35312 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 /Rules and Regulations

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bulletins, which will be rescinded after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:

fgatchel@rus.usda.gov.

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, PreConstruction 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
Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 /Rules and Regulations 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 § 1724.70 lists 12 forms. The forms

listed in § 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
35314 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 /Rules and Regulations

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

§ 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.

§ 1724.2 Waivers.

The Administrator may waive, for

good cause on a case-by-case basis,

requirements and procedures of this

part.

§ 1724.3 Definitions.

Terms used in this part have the

meanings set forth in § 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

§ 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 § 1710.110 of this chapter, loans to

reimburse funds already expended by

the borrower, and loans to replace

interim financing.

§ 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.

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

§ 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.

§ 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.

§ 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.

§ 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.

§§ 1724.10–1724.19 [Reserved]

Subpart B—Architectural Services

§ 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.

§ 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.

§§ 1724.22–1724.29 [Reserved]

Subpart C—Engineering Services

§ 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

§ 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
35316 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 /Rules and Regulations

construction progress report to RUS

upon RUS’ request.

§ 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.

§ 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.

§§ 1724.33–1724.39 [Reserved]

Subpart D—Electric System Planning

§ 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 LongRange 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.

§§ 1724.41–1724.49 [Reserved]

Subpart E—Electric System Design

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

§ 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.

§ 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
35318 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 /Rules and Regulations

‘‘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.

§ 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.

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

§ 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 m3) or more.

(ii) The ‘‘Federal Guidelines for Dam

Safety,’’ FEMA 93, June, 1979,

published by the Federal Emergency

Management Agency (FEMA), is hereby

incorporated by reference. This

incorporation by reference is approved

by the Director of the Office of the

Federal Register in accordance with 5

U.S.C. 552(a) and 1 CFR part 51. Copies

of the ‘‘Federal Guidelines for Dam

Safety’’ may be obtained from the

Federal Emergency Management

Agency, Mitigation Directorate, PO Box

2012, Jessup, MD 20794. It is also

available for inspection during normal

business hours at RUS, Electric Staff

Division, 1400 Independence Avenue,

SW., Washington, DC, Room 1246–S,

and at the Office of the Federal Register,

800 North Capitol Street, NW., Suite

700, Washington, DC.

(2) The borrower shall evaluate the

hazard potential of its dams in

accordance with Appendix E of the U.S.

Army Corps of Engineers Engineering

and Design Dam Safety Assurance

Program, ER 1110–2–1155, July 31,

1995. A summary of the hazard

potential criteria is included for

information as Appendix A to this

subpart. The U.S. Army Corps of

Engineers Engineering and Design Dam

Safety Assurance Program, ER 1110–2–

1155, July 31, 1995, published by the

United States Army Corps of Engineers,

is hereby incorporated by reference.

This incorporation by reference is

approved by the Director of the Office

of the Federal Register in accordance

with 5 U.S.C. 552(a) and 1 CFR part 51.

Copies of the U. S. Army Corps of

Engineers Engineering and Design Dam

Safety Assurance Program may be

obtained from the U. S. Army Corps of

Engineers, Publications Depot, 2803

52nd Ave., Hyattsville, MD 20781. It is

also available for inspection during

normal business hours at RUS, Electric

Staff Division, 1400 Independence

Avenue, SW., Washington, DC, Room

1246–S, and at the Office of the Federal

Register, 800 North Capitol Street, NW.,

Suite 700, Washington, DC.

(3) For high hazard potential dams,

the borrower must obtain an

independent review of the design and

critical features of construction. The

reviewer must have demonstrated

experience in the design and

construction of dams of a similar size

and nature. The 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.
35320 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 /Rules and Regulations

(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.

§§ 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 § 1724.55(a)(2).

Category 1 Low Significant High

Direct Loss of Life 2 None expected (due to rural location

with no permanent structures for

human habitation).

Uncertain (rural location with few residences and only transient or industrial development).Certain (one or more extensive residential, commercial or industrial development).

Lifeline Losses 3 .... No disruption of services—repairs are

cosmetic or rapidly repairable damage.

Disruption of essential facilities and access.Disruption of critical facilities and access.

Property Losses 4 .. Private agricultural lands, equipment

and isolated buildings.

Major public and private facilities ......... Extensive public and private facilities.

Environmental

Losses 5.

Minimal incremental damage ................ Major mitigation required ...................... Extensive mitigation 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. 5Environmental 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

§ 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).

§ 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.

§§ 1724.72—1724.73 [Reserved]

§ 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 llll, llll,

between llll (hereinafter called the

‘‘Owner’’) and llll of llll

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

$llll by the Government to the Owner

pursuant to the Rural Electrification

Administration Act of 1936, as amended,

approximately $llll 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

$llll and consists of llll in the

State of llll, having the Rural Utilities

Service project designation of llll,

(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:
Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 /Rules and Regulations 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 llll 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 llll 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
35322 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 /Rules and Regulations

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

percent ( llll %) 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
35324 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 /Rules and Regulations

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 llll

(Name of Engineer) who will be in

responsible charge of the Project possesses

license number llll issued by the State

of llll on the llll day of llll,

lll.

In witness whereof, the parties hereto have

caused this Agreement to be duly executed.

llll Owner

By llll President

ATTEST: llll Secretary

llll Engineer

llll President, Partner [Strike out

inapplicable designation.]

ATTEST: llll Secretary

Schedule A—Compensation

[End of clause]

§ 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 llll, llll,

between llll (hereinafter called the

‘‘Owner’’) and llll of llll

(hereinafter called the ‘‘Architect’’).

Whereas, the Owner owns and operates a

rural electric or telecommunications system,

having the Rural Utilities Service designation

of llll, 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 llll

(hereinafter called the ‘‘Project’’) at an

estimated cost of construction not to exceed:

llll dollars ($llll) for new work,

and/or llll dollars ($llll) for

remodeling, which aggregate llll dollars

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

COMPENSATION FOR ARCHITECTURAL

SERVICES llll

TABLE NO. 2

REMODELING WORK

COST OF REMODELING WORK llll

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: llll

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
35326 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 /Rules and Regulations

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 outof-pocket expenses, plus llll percent

(ll%) (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: llll.

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 ll

percent (ll%). [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.
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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

llll issued by the State of llll on

the llll day of llll, llll.

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.

llll Owner

By llll President

ATTEST: llll Secretary

llll Architect

By llll

llll Title

ATTEST: llll Secretary

[End of clause]

§ 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 llll, 19 ll,

between llll (hereinafter called the

‘‘Owner’’), and llll of llll

(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 llll, being hereinafter

called the ‘‘Project,’’ consisting of

approximately the following facilities:

Distribution and Transmission Lines:

llll miles (llll km) of llll kV

line,

llll miles (llll km) of llll kV

line,

llll

Substations:

Name llll llll MVA llll kV to

llll kV

llll llll MVA llll kV to

llll kV

Switching Stations:

Name llll llll kV

Name llll llll kV

Other:

llll miles (llll km) of line

conversion, llll miles (llll

km) of line removal, and the following:

llll

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 llll Owner llll 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 llll 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,
35328 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 /Rules and Regulations

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

llll

llll

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

percent ( llll %) 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
35330 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 /Rules and Regulations

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 llll

[Name of Engineer] who will be in

responsible charge of the Project possesses

license number llll issued by the State

of llll on the llll day of llll,

19ll.

In witness whereof, the Parties hereto have

caused this Agreement to be duly executed.

llll Owner

By llll President

ATTEST: llll Secretary

llll Engineer

By llll President, Partner [Strike out

inapplicable designation]

ATTEST: llll Secretary

Schedule A—Compensation

[End of clause]

§§ 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