Source: https://www.ecfr.gov/cgi-bin/text-idx?mc=true&node=pt7.11.1753&rgn=div5
Timestamp: 2020-01-25 00:27:41
Document Index: 161800343

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Title 7 → Subtitle B → Chapter XVII → Part 1753
§1753.1 General.
§1753.2 Definitions.
§1753.3 Preconstruction review.
§1753.4 Major and minor construction.
§1753.5 Methods of major construction.
§1753.6 Standards, specifications, and general requirements.
§1753.7 Plans and specifications (P&S).
§1753.8 Contract construction procedures.
§1753.9 Subcontracts.
§1753.10 Preconstruction conference.
§1753.11 Contract amendments.
§§1753.12-1753.14 [Reserved]
§1753.25 General.
§1753.26 Plans and specifications (P&S).
§1753.27 Bidding procedure.
§1753.28 Contract amendments.
§1753.29 Force account procedures.
§1753.30 Closeout procedures.
§§1753.31-1753.35 [Reserved]
§1753.36 General.
§1753.37 Plans and specifications (P&S).
§1753.38 Procurement procedures.
§1753.39 Closeout documents.
§§1753.40-1753.45 [Reserved]
§1753.46 General.
§1753.47 Plans and specifications (P&S).
§1753.48 Procurement procedures.
§1753.49 Closeout documents.
§§1753.50-1753.55 [Reserved]
§1753.56 General.
§1753.57 Procedures.
§1753.58 Closeout documents.
§§1753.59-1753.65 [Reserved]
§1753.66 General.
§1753.67 Contracts and specifications.
§1753.68 Purchasing special equipment.
§§1753.69-1753.75 [Reserved]
§1753.76 General.
§1753.77 Methods of minor construction.
§1753.78 Construction by contract.
§1753.79 Construction by force account.
§1753.80 Minor construction procedure.
§1753.81 Inspection and certification.
§1753.82 Minor construction closeout.
§§1753.83-1753.90 [Reserved]
§1753.91 General.
Source: 54 FR 39267, Sept. 25, 1989, unless otherwise noted. Redesignated at 55 FR 39396, Sept. 27, 1990.
(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 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.
(b) The typical procedure followed in constructing a project financed by an RUS loan begins with the prospective borrower obtaining the necessary preloan engineering and developing a complete loan application, including an LD (See 7 CFR part 1737). If a loan is approved and all prerequisites to advance of funds are satisfied, the borrower may proceed with the purchase and installation of materials and equipment and the construction of telephone facilities pursuant to this part 1753. Subpart A describes
(1) RUS's general requirements with respect to steps to be taken after the loan is approved and before construction begins (See §1753.3),
(2) RUS requirements with respect to methods of construction (See §§1753.5 and 1753.6),
(3) RUS requirements regarding sealed competitive bidding and negotiated bidding of construction contracts (See §§1753.6 and 1753.9),
(4) RUS standards for materials, equipment, and construction financed with loan funds (See §1753.7), and
(5) RUS requirements for subcontracts and contract amendments covering construction financed with loan funds (See §§1753.10 and 1753.12).
(c) Each borrower is responsible for the construction of its facilities and for the procurement of materials and equipment that are best suited to its needs.
(d) If contracts, P&S, or other methods of procurement are subject to RUS approval pursuant to the provisions of the loan contract, as implemented by this part, RUS will review the documents or proposals submitted and notify the borrower in writing of approval or disapproval. RUS may withhold approval if, in RUS's judgment:
(1) The P&S or contract will not accomplish loan purposes.
(2) Provisions of the P&S or contract will add unnecessary expense to the project.
(3) The proposal, method of procurement, or P&S do not conform to RUS engineering criteria or construction standards, or if they present unacceptable loan security risks to RUS.
(4) The P&S or contract have been modified.
(e) The requirements and procedures covering procurement of architectural and engineering services are described in subpart B of this part.
(f) Single copies of RUS forms cited in this part are available from Administrative Services Division, Rural Utilities Service, United States Department of Agriculture, Washington, DC 20250-1500. These RUS forms may be reproduced.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27, 1990, as amended at 64 FR 16604, Apr. 6, 1999]
For the purpose of this part 1753:
Alternate— A solicitation for a bid adjustment for a specified deviation from the Plans and Specifications.
Architect— A person registered as an architect in the state where construction is performed, or a person on the borrower's staff, approved by RUS, authorized to perform architectural services.
Bid guarantee— A bid bond or certified check required of contractors bidding on construction work to ensure that the bidder, if successful, will furnish a satisfactory performance bond ensuring completion of work.
Central office building— The facility housing the central office equipment.
Central office equipment— Switching and signaling equipment that performs call origination and completion functions for subscribers.
Closeout documents— The documents required to certify satisfactory completion of all obligations under a contract or force account proposal.
Construction— Purchase and installation of telecommunications facilities in a borrower's system using loan funds.
Contract construction— Construction and installations performed using an RUS contract form. See 7 CFR 1755.93.
Engineer— A person registered as an engineer in the state where construction is performed, or a person on the borrower's staff, approved by RUS, authorized to perform engineering services.
FAP (force account proposal)—The borrower's detailed plans submitted to RUS for force account construction.
Force account construction—Construction performed by the borrower's employees under an RUS approved FAP, with the borrower furnishing all materials, equipment, tools, and transportation.
FRS—RUS Form 481 (OMB control number 0572-0023), Financial Requirement Statement.
GFR—RUS General Field Representative.
Installation—The act of setting up or placing in position equipment for service or use in the borrower's system.
Interim construction—The purchase of equipment or the conduct of construction under an RUS-approved plan of interim financing. See 7 CFR part 1737.
Interim financing—Funding for a project which RUS has acknowledged may be included in a loan, should said loan be approved, but for which RUS loan funds have not yet been made available.
Labor and materials—All the labor and materials required for construction.
LD (loan design)—Supporting data for a loan application. See 7 CFR part 1737.
Loan—Any loan made or guaranteed by RUS. See 7 CFR part 1735.
Loan funds—Funds provided by RUS through direct or guaranteed loans. See 7 CFR part 1744 subpart C.
Loan purposes—The high level objectives of the loan are to fund 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.
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.
Minor errors or irregularities—A defect or variation in a seller's bid that is a matter of form and not of substance. Errors or irregularities are “minor” if they can be corrected or waived without being prejudicial to other bidders and when they do not affect the price, quantity, quality, or timeliness of construction. Unless otherwise noted, the borrower determines whether an error or irregularity is “minor.”
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.
Negotiation—Any form of purchasing or contracting other than sealed competitive bidding. Any contract awarded without using the sealed competitive bidding procedure is a negotiated contract.
Outside plant—The facilities that conduct electrical or optical signals between the central office and the subscriber's network interface or between central offices.
Performance bond—A surety bond on a form satisfactory to RUS guaranteeing the contractor's faithful performance of a contract.
P&S (plans and specifications)—An RUS contract form, the appropriate specifications, and such additional information and documents needed to provide a clear, accurate, and complete understanding of the installations to be made or construction to be performed.
Responsive bid—A bid that complies with the requirements of the plans and specifications.
RUS—the Rural Utilities Service, an agency of the United States Department of Agriculture established pursuant to Section 232 of the Federal Crop Insurance and Reform and Department of Agriculture Reorganization Act of 1994 (Pub. L. 103-354, 108 Stat. 3178), successor to Rural Electrification Administration with respect to administering certain electric and telecommunications program. See 7 CFR 1700.1.
Sealed competitive bidding—A method of contracting that employs sealed competitive bids, public opening of bids, and award of the contract to the bidder submitting the lowest responsive bid. See §1753.8.
Single source negotiation—Negotiating with a single source (contractor or seller).
Special equipment—Equipment used primarily for the transmission and enhancement of voice, data, carrier, radio and light signals, and other equipment and facilities, including incidental cable and other transmission equipment.
Subcontract—A secondary contract undertaking some of the obligations of a primary contract. Under all RUS forms of contract, the primary contractor bears full responsibility for the performance of the subcontractor.
Unbalanced bid—A bid which contains pricing for a task or material that is significantly higher or lower than pricing for similar tasks or materials.
Work order construction—Minor construction performed by the borrower's employees, pursuant to its work order procedure, with the borrower furnishing all materials, equipment, tools, and transportation.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27, 1990, as amended at 58 FR 66259, Dec. 20, 1993; 59 FR 17464, Apr. 13, 1994; 64 FR 16604, Apr. 6, 1999; 81 FR 71582, Oct. 18, 2016]
(a) Advance RUS approval must be obtained for any construction that does not conform to RUS standards and specifications or the approved LD, such as construction of extensions to serve subscribers in areas not included in the LD (See 7 CFR part 1737). For loans approved after RUS approval of the modernization plan in the borrower's state, the proposed construction must conform to the modernization plan, as required by 7 CFR part 1751, subpart B. To obtain approval, the borrower shall submit a written proposal containing:
(1) A description of the work, indicating any deviations from the approved LD or RUS standards and specifications.
(2) An engineering study covering the deviations if there are changes in the design.
(3) A cost estimate for labor, engineering, materials, and overheads.
(4) If applicable, a brief analysis from the borrower demonstrating that the proposed changes conform to the modernization plan.
(b) Before any construction, including interim construction, is initiated, the GFR shall meet with the borrower to review the LD to determine if any significant changes have occurred since its approval by RUS. It is important that the design and construction of the proposed facilities be based on the latest information on subscriber needs.
(c) If the borrower and GFR agree that there have been no significant changes, the borrower may proceed.
(d) If the GFR finds that the LD is no longer satisfactory, the borrower shall prepare an amendment to the LD incorporating the necessary revisions (See 7 CFR part 1737). The borrower must obtain RUS approval of the LD amendment before proceeding with engineering activities on any project to be financed with loan funds.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27, 1990, as amended at 58 FR 66259, Dec. 20, 1993; 59 FR 17464, Apr. 13, 1994; 64 FR 16604, Apr. 6, 1999]
RUS's general requirements for construction are set forth in this subpart A. Additional requirements and procedures for different types of major construction are presented in subparts D, E, F, G, and H (OMB control number 0572-0062). The requirements and procedures for minor construction are presented in subpart I. Borrowers may, at their option, follow the procedures in subparts D, E, F, G, and H for any minor construction.
(a) All major construction projects financed by loan funds shall be performed pursuant to a contract approved by RUS and awarded through sealed competitive bidding unless
(1) A specific exception is granted in subparts D, E, F, G, or H, or
(2) Written RUS approval is obtained.
(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 of bidding or bid evaluation set contained 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.
(3) The requirements and procedures for sealed competitive bidding are presented in §1753.8(a). The requirements and procedures for negotiation are presented in §1753.8(b).
(c) Force account construction. To obtain RUS approval of the force account method for major construction the borrower must demonstrate its ability to perform major construction based on past force account construction which fully met RUS construction standards and was as cost-effective as contract construction in the area. If the borrower has no record of past performance to support its request, but has adequate equipment and experienced personnel to perform the proposed construction, RUS may approve a small trial project. The requirements and procedures for force account construction are presented in subparts D, E, G, and H.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27, 1990, as amended at 59 FR 43716, Aug. 25, 1994; 64 FR 16604, Apr. 6, 1999]
(b) The borrower may use RUS loan funds to finance nonstandard construction materials or equipment only if approved by RUS in writing prior to purchase or commencement of construction.
(c) Only new materials and equipment may be financed with loan funds, unless otherwise approved by RUS. The materials and equipment must be year 2000 compliant, as defined in 7 CFR 1735.22(e).
(d) All materials and equipment financed with loan funds are subject to the “Buy American” provision (7 U.S.C. 901 et seq. as amended in 1938).
(e) All software, software systems, and firmware financed with loan funds must be year 2000 compliant, as defined in 7 CFR 1732.22(e).
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27, 1990, as amended at 59 FR 43716, Aug. 25, 1994; 63 FR 45679, Aug. 27, 1998; 64 FR 16605, Apr. 6, 1999; 81 FR 71582, Oct. 18, 2016]
(a) The P&S consist of an RUS contract form, the appropriate RUS specifications, and such additional information and documents needed to provide a clear, accurate, and complete understanding of what is included in the construction.
(b) 7 CFR 1755.93 provides a list of the RUS forms of telecommunications contracts for use in purchasing telephone materials and equipment and for constructing telephone facilities with loan funds. Also listed is the source where copies may be obtained.
(d) The P&S shall be based on the LD approved by RUS. Section 1753.3 presents the requirements and procedures for obtaining RUS approval for construction that does not conform to the LD approved by RUS.
(e) RUS approval of 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.
(f) RUS will approve only contracts that will provide for at least the following requirements.
(1) Equal employment opportunity provision. If this provision is not already in the contract, RUS Contract Form 270, Equal Opportunity Addendum, shall be attached and made a part of the contract.
(2) Liquidated damages provision. (i) If not covered by the contract, an appropriate liquidated damages provision, in a form prescribed by RUS, shall be included and made a part of the contract
(ii) The liquidated damages must be based upon the borrower's best estimate of the damages it would incur as a result of the contractor's default.
(3) Insurance and bond requirements. (i) The insurance provision shall provide coverage as required by 7 CFR 1788.
(ii) A contractor's bond shall be furnished as required by 7 CFR part 1788.
(iii) The borrower is responsible for ensuring that its contractor complies with the insurance and bond requirements.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27, 1990, as amended at 59 FR 17679, Apr. 14, 1994; 64 FR 16605, Apr. 6, 1999; 81 FR 71582, Oct. 18, 2016]
(a) Sealed, competitive bidding—(1) Bid opening date. The borrower is responsible for scheduling the bid opening date. If RUS review of P&S is required by §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 GFR of the bid date and invite GFR to attend.
(2) Invitations to bid. The borrower is responsible for sending invitations to prospective bidders and taking any other action necessary to procure full, free, and competitive bidding. The borrower should obtain from its engineer a list of prospective bidders and a recommendation indicating which bidders are considered qualified. The minimum number of contractors to be invited to bid on contracts for various types of facilities is set forth in subparts D, E, F, or H.
(3) Qualifying bidders. If the notice and instructions to bidders require that bidders show evidence of meeting certain requirements, the borrower shall qualify bidders before issuing P&S to them. Procedures for qualifying bidders are contained in subparts D, E, and F.
(4) Receipt of bids. The borrower shall write on the outside envelope of any bid or bid amendment, the date and time the bid was received. Any bid received from an unqualified bidder or after the time specified for opening shall be returned promptly to the bidder unopened.
(5) Procedure when fewer than three bids are received. If fewer than three valid bids are received, the borrower shall consult with RUS to determine whether the bids are to be opened or returned unopened. RUS requires that the project be rebid if fewer than three bids are received and RUS determines that one or more other bidders with an express interest in bidding is available and could meet the bid requirements, but was not invited to bid. RUS shall also require rebidding if it is found that qualified bidders were discouraged from bidding by unreasonable bid requirements (such as late notification to bidders) or if the borrower fails to follow the bid procedure.
(6) Conduct of bid openings. The borrower shall conduct bid openings open to the public. The borrower should be able to contact its attorney for immediate consultation.
(7) Review of bids. The borrower shall review all bids prior to reading any bid results to determine that:
(i) The bid guarantees are adequate.
(ii) All minor errors or irregularities made through inadvertence are corrected or waived. Failing this, the bid shall be rejected as nonresponsive.
(iii) In the event of non-minor errors or irregularities, the bid is rejected and the bid price not disclosed.
(8) Reading of bids. Bid prices shall not be read until the borrower has reviewed all bids to determine if there are any minor errors or irregularities that may affect the recommendation as to award. These shall be made public at the same time the bid price is announced.
(9) Evaluating bids. The borrower shall consider the same alternates in all bids in determining the low bid.
(10) Rejection. The borrower shall reject:
(i) All bids if quoted prices are not acceptable or if the specifications were ambiguous and resulted in bidders having different interpretations of the requirements.
(ii) Any bid that is not responsive, or is incomplete, or submitted by an unqualified bidder, or unbalanced between labor and materials or other respects.
(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:
(A) The project is included in an approved loan and adequate funds were budgeted in the loan and are available.
(B) All applicable RUS procedures were followed, including those in the Notice and Instructions to Bid in the standard forms of contract.
(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:
(A) Two copies of the low bid.
(B) The engineer's recommendation and the tabulation of all bids.
(C) Evidence of acceptance of the low bid by the borrower, such as:
(1) Certified copy of board resolution or
(2) letter or telegram to RUS signed by a properly authorized corporate official.
(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.
(ii) If RUS approves the contract, it shall return one copy to the borrower and send one copy to the contractor.
(b) Negotiated construction contracts. (1) For the construction of certain facilities the borrower may negotiate a contract rather than solicit sealed competitive bids. Refer to the appropriate subparts E, F, or H for specific requirements and procedures.
(2) For negotiated purchases, borrowers shall use RUS contract forms, standards, and specifications.
(3) For all contract forms except RUS Form 773:
(i) After a satisfactory negotiated proposal has been obtained, the borrower shall submit it to RUS for approval, along with the engineer's recommendation, and evidence of acceptance by the borrower.
(ii) If RUS approves the negotiated proposal, the borrower shall submit three copies of the contract, executed by the contractor and borrower, to RUS for approval.
(iii) If RUS approves the contract, RUS shall return one copy of the contract to the borrower and one copy to the contractor.
(4) For RUS Form 773, the borrower is responsible for negotiating a satisfactory proposal, executing contracts, and closing the contract. See subparts F and I of this part for requirements for major and minor construction, respectively, on Form 773.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27, 1990, as amended at 59 FR 43716, Aug. 25, 1994; 64 FR 16605, Apr. 6, 1999]
(b) RUS Form 282, Subcontract, shall be used for subcontracts under construction and installation contracts.
(1) Minor modifications or additions may be made to the subcontract form, as long as they do not change the intent of the primary contract. Any alterations to the subcontract shall be initialed and dated by the persons executing the subcontract.
(2) Subcontracts shall be prepared in quadruplicate and all copies executed by the contractor and subcontractor and consented to by the borrower and surety, if any.
(3) Four executed copies of the subcontract shall be forwarded to RUS for approval. Upon approval, one copy each will be sent to the borrower, contractor, and subcontractor.
(d) As stated in the contract, construction shall not be performed by the subcontractor before approval of the subcontract by RUS.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27, 1990, as amended at 59 FR 43716, Aug. 25, 1994; 81 FR 71582, Oct. 18, 2016]
The borrower shall conduct a conference, attended by the borrower, contractor, and resident engineer prior to the beginning of construction to provide an opportunity to discuss and agree on responsibilities, procedures, practices, and methods before the work begins. The borrower shall provide each participant with a copy of the conference results. The GFR shall be invited to attend this conference.
(a) The borrower must obtain RUS approval before execution of any amendment to a contract if
(1) The amendment alters the terms and conditions of the contract or changes the scope of the project covered by the contract regardless of the amount of the contract before amendment,
(2) The amendment increases the amount to be paid under the contract by 20% or more, or
(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 by 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.
(c) For each amendment executed, the borrower shall make certain that:
(1) The contractor's bond covers the additional work to be performed. If the amendment by itself (or together with preceding amendments) increases the original contract price by 20% or more, a bond extension will be required to bring the penal sum of the bond to the total amended contract price.
(2) If an amendment covers construction in a county or state not included in the original contract, the borrower and contractor are licensed to do business in that location.
(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.
(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.
(b) Terms used in this subpart are defined in §1753.2.
(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 §1753.26 for further instructions.
(e) The borrower shall use the sealed competitive bid procedure for all building construction, except for:
(1) Minor construction using subpart I procedures.
(2) Major construction, where the borrower has received advanced approval to perform the construction by force account.
Refer to §§1753.27 and 1753.29 for further instructions.
(f) The site location, design, and construction of the facilities must comply with all applicable laws and regulations, including:
(1) Pub. L. 90-480 (42 U.S.C. 4151) (Access to Physically Handicapped), which requires certain buildings financed with Federal funds be designed and constructed to be accessible to the physically handicapped.
(2) Pub. L. 91-596 (29 U.S.C. 651) the Occupational Safety and Health Act of 1970. OSHA issues rules and regulations covering occupational safety and health standards for buildings. These regulations are codified in 29 CFR chapter XVII.
(3) 7 CFR part 1970.
(4) 7 CFR part 1792, subpart C, which requires that the building design comply with applicable seismic design criteria. Prior to the design of buildings, borrowers shall submit to RUS a written acknowledgement from the architect or engineer that the design will comply.
(g) All construction pertaining to the building structure shall be performed under one contract. Separate contracts may be used for planting shrubbery, surfacing of roads and parking areas, and other identifiable parts of the project not pertaining to the building structure. These separate contracts shall also be subject to RUS approval as described in this subpart D.
(h) The borrower is responsible for submitting evidence, satisfactory to RUS, establishing that clear title to the building site has been obtained. RUS will not approve the construction contract until it has given title clearance.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27, 1990, as amended at 59 FR 43717, Aug. 25, 1994; 64 FR 16606, Apr. 6, 1999; 81 FR 11028, Mar. 2, 2016]
(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 §1753.25(f) and the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et seq.). The P&S shall be submitted to the GFR and are subject to RUS approval.
(b) The borrower shall prepare P&S for construction of all buildings. Each set of P&S shall include:
(1) RUS Contract Form 257, Contract to Construct Buildings, completed to the extent explained in (c) of this section.
(2) Complete and detailed specifications covering materials and workmanship.
(3) A detailed building plan. Where the building is to house electronic apparatus, the detailed plan or specifications shall include the equipment environmental requirements and special equipment required.
(4) A site plan for each building showing the building location and giving the legal description of the site. Sufficient information must be provided for the site so that it can be identified as the same property on which title opinion was submitted to RUS. The legal description shall be typed on the site plan. The borrower shall also furnish topographical information and a description of any proposed site development work and show proposed connections for public utilities.
(c) RUS Contract Form 257 shall be completed as follows:
(1) List of names or kinds of buildings and locations—Site plan and specifications must be identified with the appropriate building.
(2) Alternates—The borrower shall keep the number of alternates to a minimum. Items for which alternates are to be taken shall be fully described on a separate sheet in the specifications and the details shown on the plans, when necessary, and identified by the alternate number. The Notice and Instructions to Bidders shall explain how bids will be evaluated with respect to alternates.
(3) Time for construction—A reasonable time for completion of construction, considering local conditions, shall be determined by the borrower and inserted in the space provided. Too short a construction period may discourage bidders or influence their bids. Completion of the building, where central office equipment is involved, shall be coordinated with delivery of the equipment. The time of completion shall allow adequate drying time before the central office equipment is stored or installed in the building.
(d) The plans and specifications shall show the identification and date of the model code used for seismic safety design considerations, and the seismic factor used. See 7 CFR part 1792, subpart C.
(e) Two sets of the building plans and specifications shall be prepared and submitted to the GFR.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27, 1990, as amended at 59 FR 43717, Aug. 25, 1994; 64 FR 16606, Apr. 6, 1999]
Upon RUS approval of the P&S, the borrower shall proceed as follows:
(a) Bid documents shall consist of a copy of the approved P&S, including RUS Contract Form 257, completed in accordance with the instructions on the cover of the form and the plot plans showing site development details. For contracts in amounts of $100,000 or less, the borrower must specify in the Notice and Instructions to Bidders whether the contractor will be required to furnish a performance bond or a builder's risk policy.
(b) The borrower shall determine that title to the real estate has been approved by RUS before the invitations to bid are released.
(c) The borrower shall set the time for opening of bids, allowing ample time for bidders to prepare bids.
(d) The borrower shall solicit bids as set forth in §1753.8(a)(2). Invitations shall be sent to at least six prospective bidders.
(e) The borrower shall conduct bid opening and award of contract in accordance with the procedure set forth in §1753.8(a).
(a) The general requirements for contract amendments are set forth in §1753.11.
(b) The borrower shall prepare construction contract amendments on RUS Contract Form 238, Construction or Equipment Contract Amendments. See 7 CFR 1755.93 to obtain copies of Form 238.
(a) The borrower must obtain RUS approval of the force account method of construction of buildings in advance in order to obtain RUS financing.
(b) The borrower shall prepare the P&S in accordance with §1753.26.
(c) Prior to any construction activity or the purchase of materials or equipment, the borrower shall submit the FAP in duplicate to RUS, accompanied by a resolution indicating approval of the board of directors of the borrower or a letter signed by an authorized corporate official. The proposal shall include:
(1) A Copy of the P&S.
(2) An itemized list of all items of materials required for construction.
(3) A construction schedule showing the estimated construction period for each major construction item.
(4) An estimate of the material and labor and other costs for any construction item not provided for in the approved loan.
(d) Force Account construction to be financed with loan funds shall not be started until RUS approval has been received by the borrower.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39396, Sept. 27, 1990, as amended at 59 FR 43717, Aug. 25, 1994]
(a) This section outlines the procedure to be followed to close out RUS Contract Form 257 (Contract to Construct Buildings) and construction or rehabilitation performed by the force account method.
(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 §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 architect or engineer that the project and all required documentation are satisfactory and complete. The requirements for this certification are contained in §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.
(4) 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.
(c) Upon completion of force account construction, the borrower shall:
(1) Arrange with its architect or engineer and the GFR for final inspection of the project.
(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.
Documents Required To Closeout Construction of Buildings
238 Construction or Equipment Contract Amendment (if not previously submitted, send to RUS for approval) X (3) (to RUS) (to RUS)
181 Certificate of Completion (contract construction)1 X 2 1 1
231 Certificate of Contractor X 1 1
224 Waiver and Release of Lien From Each Supplier X 1 1
213 Certificate (buy American) X 1 1
None2 “As Built” Plans and Specifications X X 1 1
None Guarantees, Warranties, Bonds, Operating or Maintenance Instructions, etc X 1 1
None Architect/Engineer seismic safety certification X X 2 1 1
1Cost of materials and services furnished by borrower are not to be included in Total Cost on RUS Form 181.
2When 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) Final payment shall not be made until RUS has approved the closeout documents.
Source: 54 FR 39267, Sept. 25, 1989, unless otherwise noted. Redesignated at 55 FR 39397, Sept. 27, 1990.
(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 purchasing and installing central office equipment financed with loan funds.
(b) Terms used in this subpart are defined in §1753.2 and Equipment Contract, RUS Contract Form 395 (RUS Contract Form 395).
(d) Alternates, if any, specified in the P&S shall be kept to a minimum.
(f) The borrower may request permission to negotiate with a single supplier for additional central offices to standardize equipment on a system basis. RUS approval to negotiate must be obtained before release of the plans and specifications to the supplier. Except for remote switching terminals associated with an existing central office, RUS will not approve negotiation with a non-domestic manufacturer for the purpose of standardization because such a purchase does not meet the RE Act “Buy American” provisions.
(h) Only new equipment shall be purchased unless otherwise approved by RUS.
(i) All purchases of materials and equipment are subject to the “Buy American” requirements.
(j) If the sealed competitive bid procedure is followed, negotiation after bid opening will not be permitted.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27, 1990, as amended at 64 FR 16607, Apr. 6, 1999; 81 FR 71582, Oct. 18, 2016]
(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, whichever is less.
(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.
(a) Sealed competitive bidding. Sealed competitive bidding of central office equipment shall be in two steps: presentation and evaluation of suppliers' technical proposals, and compliance with the sealed competitive bidding procedure set forth in §1753.8(a). The procedure is as follows:
(1) Solicitation of bids. (i) After RUS approval of the specifications and equipment requirements (required only for projects expected to exceed $500,000 or 25% of the loan, whichever is less), the borrower shall send “Notice and Instructions to Bidders” to suppliers with central office equipment.
(ii) The “Notice” must set forth the method of evaluating bids and must require the submission of equipment lists and traffic calculations with the bids.
(iv) The borrower shall solicit bids as set forth in §1753.8(a)(2). The “Notice” shall be sent to at least three prospective bidders. A copy of the “Notice” and a list of such bidders shall be sent to RUS.
(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:
(A) Lists of equipment, material and software.
(B) Proposed floor plan.
(C) Power and heat dissipation calculations.
(D) List of exceptions to plans and specifications.
(E) Protection and grounding requirements.
(F) Description of how office administration, maintenance and traffic collection are handled with step-by-step examples and printouts.
(G) Explanation of processor and/or memory expansion required to meet ultimate size. This shall include discussions of software, processor memory, and hardware additions needed for line additions and the introduction of various future services; the relative costs of installing the necessary hardware and software initially as compared with the anticipated cost if installed at the time when the future services are to be offered.
(H) Description of how special equipment such as loop tests, volunteer fire alarm circuit, line load control, etc., will function.
(I) Description of method for translating initial office administration information into machine language, and proposal as to whether it will be done by the borrower or by the supplier.
(K) Any other items pertinent to the technical proposal, such as information regarding changes that have been made in hardware and software of the equipment that is of like manufacture to that presently in operation in the borrower's system. This shall include requirements for additional spare parts or training which have developed as a result of significant change in system device technology.
(ii) The borrower shall review in detail all exceptions to the P&S. No exceptions will be accepted unless all bidders are notified, in writing, of the change in the specifications and permitted to incorporate the change in their proposal.
(iii) If the technical proposal is not responsive, the borrower shall notify the supplier, in writing, that its proposal will not be given further consideration and why.
(iv) Changes in the P&S resulting from the technical sessions shall be subject to RUS's review and approval.
(v) After evaluation of the technical proposals and RUS approval of the changes to P&S (required only for projects that are expected to exceed $500,000 or 25% of the loan, whichever is less), sealed bids shall be solicited from only those bidders whose technical proposals meet 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.
(vi) The borrower shall invite the GFR to attend the technical sessions.
(3) Bidding and award of contract. (i) All bids must be completed, dated, and signed prior to submission.
(ii) The bid opening and award of contract shall be conducted in accordance with the procedure set forth in §1753.8(a).
(iii) The spare parts bid shall always be priced separately and added to the base bid when determining the low bidder.
(b) Single source negotiated procurement. If RUS has approved the borrower's request to procure central office equipment through single source negotiation in accordance with requirements contained in §1753.36(f), the borrower shall proceed in accordance with this subsection.
(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, whichever is less), the borrower shall send two complete copies of the approved P&S to the supplier and request that a proposal be submitted.
(2) The borrower shall schedule a time and date for a technical session by the supplier and request that the items listed in §1753.38(a)(2)(i) be available at the technical session. In addition to these items, the supplier shall be requested to provide a description of the exact differences in hardware and software between the borrower's existing equipment and the proposed equipment so that the borrower can determine spare parts interchangeability, need for retraining, and the compatibility of administration of the old and new equipment.
(3) If the contract is expected to exceed $500,000 or 25% of the loan, whichever is less, changes in the P&S resulting from the technical session shall be subject to RUS review and approval.
(4) The submitted proposal shall be based on the agreed-upon results of the technical evaluation and must be complete, dated, and signed.
(5) The borrower shall obtain an award recommendation from its engineer.
(6) The following shall be sent to RUS for review and approval:
(i) A copy of the engineer's recommendation to the borrower, and
(ii) Evidence of acceptance of the proposal by the borrower, such as
(A) A certified copy of the board resolution, or
(B) A letter to RUS signed by an authorized corporate official.
(7) RUS approval of the proposal will be conditioned upon the borrower obtaining prices that are consistent with current competitive prices. Upon RUS approval of the proposal, three copies of the contract shall be prepared with all specifications and proposal documents, and performance bonds, to be executed by the supplier and borrower.
(8) The three complete, executed contracts shall be sent to the RUS Area Engineering Branch Chief for approval.
(9) If RUS approves the contract, one copy will be returned to the borrower and one copy will be sent to the supplier.
(c) Contract amendments. (1) The general requirements for contract amendments are set forth in §1753.11.
(2) Equipment contract amendments shall be prepared on RUS Contract Form 238, Construction or Equipment Contract Amendments.
(d) Additions. When additions to existing central office equipment are required:
(1) A proposal shall be requested from the supplier.
(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 GFR. If the cost does not exceed $500,000, the borrower's award of contract is not subject to RUS approval.
(4) If the purchase is to be made by contract, three executed copies of the contract with attachments are to be submitted to the RUS.
(e) Preinstallation conference. RUS recommends, but does not require, that the borrower hold a preinstallation conference, attended by the borrower, its engineer, equipment installers, and if possible the GFR, prior to the beginning of the installation of the central office equipment.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27, 1990, as amended at 59 FR 17679, Apr. 14, 1994; 64 FR 16607, Apr. 6, 1999; 81 FR 71583, Oct. 18, 2016]
(a) Contract amendments. Amendments that must be submitted to RUS for approval, as required by §1753.11, shall be submitted promptly. All other amendments may be submitted to RUS with the engineer's contract closeout certification.
(e) Final contract closeout procedure. The documents required for the final closeout of the equipment contract, RUS Contract Form 395 with or without installation, are listed in the Table 1 to paragraph (e), which also indicates the number of copies and their distribution.
(f) Once RUS approval has been obtained for any required amendments, the borrower shall obtain certifications from the engineer that the project and all required documentation are satisfactory and complete. The requirements for the final contract certification are contained in §1753.18.
[81 FR 71583, Oct. 18, 2016]
(a) This subpart implements and explains the provisions of the loan documents setting forth the requirements and procedures to be followed by borrowers when outside plant major construction by contract is financed by loan funds. Terms used in this subpart are defined in §1753.2 and RUS Contract Form 515.
(b) The contract method for major construction is described in §1753.5(b).
(c) The two contract forms which may be used for major outside plant construction are Form 515 and Form 773. Limitations on the applicability of these forms shall be as follows:
(1) Form 515 shall be used for major outside plant construction projects which will be competitively bid. The contract contains plans and specifications and has no dollar limitation. See §§1753.47, 1753.48 and 1753.49.
(2) Contract Form 515, which is for $250,000 or less, may, at the borrower's option, be negotiated. See §1753.48(b).
(3) RUS 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.
(a) General. (1) Prior to the preparation of P&S for the construction project:
(i) A review shall be made of the outside plant requirements, and the Loan Design (LD) shall be revised to reflect any needed changes (See §1753.3).
(ii) Deviations from the approved LD (7 CFR part 1737) must be approved by RUS (See §1753.3).
(i) RUS Form 515a (Bulletin 345-150)—Specifications and Drawings for Construction of Direct Buried Plant.
(ii) RUS Form 515c (Bulletin 345-151)—Specifications and Drawings for Conduit and Manhole Construction.
(iii) RUS Form 515d (Bulletin 345-152)—Specifications and Drawings for Underground Cable Installation.
(iv) RUS Form 515f (Bulletin 345-153)—Specifications and Drawings for Construction of Pole Lines and Aerial Cables.
(v) RUS Form 515g (Bulletin 345-154)—Specifications and Drawings for Service Entrance and Station Protector Installation.
(b) Preparation of plans and specifications. Each set of plans and specifications shall include:
(1) RUS Contract Form 515, “Telephone System Construction Contract (Labor and Materials).”
(2) The specifications described in paragraph (a)(2) of this section as specified by the borrower in the RUS Contract Form 515.
(3) Description of special assembly units and guide drawings, if any.
(4) Key, detail, and cable layout maps.
(5) RUS Contract Form 787, “Supplement A to Construction Contract, RUS Contract Form 515,” when the borrower proposes to provide any materials to the contractor. The borrower shall not order materials for a contractor without RUS approval. In such cases the borrower must attach Form 787 and a “List of Owner's Materials on Hand” and/or a “List of Materials Ordered by Owner but Not Delivered” to contract Form 515 (See §1753.48(f) of this part). Any materials furnished under Supplement A shall be listed in RUS Bulletin 344-2 unless special RUS approval has been received by the borrower to use unlisted materials.
(c) Submission of plans and specifications to RUS. (1) If the project does not exceed $500,000 or 25% of the loan, whichever is less, the borrower shall furnish GFR one set of P&S. The borrower may then proceed with procurement in accordance with §1753.48.
(2) If the project exceeds $500,000 or 25% of the loan, whichever is less, RUS approval of P&S is required. Two sets of P&S shall be furnished to GFR. RUS will return one set to the borrower upon notice of approval. The borrower may then proceed with procurement in accordance with §1753.48.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27, 1990, 55 FR 53488, Dec. 31, 1990, as amended at 64 FR 16609, Apr. 6, 1999]
(a) Sealed competitive bidding—(1) Qualifying bidders. (i) The borrower is responsible for selecting qualified contractors to bid on the project. See §1753.8(a)(3). Questions relating to bidders' qualifications shall be resolved prior to the pre-bid conference.
(ii) RUS Form 274 or its equivalent, supplemented by RUS Form 276, shall be used for the submission of bidders' qualifications for all types of construction and for the required information on the bidder and subcontractors.
(2) Invitations to bid— The borrower shall solicit bids as set forth in §1753.8(a)(2). Invitations shall be sent to at least 6 prospective bidders.
(3) Pre-bid conference. (i) Representatives of the borrower and its engineer shall be present at the pre-bid conference at the time and place designated in the Notice to Bidders. The borrower shall invite the GFR to attend the pre-bid conference.
(ii) The purpose of the pre-bid conference is to acquaint the bidders with the scope and special considerations of the project and to clarify any concerns the bidders may have.
(iii) No proposals shall be considered from bidders that do not attend the pre-bid conference unless the bidder has been notified by the engineer that such bidder's attendance has been waived. Attendance can be waived if, in the judgment of the engineer, the bidder would gain no additional understanding of the construction project by attending the pre-bid conference.
(iv) The borrower shall obtain from the engineer the minutes of the pre-bid conference and shall distribute them to all potential bidders.
(v) When fewer than three bidders have been qualified to submit bids, RUS written approval must be obtained to proceed with requesting bids.
(4) Bid openings. (i) Bid openings and award of the contract shall be conducted in accordance with §§1753.5(b)(1) and 1753.8(a).
(ii) If §1753.8 requires RUS approval of award of the bid, the borrower shall submit to RUS two copies of the 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 $250,000, or less, inclusive of labor and materials.
(2) The procedures to be followed are contained in §1753.8(b) and paragraphs (3) and (4) of this section.
(3) Negotiation conference. (i) The borrower shall schedule a conference to be attended by representatives of the engineer, the borrower and the contractor selected for negotiations. The borrower shall invite the GFR to attend this conference.
(ii) The purpose of the negotiation conference is to acquaint the contractor with the scope and special considerations of the project and to answer any questions.
(iii) The borrower shall obtain from the engineer notes covering the negotiation conference and shall distribute them to all attendees.
(4) Two copies of the assembly unit sections of the negotiated contractor's proposal shall be sent to the GFR for approval.
(c) Contract amendments. The borrower shall prepare contract amendments in accordance with §1753.11 on RUS Contract Form 526, Construction Contract Amendment.
(d) Subcontracts. The RUS requirements for subcontracts and the procedures to be followed are set forth in §1753.9.
(e) Preconstruction conference. The borrower shall conduct a conference, attended by the borrower, contractor, subcontractors, resident engineer, and the GFR, prior to the beginning of cable placement, to resolve any questions pertaining to the construction. Results of the conference shall be provided to each conference participant (See §1753.10).
(f) Owner-furnished materials. When the borrower furnishes materials under RUS Contract Form 787, Supplement A to Construction Contract, these steps shall be followed:
(1) Materials on hand to be furnished by the borrower shall be released to the contractor at the start of construction. Materials on order but not received shall be provided to the contractor as they become available. The borrower shall obtain from the contractor a written receipt for all such materials delivered.
(2) Materials on hand, until released to the contractor, shall be covered by fire and either wind-storm or extended coverage insurance, exclusive of materials stored in the open and not within 100 feet of any building. Poles, wherever stored, shall be covered by fire insurance. All insured values must be at least 80 percent of the cash value of the property insured.
(3) Subject to adjustment at the time of final settlement, the borrower shall obtain from the contractor monthly invoices that show credit to the borrower, at the prices quoted in Form 787, Supplement A, for all materials furnished by the borrower and installed by the contractor during the preceding month.
(4) Any materials furnished by the borrower remaining as surplus at the completion of construction shall be returned to the borrower. For such materials, the borrower shall furnish a written receipt to the contractor and credit the contractor at the prices quoted in Supplement A.
(g) Changes or corrections in construction. (1) When changes or corrections in construction are necessary, and the cost of such changes or corrections is properly chargeable to the borrower, the borrower shall have its engineer prepare and sign four copies of a Construction Change Order, RUS Form 216, obtain borrower's approval and forward the four copies to the contractor. Receipt of the executed Construction Change Order by the contractor will constitute authorization to proceed with the changes or corrections.
(2) When the changes or corrections have been made, the borrower shall have the contractor complete the form, itemizing the costs in accordance with the terms of the contract, and return three copies to the borrower's engineer. A copy of each change order shall be attached to each copy of the construction inventory required to close out the contract.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27, 1990, as amended at 64 FR 16609, Apr. 6, 1999]
(a) General. The borrower shall be responsible for preparing the closeout documents with, if necessary, the assistance of the GFR.
(b) Documents required. The following table lists the documents required to closeout the RUS contract Form 515.
724 Final Inventory—Certificate of Completion 2 1 1
724a Final Inventory—Assembly Units 2 1 1
None Contractor's Bond Extension (send to RUS when required) (3) (to RUS) (to RUS)
281 Tabulation of Materials Furnished by Borrower 2 1 1
213 Certificate—“Buy American” 1 1
None Listing of Construction Change Orders 1 1
224 Waiver and Release of Lien (from each supplier) 1 1
231 Certificate of Contractor 1 1
527 Final Statement of Construction 2 1 1
None Reports on Results of Acceptance Tests 1 1 1
None Set of Final Staking Sheets 1 1
None Tabulation of Staking Sheets 1 1
None Correction Summary (legible copy) 1 1
None Treated Forest Products Inspection Reports or Certificates of Compliance (prepared by inspection company or supplier) 1
None Final Key Map (when applicable) 1 1
None Final Central Office Area and Town Maps 1 1
(c) Closeout procedure. (1) After construction has been completed in accordance with the plans and specifications, and acceptance tests have been made, the borrower shall arrange the time for a final inspection to be made by the borrower's engineer, the contractor, the GFR and a representative of the borrower.
(2) Final inventory documents. (i) The borrower shall obtain certifications from the engineer that the project and all required documentation are satisfactory and complete. Requirements for these contract closeout certifications are contained in §1753.18.
1 Upon Completion of Construction Borrower's Engineer Prepares the following: a set of 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 Sheet; and a tentative Final Inventory, RUS Forms 724 and 724a.
2 After acceptance tests made Borrower's Engineer Forwards letter to the borrower with copies to the GFR stating that the project is ready for final inspection. Schedules inspection date.
3 Upon receipt of letter from Borrower's Engineer GFR Advises borrower whether attending the final inspection will be 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 inspection Borrower's Engineer Prepares or obtains all the closeout documents listed in Table 3.
9 After signing final inventory Borrower Prepares and submits to RUS the 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 advance Borrower Promptly forwards check for final payment to contractor.
11 During subsequent loan fund audit review following final payment RUS Field Accountant Examines borrower's construction records for compliance with the construction contract and Subpart F, and examines RUS Form 281 (Tabulation of Materials Furnished by Borrower) if any, for appropriate costs.
Source: 55 FR 3572, Feb. 2, 1990, unless otherwise noted. Redesignated at 55 FR 39397, Sept. 27, 1990.
(a) This subpart implements and explains the provisions of the loan documents setting forth the requirements and the procedures to be followed by borrowers for outside plant major construction by the force account method with RUS loan funds. Terms used in this subpart are defined in §1753.2 and RUS Contract Form 515.
(b) A borrower shall not use the force account method for construction financed with loan funds unless prior RUS approval has been obtained.
(c) Generally, RUS will not approve the force account method for major outside plant construction for the initial loan to a borrower.
(d) The Force Account Proposals (FAPs) are subject to review and approval by RUS.
(e) The FAP is approved by RUS on the basis of estimated labor and material costs. The FAP is closed based on the borrower's actual cost of performing the construction. RUS will provide loan funds only up to the amount determined by the completed assembly units priced at the unit prices in the approved FAP.
(a) The request. (1) The borrower shall submit to RUS a certified copy of the board resolution or a letter signed by an authorized corporate official requesting approval to use the force account method of construction. The request shall state the advantages of the force account method of construction and provide the following information:
(i) The scope of the construction to be undertaken, stating briefly the facilities and equipment to be installed and other pertinent data.
(ii) The name and qualifications of the construction supervisor who will be directly in charge of construction, the names and qualifications of the construction foremen, and the availability of qualified construction personnel. The construction supervisor must have at least 5 years outside plant construction experience with at least 2 years at the supervisory level on RUS financed projects. Construction foremen must have at least 3 years of outside plant construction experience.
(iii) The availability of equipment for construction, exclusive of equipment needed for normal operation and maintenance.
(b) Force Account Proposal (FAP). Upon receiving RUS approval to use the force account method, the borrower, prior to any construction activity or the purchase of materials or equipment, shall submit to RUS two copies of its FAP. The FAP shall consist of:
(1) The RUS Contract Form 515 and appropriate supporting attachments that normally would be provided as plans and specifications for contract construction. See §1753.47.
(2) The cost estimate, using Form 515 as a convenient means of showing the following:
(i) The quantity and cost estimates of the various assembly units required. “Labor and other” cost will not include the cost of engineering, legal, and other professional services, interest during construction, preliminary survey and investigation charges, and right-of-way easement procurement costs.
(ii) A list identifying materials or construction for which loan funds will not be requested.
(3) The estimated completion time.
(c) Storage of materials. All materials ordered for the construction shall be stored separate from normal maintenance materials.
(d) Construction—(1) Preconstruction conference. The borrower shall arrange a conference, attended by the manager, construction supervisor, construction foremen, resident engineer and the GFR prior to the beginning of construction to clarify any questions pertaining to the construction. Notes of the conference shall be provided to each conference participant.
(2) Construction schedule and progress reports. The borrower shall obtain from the engineer a construction schedule and submit one copy to the GFR. The schedule shall include the starting date and a statement indicating that materials are either delivered or deliveries are assured to permit construction to proceed in accordance with the construction schedule. The borrower shall obtain from the engineer progress reports and submit one copy of each to the GFR. RUS Form 521 may be used for the construction schedule and the progress report.
(3) Borrower's management responsibilities. (i) Obtain all right-of-way easements, permits, etc., prior to construction.
(ii) Maintain records on all expenditures for materials, labor, transportation, and other costs of construction, in order that all costs may be fully accounted for upon completion of construction.
(iii) Ensure that all the required inspections and tests are made.
(4) Engineer's responsibilities. (i) Inspect and inventory construction as completed.
(ii) Require timely corrections and cleanup.
(iii) Perform acceptance tests as construction is completed.
(iv) Provide “as built” staking sheets of completed construction when the final inspections are made.
(v) Maintain accurate and current inventories of completed construction.
(5) Construction supervisor's responsibilities. (i) Correct construction errors as construction progresses.
(ii) Maintain an accurate inventory of completed construction.
(iii) Perform cleanup as construction is completed.
(iv) Perform all the inspections and acceptance tests a contractor would be required to make under the construction contract.
(v) Promptly perform cleanup required after final inspection.
(a) General. (1) This section outlines the procedure to be followed in the preparation of closeout documents for the FAP.
(2) The period between the completion of construction and submission of the closeout documents to RUS should not exceed 60 days.
(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 Close Out Force Account Outside Plant Construction
817, 817a, 817b Final Inventory Force Account Construction and Certificate of Engineer. Submit one copy to RUS, if required1
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).
1RUS Forms 817, 817a, and 817b are to be submitted to GFR only if required in paragraph (c)(5) of this section. Otherwise, the final inventory documents are to be assembed and retained by the borrower for at least two years.
(c) Closeout procedures. (1) The borrower shall notify the GFR when the project is ready for final inspection.
(2) The GFR shall be invited to make the final inspection accompanied by the engineer and the borrower.
(3) The borrower shall correct all deficiencies found during the final inspection.
(4) The borrower may request the assistance of an RUS field accountant to review the borrower's record of construction expenditures and assist the borrower with any accounting problems in connection with construction expenditures.
(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 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 assembed and retained by the borrower for at least two years.
(6) Upon approval of the closeout documents, RUS will notify the borrower of approval and of any adjustments to be made in funds advanced in connection with the construction.
(d) The above are not intended to be a complete description of the requirements of the documents relating to RUS's closeout procedure. Refer to the documents for additional requirements.
[55 FR 3572, Feb. 2, 1990. Redesignated at 55 FR 39397, Sept. 27, 1990, as amended at 64 FR 16610, Apr. 6, 1999]
[81 FR 71584, Oct. 18, 2016]
(a) General. (1) Equipment purchases are categorized as initial equipment purchase, equipment additions to existing systems and new system additions.
(i) An initial equipment purchase is a first time purchase by a borrower of a complete system of special equipment.
(ii) Equipment additions to existing systems are additions of components to complete operating systems to increase system capacity that require components made by the manufacturer of the existing system.
(iii) New system additions are purchases of complete systems of special equipment when the purpose can be accomplished either with equipment of the same type and manufacture as other complete operating systems in the borrower's system, or with complete systems of special equipment from other manufacturers.
(iv) Where equipment is obtained under a Equipment Contract, RUS Contract Form 395 (RUS Contract Form 395) without installation, the borrower shall require the supplier to provide a detailed proposed bonding and grounding plan and detailed installation information. The installation information is to enable acceptance testing by the borrower upon completion of the installation.
(2) For initial equipment purchases that qualify as major construction, the borrower shall obtain proposals from at least three suppliers of equipment of different manufacturers.
(3) For equipment additions to increase the capacity of existing systems, the borrower may negotiate for equipment of a specific type and manufacture. RUS approval to negotiate in this instance is not required if these additions were specifically described in the LD approved by RUS
(4) For new system additions, the borrower may request RUS approval to negotiate for additional equipment for the purpose of standardization on a system basis, provided RUS approved the procurement method used for the initial equipment purchase. RUS approval to negotiate must be obtained before release of the P&S to the seller.
(5) RUS will not approve negotiation with a seller of non-domestic equipment for the purpose of standardization, because such a purchase does not meet the “Buy American” provision.
(6) RUS recommends, but does not require, that borrowers include installation by the seller for initial installations of special equipment that qualify as major construction.
(7) Special equipment may be installed by the borrower if it has qualified personnel and test equipment available to install the equipment and make the required acceptance tests, and written approval is given by RUS.
(8) Installations, whether by the borrower or the seller, must meet the installation requirements of RUS Contract Form 395specifications. A copy of the acceptance tests results must be attached to the closeout documents or work order summary.
(10) The borrower must obtain authorization from the Federal Communications Commission (FCC) to construct and operate radio transmitting equipment. Evidence of FCC authorization is required for RUS contract approval. Where required, the borrower must obtain approval of state regulatory bodies regarding tariffs and related matters.
(b) Procurement procedures—(1) General. The following are the procurement procedure steps required for the purchase of special equipment by borrowers.
(2) Initial equipment purchase. (i) The borrower prepares P&S and, for projects estimated to exceed $500,000 or 25% of the loan, whichever is less, sends two copies to GFR for approval.
(ii) For projects estimated to exceed $500,000 or 25% of the loan, whichever is less, RUS will either approve P&S in writing or notify the borrower of the reasons for withholding approval.
(iii) For projects estimated to cost less than $500,000 or 25% of the loan, whichever is less, 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 §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.
(vi) The borrower sends three executed contracts including specifications to RUS for approval.
(vii) After RUS approval of the contract, one copy will be returned to the borrower and one copy will be sent to the seller.
(3) Equipment additions to existing systems. Purchase procedures for equipment additions to existing systems are the same as for initial system purchase except that the borrower may negotiate for equipment of a specific type and manufacture instead of obtaining proposals from three or more sellers.
(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, whichever is less, 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 the reasons for withholding approval).
(iii) The remainder of the purchase procedure for new system additions is the same as for initial equipment purchase.
(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 §1753.11(d). RUS Form 238, Construction or Equipment Contract Amendment, shall be used for this purpose.
(d) Closeout procedures—(1) Acceptance tests for RUS Contract Form 395 with installation. (i) Immediately upon completion of the installation and alignment of the equipment, the borrower shall arrange with the contractor's installer and the GFR for acceptance tests.
(ii) The borrower shall obtain from the contractor, in writing, the results of all inspections and tests made by the contractor as required in the specifications. The borrower will analyze the test results and determine whether the performance of the equipment meets the contract specifications.
(3) Closeout documents. When the acceptance tests have been completed 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 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.
(ii) Obtains certifications from the engineer that the project and all required documentation are satisfactory and complete. Requirements for this contract closeout certification are contained in §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.
[54 FR 39267, Sept. 25, 1989. Redesignated at 55 FR 39397, Sept. 27, 1990, as amended at 59 FR 43718, Aug. 25, 1994; 64 FR 16611, Apr. 6, 1999; 81 FR 71584, Oct. 18, 2016]
Source: 55 FR 3573, Feb. 2, 1990, unless otherwise noted. Redesignated at 55 FR 39397, Sept. 27, 1990.
(a) This subpart implements and explains the provisions of the Loan Documents containing 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 §1753.2.
[55 FR 3573, Feb. 2, 1990. Redesignated at 55 FR 39397, Sept. 27, 1990, as amended at 64 FR 16611, Apr. 6, 1999]
(a) RUS Form 773 shall be used for minor construction by contract. Compensation may be based upon unit prices, hourly rates, or another basis agreed to in advance by the borrower and the contractor. A single work project may require more than one contractor.
(b) The borrower shall prepare the contract form and attach any diagrams, sketches and tabulations necessary to specify clearly the work to be performed and who shall provide which materials. Neither the selection of the contractor nor the contract requires RUS approval.
(c) Borrowers are urged to obtain quotations from several contractors before entering into a contract to be assured of obtaining the lowest cost. The borrower must ensure that the contractor selected meets all Federal and State licensing and bonding requirements, and that the contractor maintains the insurance coverage required by the contract for the duration of the work. (See 7 part CFR 1788)
(d) Upon completion and final inspection of the construction the borrower shall obtain from the Contractor a final invoice and an executed copy of RUS Form 743, Certificate of Contractor and Indemnity Agreement.
(e) RUS Contract Form 773 may also be used to contract for the maintenance and repair of telephone equipment and facilities. Generally, RUS will not finance maintenance and repair contracts.
[55 FR 3573, Feb. 2, 1990. Redesignated at 55 FR 39397, Sept. 27, 1990, as amended at 59 FR 43718, Aug. 25, 1994]
The borrower shall require that:
(a) Minor construction by the force account method be supervised by a competent foreman. The work shall be performed in accordance with all regulatory and safety codes.
(b) Daily time and material reports, referenced by the work project number, shall be kept to record labor and materials used as construction is performed.
(c) The construction foreman shall maintain a tabulation of all construction units installed.
(a) If the borrower performs minor construction financed with loan funds, the borrower's regular work order procedure shall be used to administer construction activities that may be performed entirely by a contractor under Form 773 contract, by work order, or jointly by work order and one or more contractors under Form 773 contracts.
(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.
(c) A single minor construction project may be a discrete element of a somewhat larger overall project, such as the provision and installation of a standby power generator or heating/air conditioning equipment in connection with a building modification or expansion project or the splicing on a major cable placement project. It cannot be a portion, by dividing into smaller segments, of a discrete major construction project, such as the placement of a continuous cable facility.
(d) RUS approval must be obtained in advance for minor construction unless all of the following conditions are met:
(2) All standard RUS procedures are followed, including the application of RUS construction practices (see §1753.6).
[55 FR 3573, Feb. 2, 1990. Redesignated at 55 FR 39397, Sept. 27, 1990, as amended at 59 FR 43718, Aug. 25, 1994; 64 FR 16612, Apr. 6, 1999; 81 FR 71585, Oct. 18, 2016]
(a) Upon completion and prior to closeout, minor construction must be inspected and certified to be in compliance with RUS construction standards, to be reasonable in cost, and to meet applicable codes. The certification is made by an experienced telephone engineer who is either licensed in the state where the inspection will be performed, or is a borrower's staff engineer, who meets the requirements of the “employee in charge” of force account engineering as described in subpart B of this part. The GFR will periodically audit the inspection of minor construction to ensure integrity of the procedure. RUS borrowers with less than 2000 subscribers may use the above procedure or have construction inspection performed by the GFR.
(b) Engineering services for minor construction may be contracted using RUS Form 245, Engineering Service Contract—Special Services. Costs for these services may be included in the costs for construction on the Form 771. (See subpart B of this part.
(c) Upon completion of construction, the borrower shall obtain the engineer's certification on RUS Form 771. An official of the borrower, designated by the board of directors, shall also execute the borrower's certification on Form 771.
Source: 55 FR 3574, Feb. 2, 1990, unless otherwise noted. Redesignated at 55 FR 39397, Sept. 27, 1990.
(a) This subpart implements and explains the provisions of the loan documents setting forth the requirements and procedures to be followed by borrowers accepting nomination for the construction certification program. Terms used in this subpart are defined in §1753.2.
(a) It is RUS policy that, as borrowers gain in experience and maturity, the advice and assistance rendered by RUS shall progressively diminish. Prior to approval of a loan, RUS may nominate certain borrowers to fulfill the responsibilities for administration and construction of projects financed with RUS loans. Borrowers who accept this nomination will be known as “certification borrowers,” and the program in which they participate will be known as the “certification program.”
(b) Generally, initial loan borrowers are not eligible for the certification program.
(c) Generally, the factors which RUS will consider in selecting borrowers for the certification program will include:
(1) The experience of the staff of the borrower.
(2) The RUS assessment of the borrower's ability to handle the certification program requirements considering the size and complexity of the proposed construction in the LD.
(3) The history of the borrower in following RUS's policies and procedures.
(4) Other factors deemed relevant by RUS.
(d) Except as specifically stated in this subpart, certification borrowers must comply with all requirements applicable to other borrowers.
(e) RUS reserves the right at any time to require submission of construction documents or to remove the borrower from the certification program.
(a) Responsibilities transferred to certification borrowers. (1) Approval of engineering and architectural service contracts.
(2) Approval of P&S.
(3) Approval of price quotations and bids, except where the low price bid is not accepted.
(4) Approval of award of construction contracts and amendments.
(5) Approval of FAP's if RUS has approved the force account method of construction for the construction project.
(6) Inspection and certification of construction.
(7) Approval of closeout documents.
(8) Other responsibilities as may be specifically granted in writing by RUS.
(b) Responsibilities retained by RUS. (1) Approval to deviate from RUS requirements, except as provided in (a) above.
(2) Approval of use of loan funds for projects other than those included in the loan construction budget. See 7 CFR part 1744 subpart C.
(3) Approval of use of loan funds in excess of amounts included in the loan budget.
(4) Approval of force account methods of engineering and construction.
(5) Approval to make significant deviations from the work plan approved by RUS.
(6) Approval of interim construction.
(7) Approval to modify or alter standard forms and contracts.
(8) Approval to open bids when fewer than the required number have been received.
(90) Approval of outside plant layouts.
(10) “Buy American” determinations.
(11) Other responsibilities not specifically transferred by this subpart or in writing by RUS.
[55 FR 3574, Feb. 2, 1990. Redesignated at 55 FR 39397, Sept. 27, 1990, as amended at 81 FR 71585, Oct. 18, 2016]
(a) Certification borrowers shall appoint three certification officials. These appointments shall be subject to RUS approval.
(1) The “Certifying Officer” shall be an officer or employee of the borrower who is authorized to execute binding agreements. This officer shall sign all contracts, amendments, closeout documents and the certification on RUS Form 158, Certification of Contract or Force Account Proposal Approval, and RUS Form 159, Summary of Completed Construction.
(2) The “Construction Certifier” shall be an experienced telephone engineer who is either licensed in the state where the inspection will be performed, or is a borrower's staff engineer who meets the requirements of the “employee in charge” of force account engineering as described in subpart B of this part. RUS may determine that it will accept the certification only for matters within the staff engineer's area of specialization. In such cases the position of “Construction Certifier” shall be filled by more than one engineer. This official is responsible for certifying that the construction complies with all technical and code requirements.
(3) The “Certification Coordinator” shall administer the certification program and serve as the official point of contact for RUS. The certifying officer or construction certifier may also serve as the certification coordinator.
(b) Certification borrowers, shall submit and obtain RUS approval of a work plan before construction and related engineering begin.
(1) The work plan shall provide a description of the proposed construction and methods of purchasing in such detail as to enable RUS to monitor the construction program to ensure to its satisfaction that loan purposes are accomplished in an organized construction program.
(2) The work plan shall include the following:
(i) The names and qualifications of the proposed certification officials defined in §1753.94(a).
(ii) A listing of the proposed work projects to accomplish the loan purposes showing the estimated cost, method of performing the construction, and the proposed commencement and completion dates for each work project. The proposed work projects shall be summarized on RUS Form 157, Construction Work Plan and Cost Distribution, or a form providing essentially the same information.
(iii) The proposed source of funds for meeting cost overruns if the total estimated cost of work projects exceeds the loan budget.
(iv) A statement signed by the borrower's certification officials and the GFR that the work plan is accurate and complete.
(c) Under the certification program, the borrower shall follow all standard RUS postloan engineering and construction procedures except that the approvals shown in §1753.93(a) will be made by certification officials rather than RUS. The approvals noted in §1753.93(a)(1), (4) and (5) will be reported immediately to RUS using RUS Form 158. Approval of closeouts, §1753.93(a) (6) and (7), will be reported immediately on RUS Form 159.
(d) As the construction program progresses, the certification borrower shall request, by letter, RUS approval of any significant changes in work plan schedules and budgets and in certification officials.
Advance of loan funds needed to meet the certification borrower's current financial obligations are to be requested on RUS Form 481 for construction and engineering items supported by appropriate RUS Forms 158 and 159. For items other than construction or engineering, other supporting data shall be submitted. (See 7 CFR part 1744 subpart C.)
The certification borrower shall modify standard RUS forms of contract for use under the certification program by inserting an executed copy of the following certification addendum in each copy of the contract.
Certification Addendum
Permission has been obtained by the Owner to proceed with this contract under 7 CFR part 1753 subpart J, pursuant to which the references in the RUS construction document requiring approvals and other actions of the RUS Administrator will not apply unless RUS gives specific notice in writing to the affected parties that designated approval(s) or action(s) will be required. Certifications by the Contractor of amounts due and certifications of completions of work under the contract are to be construed to be rendered for the purpose of inducing the Rural Utilities Service to advance funds to the Owner to make, or reimburse the Owner for, payments under this contract.