2011-13126. Rural Utilities Service Telecommunications Loan and Loan Guarantee Program

AGENCY:

Rural Utilities Service, USDA.

ACTION:

Notice of elimination of the List of Materials.

SUMMARY:

Rural Development's Rural Utilities Service (RUS) and its predecessor, the Rural Electrification Administration, (REA) have played a leading role in helping rural America gain access to advanced telecommunications systems, equipment and services. The List of Materials historically has been a very useful tool in assuring product quality and reliability. However, Rural Development is taking a fundamentally new approach to advancing state-of-the-art telecommunications technologies, consistent with our commitment to high quality rural service and the efficient use of taxpayer dollars.

DATES:

Effective May 23, 2011, Rural Development will no longer accept applications for equipment to be added to the List of Materials and will cease publication of the List of Materials for Telecommunications, RUS Information Publication 344-2.

ADDRESSES:

An open letter from RUS Administrator Jonathan Adelstein is available at http://www.rurdev.usda.gov/​RUSTelecomPrograms.html. Any further information regarding this subject will also be posted on this Web site.

FOR FURTHER INFORMATION CONTACT:

Mr. Gary B. Allan, Acting Director, USDA-RUS-ASD, 1400 Independence Ave., SW., STOP 1550, Room 2844, Washington, DC 20250; Tel: [phone]; Fax: [phone].

Background: Technology has changed dramatically since the start of the agency's telecommunications program in 1949. The telecommunications equipment supply sector is very different, and far more complex and diverse, today than it was over 60 years ago. Product life cycles have accelerated, innovations abound and new suppliers have entered the market.

In this new technology environment, Rural Development must operate efficiently and effectively under current budgetary constraints. Maintaining the List of Materials, which includes a product by product review, simply cannot be sustained under our current budget and with our limited staff.

To protect our loan security and compliance with continuing Buy America statutory mandates, we will transition from a listing process to an approach which ensures that construction financed by RUS meets applicable industry standards. This new approach will be incorporated into our review of individual projects and the approval of loan advances.

Although the agency is ending the publication of the list, it is not ending its insistence that infrastructure financed by taxpayers through our program conform to the highest technical standards. It is also not altering its statutory Buy America obligations. In addition to facilitating government efficiency, this new approach will give our customers increased flexibility to find and deploy technology that meets the specific needs of their customers. Our staff stands prepared to work with applicants and borrowers to help them deploy effective technology that meets the needs of the rural communities they serve.

In addition, RUS understands that many borrowers that have put contracts out to bid requiring utilization of the List of Materials. In these cases, borrowers have two choices. First, they can cancel the bid solicitation or modify the solicitation to extend the bid date or clarify the bidding terms based upon the List of Materials no longer being available. Or two, they can require that bidders still follow the List of Materials that was in effect on the date the contract was put out to bid. In the event a potential bidder does not have a copy of the List of Materials that was in effect on the date the contract was put out to bid, the bidder may contact RUS staff for assistance in determining whether certain equipment was on the approved list at the time. RUS staff stand ready to assist all customers during this transition period.

Dated: May 23, 2011.

Jonathan Adelstein,

Administrator, Rural Utilities Service.