§ 1753.50 - Construction by Form 773 contract.

(a) The borrower shall prepare the contract form and provide such details of construction as may be available. Compensation may be based upon unit prices, hourly rates, or another mutually agreeable basis.

(b) 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.

(d) The borrower must ensure that the contractor selected meets all Federal and State requirements, and that the contractor maintains the insurance coverage required by the contract for the duration of the work. See 7 CFR part 1788.

(e) The borrower shall finance major construction under the Form 773 contract with general funds and obtain reimbursement with loan funds when construction is completed and an executed Form 771 has been submitted to RUS.

(f) If the contract exceeds $100,000, a contractor's bond shall be required. See 7 CFR part 1788.

(g) When the construction is completed to the borrower's satisfaction, the borrower shall obtain from the contractor a final invoice and an executed copy of RUS Form 743, Certificate of Contractor and Indemnity Agreement.

(h) The closeout document for the Form 773 contract is RUS Form 771. See § 1753.81 for the requirements for completing Form 771.

(i) An original and two copies of Form 771 shall be sent to the GFR. The GFR may inspect the construction, and will initial and return the original and one copy to the borrower.

(j) The original Form 771 shall be submitted with an FRS to RUS only in conjunction with a request for an advance of loan funds for the work.