[Federal Register Volume 63, Number 137 (Friday, July 17, 1998)]
[Proposed Rules]
[Pages 38503-38511]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18759]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 63, No. 137 / Friday, July 17, 1998 / 
Proposed Rules

[[Page 38503]]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1753

RIN 0572-AB34


Telecommunications System Construction Policies and Procedures

AGENCY: Rural Utilities Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: The Rural Utilities Service (RUS) proposes to revise its 
regulations on telecommunications system construction policies and 
procedures. This revision includes empowering the telecommunications 
borrowers by reducing oversight by RUS with respect to preparation of 
plans and specifications, bid approvals, and final document approvals. 
In addition to reducing the requirements for facilities construction, 
RUS will also make technical corrections and clarifications, and minor 
technical changes.

DATES: Public comments must be received by RUS or bear a postmark or 
equivalent, no later than September 15, 1998.

ADDRESSES: Written comments should be sent to Orren E. Cameron, III, 
Director, Telecommunications Standards Division, Rural Utilities 
Service, U.S. Department of Agriculture, 1400 Independence Ave., SW., 
Room 2835-S, STOP 1598, Washington, DC 20250-1598. Telephone: (202) 
720-8663. RUS requires a signed original and three copies of all 
comments (7 CFR 1700.4). Comments will be available for public 
inspection during regular business hours (7 CFR 1.27(b)).

FOR FURTHER INFORMATION CONTACT: Orren E. Cameron III, Director, 
Telecommunications Standards Division, Rural Utilities Service, U.S. 
Department of Agriculture, 1400 Independence Avenue, SW, Room 2835-S, 
Stop 1598, Washington, DC 20250-1598. Telephone (202) 720-8663. E-Mail: 
<a href="/cdn-cgi/l/email-protection#b8dddbd9d5ddcad7d6f8cacdcb96cdcbdcd996dfd7ce"><span class="__cf_email__" data-cfemail="523731333f37203d3c122027217c272136337c353d24">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866 and therefore has not been reviewed 
by OMB.

Executive Order 12778

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

Regulatory Flexibility Act Certification

    RUS had determined that this proposed rule will not have a 
significant economic impact on a substantial number of small entities, 
as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
The RUS telecommunications program provides loans to borrowers at 
interest rates and terms that are more favorable than those generally 
available from the private sector. RUS borrowers, as a result of 
obtaining federal financing, receive economic benefits which exceed any 
direct economic costs associated with complying with RUS regulations 
and requirements. Moreover, this action liberalizes certain contract 
requirements by changing contract limits thereby reducing RUS oversight 
requirements and further offsetting economic costs.

Information Collection and Recordkeeping Requirements

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35, as amended) RUS is requesting comments on the information 
collection incorporated in this proposed rule.
    Comments on this information collection must be received by 
September 15, 1998.
    Comments are invited in: (a) whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (b) the accuracy of the agency's estimate of the burden of the 
proposed collection of information; (c) ways to enhance the quality, 
utility and clarity of the information to be collected; and (d) ways to 
minimize the burden of the collection of information on respondents, 
including through the use of automated collection techniques of other 
forms of information technology.
    For further information contact Orren E. Cameron III, Director, 
Telecommunications Standards Division, Rural Utilities Service, U.S. 
Department of Agriculture, 1400 Independence Ave., SW., Stop 1598, 
Washington, DC 20250-1598. Telephone: (202) 720-8663. FAX: (202) 720-
4099. E-Mail: <a href="/cdn-cgi/l/email-protection#9ffafcfef2faedf0f1dfedeaecb1eaecfbfeb1f8f0e9"><span class="__cf_email__" data-cfemail="a8cdcbc9c5cddac7c6e8dadddb86dddbccc986cfc7de">[email protected]</span></a>.
    Title: Telecommunications Standards/Specifications Acceptance, 
Telecommunications Field Trials, and Telecommunications Contract Forms.
    OMB Number: 0572-0059.
    Type of Request: Amendment.
    Abstract: The Rural Utilities Service (RUS) proposes to revise its 
regulations on telecommunications system construction policies and 
procedures. This revision includes empowering the telecommunications 
borrowers by reducing oversight by RUS with respect to preparation of 
plans and specifications, bid approvals, and final document approvals 
and transferring those approval authorities to borrowers and their 
consulting engineers. In addition, this revision updates the regulation 
to include headquarters building financing which was reauthorized under 
certain loan programs in the Rural Electrification Loan Restructuring 
Act of 1993, and clarifies the manner in which RUS waives postloan 
engineering and construction requirements.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 1 hour per response.
    Respondents: Business or other for profit and non-profit 
institutions.
    Estimated Number of Respondents: 212.
    Estimated Number of Responses per Respondents: 25.
    Estimated Total Annual Burden on Respondents: 3,356 hours.
    Copies of this information collection can be obtained from Dawn 
Wolfgang, Program Development and Regulatory Analysis, Rural Utilities 
Service. Telephone: (202) 720-0812.
    Send comments regarding this information collection requirement to 
F. Lamont Heppe, Jr., Director, Program Development and Regulatory 
Analysis, USDA, Rural Utilities Service, 1400 Independence Ave., SW., 
Room 4034,

[[Page 38504]]

Stop 1522, Washington, DC 20250-1522.
    Comments are best assured of having full effect if OMB receives 
them within 30 days of publication in the Federal Register. All 
comments will become a matter of public record.

National Environmental Policy Act Certification

    RUS has determined that this proposed 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 proposed rule is listed in the 
Catalog of Federal Domestic Assistance Programs under No. 10.851, Rural 
Telephone Loans and Loan Guarantees, and No. 10.852, Rural Telephone 
Bank Loans. This catalog is available on a subscription basis from the 
Superintendent of Documents, United States Government Printing Office, 
Washington, DC 20402-9325.

Executive Order 12372

    This proposed rule is excluded from the scope of Executive Order 
12372, Intergovernmental Consultation. A Notice of Proposed Rule 
entitled Department Programs and Activities Excluded from Executive 
Order 12372 (50 FR 47034) exempts RUS and RTB loans and loan guarantees 
to governmental and nongovernmental entities from coverage under this 
Order.

Unfunded Mandates

    This rule contains no Federal Mandates (under the regulatory 
provision of Title II of the Unfunded Mandate Reform Act) for State, 
local, and tribal governments of the private sector. Thus today's rule 
is not subject to the requirements of section 202 and 205 of the 
Unfunded Mandate Reform Act.

Background

    RUS has undertaken a strategic review of all policies and 
procedures covering its preloan and postloan requirements of borrowers. 
This review was part of RUS efforts in governmental streamlining and 
empowering the recipients of the loans provided under the Rural 
Electrification Act (RE Act) of 1936, (U.S.C. 901 et seq.), as amended. 
As a result of this review, several procedures and policies were deemed 
no longer necessary. Other policies and procedures have been 
streamlined and RUS proposes to place more responsibility with the 
borrowers to insure a more cost effective review process while 
maintaining the required loan security. In view of this increased 
reliance upon borrowers and their consultants, certain provisions have 
been added to reduce the government's vulnerability to conflicts of 
interest. Provisions have also been added for construction of 
headquarters facilities pursuant to the Rural Electrification Loan 
Restructuring Act of 1993 (107 Stat. 1356).
    RUS further proposes to make technical corrections to final 
regulations which were reorganized and redesignated on September 27, 
1990, at 55 FR 39393. In particular, certain regulations contained 
cross references which inadvertently had not been updated. This action 
is simply a correction to these regulations with no change to 
substance. Changes to regulatory text are merely to update cross 
references. As currently published, the final regulations may prove to 
be misleading.

List of Subjects in 7 CFR Part 1753

    Communications equipment, Loan programs--communications, Reporting 
and recordkeeping requirements, Rural areas, Telecommunication, 
Telephone.

    For reasons set forth in the preamble, 7 CFR chapter XVII is 
amended as follows:

PART 1753--TELECOMMUNICATION SYSTEM CONSTRUCTION POLICIES AND 
PROCEDURES

    1. The authority citation for part 1753 continues to read as 
follows:

    Authority: 7 U.S.C. 901 et seq.; 7 U.S.C. 1921 et seq.; Pub. L. 
103-354, 108 Stat. 3178 (7 U.S.C. 6941 et seq.).

    2. In Sec. 1753.1, paragraph (a) is revised to read as follows:


Sec. 1753.1  General

    (a) The standard RUS Telecommunications Loan Documents contain 
provisions regarding procurement of materials and equipment and 
construction of telecommunications facilities by telecommunications 
borrowers. This part 1753 implements certain of the provisions by 
setting forth requirements and procedures. Borrowers shall follow these 
requirements and procedures whenever using loan funds to purchase 
materials and equipment or perform construction, unless they have 
received the Administrator's written approval to do otherwise.
* * * * *
    3. In Sec. 1753.2, a new definition of ``loan purposes'' is added, 
and the definitions of ``major construction'', ``minor construction'' 
and ``modernization plan'' are revised, to read as follows:


Sec. 1753.2  Definitions.

* * * * *
    Loan purposes--The high level objectives of the loan which is 
funding the construction. These purposes are first stated in the 
characteristics letter described in 7 CFR 1737.80, which is sent to the 
applicant to offer a loan after RUS has completed its preloan studies. 
These purposes are restated in the loan contract.
    Major construction--A telecommunications plant project estimated to 
cost more than $250,000, including all labor and materials.
    Minor construction--A telecommunications plant project estimated to 
cost $250,000 or less, including all labor and materials.
* * * * *
    Modernization plan--A State plan, which has been approved by RUS, 
for improving the telecommunications network of those 
Telecommunications Providers covered by the plan. A Modernization Plan 
must conform to the provisions of 7 CFR part 1751, subpart B.
* * * * *
    4. The first word of Sec. 1753.3(a) is revised from ``prior'' to 
read ``advance''.
    5. In Sec. 1753.5, paragraph (b)(1) is revised, paragraph (b)(2) is 
redesignated (b)(3), and a new paragraph (b)(2) is added, to read as 
follows:


Sec. 1753.5  Methods of major construction.

* * * * *
    (b) Contract construction. (1) RUS approval of the borrower's award 
of the contract is not required if the contractor is selected through 
sealed competitive bidding, the bid amount is $500,000 or less and the 
contractor is not a company or organization affiliated with the 
borrower. This does not relieve the borrower of the requirements for 
bidding or bid evaluation set forth in this part.
    (2) RUS approval of the borrower's award of the contract is 
required for all other competitively-bid and for negotiated major 
construction contracts.
* * * * *
    6. In Sec. 1753.6, paragraph (e) is added to read as follows:


Sec. 1753.6  Standards, specifications, and general requirements.

* * * * *
    (e) All software, software systems, and firmware financed with loan 
funds must

[[Page 38505]]

be year 2000 compliant, as defined in 7 CFR 1732.22(e).
    7. In Sec. 1753.7, paragraphs (c) and (e) are revised to read as 
follows:


Sec. 1753.7  Plans and specifications (P&S).

* * * * *
    (c) The appropriate standards and specifications listed in 7 CFR 
part 1755 shall be included in the P&S. When RUS has not prepared 
standards and specifications, the borrower shall use general 
engineering requirements and specifications prepared by the borrower's 
engineer. The specifications prepared by the borrower's engineer and 
based on general engineering requirements shall be subject to review 
and approval by RUS for all major construction, including major 
projects which would be exempted from RUS approval under 
Sec. 1753.7(e).
* * * * *
    (e) RUS approval of the P&S is required for construction that is 
estimated to cost over $500,000 or 25% of the total loan, whichever is 
less, and for all building construction. P&S for all other construction 
are exempt from RUS review and approval except that, at the time of 
contract approval, RUS will examine the plans and specifications for 
conformity with the loan purposes and to determine that they comply 
with other requirements of this part.
* * * * *
    8. In Sec. 1753.8, paragraphs (a)(1), (a)(11)(i), (a)(11)(ii) 
introductory text, (a)(11)(iii) introductory text, and (a)(12)(i) are 
revised, and a new paragraph (a)(11)(iv) is added, to read as follows:


Sec. 1753.8  Contract construction procedures.

    (a) Sealed, competitive bidding--(1) Bid opening date: The borrower 
is responsible for scheduling the bid opening date. If RUS review of 
the P&S is required by Sec. 1753.7, the borrower shall wait until 
approval has been received before setting the date. In setting the 
date, sufficient time should be allowed for the bidders to examine the 
project site and prepare their bids. The borrower shall notify the GFR 
of the bid date and invite the GFR to attend.
* * * * *
    (11) Award of contract: (i) The borrower shall obtain from the 
engineer the determination of the lowest responsive bid, a tabulation 
of all bids and the engineer's recommendation for award of the 
contract. Contract award is subject to RUS approval if either the cost 
of the project is over $500,000 or the contract is with an organization 
affiliated with the borrower. Contract award of all other projects is 
not subject to RUS approval.
    (ii) If an award is made, the borrower shall award the contract to 
the lowest responsive bidder. The borrower may award the contract 
immediately upon determination of the lowest responsive bidder if the 
following conditions are met:
* * * * *
    (iii) If RUS approval of the award of contract is required under 
this paragraph (a)(11), the borrower shall send to RUS for 
consideration of approval of the award:
* * * * *
    (iv) If RUS approval of the award of contract is not required under 
this paragraph (a)(11), the borrower shall keep a file available for 
inspection by RUS. The file shall be kept for at least two years and 
shall include:
    (A) One copy of all received bids.
    (B) The engineer's recommendation and tabulation of all bids 
including ``Buy American'' evaluations, if any, and all other 
evaluations required by law.
    (C) Evidence of acceptance of the low bid by the borrower, such as 
a copy of the board resolution certified by the Secretary of the board.
    (12) Execution of contract: (i) The borrower shall submit to RUS 
three original counterparts of the contract executed by the contractor 
and borrower.
* * * * *
    9. In Sec. 1753.11, paragraphs (a)(3), (b) and (d) are revised to 
read as follows:


Sec. 1753.11  Contract amendments.

    (a) * * *
    (3) The amendment causes an unbonded contract to require a 
contractor's performance bond. This would occur when a contract that is 
executed in an amount below that requiring a performance bond in 7 CFR 
part 1788, subpart C, is amended to an amount above that amount.
    (b) Advance RUS approval to execute other contract amendments is 
not required. These amendments may be submitted to RUS at any time 
prior to closeout. If a borrower wishes to receive an advance of funds 
based on an amended contract amount (i.e., amendments that increase a 
contract by less than 20%), the borrower may initiate an increase in 
the amount approved for advance by submitting three copies of the 
amendment to RUS for approval.
* * * * *
    (d) Upon execution of any amendment that causes the amended 
contract amount to exceed the original contract amount by 20% or more, 
three copies of the amendment shall be submitted to RUS for approval.
* * * * *
    10. In Sec. 1753.15, paragraphs (a)(1), (a)(4)(i) and (a)(4)(ii) 
are revised, and a new paragraph (a)(2) is added, paragraphs (a)(2) 
through (a)(5) are redesignated (a)(3) through (a)(6) respectively, and 
a new paragraph (a)(2) is added, to read as follows:


Sec. 1753.15  General.

    (a)(1) The standard RUS Loan Documents contain provisions regarding 
engineering and architectural services performed by or for RUS 
telephone borrowers. This part implements certain of the provisions by 
setting forth the requirements and procedures to be followed by 
borrowers in selecting architects and engineers and obtaining 
architectural and engineering services by contract or by force account.
    (2) Borrowers shall obtain architectural and engineering services 
only from persons or firms which are not affiliated with, and have not 
represented, a contractor, vendor or manufacturer who may provide 
labor, materials, or equipment to the borrower under any current loan.
* * * * *
    (5)(i) For major construction, services provided by architects and 
engineers not on the borrower's staff must be provided under Form 220, 
Architectural Service Contract, or Form 217, Postloan Engineering 
Service Contract--Telecommunications. These contracts require RUS 
approval.
    (ii) For minor construction, borrowers may use the contracts in 
paragraph (a)(5)(i) of this section for postloan architectural or 
engineering services or any other form of contract, such as Form 245, 
Engineering Service Contract, Special Services-Telephone. RUS approval 
of contracts for postloan architectural or engineering services 
associated with minor construction, except for buildings covered in 
paragraph (a)(6) of this section, is not required.
* * * * *
    11. In Sec. 1753.16, paragraphs (b)(1) through (b)(4) are revised, 
to read as follows:


Sec. 1753.16  Architectural services.

    (a) *  *  *
    (b)(1) The borrower shall use Form 220 when contracting for 
architectural services for major construction, except that the borrower 
may use either Form 220 or Form 217 if the building is an unattended 
central office building.
    (2) The borrower and the architect negotiate the fees for services 
under the Form 220 contract.

[[Page 38506]]

    (3) Reasonable modifications or additions to the terms and 
provisions in Form 220 may be made, subject to RUS approval, to obtain 
the specific services needed for a building.
    (4)(i) Three copies of Form 220, executed by the borrower and the 
architect, shall be sent to the GFR to be forwarded to RUS for 
approval. RUS will review the contract terms and conditions. RUS will 
not approve the contract if, in RUS's judgement:
    (A) Unacceptable modifications have been made to the contract form.
    (B) The contract will not accomplish loan purposes.
    (C) The architectural service fees are unreasonable.
    (D) The contract presents unacceptable loan security risk to RUS.
    (ii) If RUS approves the contract, RUS will send one copy to the 
architect and one copy to the borrower.
* * * * *
    12. In Sec. 1753.17(b)(1)(ii)(D), remove ``(See 7 CFR part 1758)''. 
Paragraph (b)(1)(ii)(E), is added, and paragraphs (c)(1)(i)(C) and 
(c)(2)(i)(A) are revised, to read as follows:


Sec. 1753.17  Engineering services.

* * * * *
    (b) *  *  *
    (1) *  *  *
    (ii) *  *  *
    (E) The consulting engineering firm is affiliated with or has 
represented a contractor, vendor, or manufacturer who may provide 
labor, materials, or equipment to the borrower under any current loan.
* * * * *
    (c) *  *  *
    (1) *  *  *
    (i) *  *  *
    (C) The names, qualifications, and responsibilities of other 
principal employees who will be associated with providing the 
engineering services.
* * * * *
    (2) *  *  *
    (i) *  *  *
    (A) A copy of the employee's qualifications and experience record, 
unless previously submitted. RUS requires a minimum of four years of 
construction and inspection experience. The employee cannot be engaged 
in the actual construction.
* * * * *
    13. A new Sec. 1753.18 is added to read as follows:


Sec. 1753.18  Engineer/Architect contract closeout certifications.

    A certification of completion and inspection of construction, 
required elsewhere in this part, signed by the borrower and 
countersigned in accordance with accepted professional engineering and 
architectural practice, by the engineer or architect, shall be prepared 
as evidence of completion of a major construction project. This 
certification shall make reference to the contract number and contract 
amount, and shall include the following:
    (a) A statement that the construction is complete and was done in 
accordance with the RUS approved system design or layout or subsequent 
RUS approved changes.
    (b) A statement that the construction was for loan purposes.
    (c) A statement that construction used RUS-accepted materials and 
was in accordance with specifications published by RUS covering the 
construction which were in effect when the contract was executed, or in 
the absence of such specifications, that it meets other applicable 
specifications and standards (specify), and that it meets all 
applicable national and local code requirements as to strength and 
safety.
    (d) A statement that the construction complies with the ``Buy 
American'' provision (7 U.S.C. 903 note) of the Rural Electrification 
Act of 1936, as amended (7 U.S.C. 901 et seq).
    (e) A statement that all necessary approvals have been obtained 
from regulatory bodies and other entities with jurisdiction over the 
project.
    (f) A statement that all closeout documents required in this part 
have been examined and found complete such that the Contractor has 
fulfilled all obligations under the contract except for warranty 
coverage.
    (g) A statement that the engineer or architect is not affiliated 
with and does not represent the contractor, vendor, or manufacturer who 
is a participant in the contract.
    14. In Sec. 1753.25, paragraphs (a), (c) and (d) are revised as 
follows:


Sec. 1753.25  General

    (a) This subpart implements and explains the provisions of the Loan 
Documents setting forth the requirements and the procedures to be 
followed by borrowers in constructing headquarters, commercial office, 
central office, warehouse, and garage buildings with loan funds.
* * * * *
    (c) All plans and specifications for buildings to be constructed 
with loan funds are subject to the approval of RUS. In addition, 
preliminary plans and specifications for headquarters and commercial 
office buildings to be constructed with loan funds are subject to RUS 
approval.
    (d) RUS Form 257, Contract to Construct Buildings, shall be used 
for the construction of all headquarters, commercial office, central 
office, warehouse, and garage buildings with loan funds. Refer to 
Sec. 1753.26 for further instructions.
* * * * *
    15. In Sec. 1753.26, paragraphs (a) through (d) are redesignated 
(b) through (e) respectively, redesignated paragraph (b)(1 is revised, 
and a new paragraph (a) is added, to read as follows:


Sec. 1753.26  Plans and specifications (P&S).

    (a) For headquarters and commercial office buildings only, the 
borrower shall prepare preliminary P&S showing the floor plan and 
general architectural details of the building to be constructed using 
loan funds. In particular, the preliminary P&S shall address the 
requirements of Sec. 1753.25(f) and the Uniform Relocation Assistance 
and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et 
seq.). These P&S shall be submitted to the GFR and are subject to RUS 
approval.
    (b)* * *
    (1) RUS Contract Form 257, Contract to Construct Buildings, 
completed to the extent explained in paragraph (c) of this section.
* * * * *
    16. In Sec. 1753.30, paragraphs (b), (c)(2), (c)(3) and (d) are 
revised to read as follows:


Sec. 1753.30  Closeout procedures.

* * * * *
    (b) RUS Form 257 Contract. (1) Whenever changes were made in the 
plans and specifications which did not require immediate submission to 
RUS of an amendment under Sec. 1753.11, a final contract amendment 
showing the changes shall be prepared.
    (2) Upon completion of the project, the borrower shall obtain 
certifications from the licensed architect or engineer that the project 
and all required documentation are satisfactory and complete. The 
requirements for this certification are set forth in Sec. 1753.18.
    (3) The engineer's or architect's contract closeout certification 
and the final amendment shall be submitted to RUS as a basis for the 
final advance of funds for the contract.
    (c) * * *
    (2) Complete, with the assistance of its architect or engineer, the 
documents listed in the following table that are required for the 
closeout of force account construction.

[[Page 38507]]



                                                Documents Required to Closeout Construction of Buildings                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   Use with            No. of copies prepared         Distribution      
                                                                         ----------------------------            by            -------------------------
             RUS form No.                          Description                                       --------------------------                         
                                                                            Contract        Force                   Architect/    Borrower    Contractor
                                                                                          account.     Contractor    engineer                           
--------------------------------------------------------------------------------------------------------------------------------------------------------
238...................................  Construction or Equipment                   X           (3)   ...........  ...........                          
                                         Contract Amendment (If not                                                                                     
                                         previously submitted, send to                                                                                  
                                         RUS for approval.).                                                                                            
(1) (to RUS)                                                                                                                                            
181...................................  Certificate of Completion                   X   ............  ...........           2             1            1
                                         (Contract Construction) \1\.                                                                                   
231...................................  Certificate of Contractor.......            X   ............            1  ...........            1  ...........
224...................................  Waiver and Release of Lien from             X   ............            1  ...........            1  ...........
                                         each Supplier.                                                                                                 
213...................................  Certificate (Buy American)......            X   ............            1  ...........            1  ...........
None \2\..............................  ``As Built'' Plans and                      X             X   ...........           1             1  ...........
                                         Specifications.                                                                                                
None..................................  Guarantees, Warranties, Bonds,              X   ............            1  ...........            1  ...........
                                         Operating or Maintenance                                                                                       
                                         Instructions, et certera.                                                                                      
None..................................  Architect/Engineer seismic                  X             X   ...........           2             1            1
                                         safety certification.                                                                                          
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Cost of materials and services furnished by borrower are not to be included in Total Cost on RUS Form 181.                                          
\2\ When only minor changes were made during construction, two copies of a statement to that effect from the Architect will be accepted instead of the  
  ``as built'' Plans and Specifications.                                                                                                                

    (3) Make distribution of the completed documents as indicated in 
the table in this section.
    (d) After all required RUS approvals are obtained, final payment is 
made in accordance with Article III of RUS Form 257 once the borrower 
has received the architect's or engineer's certifications regarding 
satisfactory completion of the project.
    17. In Sec. 1753.37, paragraph (c) is revised to read as follows:


Sec. 1753.37  Plans and specifications (P&S).

* * * * *
    (c) RUS review of P&S is required for construction estimated to 
cost over $500,000 total or estimated to cost more than 25% of the 
total loan.
    (1) If RUS review is required, the borrower shall submit one copy 
of the P&S to the GFR for RUS review.
    (2) RUS will review the P&S and notify the borrower in writing of 
approval or disapproval.
    18. In Sec. 1753.38, paragraphs (a)(1)(i), (a)(1)(v), (a)(2)(i), 
(a)(2)(v), (b)(1), (b)(3), (b)(5), (e)(2), and (e)(3) are revised, to 
read as follows:


Sec. 1753.38  Procurement procedures.

    (a) * * *
    (1) Solicitation of bids. (i) After RUS approval of the 
specifications and equipment requirements (required only for projects 
exceeding $500,000 or 25% of the loan), the borrower shall send 
``Notice and Instructions to Bidders'' to suppliers with central office 
equipment included in the current Informational Publication (I.P.) 300-
4, ``List of Materials Acceptable for Use on Telecommunications Systems 
of RUS Borrowers.'' I.P. 300-4 is a subscription item available from 
the Superintendent of Documents, U.S. Government Printing Office, P.O. 
Box 371954, Pittsburgh, PA 15250-7954. This ``Notice'' may also be sent 
to suppliers of non-domestic equipment currently accepted by RUS as 
meeting RUS technical standards. The ``Notice'' may also be sent to 
suppliers of central office equipment accepted for field trial.
* * * * *
    (v) At the request of an invited supplier, the borrower shall 
provide two copies of the P&S.
    (2) Technical sessions. (i) The borrower shall schedule individual 
technical sessions by the suppliers, notify each supplier of its 
scheduled date and time, notify the GFR of all scheduled dates and 
times, and request the following be available at the technical session:
* * * * *
    (v) After evaluation of the technical proposals and RUS approval of 
the changes to the P&S (required only for projects that exceed $500,000 
or 25% of the loan), sealed bids shall be solicited from only those 
bidders whose technical proposals meet the P&S requirements. When fewer 
than three bidders are adjudged qualified by the borrower to bid, RUS 
approval must be obtained to proceed. Generally, RUS will grant such 
approval only if the borrower can demonstrate to the satisfaction of 
RUS that a good faith effort was made to obtain at least three 
competitive bids. This would be demonstrated if all suppliers currently 
listed in I.P. 300-4 were invited to submit technical proposals. This 
could not be demonstrated if a listed supplier of central office 
equipment was not invited.
* * * * *
    (b) * * *
    (1) After RUS approval of the P&S and equipment requirements 
(required only for contracts expected to exceed $500,000 or 25% of the 
loan), the borrower shall send two complete copies of the approved P&S 
to the supplier and request that a proposal be submitted.
* * * * *
    (3) If the contract is expected to exceed $500,000 or 25% of the 
loan, changes in the P&S resulting from the technical session shall be 
subject to RUS review and approval.
* * * * *
    (5) The borrower shall obtain an award recommendation from its 
engineer.
* * * * *
    (e) * * *
    (2) The borrower shall prepare a plan containing an outline of the 
proposed use of the equipment, the proposal from the supplier and an 
estimate of the installation cost. If the total cost exceeds $500,000, 
RUS approval of the award of contract is required. The borrower shall 
in this case submit its plan and the supplier's proposal to the GFR. If 
the cost does not exceed $500,000, the borrower's award of contract is 
not subject to RUS approval.
    (3) If RUS approval was required in paragraph (e)(2) of this 
section, upon RUS approval the purchase may be made using RUS Contract 
Form 525 or 545, or when applicable, the procedures contained in 
subpart I of this part.
* * * * *

[[Page 38508]]

    19. In Sec. 1753.39, paragraphs (a), (e)(1), (e)(2), (f), 
(f)(1)(ii)(A), (f)(1)(iii), (f)(1)(iv) and (g) are revised, paragraph 
(e)(3) is deleted, and paragraph (h) is added, to read as follows:


Sec. 1753.39  Closeout documents.

* * * * *
    (a) Contract amendments. Amendments that must be submitted to RUS 
for approval, as required by Sec. 1753.11, shall be submitted promptly. 
All other amendments may be submitted to RUS with the engineer's 
contract closeout certification.
* * * * *
    (e) * * *
    (1) Obtain from the engineer a certification of partial closeout.
    (2) Submit one copy of the summary to RUS with an FRS.
    (f) Final contract closeout procedure. The documents required for 
the final closeout of the central office equipment contracts, RUS 
Contract Forms 525 and 545, are listed in the following table, which 
also indicates the number of copies and their distribution. The 
procedure to be followed is outlined as follows:

                                            Documents Required to Closeout Central Office Equipment Contract                                            
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   Use with                  Prepared by              Distribution      
             RUS form No.                          Description           -------------------------------------------------------------------------------
                                                                          RUS form 525  RUS form 545   Contractor    Engineer     Borrower    Contractor
--------------------------------------------------------------------------------------------------------------------------------------------------------
238...................................  Construction or Equipment                   X             X   ...........          (3)                          
                                         Contract Amendment (If not                                                                                     
                                         previously submitted, send to                                                                                  
                                         RUS for approval).                                                                                             
(1) (to RUS)                                                                                                                                            
754...................................  Certificate of Completion and               X   ............            3           3             2            1
                                         Certificate of Contractor and                                                                                  
                                         Indemnity Agreement (if                                                                                        
                                         submitted, Form 744 is not                                                                                     
                                         required).                                                                                                     
517...................................  Results of Acceptance Tests                 X   ............  ...........           2             1            1
                                         (Prepare and distribute copies                                                                                 
                                         immediately upon completion of                                                                                 
                                         the acceptance tests of each                                                                                   
                                         central office).                                                                                               
752a..................................  Certificate of Completion--Not    ............            X   ...........           2             1            1
                                         Including Installation.                                                                                        
224...................................  Waiver and Release of Lien (from            X   ............            1  ...........            1             
                                         each supplier).                                                                                                
231...................................  Certificate of Contractor.......            X   ............            1  ...........            1             
213...................................  Certificate (Buy American)......            X             X             1  ...........            1             
None..................................  Switching Diagram, as installed.            X             X             2  ...........            2             
None..................................  Set of Drawings (Each set to                X             X             2  ...........            2             
                                         include all the drawings                                                                                       
                                         required under the                                                                                             
                                         Specification, RUS Form 522).                                                                                  
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (1) * * *
    (ii) * * *
    (A) Prepare and assemble the documents listed in the table in this 
section, Documents Required to Close Out Central Office Equipment 
Contracts.
* * * * *
    (iii) Make the documents listed in the table available for GFR 
review on the date of final inspection.
    (iv) Distribute the documents as indicated in the table, including 
submission to the GFR of all documents required by RUS.
* * * * *
    (g) Once RUS approval has been obtained for any required 
amendments, the borrower shall obtain certifications from the licensed 
engineer that the project and all required documentation are 
satisfactory and complete. The requirements for the final contract 
certification are set forth in Sec. 1753.18.
    (h) Once these certifications have been received, final payment 
shall be made according to the payment terms of the contract. Copies of 
the certifications shall be submitted with the FRS, requesting the 
remaining funds on the contract.
    20. In Sec. 1753.46, paragraphs (c)(2) and (c)(3) are revised to 
read as follows:


Sec. 1753.46  General.

* * * * *
    (c) * * *
    (2) Contract Form 515, which is for less than $250,000, may, at the 
borrower's option, be negotiated. See Sec. 1753.48(b).
    (3) Form 773 may be used for minor outside plant projects which are 
not competitively bid because they cannot be designed and staked at the 
time of contract execution. Projects of this nature include routine 
line extensions and placement of subscriber drops. See Subpart I of 
this part.
    21. In Sec. 1753.47, paragraph (c) is revised to read as follows:


Sec. 1753.47  Plans and specifications (P&S).

* * * * *
    (c) Submission of plans and specifications to RUS. (1) If the 
project does not exceed $500,000 or 25% of the loan, the borrower shall 
furnish the GFR one set of the P&S and one copy of the ``Checklist for 
Review of Plans and Specifications,'' RUS Form 553, signed by the 
engineer. The borrower may then proceed with procurement in accordance 
with Sec. 1753.48.
    (2) If the project exceeds $500,000 or 25% of the loan, RUS 
approval of the P&S is required. Two (2) sets of the P&S and one copy 
of the ``Check List for Review and Plans and Specifications,'' RUS Form 
553, signed by the borrower's engineer, shall be furnished to the GFR. 
RUS will return one set to the borrower upon notice of approval. The 
borrower may then proceed with procurement in accordance with 
Sec. 1753.48.
    22. In Sec. 1753.48, paragraphs (a)(4) and (b)(1) are revised to 
read as follows:


Sec. 1753.48  Procurement procedures.

    (a) * * *
    (4) Bid openings. (i) Bid openings and award of the contract shall 
be conducted in accordance with Sec. 1753.5(b)(1) and Sec. 1753.8(a).
    (ii) If Sec. 1753.8 requires RUS approval of award of the bid, the 
borrower shall submit to RUS two copies of the

[[Page 38509]]

assembly unit sections of the apparent lowest responsive bid accepted 
by the borrower.
    (b) Negotiated procurement. (1) Competitive bids are not required 
for outside plant construction that is estimated to cost less than 
$250,000 labor and materials. If the contract exceeds $500,000 or 25% 
of the loan, the borrower shall obtain RUS approval of the plans and 
specifications before it begins negotiating with a contractor.
* * * * *
    23. In Sec. 1753.49, paragraphs (b), (c)(2) and (c)(3) are revised, 
to read as follows:


Sec. 1753.49  Closeout documents.

* * * * *
    (b) Documents required. The following table lists the documents 
required to closeout the Form 515 construction contract.

                        Documents Required to Closeout Construction Contract RUS Form 515                       
----------------------------------------------------------------------------------------------------------------
                                                               No. of copies prepared         Distribution      
                                                                         by            -------------------------
         RUS Form No.                   Description          --------------------------                         
                                                               Contractor    Engineer     Borrower    Contractor
----------------------------------------------------------------------------------------------------------------
724..........................  Final Inventory--Certificate   ...........            2            1            1
                                of Completion.                                                                  
724a.........................  Final Inventory--Assembly      ...........            2            1            1
                                Units.                                                                          
None.........................  Contractor's Bond Extension            (3)  ...........                          
                                (Send to RUS when required.).                                                   
(1) (to RUS)                                                                                                    
281..........................  Tabulation of Materials                 2   ...........            1            1
                                Furnished by Borrower.                                                          
213..........................  Certificate--``Buy American''           1   ...........            1  ...........
None.........................  Listing of Construction        ...........            1            1  ...........
                                Change Orders.                                                                  
224..........................  Waiver and Release of Lien              1   ...........            1  ...........
                                (from each supplier).                                                           
231..........................  Certificate of Contractor....           1   ...........            1  ...........
527..........................  Final Statement of             ...........            2            1            1
                                Construction.                                                                   
None.........................  Reports on Results of          ...........            1            1            1
                                Acceptance Tests.                                                               
None.........................  Set of Final Staking Sheets..  ...........            1            1  ...........
None.........................  Tabulation of Staking Sheets.  ...........            1            1  ...........
None.........................  Correction Summary (legible    ...........            1            1  ...........
                                copy).                                                                          
None.........................  Treated Forest Products        ...........  ...........            1  ...........
                                Inspection Reports or                                                           
                                Certificates of Compliance                                                      
                                (prepared by inspection                                                         
                                company or supplier).                                                           
None.........................  Final Key Map (when            ...........            1            1  ...........
                                applicable).                                                                    
None.........................  Final Central Office Area and  ...........            1            1  ...........
                                Town Maps.                                                                      
----------------------------------------------------------------------------------------------------------------

    (c) * * *
    (2) Final inventory documents. (i) The borrower shall obtain 
certifications from the licensed engineer that the project and all 
required documentation are satisfactory and complete. Requirements for 
these contract closeout certifications are set forth in Sec. 1753.18.
    (ii) The borrower shall prepare and distribute the final inventory 
documents as indicated in the tables in this section. The documents 
listed for RUS shall be retained by the borrower for inspection by RUS 
for at least two years from the date of the engineer's contract 
closeout certification.

                    Step-by-Step Procedure for Closeout of Construction Contract RUS Form 515                   
----------------------------------------------------------------------------------------------------------------
                     Sequence                                                                                   
--------------------------------------------------           By                          Procedure              
        Step No.                    When                                                                        
----------------------------------------------------------------------------------------------------------------
1.......................  Upon completion of       Borrower's Engineer...  Prepares the following: a set of     
                           construction.                                    Detail Maps and a set (when         
                                                                            applicable) of Key Maps which show  
                                                                            in red the work done under the 515  
                                                                            contract; a Tabulation of Staking   
                                                                            Sheets; and a tentative Final       
                                                                            Inventory, RUS Forms 724 and 724a.  
2.......................  After acceptance tests   Borrower's Engineer...  Forwards letter to the borrower with 
                           made.                                            copies to the GFR stating that the  
                                                                            project is ready for final          
                                                                            inspection. Schedules inspection    
                                                                            date.                               
3.......................  Upon receipt of letter   GFR...................  Advises borrower whether attending   
                           from Borrower's                                  the final inspection will be        
                           Engineer.                                        possible.                           
4.......................  By inspection date.....  Borrower's Engineer...  Obtains and makes available the      
                                                                            following documents: a set of ``as  
                                                                            constructed'' detail maps and (when 
                                                                            applicable) ``as built'' key maps; a
                                                                            list of construction change orders; 
                                                                            the final staking sheets; the       
                                                                            tabulation staking sheets; the      
                                                                            treated forest products inspection  
                                                                            reports or certificates of          
                                                                            compliance; the tentative final     
                                                                            inventory, RUS Forms 724 and 724a;  
                                                                            the tentative tabulation, RUS Form  
                                                                            231(if borrower furnished part of   
                                                                            material); and, a report of results 
                                                                            of acceptance tests.                
5.......................  During inspection......  Borrower's Engineer...  Issues instructions to contractor    
                                                                            covering corrections to be made in  
                                                                            construction as a result of         
                                                                            inspection.                         
6.......................  During inspection......  Contractor............  Corrects construction on basis of    
                                                                            instructions from the borrower's    
                                                                            engineer. The corrections should    
                                                                            proceed closely behind the          
                                                                            inspection in order that the        
                                                                            borrower's engineer can check the   
                                                                            corrections before leaving the      
                                                                            system.                             
7.......................  During inspection......  Borrower's Engineer...  Inspects and approves corrected      
                                                                            construction. Marks inspected areas 
                                                                            on the key map, if available,       
                                                                            otherwise on the detail maps.       
8.......................  Upon completion of       Borrower's Engineer...  Prepares or obtains all the closeout 
                           inspection.                                      documents listed in Table 3.        

[[Page 38510]]

                                                                                                                
9.......................  After signing final      Borrower..............  Prepares and submits to RUS the      
                           inventory.                                       engineer's certifications of        
                                                                            completion and a Financial          
                                                                            Requirement Statement, RUS Form 481,
                                                                            requesting amount necessary to make 
                                                                            final payment due under contract.   
10......................  On receipt of final      Borrower..............  Promptly forwards check for final    
                           advance.                                         payment to contractor.              
11......................  During subsequent loan   RUS Field Accountant..  Examines borrower's construction     
                           fund audit review                                records for compliance with the     
                           following final                                  construction contract and Subpart F,
                           payment.                                         and examines RUS Form 281           
                                                                            (Tabulation of Materials Furnished  
                                                                            by Borrower) if any, for appropriate
                                                                            costs.                              
----------------------------------------------------------------------------------------------------------------

    (iii) When the total inventory price exceeds the maximum contract 
by more than 20 percent, an extension to the contractor's bond is 
required.
    (iv) The borrower shall submit the engineer's contract closeout 
certification with the FRS for the final advance of funds.
    (3) Final payment shall be made according to the payment provisions 
of Article III of RUS Form 515, except that certificates and other 
documents required to be submitted to or approved by the Administrator 
shall be submitted to and approved by the Owner.
    24. Section 1753.50 is removed and reserved.
    25. In Sec. 1753.58, paragraphs (b), (c)(2) and (c)(5) are revised 
to read as follows:


Sec. 1753.58  Closeout documents.

* * * * *
    (b) Documents. The documents required to close the FAP are listed 
in the following table. The following is a brief description of the 
closeout documents:

 Documents Required to Closeout Force Account Outside Plant Construction
------------------------------------------------------------------------
              RUS Form No.                         Description          
------------------------------------------------------------------------
817, 817a, 817b........................  Final Inventory Force Account  
                                          Construction and Certificate  
                                          of Engineer. Submit one copy  
                                          to RUS, if required.\1\       
213....................................  Certificate--``Buy American''  
                                          (as applicable from each      
                                          supplier).                    
None...................................  Detail Maps.                   
None...................................  Key map, if applicable.        
None...................................  Staking Sheets.                
None...................................  Tabulation of staking sheets.  
None...................................  Treated Forest Products        
                                          Inspection Reports or         
                                          Certificates of Compliance    
                                          (prepared by inspection       
                                          company or supplier).         
------------------------------------------------------------------------
\1\ RUS Forms 817, 817a, and 817b are to be submitted to the GFR only if
  required in paragraph (c)(5) of this section. Otherwise, the final    
  inventory documents are to be assembled and retained by the borrower  
  for at least two years.                                               

    (c) * * *
    (2) The GFR shall be invited to make the final inspection 
accompanied by the engineer and the borrower.
* * * * *
    (5) After inspection, the final inventory documents shall be 
assembled as indicated in the table in this section. RUS Forms 817, 
817a, and 817b are to be submitted to the GFR only if the amount of the 
closeout exceeds the original force account proposal by 20% or more. 
Otherwise, the final inventory documents are to be assembled and 
retained by the borrower for at least two years.
* * * * *
    26. In Sec. 1753.68, paragraphs (b)(2)(i), (b)(2)(ii), (b)(2)(iii), 
(b)(2)(iv), (b)(2)(v), (b)(4)(i), (b)(4)(ii), (c)(2), and (d)(3) are 
revised to read as follows:


Sec. 1753.68  Purchasing special equipment.

* * * * *
    (b) *  *  *
    (2) Initial equipment purchase. (i) The borrower prepares the P&S 
and, for projects estimated to exceed $500,000 or 25% of the loan, 
whichever is less, sends two copies to the GFR for approval.
    (ii) For projects estimated to exceed $500,000 or 25% of the loan, 
RUS will either approve the P&S in writing or notify the borrower of 
any reason for withholding approval.
    (iii) For projects estimated to cost less than $500,000 or 25% of 
the loan, the borrower may proceed with procurement upon completion of 
the P&S.
    (iv) If the borrower has employed full competitive bidding in the 
selection, a contract may be executed with the successful bidder and 
the borrower may proceed to paragraph (b)(2)(vi) of this section.
    (v) If the borrower did not follow a fully competitive bidding 
process as described in Sec. 1753.8, the selection, along with a 
summary of all proposals and an engineer's recommendation, shall be 
sent to RUS. RUS shall approve the proposal selection in writing or 
notify the borrower of any reason for withholding approval.
* * * * *
    (4) New system additions. (i) The borrower prepares the P&S and, if 
the project is estimated to exceed $500,000 or 25% of the loan, sends 
two copies to the GFR for approval. The borrower may request RUS 
approval to negotiate for the purpose of standardization on a system 
basis prior to preparing the P&S.
    (ii) RUS notifies the borrower in writing as to whether the 
borrower may negotiate for specific equipment. If P&S were required to 
be submitted to RUS under paragraph (b)(4)(i) of this section, RUS 
notifies the borrower in writing of P&S approval (or notifies the 
borrower of any reason for withholding approval).
* * * * *
    (c) *  *  *
    (2) The borrower shall prepare any required amendments to the 
special equipment contract, arrange for the execution by all parties, 
and submit these amendments to RUS in accordance with Sec. 1753.11(d). 
RUS Form 238 , Construction or Equipment Contract Amendment, shall be 
used for this purpose.
* * * * *
    (d) *  *  *
    (3) Closeout documents. When the acceptance tests have been 
completed

[[Page 38511]]

and all deficiencies have been corrected, the borrower:
    (i) Assembles and distributes the documents listed in the following 
table that are required for the closeout of the special equipment 
contract. The documents listed for RUS shall be retained by the 
borrower for inspection by RUS for at least two years from the date of 
the engineer's contract closeout certification.

                                    Documents Required to Closeout Special Equipment Contracts RUS Forms 397 and 398                                    
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      No. of copies prepared by                         
                                                                           -----------------------------------------------------------------------------
              RUS Form No.                          Description                     Form 397                  Form 398                Distribution      
                                                                           -----------------------------------------------------------------------------
                                                                             Contractor    Engineer    Contractor    Engineer     Borrower    Contractor
--------------------------------------------------------------------------------------------------------------------------------------------------------
238....................................  Construction or Equipment          ...........          (3)  ...........          (3)                          
                                          Contract Amendment (If not                                                                                    
                                          previously submitted, send to                                                                                 
                                          RUS for approval.).                                                                                           
(1) (to RUS)                                                                                                                                            
396....................................  Certificate of Completion--        ...........           2   ...........  ...........            1            1
                                          Special Equipment Contract                                                                                    
                                          (Including Installation).                                                                                     
396a...................................  Certificate of Completion--        ...........  ...........  ...........           2             1            1
                                          Special Equipment Contract (Not                                                                               
                                          Including Installation).                                                                                      
744....................................  Certificate of Contractor and                1  ...........  ...........  ...........            1  ...........
                                          Indemnity Agreement.                                                                                          
213....................................  Certificate (Buy American).......            1  ...........            1  ...........            1  ...........
None...................................  Report in writing, including all             1  ...........  ...........           1             1  ...........
                                          measurements and other                                                                                        
                                          information required under Part                                                                               
                                          II of the applicable                                                                                          
                                          specifications.                                                                                               
None...................................  Set of maintenance                           1  ...........            1  ...........            1  ...........
                                          recommendations for all                                                                                       
                                          equipment furnished under the                                                                                 
                                          contract.                                                                                                     
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (ii) Obtains certifications from the licensed engineer that the 
project and all required documentation are satisfactory and complete. 
Requirements for this contract closeout certification are set forth in 
Sec. 1753.18.
    (iii) Submits copies of the engineer's certifications to RUS with 
the FRS requesting the remaining funds on the contract.
    (iv) Makes final payment in accordance with the payment terms of 
the contract.
    27. In Sec. 1753.76, paragraph (a) is revised to read as follows:


Sec. 1753.76  General.

    (a) This subpart implements and explains the provisions of the Loan 
Documents setting forth the requirements and procedures to be followed 
by borrowers for minor construction of telecommunications facilities 
using RUS loan funds. Terms used in this subpart are defined in 
Sec. 1753.2.
* * * * *
    28. In Sec. 1753.80, paragraph (b) is revised to read as follows:


Sec. 1753.80  Minor construction procedure.

* * * * *
    (b) RUS financing under Form 773 contracts dated in the same 
calendar year is limited to the following amounts for the following 
discrete categories of minor construction. The date of the Form 773 
contract is the date the Form 773 contract is executed.
    (1) For outside plant construction, the limit is $500,000 or ten 
per cent (10%) of the borrower's previous calendar year's outside plant 
total construction, whichever is greater.
    (2) For central office equipment, the limit is $500,000.
    (3) For special equipment and buildings, the limit is $250,000.
* * * * *
    29. Appendices A through F are removed.

    Dated: July 8, 1998.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 98-18759 Filed 7-16-98; 8:45 am]
BILLING CODE 3410-15-P


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