reports.
    Section 5. The Architect shall, upon notice by the Contractor of 
completion of the work and a request for a final inspection of the 
Project:
    (a) Make a careful and thorough inspection to determine that the 
construction of the Project has been completed in accordance with 
the Plans and Specifications and the terms of the Construction 
Contract and any amendments thereto.
    (b) Prepare and deliver to the Owner complete and detailed final 
documents, including, without limitation, the following:
    (1) An itemized statement of the amounts payable by the Owner 
under all contracts for the construction of the Project and the 
furnishing of materials and services therefor.
    (2) A Certificate of Completion on the form approved by the 
Administrator, to the effect that the Project has been fully 
constructed in accordance with the Plans and Specifications, if and 
as amended.
    (3) One complete set of ``as-constructed'' Plans and 
Specifications of the Project in reproducible form satisfactory to 
the Owner.
    (4) A Certificate of Architect and a Final Statement of 
Architect's Fee due hereunder.
    (c) Use diligent efforts:
    (1) To obtain from the Contractor releases of all liens and of 
rights to claim any lien from manufacturers, material suppliers, and 
subcontractors that have furnished materials or services for the 
construction of the Project.
    (2) To obtain a Certificate of Contractor, on the form approved 
by the Administrator, to the effect that all labor has been paid.
    (3) To obtain and deliver to the Owner all material and 
workmanship warranties or bonds required by the Plans and 
Specifications and service and operating manuals furnished by 
manufacturers or suppliers.

Article IV

Compensation

    Section 1. The Owner shall pay the Architect for all services 
performed hereunder, except as provided in Section 3 hereof, a sum 
calculated as follows. (The Owner and Architect should agree upon 
the compensation schedule to be inserted in Tables Nos. 1 and 2 
below.)

Table No. 1

NEW CONSTRUCTION
COST OF NEW CONSTRUCTION ________
COMPENSATION FOR ARCHITECTURAL SERVICES ________
TABLE NO. 2
REMODELING WORK
COST OF REMODELING WORK ________
COMPENSATION FOR ARCHITECTURAL SERVICES

    If a Project shall consist of new construction and remodeling 
work, the Architect and the Owner shall agree on an equitable 
distribution of the final cost of construction between new 
construction and remodeling work, which shall be used to determine 
the applicable compensation from the two tables in this Section 1. 
For the purpose of computing compensation due the Architect under 
this Agreement for services rendered, ``remodeling,'' shall be 
defined for this project as follows: ________
    The sum shall be due and payable as follows:
    (a) Twenty percent (20%) thereof (using the Anticipated Cost in 
lieu of the Cost of Construction) within thirty (30) days after the 
date of approval of the Preliminary Documents.
    (b) An additional fifty percent (50%) thereof (using the 
Anticipated Cost in lieu of the Cost of Construction) within thirty 
(30) days after the date of approval of the Plans and 
Specifications.
    (c) An additional twenty percent (20%) thereof, as construction 
progresses, in monthly installments each bearing the same ratio to 
the total amount payable under this subsection (c) as the 
corresponding monthly payment to the Contractor bears to the total 
amount payable to the Contractor.
    (d) The balance, if any, of the compensation due under this 
Section 1 and all other provisions of this Agreement, shall be 
payable within thirty (30) days after Completion of the Project in 
accordance with the provisions of Section 2 of this Article IV.
    For the purpose of this Article, the term ``Cost of Construction 
of the Project,'' shall mean the Construction Contract Price 
including amendments thereto, plus the cost of labor and materials 
furnished for the Project by the Owner and in respect of which the 
Architect shall have rendered services hereunder. Extra drafting or 
other services performed shall be paid for as provided in Section 3 
of this Article IV.
    The term ``Completion of the Project'' shall mean full 
performance of all obligations under this Agreement and all 
amendments and revisions thereof.
    Section 2. Prior to the time when any payment shall be made to 
the Architect pursuant to this Agreement, the Architect, if 
requested by the Owner, shall furnish to the Owner, as a condition 
precedent to such payment, a certificate to the effect that all 
salaries or wages earned by the employees of the Architect in 
connection with the Project have been fully paid by the Architect up 
to

[[Page 35326]]

and including a date not more than fifteen (15) days prior to the 
date when such payment shall be due. Before the time when the final 
payment provided to be made pursuant to this Article IV shall be 
made to the Architect by the Owner, the Architect shall also furnish 
to the Owner as a condition precedent to such payment (a) a 
Certificate of Architect stating that all the employees of the 
Architect have been paid for services rendered by them in connection 
with the Project and that all other obligations which might become a 
lien upon the Project have been paid, and (b) a Final Statement of 
Architect's Fee showing the Cost of Construction of the Project and 
the amount due the Architect under this Agreement.
    Section 3. If the Architect shall, at the request of the Owner, 
perform any of the services outlined in Section 2 of Article II or 
if, after approval of the Construction Contract the Architect shall 
perform extra drafting or other services because of changes ordered 
by the Owner or default of the Contractor, the Architect shall be 
paid, in respect thereof, a sum equal to the Architect's reasonable 
out-of-pocket expenses, plus ________ percent (____%) (not to exceed 
fifty percent (50%)) thereof for office overhead plus reasonable 
subsistence, transportation, and communication expenses, if any, 
paid to, or on behalf of, employees; which amount shall be due and 
payable ten (10) days after approval by the Owner of the services 
performed and the invoice of the Architect. The compensation due the 
Architect under this paragraph shall be decreased by the amount of 
any increase in the compensation due the Architect under Section 1 
of this Article IV. The Architect shall submit to the Owner a 
statement of out-of-pocket expenses in respect of extra drafting or 
other services to be compensated for pursuant to this Section 3. 
Out-of-pocket expenses shall be limited to money paid by the 
Architect for direct labor, labor taxes, labor insurance, prorated 
sick leave, vacation, holiday, retirement, and medical insurance 
benefits, all applicable to such direct labor, except that, in the 
case of services performed with the prior approval of the Owner by 
the following officers, partners, or others having ownership 
interests in the Architect, the rates corresponding to ``direct 
labor'' set forth below shall apply: ________.
    Section 4. If this Agreement shall be terminated pursuant to the 
provisions of Section 1 or Section 2 of Article V hereof, the 
compensation for services rendered prior to such termination shall 
be computed as follows:
    (a) One-fifth of the compensation set forth in Section 1 of this 
Article IV based upon the Anticipated Cost (or of the Cost of 
Construction of the Project if termination is effective after 
approval of the Construction Contract) shall represent compensation 
for the Preliminary Documents and such compensation shall be 
prorated on the basis of the percentage of completion of such 
Preliminary Documents as of the effective date of termination.
    (b) One-half of the compensation set forth in Section 1 of this 
Article IV based upon the Anticipated Cost (or of the Cost of 
Construction of the Project if termination is effective after 
approval of the Construction Contract) shall represent compensation 
for the Plans and Specifications and such compensation shall be 
prorated on the basis of the percentage of completion of such Plans 
and Specifications as of the effective date of termination.
    (c) One-fifth of the compensation set forth in Section 1 of this 
Article IV based upon the Anticipated Cost shall represent 
compensation for the coordination and inspection of construction of 
the Project and such compensation shall be prorated on the basis of 
the percentage of such services determined by the value of the 
Project constructed prior to the effective date of termination.
    (d) One-tenth of the compensation set forth in Section 1 of this 
Article IV based upon the Cost of Construction of the Project shall 
represent compensation for the services provided for in Section 5 of 
Article III and such compensation shall be prorated on the basis of 
the percentage of such services performed prior to the effective 
date of termination.
    (e) Compensation for the services referred to in Section 2 of 
Article II, which may be performed by the Architect at the request 
of the Owner and for extra drafting and other services because of 
changes ordered by the Owner, shall be computed in accordance with 
the provisions of Section 3 of this Article IV.
    Section 5. Interest shall be paid by the Owner to the Architect 
on all unpaid balances due the architect, commencing thirty (30) 
days after the due date, provided that the delay in payment beyond 
the due date shall not have been caused by any condition within the 
control of the Architect. Such interest shall be at the rate of ____ 
percent (____%). [Percentage is not to exceed any applicable State 
usury laws.] Such compensation shall be paid ten (10) days after the 
amount of the interest has been determined by the Architect and the 
Owner.

Article V

Miscellaneous

    Section 1. The Owner may at any time terminate this Agreement by 
giving notice to the Architect in writing to that effect, delivered 
and mailed to the Architect's last known address not less than ten 
(10) days prior to the effective date of termination specified in 
the notice. From and after the effective date of termination 
specified in such notice, this Agreement shall be terminated, 
provided, however, that the Architect shall be entitled to receive 
compensation for services theretofore rendered pursuant to this 
Agreement, computed in accordance with the provisions of Article IV, 
Section 4, hereof.
    Section 2. The Architect shall have the right, by giving to the 
Owner not less than thirty (30) days notice in writing, to terminate 
this Agreement if the Architect shall have been prevented by 
conditions beyond the control and without the fault of the Architect 
(a) from commencing performance of this Agreement for a period of 
twelve (12) months from the date of this Agreement, or (b) from 
proceeding with the completion of full performance of any remaining 
services required of the Architect pursuant to this Agreement for a 
period of six (6) months from the date of last performance by the 
Architect of other services required pursuant to this Agreement. 
From and after the effective date specified in such notice this 
Agreement shall be terminated, except that the Architect shall be 
entitled to receive compensation for services performed hereunder, 
computed and payable in the same manner as set forth in Section 1 of 
this Article.
    Section 3. Upon Completion of the Project or termination of this 
Agreement, the Architect shall be obligated forthwith to deliver to 
the Owner all maps, tracings, and drawings of the Project and all 
letters, documents, and other material including all records 
pertaining thereto.
    Section 4. Insurance. The Architect shall take out and maintain 
throughout the period of this Agreement insurance of the following 
types and minimum amounts:
    (a) Workers' compensation and employers' liability insurance, as 
required by law, covering all of the Architect's employees who 
perform any of the obligations of the Architect under the Agreement. 
If any employer or employee is not subject to the workers' 
compensation laws of the governing State, then insurance shall be 
obtained voluntarily to extend to the employer and employee coverage 
to the same extent as though the employer or employee were subject 
to the workers' compensation laws.
    (b) Public liability insurance covering all operations under the 
Agreement shall have limits for bodily injury or death of not less 
than $1 million each occurrence, limits for property damage of not 
less than $1 million each occurrence, and $1 million aggregate for 
accidents during the policy period. A single limit of $1 million of 
bodily injury and property damage is acceptable. This required 
insurance may be in a policy or policies of insurance, primary and 
excess including the umbrella or catastrophe form.
    (c) Automobile liability insurance on all motor vehicles used in 
connection with the Agreement, whether owned, nonowned, or hired, 
shall have limits for bodily injury or death of not less than $1 
million per person and $1 million per occurrence, and property 
damage limits of $1 million for each occurrence. This required 
insurance may be in a policy or policies of insurance, primary and 
excess including the umbrella or catastrophe form.
    (d) Errors and Omissions (Professional Liability) Insurance in 
an amount at least as large as the maximum compensation specified in 
Article IV, Section 1, but not less than $500,000.
    The Owner shall have the right at any time to require public 
liability insurance and property damage liability insurance greater 
than those required in subsections ``b'' and ``c'' of this Section. 
In any such event, the additional premium or premiums payable solely 
as the result of such additional insurance shall be added to the 
total compensation to be paid under this Agreement.
    The Owner shall be named as Additional Insured on all policies 
of insurance required in subsections ``b'' and ``c'' of this 
Section.

[[Page 35327]]

    The policies of insurance shall be in such form and issued by 
such insurer as shall be satisfactory to the Owner. The Architect 
shall furnish the Owner a certificate evidencing compliance with the 
foregoing requirements which shall provide not less than thirty (30) 
days prior written notice to the Owner of any cancellation or 
material change in the insurance.
    The Architect shall also follow the requirements of 7 CFR part 
1788, RUS Fidelity and Insurance Requirements for Electric and 
Telephone Borrowers.
    Section 5. The obligations and duties to be performed by the 
Architect under this Agreement shall be performed by persons 
qualified to perform such duties efficiently. The Architect, if the 
Owner shall so direct, shall replace any person employed by the 
Architect in connection with the Project.
    For the information of the Owner and the Administrator, the 
Architect shall, upon request, file with the Owner and the 
Administrator, on forms approved by the Administrator, statements of 
the qualifications, including specific experience, of each person 
assigned to the Project and the duties assigned to each, and 
certifications of insurance coverage.
    Section 6. The Architect shall follow all applicable RUS rules 
and regulations.
    Section 7. This Agreement shall be simultaneously executed and 
delivered in three counterparts, each of which when so executed and 
delivered shall be deemed to be an original, and all shall 
constitute but one and the same instrument.
    Section 8. The obligations of the Architect under this Agreement 
shall not be assigned without the approval in writing of the Owner.
    Section 9. The Architect shall comply with applicable statutes 
pertaining to the practice of the profession. It is hereby warranted 
that the Architect possesses license number ________ issued by the 
State of ________ on the ________ day of ________, ________.
    In Witness Whereof, the parties hereto have caused this 
Agreement to be duly executed and their respective corporate seals 
to be affixed and attested by their duly authorized representatives 
all as of the date first above written.

________ Owner

By ________ President

ATTEST: ________ Secretary

________ Architect

By ________

________ Title

ATTEST: ________ Secretary

[End of clause]


Sec. 1724.76  Engineering service contract--electric system design and 
construction, RUS Form 236.

    The contract form in this section shall be used when required by 
this part.

ENGINEERING SERVICE CONTRACT

ELECTRIC SYSTEM DESIGN AND CONSTRUCTION

    AGREEMENT made ________, 19 ____, between ________ (hereinafter 
called the ``Owner''), and ________ of ________ (hereinafter called 
the ``Engineer'').
    Whereas, the Owner has obtained loans made or guaranteed by the 
United States of America, acting through the Administrator of the 
Rural Utilities Service (hereinafter called the ``Administrator''), 
to finance in whole or in part a rural electric system pursuant to 
the Rural Electrification Act of 1936, as amended, and plans the 
construction of a project designated ________, being hereinafter 
called the ``Project,'' consisting of approximately the following 
facilities:
    Distribution and Transmission Lines:

________ miles (________ km) of ________ kV line,

________ miles (________ km) of ________ kV line,

________

    Substations:

Name ________ ________ MVA ________ kV to ________ kV

      ________ ________ MVA ________ kV to ________ kV

    Switching Stations:
Name ________ ________ kV

Name ________ ________ kV

    Other:
________ miles (________ km) of line conversion, ________ miles 
(________ km) of line removal, and the following: ________

    Now, therefore, in consideration of the mutual undertakings 
herein contained, the parties hereto agree as follows:

Article I

General Obligations

    In accordance with the normal standards and practices used in 
the profession, the Engineer shall render diligently and competently 
all engineering services which shall be necessary or advisable for 
the expeditious, economical, and sound design and construction of 
the Project, with due consideration given to applicable ecological 
and environmental requirements. The enumeration of specific duties 
and obligations to be performed by the Engineer hereunder shall not 
be construed to limit the general undertakings of the Engineer.

Article II

Preconstruction Period

    Section 1. The Engineer shall give thorough consideration to 
aesthetics and the protection of the environment in all phases of 
construction of the Project, including line routing and station 
locations. Where RUS or the Owner has prepared an environmental 
document or the Owner must comply with the conditions of a Special 
Use Permit imposed by a Federal land management agency, the Engineer 
shall incorporate all environmental commitments of the applicable 
documents that specifically relate to the facilities to be 
constructed.
    Section 2. The Engineer shall, within thirty (30) days after the 
date of execution of this Agreement, make a complete field 
inspection and investigation for the purpose of determining the most 
economical and practicable location of the proposed lines.
    The Engineer shall cooperate with the Owner's right-of-way agent 
and attorney in developing a schedule of right-of-way procurement 
and assist the Owner in developing suitable property maps for use by 
the Owner's easement solicitors.
    Section 3. Prior to the preparation of Plans and Specifications 
by the Engineer, the Owner shall furnish to the Engineer the 
following as may be applicable:
    (a) Copies of pertinent Engineering Studies, including 
Construction Work Plans when available, on which to base the design 
of the electrical facilities to be built; key maps of the Owner's 
present and proposed facilities and detail or vicinity maps showing 
location of existing lines, consumers served, and easements 
obtained.
    (b) Detailed lists of materials, if any, on hand or on order 
which are to be furnished by the Owner in the construction of the 
Project, together with the quantity and the value of each item of 
such material.
    (c) With respect to materials contained in the assembly units 
indicated for removal, a list showing values of individual material 
items for which the Contractor will be credited with respect to 
salvaged materials returned to the Owner if not included in item (b) 
above.
    Section 4. Sufficient soil test data to ensure adequate 
foundation designs shall be provided by the ________ Owner ________ 
the Engineer [check one].
    Section 5. If requested by the Owner, the Engineer shall prepare 
and submit to the Owner estimates of quantities of materials to be 
furnished by the Owner for use in connection with the construction 
of the Project. The Engineer shall procure and submit to the Owner 
forms of contracts and other documents for such materials and for 
such other services as may be necessary or desirable in connection 
with the construction of the Project.
    Section 6. For transmission lines, the Engineer shall prepare 
and submit to the Owner for approval and to the Administrator for 
approval, if approval of the Administrator is required, a summary of 
transmission line and substation design data with supporting 
calculations. The Plans and Specifications and the Plan and Profile, 
if any, shall be based on the design data approved by the Owner and 
by the Administrator, if approval of the Administrator is required.
    Section 7. The Engineer shall prepare and submit to the Owner 
for approval and to the Administrator for approval, if approval of 
the Administrator is required, plan and profile sheets for all 
transmission lines.
    Section 8. In specifying right-of-way clearing for transmission 
lines where ``feathering'' and/or undulating boundaries are 
required, the Engineer shall mark all brush and trees to be removed 
unless such marking is the responsibility of another authority. The 
Engineer shall also compute all clearing units, and show all 
clearing units on the plan and profile drawings or on separate 
drawings prepared for this purpose.
    Section 9. The Engineer shall prepare, and within ________ days 
after the date of execution of this Agreement submit to the Owner 
for approval and to the Administrator for approval, if approval of 
the Administrator is required, two copies of complete and detailed 
plans and specifications, drawings,

[[Page 35328]]

maps, and other documents required for the construction of the 
Project (all of the foregoing being hereinafter collectively called 
the ``Plans and Specifications''). In the preparation of the Plans 
and Specifications, the Engineer shall consult with the Owner to the 
end that the Project shall serve the purpose intended by the Owner. 
Unless otherwise directed by the Owner, the Engineer shall use 
Construction Work Plans and Engineering Studies, as furnished by the 
Owner, as a basis for the preparation of the Plans and 
Specifications. The Engineer shall diligently make such changes in 
the Plans and Specifications as may be required by the Owner or the 
Administrator as a condition of approval thereof.
    Section 10. The Engineer shall, for each substation, prepare and 
furnish for the Owner's approval and for the Administrator's 
approval, if approval of the Administrator is required, the 
following drawings and such others as may be necessary or desirable 
for the construction of the Project:

One line diagram (relays, breakers, transformers, switches, etc.)
Three line diagram (PT, CT, phasing, etc.)
Plot plan (excluding land surveys and plots necessary in acquisition 
of property)
Grading plan, fence layout and details
Structure plan and details
Structure elevations (with section views)
Footing plan and details
Grounding plan and details
Cable trench and layout plan
Lighting plan and details
Control house plan and details
Control house elevations and details
Material lists
________
________

    Section 11. All maps, drawings, plan and profile sheets, plans 
and specifications, contract forms, addenda, estimates, studies, and 
other documents required to be prepared or submitted by the Engineer 
under this Article II or other articles of this Agreement shall 
conform to the applicable standard specifications and other forms 
prescribed by the Administrator, unless deviation therefrom shall 
have been approved by the Administrator.
    Section 12. The Engineer shall furnish to the Owner all 
engineering information, data, and drawings required for procuring 
all necessary or desirable permits, licenses, franchises, and 
authorizations from public bodies, and all necessary or desirable 
permits, licenses, or agreements with respect to the crossing of 
navigable streams, railroads, and power lines, and with respect to 
the paralleling or crossing of communications lines and signal 
circuits, and shall assist the Owner to the extent necessary to 
obtain such permits, licenses, franchises, authorizations, and 
agreements. The Engineer shall also furnish to the Owner all 
engineering information, data, and drawings required for procuring 
transmission line right-of-way through condemnation proceedings. If 
requested by the Owner, the Engineer shall attend, or appear as a 
witness in, hearings or other proceedings before public service 
commissions or other regulatory bodies in connection with procuring 
of the foregoing.
    Section 13. When notified by the Administrator (if approval of 
the Administrator is required) and by the Owner of their approval of 
the form of Construction Contract, the Engineer shall immediately 
take all appropriate and necessary action to procure full, free, and 
competitive bidding for the award of such contract or contracts, and 
when requested assist the Owner with the purchase of material and 
equipment. The term ``Construction Contract'' as used herein shall 
also include right-of-way clearing contracts, equipment contracts, 
or materials contracts if such contracts are utilized in the 
construction of the project. In fulfilling this responsibility, the 
Engineer shall prepare and submit to the Owner for approval a 
recommended list of qualified bidders to construct the project. Upon 
approval of such list by the Owner, the Engineer, in collaboration 
with the Owner, shall fix a date for the opening of bids for such 
contracts. The Engineer shall prepare and furnish to the qualified 
bidders the Plans and Specifications and Construction Drawings 
together with all necessary forms and other documents.
    Section 14. The Engineer shall be available to each prospective 
bidder for consultation with respect to the details of the Plans and 
Specifications and all other matters pertaining to the preparation 
of the proposals for the construction of the Project or the supply 
of materials or services therefor. The Engineer, or a competent 
representative of the Engineer, shall attend and supervise all 
openings of bids for the construction of the Project or for the 
furnishing of materials or services therefor. In case fewer than 
three (3) bids are received for the construction of the Project or 
component parts of the Project, the Owner shall be notified 
immediately and such bids shall remain unopened unless permission is 
obtained from the Owner for the opening of such bids. If bids are 
opened, the Engineer shall carefully check and prepare detailed 
assembly unit price tabulations of all bids received, and shall 
render to the Owner all such assistance as shall be required in 
connection with consideration of the bids received so that contracts 
may be prudently and properly awarded in accordance with the policy 
and procedure prescribed by the Owner and the Administrator.
    Section 15. If any change is to be made in the Plans and 
Specifications after the Construction Contract has been approved by 
the Owner and by the Administrator, if approval of the Administrator 
is required, the Engineer shall prepare and submit the necessary 
details for a contract amendment in accordance with the procedure 
prescribed by the Owner and the Administrator.

Article III

Staking

    Section 1. The Engineer, with the approval of the Owner, shall 
determine when staking of the Project shall begin; provided, 
however, that the Engineer shall not commence staking until the 
Owner shall have certified that all right-of-way authorizations and 
easements reasonably required for the construction of the Project 
have been procured. The Owner shall furnish qualified persons to 
negotiate with landowners or tenants with respect to such right-of-
way authorizations and easements and the locations of meter poles or 
service entrances. The Engineer shall proceed diligently with such 
staking and continue therewith in such manner as not to retard the 
progress of construction of the Project.
    The staking shall be done in a thorough and workmanlike manner 
and in accordance with the latest revision of the National 
Electrical Safety Code, applicable State codes, plans and 
specifications, and approved transmission line plan and profile 
sheets. The Engineer shall in no case stake lines other than those 
authorized by the Owner. The Engineer shall replace all stakes lost 
or removed prior to or during construction of the Project. All 
costs, including costs of stakes, equipment, and other material used 
in connection with the staking, shall be borne by the Engineer. All 
stakes shall be marked to show the pole number. Where practicable, 
all stakes shall be driven in such manner that the pole number shall 
be visible from the pole hauling truck when poles are being 
distributed. Each transmission structure stake shall be marked with 
the station number and the height and class of pole. Where it is 
probable that the Contractor will have difficulty in locating 
stakes, the Engineer shall drive a four-foot (1.2 m) building lath 
or equivalent in addition and adjacent to the stake. The Engineer 
shall give due consideration to the location of the consumer's load 
center and service termination in staking pole locations on or near 
the consumer's premises so that the service entrance cable or low 
voltage conductors to buildings will be as short as possible.
    Section 2. The Engineer shall cause staking sheets or structure 
lists to be maintained in such form as the Owner shall require, on 
which shall be accurately entered all pertinent and useful 
information and directions concerning the construction of the 
Project. Five counterparts of the staking sheets or structure lists 
shall be supplied by the engineer to the Contractor and two copies 
shall be supplied to the Owner. When revisions in staking sheets or 
structure lists are necessary, the Engineer shall cause all copies 
of the staking sheets or structure lists to be corrected to reflect 
such revisions in the information or directions previously 
incorporated thereon.
    Section 3. The Engineer shall prepare and submit to the Owner a 
report showing the quantity, kind, price, and extended total of all 
units of construction for each portion of the Project at the time 
such portion is released to the Contractor for construction.
    Section 4. A competent resident engineer, with full authority to 
act for the Engineer, shall be maintained by the Engineer at the 
site of the Project at all times when staking is being performed.

Article IV

Construction Management

    Section 1. The Engineer shall supervise the construction of the 
Project and shall make a diligent effort to ensure the expeditious 
and economical construction thereof in accordance with the Plans and 
Specifications and the terms of the Construction Contract or

[[Page 35329]]

contracts and ensure that all specified environmental criteria are 
followed. The Engineer shall carefully inspect all materials and 
equipment prior to their incorporation in the Project and shall 
promptly reject those not in compliance with the Specifications. The 
Engineer shall also supervise and inspect the incorporation of the 
materials in the Project and the workmanship with which such 
materials are incorporated. Such inspection shall be deemed to be 
adequate if a reasonable percentage of all construction units are 
inspected at the time of installation. The Engineer, as 
representative of the Owner, shall have sole responsibility for 
requiring the Contractor to perform the Construction Contract in 
accordance with its terms and the Plans and Specifications; and, in 
performing the duties incident to such responsibility, the Engineer 
shall issue to the Contractor such directives and impose such 
restrictions as may be required to obtain reasonable and proper 
compliance by the Contractor with the terms of the Construction 
Contract and the Plans and Specifications, in construction of the 
Project; provided that the Engineer shall not be required to 
exercise any actual control over employees of the Contractor. The 
term ``supervise'' when used herein shall not confer upon the 
Engineer responsibility for the Contractor's construction means, 
methods, or techniques. The obligations of the Engineer hereunder 
run to and are for the benefit of only the Administrator and the 
Owner.
    Section 2. The Engineer shall measure ground resistance at all 
substation ground fields prior to bonding the ground field to the 
substation structure. In addition, upon recommendation by the 
Engineer and authorization by the Owner, the Engineer shall measure 
the ground resistance at the following locations:
    (a) At all transmission structures with overhead ground wire 
prior to the installation of the overhead ground wire.
    (b) At all transmission structures with pole grounds prior to 
the installation of power conductor. The Engineer shall prepare a 
report of the ground resistance measurements mentioned above and 
submit such report to the Owner together with recommendations for 
changes, if any, required to ensure satisfactory operation. To the 
extent such changes are approved, the Engineer shall make 
appropriate changes in the Plans and Specifications in accordance 
with the provisions of Section 15 of Article II.
    Section 3. The Engineer shall maintain at the site of the 
Project during the entire period of construction a competent 
resident engineer with full authority to act for the Engineer, 
unless specifically directed otherwise by the Owner in writing. When 
necessary to assure adequate inspection, one or more competent 
inspectors shall also be maintained when construction units are 
being installed or corrective work is being performed, the number of 
inspectors being subject to approval by the Owner. The Engineer 
shall report, in writing, defects in workmanship or materials to the 
Contractor and the Owner and shall instruct the Contractor to 
correct such defects immediately, in accordance with the terms of 
the Construction Contract. A resident engineer shall be present 
during the final inspection of completed construction.
    Section 4. The Engineer shall test along lines, immediately 
after they have been energized, for objectionable radio 
interference. All cases of radio interference due to faulty 
construction of or defective equipment in the Project shall be 
reported to the Contractor for correction.

Article V

Final Documents

    Section 1. The Engineer shall prepare and, within twenty (20) 
days after the completion of construction of the Project by the 
Contractor, submit complete and detailed final documents to the 
Owner for approval and to the Administrator for approval, if 
approval of the Administrator is required.

Article VI

Compensation

    Section 1. The Owner shall pay the Engineer for the services 
performed hereunder as indicated in the attached Schedule A.
    Section 2. The total compensation to be paid in connection with 
this Agreement shall not exceed $________ (________ Dollars.)
    Section 3. Compensation payable to the Engineer under this 
Agreement shall be in addition to taxes or levies (excluding 
Federal, State and local income taxes) which may be assessed against 
the Engineer by any State or political subdivision directly on 
services performed or payments for services performed by the 
Engineer pursuant to this Agreement. Such taxes or levies, which the 
Engineer may be required to collect or pay, shall, in turn, be added 
by the Engineer to invoices submitted to the Owner pursuant to this 
Agreement.
    Section 4. Interest at the rate of ________ percent ( ________ 
%) per annum [percentage is not to exceed any applicable State usury 
laws] shall be paid by the Owner to the Engineer on all unpaid 
balances due the Engineer commencing thirty (30) days after the due 
date; provided that the delay in payment beyond the due date is not 
caused by any condition within the control of the Engineer. Such 
compensation shall be paid ten (10) days after the amount of 
interest has been determined by the Engineer and the Owner.
    Section 5. Prior to the time when any payment shall be made to 
the Engineer pursuant to this Agreement, the Engineer, if requested 
by the Owner, shall furnish to the Owner, as a condition precedent 
to such payment, a certificate to the effect that all salaries or 
wages earned by the employees of the Engineer in connection with the 
Project, have been fully paid by the Engineer up to and including a 
date not more than fifteen (15) days prior to the date when such 
payment shall be made. Before the time when the final payment shall 
be made to the Engineer by the Owner, the Engineer shall also 
furnish to the Owner, as a condition precedent to such payment, a 
certificate that all the employees of the Engineer have been paid 
for services rendered by them in connection with the Project and 
that all other obligations which might become a lien upon the 
Project have been paid.

Article VII

Miscellaneous

    Section 1. The Owner may at any time terminate this Agreement by 
giving notice to the Engineer in writing to that effect not less 
than ten (10) days prior to the effective date of termination 
specified in the notice. Such notice shall be deemed given if 
delivered or mailed to the last known address of the Engineer. From 
and after the effective date specified in such notice, this 
Agreement shall be terminated, except that the Engineer shall be 
entitled to receive compensation for services hereunder as provided 
in Section 2 of this Article VII.
    Section 2. In the event that this Agreement at any time be 
terminated pursuant to Section 1 of this Article VII, the 
compensation which shall be payable to the Engineer by the Owner 
shall be computed so far as possible in accordance with the 
provisions of Article VI. To the extent that the provisions of 
Section 1 of Article VI cannot be applied because construction is 
incomplete at the effective date of such termination, the Engineer 
shall be paid for engineering services in respect of incomplete 
construction a sum which shall bear the same ratio of the 
compensation which would have been payable under the provisions of 
Section 1 of Article VI, if such construction had been completed, as 
the engineering services in respect of such incomplete construction 
bear to the engineering services which would have been rendered if 
construction had been completed.
    If requested by the Owner, the Engineer shall submit to the 
Owner in duplicate a verified statement of actual expenses in 
respect of such incomplete construction. All compensation payable 
under this Section 2 shall be due and payable thirty (30) days after 
the approval by the Owner of the amount due hereunder.
    Section 3. The Engineer shall have the right, by giving the 
Owner not less than thirty (30) days notice in writing, to terminate 
this Agreement if the Engineer shall have been prevented by 
conditions beyond the control and without the fault of the Engineer 
(a) from commencing performance of this Agreement for a period of 
twelve (12) months from the date of this Agreement, or (b) from 
proceeding with the completion of full performance of any remaining 
services required of the Engineer pursuant to this Agreement for a 
period of six (6) months from the date of last performance by the 
Engineer of other services required pursuant to this Agreement. From 
and after the effective date specified in such notice this Agreement 
shall be terminated, except that the Engineer shall be entitled to 
receive compensation for services performed hereunder, computed and 
payable in the same manner as set forth in Section 2 of this 
Article.
    Section 4. Upon completion of the Project or termination of the 
Contract, the Engineer shall be obligated forthwith to deliver to 
the Owner all maps, tracings, and drawings of the Project and all 
letters, documents, and other material, including all records 
pertaining thereto.
    The term ``Completion of the Project'' shall mean full 
performance of all obligations

[[Page 35330]]

under this Contract and all amendments and revisions thereof as 
evidenced by the approval of the final documents by the Owner and by 
the Administrator, if approval of the Administrator is required.
    Section 5. The Engineer shall follow all applicable RUS rules 
and regulations.
    Section 6. The Engineer shall prepare and execute in such form 
and detail as the Owner and the Administrator shall direct all 
estimates, certificates, reports, and other documents required to be 
executed by the Engineer pursuant to the terms of the Construction 
Contract or the Loan Contract, including progress reports of 
engineering services and reports of the progress of construction.
    Section 7. The Engineer shall approve each monthly estimate of 
the Contractor prior to payment by the Owner. Such approval shall 
include a certification by the Engineer that all construction for 
which payment is requested has been completed in accordance with the 
terms of the Construction Contract and that all defective 
construction, of which the Contractor shall have received fifteen 
(15) or more days written notice, has been corrected. The Engineer 
shall also maintain at the site of the Project a cumulative 
inventory of all units of construction incorporated in the Project.
    Section 8. The Engineer shall notify the Owner when the Project, 
or any section thereof, shall be ready to be energized. When 
requested by the Administrator, such notice shall also be given to 
the Administrator. The Engineer shall assist the Owner in causing 
the Project, or such section thereof, to be energized.
    Section 9. Insurance. The Engineer shall take out and maintain 
throughout the period of this Agreement insurance of the following 
types and minimum amounts:
    (a) Workers' compensation and employers' liability insurance, as 
required by law, covering all of the Engineer's employees who 
perform any of the obligations of the Engineer under the Agreement. 
If any employer or employee is not subject to the workers' 
compensation laws of the governing State, then insurance shall be 
obtained voluntarily to extend to the employer and employee coverage 
to the same extent as though the employer or employee were subject 
to the workers' compensation laws.
    (b) Public liability insurance covering all operations under the 
Agreement shall have limits for bodily injury or death of not less 
than $1 million each occurrence, limits for property damage of not 
less than $1 million each occurrence, and $1 million aggregate for 
accidents during the policy period. A single limit of $1 million of 
bodily injury and property damage is acceptable. This required 
insurance may be in a policy or policies of insurance, primary and 
excess including the umbrella or catastrophe form.
    (c) Automobile liability insurance on all motor vehicles used in 
connection with the Agreement, whether owned, nonowned, or hired, 
shall have limits for bodily injury or death of not less than $1 
million per person and $1 million per occurrence, and property 
damage limits of $1 million for each occurrence. This required 
insurance may be in a policy or policies of insurance, primary and 
excess including the umbrella or catastrophe form.
    (d) Errors and Omissions (Professional Liability) Insurance in 
an amount at least as large as the maximum compensation specified in 
Article VI, Section 2, but not less than $500,000.
    The Owner shall have the right at any time to require public 
liability insurance and property damage liability insurance greater 
than those required in subsections ``b'' and ``c'' of this Section. 
In any such event, the additional premium or premiums payable solely 
as the result of such additional insurance shall be added to the 
total compensation to be paid under this Agreement.
    The Owner shall be named as Additional Insured on all policies 
of insurance required in subsections ``b'' and ``c'' of this 
Section.
    The policies of insurance shall be in such form and issued by 
such insurer as shall be satisfactory to the Owner. The Engineer 
shall furnish the Owner a certificate evidencing compliance with the 
foregoing requirements which shall provide not less than thirty (30) 
days prior written notice to the Owner of any cancellation or 
material change in the insurance.
    The Engineer shall also follow the requirements of 7 CFR part 
1788, RUS Fidelity and Insurance Requirements for Electric and 
Telephone Borrowers.
    Section 10. The obligations and duties to be performed by the 
Engineer under this Agreement shall be performed by persons 
qualified to perform such duties efficiently. The Engineer, if the 
Owner shall so direct, shall replace any resident engineer or other 
persons employed by the Engineer in connection with the Project. The 
Engineer shall file with the Owner and the Administrator a 
statement, signed by the Engineer, of the qualifications, including 
specific experience of each engineer and inspector assigned to the 
Project and the duties assigned to each.
    Section 11. Approvals, directions, and notices provided to be 
given hereunder by the Administrator to the Engineer or the Owner 
shall be deemed to be properly given if given by any person 
authorized by the Administrator to give approvals, directions, or 
notices.
    Section 12. The Engineer shall establish and maintain an office 
at the site of the Project, with telephone service where available, 
when staking or construction is in progress. Any notice, 
instructions, or communications delivered to such office shall be 
deemed to have been delivered to the Engineer.
    Section 13. This Agreement may simultaneously be executed and 
delivered in two or more counterparts each of which so executed and 
delivered shall be deemed to be an original, and all shall 
constitute but one and the same instrument.
    Section 14. The obligations of the Engineer under this Agreement 
shall not be assigned without the approval in writing of the Owner.
    Section 15. The Engineer shall comply with applicable statutes 
pertaining to engineering and warrants that ________ [Name of 
Engineer] who will be in responsible charge of the Project possesses 
license number ________ issued by the State of ________ on the 
________ day of ________, 19____.
    In witness whereof, the Parties hereto have caused this 
Agreement to be duly executed.

________ Owner

By ________ President

ATTEST: ________ Secretary

________ Engineer

By ________ President, Partner [Strike out inapplicable designation]

ATTEST: ________ Secretary

Schedule A--Compensation

[End of clause]


Secs. 1724.77-1724.99  [Reserved]

    Dated: June 17, 1998.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 98-16792 Filed 6-26-98; 8:45 am]
BILLING CODE 3410-15-P


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