Code of Federal Regulations (Last Updated: July 5, 2024) |
Title 7 - Agriculture |
Subtitle B - Regulations of the Department of Agriculture |
Chapter XVIII - Rural Housing Service, Rural Business-Cooperative Service, Rural Utilities Service, and Farm Service Agency, Department of Agriculture |
SubChapter H - Program Regulations |
Part 1924 - Construction and Repair |
Subpart F - Complaints and Compensation for Construction Defects |
§ 1924.276 - Action against contractor.
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§ 1924.276 Action against contractor.
If Rural Development pays for correction of construction defects which are the responsibility of the contractor, debarment proceedings will be initiated against the contractor in accordance with subpart M of part 1940 of this chapter (available in any Rural Development office), even if the contractor has gone out of business, declared bankruptcy, cannot be located, etc. The debarment will be pursued in both the contractor's company name and the principal parties as individuals, and any successor entities, if known. If the manufacturer of the defective product is determined to be solely responsible, no action will be taken against the contractor. In such a case, debarment will be initiated against the manufacturer. An assignment of the borrower's claim against the contractor or other party will be obtained if it appears to the approval officials, with any necessary advice from the Office of the General Counsel, that recovery is reasonably possible.