[Federal Register Volume 59, Number 116 (Friday, June 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14058]
[[Page Unknown]]
[Federal Register: June 17, 1994]
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DEPARTMENT OF AGRICULTURE
Rural Electrification Administration
7 CFR Parts 1753 and 1755
RIN 0572-AA20
REA Form 525, Central Office Equipment Contract (Including
Installation)
AGENCY: Rural Electrification Administration, USDA.
ACTION: Final rule.
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SUMMARY: The Rural Electrification Administration (REA) hereby amends
its regulations on Telecommunications Standards and Specifications for
Materials, Equipment and Construction to add a Central Office Equipment
Contract (Including Installation) and to announce a general revision of
REA Form 525, Central Office Equipment Contract (Including
Installation). REA is updating this contract in order to incorporate
technological changes.
EFFECTIVE DATE: July 18, 1994.
FOR FURTHER INFORMATION CONTACT: John J. Schell, Chief, Central Office
Equipment Branch, Telecommunications Standards Division, Rural
Electrification Administration, room 2836, South Building, USDA,
Washington, DC 20250-1500, telephone number (202) 720-0671.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This final rule has been determined to be not-significant for
purposes of Executive Order 12866 and therefore has not been reviewed
by OMB.
Executive Order 12372
This final rule is excluded from the scope of Executive Order
12372, Intergovernmental Consultation. A Notice of Final Rule entitled
Department Programs and Activities Excluded from Executive Order 12372
(50 FR 47034) exempts REA and RTB loans and loan guarantees, and RTB
bank loans, to governmental and nongovernmental entities from coverage
under this Order.
Executive Order 12778
This final rule has been reviewed under Executive Order 12778,
Civil Justice Reform. This final rule: (1) Will not preempt any state
or local laws, regulations, or policies; (2) Will not have any
retroactive effect; or (3) Will not require administrative proceedings
before parties may file suit challenging the provisions of this rule.
Regulatory Flexibility Act Certification
The Administrator of REA has determined that this final rule will
not have a significant impact on a substantial number of small entities
as defined by the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
The changes to the Central Office Equipment Contract in this final rule
are updates which have been made so that REA telephone borrowers can
continue to provide their subscribers with the most up-to-date and
efficient telephone service.
Information Collection and Recordkeeping Requirements
The reporting and recordkeeping requirements contained in this
final rule have been submitted to the Office of Management and Budget
(OMB) in accordance with the Paperwork Reduction Act of 1980 (44 U.S.C.
3501 et seq.). Comments concerning these requirements should be
directed to the Department of Agriculture, Clearance Office, Officer of
Information Resources Management, room 404-W, Washington, DC 20250, and
to the Office of Information and Regulatory Affairs of OMB, Attention:
Desk Officer for USDA, room 3201, NEOB, Washington, DC 20503. When OMB
has approved the information and recordkeeping requirement contained in
this final rule, REA will publish an amendment to this final rule to
add the OMB control number and statement to the regulatory text.
National Environmental Policy Act Certification
The Administrator of REA has determined that this final rule will
not significantly affect the quality of the human environment as
defined by the National Environmental Policy Act of 1969 (42 U.S.C.
4321 et seq.). Therefore, this action does not require an environmental
impact statement or assessment.
Catalog of Federal Domestic Assistance
The program described by this final rule is listed in the
Catalog of Federal Domestic Assistance Programs under No. 10.851,
Rural Telephone Loans and Loan Guarantees, and 10.852, Rural
Telephone Bank Loans. This catalog is available on a subscription
basis from the Superintendent of Documents, the United States
Government Printing Office, Washington, DC 20402.
Background
The proposed rule for 7 CFR 1755.525 was first published in the
Federal Register as a 7 CFR part 1762 proposed rule on October 29,
1989, at 54 FR 43429. Since that time part 1762 has been incorporated
into part 1755. Due to the pertinence of the comments received REA
decided to incorporate many of them into the document. The revised rule
was published as a 7 CFR part 1755 proposed rule on March 14, 1991, at
56 FR 10827 with a 60 day comment period. During this period comments
and suggestions were received from six major manufacturers of central
office equipment. Many useful comments and suggestions were received
and many of them have been incorporated into the revised Form 525
Contract.
The last revision to the Form 525 Contract was September 1966.
Since that date, significant changes have been made in the telephone
industry. The profound advancement in central office equipment
technology has made possible many new services on a cost effective
basis. Divestiture and competition, legislation and regulation have
brought about many changes in the conduct of telecommunications
business. The revised Form 525 Contract incorporates these changes into
the Central Office Equipment Contract. The main changes to the Contract
are new requirements that: (1) Provide for a software license, (2)
provide for patent, copyright, and trademark infringement protection,
(3) provide a cap on consequential damages, and (4) provide Equal
Employment Opportunity requirements. In addition, it revises and
updates provisions for (1) delivery and installation of equipment, (2)
inspection and testing of the completed installations, (3) payments to
the contractor, (4) insurance, (5) liquidated damages, and (6)
completion of the project. This action will make it possible for REA
telephone borrowers to continue to provide their subscribers with the
most modern and efficient telephone service.
REA has issued a series of 7 CFR chapter XVII parts which serve to
implement the policies, procedures, and requirements for administering
its loan and loan guarantee programs and the loan documents and
security instruments which provide for and secure REA financing. The
technical change to 7 CFR part 1753 updates the number of days allowed
for acceptance testing in order to conform with REA Form 525 Central
Office Equipment Contract (Including Installation). The revision to 7
CFR part 1755 codifies REA Form 525, Central Office Equipment Contract
(Including Installation). The 7 CFR part 1755 also describes where
copies of the contract may be obtained. REA telephone borrowers are
required to use the REA Form 525 Contract where major central office
facilities are being procured and installed under contract. The present
REA Form 525 has become outdated due to technological advancements and
other reasons. Advanced technology and equipment concepts have
introduced new issues. Contract terms and obligations need to be
modified and updated to more accurately reflect present business
practices. Some representative issues addressed in updating this
contract are: Expansion of patent infringement protection to include
copyrights, trademarks, etc.; software right-to-use licensing terms;
warranty coverage; use of information; consequential damages; delays in
project; liquidated damages; bonding and insurance; independent
contractor provisions; and support of discontinued products. All these
additions and changes have been made so that REA telephone borrowers
can continue to provide their subscribers with the most up-to-date and
efficient telephone service.
Comments
Public comments were received from Alcatel Network Systems, Inc.,
AT&T Network Systems, Mitel Public Switching, Northern Telecom Inc.,
Redcom Laboratories, Inc., and Seimens Stromberg-Carlson. The comments,
recommendations and responses are summarized as follows:
General Comments
One commenter remarked that a telephone central office switch is a
computer and should be purchased using a supply type contract rather
than a construction contract and therefore, REA Form 525 should not
apply.
Response: REA feels that due to the very complex nature and
individuality of each central office and the immense amount of
coordination and development that must be done prior to, during, and
after the installation a supply type contract would not be a suitable
instrument to achieve the desired results. Further, REA feels a supply
type contract does not provide the Borrower the same degree of
protection as the REA Form 525 Contract. This lack of protection could
be devastating to the Borrower and consequently, jeopardize REA loan
security. The required use of REA Form 525, Central Office Equipment
Contract (Including Installation), remains.
Notice and Instructions to Bidders
Item 4: One commenter remarked that the Owner should be responsible
for providing a notice that the state requires a license for bidding,
if such a requirement exists.
Response: Since the Bidder is the party who ultimately will have to
abide by the State's licensing requirements, REA believes the Bidder
should bear the responsibility for determining whether a license is
required for bidding.
Item 6: One commenter remarked that the method of bidding in the
existing REA Form 525 makes bid bonds optional and the proposed REA
Form 525 removes this option. They feel that the option should remain.
Response: The existing REA Form 525, Notice and Instructions to
Bidders, Item 5, and the proposed REA Form 525, Notice and Instructions
to Bidders, Item 6, specifically state that each proposal must be
accompanied by a Bid Bond or a certified check. No other option exists.
The wording in both documents is essentially the same.
Item 14: (b) One commenter remarked that this requirement adds
complexity and administrative burden because the manufacturers are
already required to comply with REA Form 525, Article VI.
Response: Item 14(b) is required by the Office of Federal Contract
Compliance Programs (OFCCP) requirement.
Bidder's Proposal To Engineer, Furnish, Deliver, and Install Equipment,
Materials and Software
Article I, Bid Price
Section 1: Two commenters questioned the use of the term ``Delivery
Acceptance'' in column five of this section.
Response: Column five is the time in calendar days between approval
of the Contract and delivery of equipment. The term ``Acceptance'' has
been removed from this column to more clearly define the requirement.
Section 1: One commenter remarked that there should be some
instruction as to how to identify each project.
Response: REA agrees. REA has added Note 3 to Article I, section 1,
as an instruction to leave a blank line between each Project listed in
section 1.
Section 3: One commenter remarked that the word ``substantial''
should be replaced and one commenter remarked that the language ``The
Owner * * * may * * * make reasonable changes, additions to or
subtractions from the Specifications * * *'' is ambiguous and should be
changed.
Response: This is the same language that is in the existing REA
Form 525 Contract. It has worked well in the past and REA does not feel
there is a need to change it.
Article II, Delivery and Installation
Section 1: One commenter remarked that the draft REA Form 525 made
the Completion of Installation of the essence. The commenter feels that
Completion of the Project should be of the essence, since liquidated
damages are measured from that event.
Response: Completion of Installation is a scheduled date that must
be met. The scheduled date for the Completion of the Project, as shown
in Article I, Section 1, Column 7, is established by adding 60 days to
the Completion of Installation. Liquidated Damages are measured from
the scheduled date for Completion of the Project. Actual Completion of
the Project may be a date earlier or later than the scheduled date of
Completion of the Project as defined in Article VII, Section 1,
Definitions. Therefore, REA believes that Completion of Installation
must be of the essence.
Section 1: One commenter remarked that if a remote switching
terminal is scheduled independently of a central office, the Contract
should reflect this as a separate Project.
Response: Article I, Section 1, and the Contract in general, regard
a central office, including all associated remote switching terminals,
to be an indivisible unit for delivery, payment, turnover, closeout,
liquidated damages, and other purposes. A host office and its remotes
are interdependent and alterations to one may affect the others.
Therefore, REA regards a host office and all associated remotes as one
item under the Contract.
Section 1: One commenter remarked that the reference to ``the
satisfaction of the Owner and the Administrator'' is a subjective
standard and should be removed.
Response: If the language in question is deleted, the Section would
require unconditional adherence to the terms of the Contract. The
language is included here to allow the possibility of latitude, where
the Owner and REA agree.
Section 3: One commenter had the following remarks:
(i) In the first sentence the wording ``give sufficient supervision
to'' should be changed to ``supervise.''
(ii) Also, this commenter feels the language ``using Bidder's best
skill and attention'' is onus and unenforceable and should be deleted.
(iii) The commenter also feels the second sentence should be
expanded to include the following language ``but that the failure of
the Bidder to discover these items shall not create any obligation or
liability on the part of the Bidder, nor relieve the Owner of its
performance or responsibilities.''
Response: REA feels that the existing language is appropriate. REA
disagrees with the expansion of the second sentence since REA believes
it is reasonable for the Bidder to be responsible for the fulfillment
of the Contract requirements.
Section 4: One commenter had the following remarks:
(i) The reference to ``manufacturing'' in the first paragraph
should be replaced with ``other than cost information or any other
information from which cost could be derived.''
(ii) The commenter also suggests the language ``each central office
(and its associated remote switching terminals), feature or service''
be replaced with the word ``Project'' as a potential exists for a
remote to be scheduled as a separate Project.
(iii) In addition, the commenter feels the word ``nonperformance''
in the fourth paragraph should be replaced with ``failure to
satisfactorily resolve all such deficiencies as previously listed on
the REA Form 517.''
Response:
(i) REA feels the language in the first paragraph offers sufficient
protection to the Bidder as written. This language has not been
changed.
(ii) As previously responded to, Article I, Section 1, and the
Contract in general, regard a central office, including all associated
remote switching terminals, to be an indivisible unit. However, in the
interest of brevity, this language has been replaced with the word
``Project.''
(iii) REA agrees and has revised Article II, section 4, paragraph 4
to include the suggested language.
Section 4: One commenter remarked that the fourth paragraph of this
Section imposes an artificial thirty (30) day requirement for
correction of deficiencies. They suggest the Section be amended to
require corrections within thirty (30) days of receipt of the REA Form
517 from the Borrower or by the scheduled date for Completion of the
Project, whichever is longer.
Response: REA feels this Section offers the Bidder and the Borrower
equal protection by imposing specific time limits for the Borrower's
tests and the Bidder's corrections. This language has not been changed.
Section 7: One commenter remarked that the first paragraph of this
Section should be modified to permit the Bidder either to correct the
defect within 30 days or to agree with the Borrower during such 30 days
on a course of correction reasonably designed to cure the defect.
Response: REA agrees. This Section has been revised to allow an
extension of time if agreed upon by the Owner and REA.
Section 7: One commenter remarked that refund and credit options
should be included in the event a defect cannot reasonably be
corrected.
Response: Such a provision would give the Bidder the right to
simply ``buy back'' equipment or software when a problem is
encountered. To the Borrower, this means that essential features or
capability could be lost and would remain unavailable for the entire
useful life of new switching equipment. The resulting reduction in
value of the Contract to the borrower cannot be predicted. This option
has not been added to Form 525.
Section 7: One commenter remarked that minor ``bugs'' are inherent
in all software and should not rise to the level of warranty defects.
Another commenter remarked that the Form 522 Specifications and not
other technical material provided by the Bidder should be the standard
for software warranty.
Response: REA feels the performance of the software must be in
accordance with the Form 522 Specifications and Bidder documentation.
The Bidder documentation is furnished to assist the borrower in the
operation, administration and maintenance of the switch.
Section 7: Three commenters remarked that this Section should be
rewritten to add disclaimers and exclusive remedies and to limit the
Bidder's liabilities and limit the Owner's remedies.
Response: REA believes that the language as stated divides the
risks equitably.
Section 7(a): One commenter remarked that the reference to ``a
central office and its associated remote switching terminals'' be
deleted and replaced with the words ``each Project.''
Response: As previously responded to, this language has been
replaced with the word ``Project.''
Section 7(b): Three commenters remarked that the warranty period
for software should be shortened.
Response: REA requires a five (5) year warranty period because
software is information based and defects in seldom used programs would
not be detected until the program is used. REA believes that over a 5
year period even seldom used programs would be used and any defects
corrected.
Section 7(e): One commenter remarked that exceptions to the
warranty in the subsection should also include fire, explosions, power
failures, force majeure, and equipment which is normally consumed in
operation, such as fuses.
Response: The warranty must cover losses of whatever nature,
resulting from causes covered by the warranty provided for in the
formal Contract.
Section 7(f): One commenter requested that the period after the
word ``Owner'' in the last line in the subsection be deleted and the
words ``during the warranty period, thereafter, all such costs and risk
of shipping shall be borne by the Owner.'' be added.
Response: The first paragraph of the Section specifically defines
these conditions as applying ``Throughout the warranty period * * *.''
REA does not feel additional language is required to further define
this.
Article III, Payments and Releases of Lien
Section 1(a),(b): One commenter remarked that these subsections are
unfair as written. Each central office and its associated remotes
should be treated separately for payment purposes to allow the Bidder
to get paid for his investment in a timely manner.
Response: Article I, Section 1, and the Contract in general, regard
a central office, including all associated remote switching terminals,
to be an indivisible unit for delivery, payment, turnover, closeout,
liquidated damages, and other purposes. A host office and its remotes
are interdependent and alterations to one may affect the others.
Therefore, REA regards a host office and all associated remotes as one
item under the Contract.
Section 1(c): One commenter remarked that the phrase ``Completion
of the Contract'' in this subsection should be changed to read
``Completion of the Project.'' This would enable the Bidder to receive
the final ten percent (10%) for each Project as it is satisfactorily
completed.
Response: These have been the standard REA Contract terms for many
years. REA feels it offers sufficient protection to the Borrower that
the Contract will be completed in a satisfactory manner, while allowing
the Bidder a return on its investment prior to satisfactory completion
of the Contract. Also, the Bidder can receive the final ten percent
(10%) of a Project if the partial closeout procedure is allowed.
Section 1(a), (b), (c): One commenter remarked that unproven
features and capabilities should not delay payments for the Project.
Response: Unproven features and capabilities are listed as separate
Projects in Article I, section 1, with separate time frames for
delivery and installation of features and capabilities that cannot be
provided at the time of Completion of the Project. If separate
schedules are not part of the Contract, delays in delivery would cause
delays in payments for the entire Project. This encourages a Bidder's
disclosures as required in Article V, section 2.
Section 1(e): One commenter remarked that the subsection should be
reworded to require the Owner to pay the Bidder for each central office
if the subsection is not struck out.
Response: REA agrees with this comment. The language in Section
1(e) has been changed to require the Owner to strike out this section
if the partial closeout procedure is not to be allowed.
Section 2: One commenter remarked that this section references a
``Waiver and Release of Liens,'' a ``Certificate of Contractor'' and a
``Certificate of Contractor and Indemnity Agreement'' but these
documents were not made public at the time, consequently, they reserve
their right to comment after they are issued.
Response: The documents referred to by the commenter are existing
and have not been revised. If any changes are made to the
aforementioned documents they will be published as a Proposed Rule and
comments will be requested at that time.
Article IV, Particular Undertakings of the Bidder
Section 1(b): Two commenters remarked that this Section is unfair
to the Bidder. They feel that the Bidder should only be responsible for
damages caused by the Bidder and that the Borrower is in a much better
position to protect its site, and guard against fire, flood and theft.
Response: The Bidder is required by law to have insurance from
commencement to completion of the Contract. The Bidder also has charge
and control of all work, equipment, materials and software to be done
or used therein. Therefore, REA feels the Bidder is in a better
position during this time period to protect itself against risk of
loss.
Section 3: One commenter remarked that commercial insurance is
unnecessary. Specifically, the coverage limits required are within the
``deductible'' for large companies. Thus the risk is self retained.
Response: Insurance requirements for contractors are set forth in 7
CFR part 1788, subpart C, Insurance for Contractors, Engineers and
Architects. Generally, this regulation is intended to set minimum
coverage requirements for companies of all sizes.
Section 5: One commenter remarked that the 525 Contract should be
modified to include a Uniform Software Agreement.
Response: REA agrees. A Uniform Software License was drafted and
published for comments on May 20, 1993, at 58 FR 29363, and was
published as a final rule on April 14, 1994, at 59 FR 17675. The final
rule will be an addendum to any 525 or 545 Contract that requires a
license.
Section 6: One commenter remarked that some guarantees may not be
transferable or assignable by the Bidder and this Section should be
subject to any applicable restrictions on transfer or assignment.
Response: Article IV, section 6 has been revised to allow for
restrictions on transfer of warranties. However, regardless of
restrictions upon transfer or assignment, the warranty coverage defined
in Article II, section 7, is required.
Section 7: Two commenters remarked that a buy back option should be
allowed for infringement of intellectual property rights.
Response: Such a provision would give the Bidder the right simply
to ``buy back'' equipment or software when a copyright problem is
encountered. To the Owner, this means that essential features or
capability could be lost and would remain unavailable for the entire
useful life of the new switching equipment. The resulting reduction in
value of the Contract to the Owner cannot be predicted, and often would
be greater than the amount the Owner paid for the price of the
infringing equipment or software.
Section 7: One commenter remarked that this Section should be
limited to United States patents, trademarks, copyrights and trade
secrets.
Response: REA believes this would not provide sufficient
protection.
Section 7: One commenter remarked that the Bidder should be allowed
to take pro-active steps to avoid an injunction, rather than always
having to react to an injunction after it is imposed.
Response: This section merely states the action the Bidder must
take to protect the Owner after the use of the equipment or software is
enjoined. It does not proscribe any action the Bidder may wish to take
to protect its own interests and the Owner's interests before the
injunction is granted.
Article V, Remedies
Section 2: Three commenters remarked that the cap on liquidated
damages is excessive and unrelated to any actual damage.
Response: REA believes that if a limit is to be set it should not
be less than the price of the affected central office and all
associated remote switching units. This in many cases will be less than
the total Contract price. This Section also instructs the Owner to
notify the Bidder in writing how the liquidated damages were computed.
Section 2: One commenter remarked that previous draft versions of
the 525 Central Office Equipment Contract better defined ``placed in
service'' and assumes liquidated damages are applied based on that
date.
Response: REA believes that the wording ``used by the Owner to earn
revenue'' more clearly defines ``placed in service.'' Article V,
sections 2 and 5, and Article VII, section 1, Definitions, clearly
state that liquidated damages can only be assessed and are the
exclusive remedy when the Bidder has failed to complete the Project on
time and are not based on when a central office is placed in service.
Section 2: One commenter remarked that the Bidder should not be
assessed liquidated damages based on the entire Project when a only a
portion is delayed.
Response: As stated previously, the central office and all
associated remote switching terminals are a unit for the purposes of
this Contract. Liquidated damages are measured from ``Completion of
Project.'' This gives the Bidder an incentive to complete the Project
in a timely manner. If liquidated damages were assessed on each
individual part of a Project, then in some cases the incentive to
finish the Project on time would be removed.
Section 2: One commenter remarked that liquidated damages should
not apply to features or capabilities that are not fully developed or
do not have a verifiable satisfactory field performance because they
have been accepted by the Owner and by definition they are unproven. It
was also felt that even if they are not exempt, liquidated damages
should not apply if the central office has been placed in service.
Response: The Owner allowed these unproven features to be bid based
on a time period established by the Bidder for the availability of
these features. A Bidder's responsibility to provide the features or
capabilities bid on, in the time period established by the Bidder,
cannot be diminished by notifying the Owner that they are not going to
be available in the time promised. The language in Article V, section
2, remains.
Liquidated damages on unproven features are a measure of revenue
that would be lost by that feature not being available on time. It does
not have a bearing on, and should not be associated with, revenue from
the rest of the Project that is in service. If it was as suggested in
the comment, then it would be a penalty to the Owner in lost revenue
for the Bidder not completing the feature or capability as scheduled.
Section 2: One commenter remarked that additional language be added
after the word ``Provided,'' to clarify this provision. It was also
felt that the last line of this section seemed inappropriate and should
be deleted.
Response: REA feels the existing language clearly identifies the
intent of this provision. Also, a Bidder's responsibility to complete
the Project as originally bid should not be diminished because of
neglect by the Bidder to notify the Owner of unproven or unavailable
features or capabilities. The last sentence remains.
Section 3: Four commenters remarked on this section. From the
comments received, it appears this section is still of great concern to
the equipment manufacturers. The comments and recommendations received
are summarized below:
(i) Two commenters remarked that ten times the Contract price is
excessive. Three commenters remarked that they should be able to
disclaim consequential damages. Two commenters remarked that that much
exposure is probably not insurable but if it was, the premiums would be
excessive and would be passed on to the Owner. One commenter
recommended that consequential damages be the lesser of five times the
purchase price of the affected central office and its associated remote
terminals, or $5.0 million.
(ii) One commenter recommended that the Owner retain the liability
since the Owner is in a better position to prevent losses by properly
maintaining its network. One commenter felt that consequential damages
should only be available during the warranty period.
Response:
(i) The existing Form 525 does not limit the liability for
incidental or consequential damages. REA's intent is to place a limit
of liability on consequential and incidental damages, except for
personal injury or tangible property damage, which will: enable Bidders
to insure for a risk of known limit; provide Owners with protection
against losses related to product failure; protect the government's
loan security; and serve as a standard that Bidders and Owners alike
can expect to see on every Contract so competitive bidding can be
facilitated. REA has established a liability limit of ten times the
total Contract amount, which will result in a limit in the range of
$2.5 million to $10 million for typical REA Contracts.
(ii) Consequential damages provide a measure of protection from
loss due to product failure or other causes related to the Bidder's
performance. Since the risk of loss still exists after the warranty
period, consequential damages must also be available.
Section 5: One commenter remarked that in order to make the
proposed draft consistent with the suggested addition of exclusive
remedies language in other sections, some minor language adjustments
are needed for this section.
Response: REA has not added exclusive remedy language so no
language adjustments were made.
Section 5: One commenter remarked that cumulative remedies should
not apply for a normal warranty claim. The warranty provisions of the
Contract provide for a remedy and course of conduct in the event of a
product failure.
Response: The warranty provisions may not fully protect the
Borrower in some situations. For example, a defective component,
serviced under Article II, section 6, could cause a consequential
damages claim. The language in section 5 is unchanged.
Article VI, Equal Employment
One commenter remarked that a number of large national employers
have made direct arrangements with the Office of Federal Contract
Compliance Programs (OFCCP) relating to the procedures to be followed
in connection with EEO policies and language should be added to this
Article VI to cover separately negotiated arrangements.
Response: The language in Article VI, was provided by the Office of
Federal Contract Compliance Programs (OFCCP) and cannot be changed by
REA.
Article VII, Miscellaneous
Section 1: One commenter felt the definition of Software should be
expanded to clarify that Software means the Software provided to the
Owner by the Bidder hereunder and the words ``and similar design level
documentation'' should be inserted after the words ``source code'' in
this subsection. It was also felt that the definition of Project should
be expanded to include remote switching terminal(s).
Response: REA feels the definition of the term ``Software'' is
appropriate as written and will not be construed to mean any software
other than the software furnished for the Contract in question. The
words ``and similar design level documentation'' have not been added to
the words ``source code.'' Source code is a definable commodity but
``and similar * * *.'' is overly vague. REA also feels the definition
of the word ``Project'' is sufficient. If a remote is to be a separate
Project, it must be listed as such in Article 1, section 1.
Section 1: One commenter is concerned that the Owner's failure to
provide site availability and needed facilities for remotes can unduly
hold up Completion of the Project. The commenter proposed adding
language to cover that event.
Response: REA feels the definition of ``Completion of the Project''
is appropriate. The concerns of ``Site availability or functionality''
not being available in a timely manner is covered under Article II,
section 1, Time of Completion of Installation.
Section 2: Two commenters remarked on this section. Their comments
are summarized below:
(i) One commenter remarked that this Section still requires that
equipment and software support be provided for five or eight years from
discontinuing the manufacture of that Equipment. The commenter feels
this time period should commence upon Completion of the Contract. It is
felt this provision as drafted would penalize Bidders which enhance and
manufacture existing equipment and reward Bidders who discontinue
manufacture of equipment and develop new and incompatible equipment.
(ii) One commenter wanted to revise the language to change the
intent of this paragraph and also add a provision for a one (1) year
software warranty.
Response: REA previously responded in the Federal Register on March
14, 1991, at 56 FR 10827, that it concludes, based on previous
comments, that this new Section strikes a reasonable balance for
sellers and buyers.
Section 3: One commenter remarked that its only area of concern
arises in a two fold fashion. To begin with, the use of the word
``and'' following the word ``substantially'' in the first sentence
interferes with the intended meaning of the sentence, and as such,
should be deleted. The specific concern arises from the wording of this
section 3, Notwithstanding the possibility of authorization by the
Administrator, it suggests that such authorization is permissive, not
mandatory and that therefore the intent of REA Bulletin 344-3 is not
met. The commenter submits that such authorization be mandatory in the
event the valuation conditions of the Bulletin are met.
Response: The word ``and'' following ``substantially'' in the first
sentence is a typographical error and has been changed to ``all.'' In
regard to the Administrator's authorization being permissive, the
Administrator's authorization is not required when the conditions of
Bulletin 344-3 are met. It is only required when the conditions of
Bulletin 344-3, paragraph IV.B. or IV.C. are not met.
Section 6: One commenter remarked that the proposed draft has added
a new sentence to this section which releases the borrower from its
obligation to maintain the confidentiality of the Bidder's proprietary
information if the Bidder fails to fulfill its continuing support
obligations. The commenter believes the proposed remedy for such a
problem is overly broad and is punitive to the Bidder.
Response: REA feels this section offers sufficient protection for
the Bidder and the Owner. The only way the Owner can be released from
the confidentiality requirement is by the Bidder's failure to meet the
obligations of the Form 525 Contract. Article VI, section 6, as
proposed, provides some incentive not to violate the obligations of the
Contract.
Section 12: One commenter suggested that the Bidder not be required
to obtain the consent of its surety for all sub-contractors. It is felt
that if the surety makes such a requirement on the Bidder, this
language adds nothing to the Bidder's obligation to obtain proper
protection. On the other hand, if such a condition is not required by
the surety, there should be no need to retain this condition.
Response: The only way the REA and the Owner can be assured that
the surety allows subcontractors is by written consent. The language in
this section remains unchanged.
Section 12: One commenter remarked that either party should be
permitted to subcontract the Agreement to an affiliate without the
consent of the other party. A corporate restructuring of a Bidder
should not be able to be arbitrarily held up by a single Owner.
Response: REA does not feel that a Bidder should be allowed to
arbitrarily subcontract an REA Contract without the proper consent,
which will not be unreasonably withheld. This language has worked well
in the past and REA feels it will continue to work well in the future.
List of Subjects
7 CFR Part 1753
Communications equipment, Loan programs--communications, Reporting
and recordkeeping requirements, Rural areas, Telephone.
7 CFR Part 1755
Loan programs--communications, Reporting and recordkeeping
requirements, Rural areas, Telephone.
For the reasons set out in the preamble, chapter XVII of title 7 of
the Code of Federal Regulations is amended as follows:
PART 1753--TELECOMMUNICATIONS SYSTEM CONSTRUCTION POLICIES AND
PROCEDURES
1. The authority citation for part 1753 continues to read as
follows:
Authority: 7 U.S.C. 901 et seq., 1921 et seq.
2. In Sec. 1753.39, paragraph (f)(1)(i) is revised to read as
follows:
Sec. 1753.39 Closeout documents.
* * * * *
(f) * * *
(1) * * *
(i) Immediately following completion of the last central office
equipment installation, arrange with the contractor's installer,
connecting company (where necessary), and the GFR for performance of
the acceptance tests of offices not previously tested. The date for
testing should be established so that the installer will not be
required to return to the site for the sole purpose of assisting in
these tests. Acceptance tests shall be performed within 30 days of
completion of the installation, unless otherwise requested in writing
by the contractor and approved in writing by the borrower.
* * * * *
PART 1755--TELECOMMUNICATIONS STANDARDS AND SPECIFICATIONS FOR
MATERIALS, EQUIPMENT AND CONSTRUCTION
1. The authority citation for part 1755 continues to read as
follows:
Authority: 7 U.S.C. 901 et seq., 1921 et seq.
2. Section 1755.93 is amended by revising the entry for Form 525 in
the table and footnote 1 at the end of the table to read as follows:
Sec. 1755.93 List of standard forms of telecommunications contracts.
* * * * *
----------------------------------------------------------------------------------------------------------------
Source of
REA form No. Issue date Title Purpose copies
----------------------------------------------------------------------------------------------------------------
* * * * ** *
525................ July 18, 1994............. Central Office Purchase and REA.\1\
Equipment Contract Installation of
(Including central office
Installation). switching equipment.
* * * * ** *
----------------------------------------------------------------------------------------------------------------
\1\A limited number of copies of the publication will be furnished by REA upon request. As this document is
produced by the Federal Government and is, therefore, in the public domain, additional copies may be
duplicated locally by any user as desired. Requests for copies should be sent the Director, Administrative
Services Division, U.S. Department of Agriculture, Rural Electrification Administration, Washington, DC 20250.
The telephone number of the REA Publication Office is (202) 720-8674.
* * * * *
3. Section 1755.525 is added to read as follows:
Sec. 1755.525 Form 525, central office equipment contract (including
installation.)
The REA Form 525, Central Office Equipment Contract (Including
Installation), in this section shall be used for all purchases of
central office equipment (other than such purchases of special
equipment using Form 397) using REA financial assistance when the
equipment is supplied and installed by the seller or installed by a
firm under contract with the seller as defined in 7 CFR part 1753,
subparts E and H. The REA Form 525 Central Office Equipment Contract
follows:
Central Office Equipment Contract (Including Installation)
Notice and Instructions to Bidders; Central Office Equipment
Project (Including Installation)
1. Sealed Proposals for the engineering, furnishing, delivery,
and installation of central office equipment, materials and software
for the
----------------------------------------------------------------------
----------------------------------------------------------------------
(hereinafter called the ``Owner'') which is to be part of the system
known as
----------------------------------------------------------------------
----------------------------------------------------------------------
to be financed pursuant to a loan contract between the Owner and the
United States of America (hereinafter called the ``Government'') by
the Administrator of the Rural Electrification Administration
(hereinafter called the ``Administrator'') will be received by the
Owner on or before ____________ o'clock, ________.M.,
----------------------------------------------------------------------
at---------------------------------------------------------------------
----------------------------------------------------------------------
at which time and place the Proposals will be publicly opened and
read. The Rural Telephone Bank may also be a party to the loan
contract.
2. The Bid Documents (composed of plans, specifications and
drawings), together with all necessary forms and other documents for
Bidders, may be obtained from the Owner or from the Engineer, at the
latter's office at
----------------------------------------------------------------------
----------------------------------------------------------------------
The Specifications may be examined at the office of the Owner or
at the office of the Engineer. A copy of the loan contract between
the Owner and the Government may be examined at the office of the
Owner.
Each set of Bid Documents will have a serial number, assigned by
the Engineer, and the number of each set with the name of the Bidder
will be recorded by the Engineer. Bids will be accepted only from
original Bidders, or from some other qualified Bidder to whom such a
set has been transferred by the original Bidder with the approval of
the Engineer prior to the pre-bid technical session.
3. A pre-bid technical session will be held with each Bidder
during the week of __________, 19______ at
----------------------------------------------------------------------
for the purpose of receiving the Bidder's Technical Proposal,
discussing details of the Project(s), and considering suggestions
from Bidders. The Owner shall attach to this Notice a list of the
information required in the Bidder's Technical Proposal. Each Bidder
will be given a specific time period for the pre-bid technical
session. At the pre-bid technical session, the Bidder shall fully
describe to the Owner any exceptions to the Specifications the
Bidder may request. In addition, the Bidder shall identify all
features and capabilities that are not fully developed or do not
have a verifiable satisfactory field performance record. If the
Owner decides to incorporate any changes into the Specifications,
the Owner shall furnish all prospective Bidders a copy of the
Specifications containing such revisions (the ``Revised
Specifications'') and all Bids shall be made on the basis of the
Revised Specifications. At this session, the Bidder shall identify
all documentation and materials that it claims constitute agreed
excluded documentation under section (2)(xi) of the Software
License. The Bidder shall claim as agreed excluded documentation
only those items it may be unable to provide to the Borrower as
required by said section (2)(xi). The Engineer shall immediately
provide a list of all items so identified to [appropriate REA
office]. The Engineer shall inform the Bidder at least ________ days
before the scheduled bid opening whether either the Engineer or
[REA] will reject the Bid because of items so identified. Licensor
agrees that certain Licensed Software cannot be excluded from the
requirements of said section (2)(xi), including but not limited to
software that would significantly impair the operation of the
System, would significantly impair the ability of the Owner to
generate revenue, or would pose a risk to REA loan security. If
allowed, the agreed excluded documentation shall be individually
identified in an attachment to the Bid. No bid shall be accepted
from a Bidder who fails to attend the pre-bid technical session or
fails to demonstrate to the Owner that its equipment meets the
requirements of the Plans and Specifications.
4. Proposals shall be submitted on the forms furnished by the
Owner and must be delivered in a sealed envelope addressed to the
Owner. The name and address of the Bidder, its license number, if a
license is required for bidding on a project by the State, and the
date and hour of the opening of bids must appear on the envelope in
which the Proposal is submitted. Proposals must be in ink or
typewritten. No alterations or interlineations will be permitted,
unless made, initialed, and dated before submission.
5. Prior to the submission of the Proposal, the Bidder shall
make and shall be deemed to have made a careful examination of the
Specifications, forms of Bidder's Proposal and Acceptance, and
Contractor's Bond attached hereto, and shall become informed as to
the location and characteristics of the proposed central office and
remote terminal installations, features and services, the
transportation facilities, the kind of facilities required before
and during the delivery and installation of the equipment and
materials, the general local conditions and all other matters that
may affect the cost and the time of completion of the installations.
Bidders will be required to comply with all applicable statutes,
codes, and regulations, including those pertaining to the licensing
of contractors and the ``Anti Kick-Back Acts,'' as amended, (40
U.S.C. 276c; 41 U.S.C. 51 et seq.) and regulations issued pursuant
thereto, and 18 U.S.C. 287, 874, 1001, as amended.
6. Each Proposal must be accompanied by a Bid Bond, in the form
attached, or a certified check on a bank that is a member of the
Federal Deposit Insurance Corporation, payable to the order of the
Owner, in an amount equal to ten percent (10%) of the maximum
possible bid price. The maximum possible bid price is the sum of the
total base bid, spare parts, maintenance tools and all positive
amounts for alternates. Each Bidder agrees that, if its Proposal is
one of the three low Proposals, its Bid Bond or check shall be held
by the Owner until a Proposal is accepted and Contractor's Bond,
when required, is furnished by the successful Bidder and such
acceptance has been approved by the Administrator, or for a period
not to exceed ninety (90) days from the date hereinbefore set for
the opening of Proposals whichever period shall be the shorter. If
such Proposal is not one of the three low Proposals, the Bid Bond or
check will be returned to the Bidder within a period of thirty (30)
days.
7. The successful Bidder will be required to furnish to the
Owner a Contractor's Bond in conformance with the requirements of 7
CFR part 1788, subpart C, Insurance for Contractors, Engineers, and
Architects.
8. Should the successful Bidder fail or refuse to furnish a
Contractor's Bond within thirty (30) days after written notification
of the award of the Contract by the Owner, the Bidder will be
considered to have abandoned the Proposal. In such event, the Owner
shall be entitled (a) to enforce the Bid Bond in accordance with its
terms, or (b) if a certified check has been delivered with the
Proposal, to retain from the proceeds of the certified check the
difference (not exceeding the amount of the certified check) between
the amount of the Proposal and such larger amount for which the
Owner may in good faith contract with another party to construct the
Project(s). The term ``successful Bidder'' shall be deemed to
include any Bidder whose Proposal is accepted after another Bidder
has previously refused or has been unable to execute the Contract or
to furnish a Contractor's Bond.
9. If requested by the Owner or the Administrator, the Bidder
shall furnish evidence, satisfactory to the Owner and the
Administrator, that the Bidder has the necessary facilities,
ability, and financial resources to perform the Contract.
10. The Contract, when executed, shall be deemed to include the
entire agreement between the parties thereto and neither party shall
claim any modification thereof resulting from any representation or
promise made at any time by any officer, agent, or employee of the
other or by any other person.
11. The Owner reserves the right to waive minor irregularities
or minor errors in any Proposal, if it appears to the Owner that
such irregularities or errors were made through inadvertence. Any
such irregularities or errors so waived must be corrected on the
Proposal in which they occur prior to the execution of any Contract
which may be awarded thereon. Failure to provide a Bid Bond or check
as specified in item six (6) above is not a minor irregularity.
12. The Owner reserves the right to reject any or all Proposals.
13. The equipment to be furnished for all central offices and
remote switching terminals included in the Proposal is to be of one
and the same basic design. A Proposal submitted on any other basis
will not be considered.
14. Equal Opportunity and Employment
(a) The Offeror's or Bidders's attention is called to the
``Equal Opportunity Clause'' and the ``Standard Federal Equal
Employment Specifications'' set forth herein.
(b) The goals and timetables for minority and female
participation, expressed in percentage terms for the Contractor's
aggregate workforce in each trade on all construction work in the
covered area, are as follows:
------------------------------------------------------------------------
Goals for minority
Timetables participation for Goals for female
each trade participation in trade
------------------------------------------------------------------------
(Insert goals for (Insert goals for each
each year) year)
------------------------------------------------------------------------
These goals are applicable to all the Contractor's construction
work (whether or not it is federal or federally assisted) performed
in the covered area. If the Contractor performs construction work in
a geographical area located outside of the covered area, it shall
apply the goals established for such geographical area where work is
actually performed. With regard to this second area, the Contractor
also is subject to the goals for both its federally involved and
nonfederally involved construction.
The Contractor's compliance with Executive Order 11246 (3 CFR,
1963-1965 Comp., p. 340) and the regulations in 41 CFR part 60-4
shall be based on its implementation of the Equal Opportunity
Clause, specific affirmative action obligations required by the
specifications set forth in 41 CFR 60-4.3(a), and its efforts to
meet the goals. The hours of minority and female employment and
training must be substantially uniform throughout the length of the
contract, and in each trade, and the Contractor shall make a good
faith effort to employ minorities and women evenly on each of its
projects. Transfer of minority or female employees or trainees from
Contractor to Contractor or from project to project for the sole
purpose of meeting the Contractor's goals shall be a violation of
the contract, Executive Order 11246 and the regulations in 41 CFR
part 60-4. Compliance with the goals will be measured against the
total work hours performed.
(c) The Contractor shall provide written notification to the
Director of the Office of Federal Contract Compliance Programs
within 10 working days of award of any construction subcontract in
excess of $10,000 at any tier for construction work under the
contract resulting from this solicitation. The notification shall
list the name, address and telephone number of the subcontractor;
employer identification number of the subcontractor; estimated
dollar amount of the subcontract; estimated starting and completion
dates of the subcontract; and the geographical area in which the
subcontract is to be performed.
(d) As used in this Notice, and in the contract resulting from
this solicitation, the ``covered area'' is
----------------------------------------------------------------------
----------------------------------------------------------------------
(insert description of the geographical areas where the contract is
to be performed giving the state, county and city, if any).
Note: Paragraph 14 is applicable to the extent required by law.
If applicable, certain information needs to be inserted at
subparagraphs (b) and (d). In determining whether and how this
paragraph is applicable, reference should be made to Office of
Federal Contract Compliance Programs regulations (41 CFR Chapter
60).
----------------------------------------------------------------------
Date
----------------------------------------------------------------------
Owner
By---------------------------------------------------------------------
Title------------------------------------------------------------------
Bidder's Proposal to Engineer, Furnish, Deliver, and Install
Equipment, Materials and Software
(Proposal shall be submitted in ink or typewritten)
To:--------------------------------------------------------------------
(Hereinafter called the ``Owner'')
The undersigned (hereinafter called the ``Bidder'') hereby
proposes to engineer, furnish, deliver, and install the equipment,
materials and software for each Project listed under Column 1,
``Project,'' in Article I, section 1, and described in the plans,
specifications and drawings (hereinafter called the
``Specifications'') prepared by the Owner and attached hereto and
made a part hereof, financed by a loan to the Owner made or
guaranteed by the United States of America, acting through the
Administrator of the Rural Electrification Administration
(hereinafter called the ``Administrator''), or by loans to the Owner
by the United States of America and by the Rural Telephone Bank, and
designated ____________.
The Bidder has become informed as to the location and
characteristics of the proposed installations, has become informed
as to the kind of facilities required before and during the delivery
and installation of the equipment, material, and software and has
become acquainted with the labor conditions which would affect the
work.
The Bidder agrees that if its bid is accepted the following
terms and conditions shall govern.
If, in submitting this Proposal, the Bidder has taken any
exception to the form of proposal furnished by the Owner, the Bidder
understands that the Owner and the Administrator may evaluate the
effect of such change as they see fit and they may exclude the
Proposal from consideration in determining the award of the
Contract.
Article I
[Section 1. Bid Price. The Bidder will engineer, furnish, deliver, and install the equipment, materials, and software described in the Specifications
for the following sums:]
Time in calendar days
---------------------------------------------------------------------------------------------------------------------------------------------------------
Materials, Completion of
Project (see notes 1, equipment, Installation Base bid Delivery Completion of the project Spare parts Item Maintenance
2 and 3) and software installation (see note 4) tools
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
--------------------------------------------------------------------------------------------------------------------------------------------------------
$ $ $ ............. ............. ............. $ a $
$ $ $ ............. ............. ............. $ b $
$ $ $ ............. ............. ............. $ c $
$ $ $ ............. ............. ............. $ d $
$ $ $ ............. ............. ............. $ e $
$ $ $ ............. ............. ............. $ f $
$ $ $ ............. ............. ............. $ g $
$ $ $ ............. ............. ............. $ h $
$ $ $ ............. ............. ............. $ i $
$ $ $ ............. ............. ............. $ j $
---------------------------------------------------------------------------------------------------------------------------------
Totals.......... $ $ XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX $ XXX $
=================================================================================================================================
Total Base Bid.. ............. ............. $ XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX XXXXX XXXXXXXXXX
Alternate No. 1....... $ $ $ ............. ............. ............. $ k $
Alternate No. 2....... $ $ $ ............. ............. ............. $ l $
Alternate No. 3....... $ $ $ ............. ............. ............. $ m $
Alternate No. 4....... $ $ $ ............. ............. ............. $ n $
Alternate No. 5....... $ $ $ ............. ............. ............. $ o $
Alternate No. 6....... $ $ $ ............. ............. ............. $ p $
Note 1: If a remote switching terminal, so designate and list after host office.
Note 2: All items included in a Project shall have the same completion schedule.
Note 3: Each Project shall be separated by a blank line.
Note 4: Time in calendar days for Completion of the Project shall be 60 days after the time established for Completion of Installation.
Section 2. Acceptable Equipment. Unless otherwise specified by
the Owner (and agreed to in advance in writing by REA), the Bidder
agrees to furnish under this Proposal only equipment which is
currently covered by a letter of acceptance issued by the Chairman,
Committee ``A'' (Telephone). [Note: for convenience of borrowers and
others, domestically manufactured products are included in REA
Bulletin 17551-100.] The Bidder agrees also to furnish only
materials, equipment and software which are new and of most recent
issue and manufacture, as of the date of the bid opening, or of near
future release for which the Bidder can assure timely delivery.
Section 3. Changes in Project. The Owner, with the approval of
the Administrator, may from time to time during the performance of
the Contract effected by the acceptance of this Proposal, make
reasonable changes, additions to or subtractions from the
Specifications which are part of the Proposal as conditions may
warrant. However, if substantial changes in the Project shall
require an extension of time, a reasonable extension will be granted
if the Bidder shall make a written request therefor to the Owner
within thirty (30) days after any such change is made. Further, if
the cost to the Bidder shall be increased or decreased by any such
change or addition, the Contract price shall be increased or
decreased by a reasonable amount in accordance with a contract
amendment signed by the Owner and the Bidder and approved by the
Administrator. No claim for additional compensation for any such
change or addition will be considered unless the Bidder shall have
made a written request therefor to the Owner prior to the
commencement of work in connection with such change or addition. The
Delivery or Completion of Installation times specified under Columns
5, ``Delivery'', and 6, ``Completion of Installation,'' in Article
I, section 1, can only be changed by a Contract amendment approved
by the Bidder, the Owner and REA.
Section 4. Taxes. The bid prices herein set forth do not include
any amounts payable by the Bidder or the Owner on account of taxes
imposed by any taxing authority upon the sale, purchase or use of
materials, supplies, equipment or software to be incorporated in the
Project(s). If any such tax is applicable to the sale, purchase or
use of materials, supplies, equipment or software hereunder, the
amount thereof shall be stated separately on all invoices and paid
by the Owner.
Article II
Delivery and Installation
Section 1. Time of Completion of Installation. The time of
delivery of materials, equipment, and software and of Completion of
Installation are of the essence of this Contract. The Bidder shall
deliver the materials, equipment, and software required hereunder
for each Project upon the time intervals established under Column 5,
``Delivery,'' in Article I, section 1, after the Administrator shall
have approved this Contract in writing, and shall prosecute
diligently and complete the installation of materials, equipment and
software for each Project in accordance with the terms of this
Contract and Specifications to the satisfaction of the Owner and the
Administrator within the number of calendar days specified under
Column 6, ``Completion of Installation,'' in Article I, section 1.
The times for such Delivery or such Completion of Installation shall
be extended for the period of any reasonable delay due exclusively
to causes beyond the control and without the fault of the Bidder,
including, but not limited to, acts of God, fires, strikes, floods,
changes in the Specifications as herein provided, and acts or
omissions of the Owner with respect to matters for which the Owner
is solely responsible. However, no such extension of time shall be
granted the Bidder unless within thirty (30) days after Bidder
becomes aware of the happening of any event relied upon by the
Bidder for such an extension of time the Bidder shall have made a
request therefor in writing to the Owner. Further, no delay in such
time for delivery of materials, equipment and software or Completion
of Installation or in the progress of the work shall result in any
liability on the part of the Owner, except that the Owner shall be
responsible for and shall pay the Bidder on demand all additional,
supportable costs and expenses incurred by the Bidder due to delays
to the extent such delays are caused by the Owner's failure to
perform its obligations under this Contract unless the Owner's
failure to perform is caused by forces beyond its control.
Section 2. Sequence of Installation. All Projects shall be
completed in the sequence in which they are listed under Column 1,
``Project,'' in Article I, section 1.
Section 3. Supervision and Inspection. The Bidder shall give
sufficient supervision to the work at the site of the Project(s),
using the Bidder's best skill and attention. The Bidder shall
carefully study and compare all drawings, specifications, and other
instructions and shall promptly report to the Owner any error,
inconsistency or omission which Bidder may discover. The Bidder
shall keep on the Project(s) during its progress a competent
superintendent (hereinafter called the ``Superintendent'') and any
necessary qualified assistants, all satisfactory to the Owner. The
Superintendent shall represent the Bidder and all directions given
to the Superintendent by the Owner shall be as binding as if given
to the Bidder. When requested by the Bidder, such directions shall
be confirmed in writing.
Section 4. Inspection and Tests. The installation of materials,
equipment and software hereunder and all materials, equipment and
software used therein shall be subject to the inspection, test and
approval of the Owner and Administrator, in accordance with the
Specifications. The Bidder shall furnish all pertinent information
required concerning the nature or source of materials. The Owner and
the Administrator shall have the right to inspect pertinent records
(other than manufacturing cost information) of the Bidder and of any
subcontractor relevant to this Project(s). The Bidder shall provide
all reasonable facilities necessary for such inspection and tests,
except that the Bidder is not required to provide test equipment for
the Owner's tests unless specifically required in the
Specifications. Failure of the Owner to make inspections shall not
release the Bidder from performance required hereunder.
The Bidder shall notify the Owner in writing upon Completion of
Installation of each Project and provide a copy of the results of
tests, if any, conducted by the Bidder.
The Owner shall make inspections and tests of each Project for
compliance with the Specifications and provide the Bidder the
results of such inspections and tests on REA Form 517, Results of
Acceptance Tests. If the Owner has not completed its inspections and
tests and provided the Bidder the results on REA Form 517 within
thirty (30) days after the written notification of Completion of
Installation from the Bidder, the Owner shall (1) pay to the Bidder
the costs incurred by the Bidder as a result of this delay, and (2)
grant an extension of time for the Completion of the Project equal
to the number of days from the date of the end of the thirty (30)
day period until the date the Owner provides the REA Form 517 to the
Bidder.
Within thirty (30) days of receipt of the REA Form 517 from the
Owner, the Bidder shall correct all deficiencies, if any, listed on
the REA Form 517 and notify the Owner in writing of such corrections
and deliver to the Owner the documents set forth in Article III,
section 2, at which time a final Owner's inspection and test of each
Project shall be conducted. If tests subsequent to this are made
necessary by the Bidder's failure to satisfactorily resolve all such
deficiencies as previously listed on the REA Form 517, the Bidder
shall pay the Owner for the cost incurred by the Owner for all such
subsequent tests.
Section 5. Delivery of Possession and Control to the Owner. The
Bidder shall deliver to the Owner, and the Owner shall accept, full
possession and control of each Project on the date of Completion of
the Project or on an earlier date if agreed under Article IV,
section 2.
Section 6. Employees. The Owner shall have the right to require
the removal of any employee of the Bidder from the Project site if
in the judgment of the Owner such removal is necessary in order to
protect the interest of the Owner.
Section 7. Defective Workmanship, Materials or Software.
Throughout the warranty period defined below the Bidder shall,
within thirty (30) days of written notice from the Owner, and
without charge to the Owner, at the Bidder's option, either remedy
or replace any materials, equipment or software found to be
defective in material, workmanship or installation, or not in
conformity with the Specification. This is subject to the following
definitions and conditions:
(a) The warranty start date for a Project is the date of
delivery of possession and control by the Bidder to the Owner of
that Project included in the Contract. Refer to Article II, section
5. The warranty period is twelve (12) months from the warranty start
date, or six (6) months from Completion of the Project, whichever
results in the longer period of coverage.
(b) Without regard to the expiration of the warranty period set
forth above, the Bidder warrants to the Owner that any Software
furnished under this Contract shall function, for a period of five
(5) years from the warranty start date defined in the Contract, in
accordance with the specifications and any written or printed
technical material provided by the Bidder to explain the operation
of the Software and aid in its use. The Bidder shall correct all
deficiencies within thirty (30) days from the date of receipt by the
Bidder of written notice of such deficiencies from the Owner. An
extension of this thirty (30) day period may be allowed only if
agreed upon by the Owner. It shall be the Bidder's obligation to
insert and thoroughly test, at no charge to the Owner, any software
amendment or alteration provided to satisfy the obligations of this
Section 7. If a deficiency is detected or a correction made within
the final ninety (90) days of the warranty, the warranty shall be
extended to a date ninety (90) days after the deficiency has been
corrected.
(c) The Owner shall pay the Bidder for any use of the Bidder's
technical assistance center except for usage to diagnose defects
covered by this warranty.
(d) This warranty is not diminished by the acceptance of
workmanship, materials, equipment, or software, or by the issuing of
any certificate with respect to Completion of the Project.
(e) This warranty does not cover defects in materials, equipment
or software that are caused by modifications to or abuse of
materials, equipment or software by the Owner.
(f) The Owner shall bear the cost and risk of shipping defective
components to the Bidder's designated repair center. The Bidder
shall bear the cost and risk of shipping new or repaired replacement
components to the Owner.
Article III
Payments and Releases of Lien
Section 1. Payment to Bidder.
(a) The Owner shall pay the Bidder upon the basis of written
estimates of the materials, equipment, and software delivered at the
site of the Project, presented by the Bidder, and approved by the
Owner, the following percentages of the price of the materials,
equipment, and software for each Project set forth under Column 2,
``Materials, Equipment, and Software,'' in Article I, Section 1, as
and if revised:
(i) Forty-five percent (45%) when fifty percent (50%) of the
materials, equipment, and software for each Project has been
delivered at the site of the Project, and
(ii) Ninety percent (90%) when all the materials, equipment, and
software required to place each Project into operation has been
delivered at the site of the Project.
(b) Upon written notification of the Completion of Installation
of each Project, the Owner shall pay the Bidder ninety percent (90%)
of the Base Bid plus accepted alternates for that Project.
(c) Upon the Completion of Installation, but prior to the
payment to the Bidder of any amount in excess of ninety percent
(90%) of the Total Contract Price, the Owner shall inspect the work
performed hereunder and if the work shall be found to be in
accordance with the Specifications and all provisions hereunder, the
Owner shall certify as to that fact and as to the amount of the
balance found to be due to the Bidder. No later than thirty (30)
days after Completion of the Contract, as defined in Article VII,
section 1, ``Definitions,'' the Owner shall submit such final
certificate to the Administrator for approval and when such approval
has been given, the Owner shall pay to the Bidder all unpaid amounts
to which the Bidder shall be entitled hereunder; provided, however,
such final payments shall be made not later than sixty (60) days
after Completion of the Contract unless approval by the
Administrator shall be withheld or delayed due to Bidder's actions
or failure to act.
(d) Payment on undisputed invoices submitted by the Bidder shall
be due thirty (30) days after receipt. Any amounts of these invoices
not paid when due shall accrue interest at a rate one and one-half
percent (1\1/2\%) higher than the ``Prime Rate'' published in the
Wall Street Journal in its first issue of the month in which payment
becomes due and changing each subsequent month with the first issue
published in the respective month.
(e) Notwithstanding other provisions of this Article III, the
Bidder, shall, at its request in writing, receive payment in full
for each Project upon Completion of Installation of such and upon:
(i) Completion of the final acceptance tests of such Project as
certified on REA Form 754, Certificate of Completion, Central
Office(s) and approved by the Owner.
(ii) Submission to the Owner and Administrator of the releases
of lien and Certificate of Contractor referred to in section 2
hereof or in lieu thereof, where the Bidder is the manufacturer, the
execution of the Certificate of Contractor and Indemnity Agreement
on REA Form 754, all in respect of such Project.
(iii) Approval by the Administrator of the Certificate of
Completion, REA Form 754 in respect of such Project.
Ten percent (10%) of the contract price of one central office
shall be retained until the Bidder shall have furnished the
certificates and releases of lien or indemnity agreement in respect
of the Project required by section 2 of this Article III.
(This Section 1(e) is to be used only if (1) the Contract
includes at least one central office and (2) the Owner wishes to
allow the partial closeout procedure. The Owner shall strike out
this Section 1(e) if the partial closeout procedure is not to be
allowed)
(f) Acceptance by the Owner of equipment, materials, workmanship
or software while the Bidder is in default under any provision of
this Contract shall not be construed as a waiver by the Owner of any
right hereunder including, without limitation, any right to
liquidated damages the Owner may have by virtue of Article V,
section 2.
Section 2. Release of Liens. Upon the Completion of Installation
by the Bidder, but prior to the payment to the Bidder of any amount
in excess of ninety percent (90%) of the Total Contract Price,
except as specified in Article III, section 1(e), the Bidder shall
deliver to the Owner (a) two original Waiver and Release of Lien in
the form attached hereto, from manufacturers, material suppliers and
subcontractors who have furnished materials or services for the
work, and (b) two original Certificate of Contractor, in the form
attached hereto, to the effect that all labor has been paid and that
all such releases have been submitted to the Owner; and the Owner
shall deliver to the Administrator for approval one of the originals
of each such release and certificate.
In lieu of releases of lien where the Bidder is the manufacturer
of the equipment, the Bidder may deliver to the Owner, in duplicate
in the form attached hereto, a Certificate of Contractor and
Indemnity Agreement, stating that all manufacturers, material
suppliers and subcontractors who have furnished materials or
services for the Project(s) have been paid in full, and agreeing to
indemnify the Owner against any liens arising out of the Bidder's
performance hereunder which may have been or may be filed against
the Owner.
In this Article III ``manufacturer'' shall mean a Bidder who
makes, produces, or manufactures the equipment and whose interest,
including non-contracted installation, represent more than fifty
percent (50%) of the value of the Total Contract Price.
Article IV
Particular Undertakings of the Bidder
Section 1. Protection to Persons and Property. At all times when
equipment and materials are being delivered and installed the Bidder
shall exercise reasonable precautions for the safety of employees on
the job and of the public and shall comply with all applicable
provisions of Federal, State and Municipal safety laws and building
and construction codes. All machinery and equipment and other
physical hazards shall be guarded in accordance with the ``Manual of
Accident Prevention in Construction'' of the Associated General
Contractors of America unless such instructions are incompatible
with Federal, State or Municipal laws or regulations. The following
provisions shall not limit the generality of the above requirements:
(a) The Bidder shall at all times keep the premises free from
accumulations of waste material or rubbish caused by its employees
or work, and at the completion of the work the Bidder shall remove
all rubbish from and about the Project(s) and all its tools,
scaffolding and surplus materials and shall leave its work ``broom
clean.''
(b) The work, from its commencement to completion, or to such
earlier date or dates when the Owner may take possession and
control, shall be under the charge and control of the Bidder and
during such period of control by the Bidder all risks in connection
therewith, and in connection with the equipment, materials and
software to be used therein, shall be borne by the Bidder. The
Bidder shall make good and fully repair all injuries and damages to
the equipment, materials and software under the control of the
Bidder by reasons of any act of God, or any other casualty or cause
whether or not the same shall have occurred by reason of the
Bidder's negligence. The Bidder shall hold the Owner harmless from
any and all claims for injuries of persons or for damage to property
happening by reason of any negligence on the part of the Bidder or
any of the Bidder's agents, subcontractors or employees during the
control by the Bidder of the Project(s) or any part thereof. The
Owner shall promptly notify the Bidder in writing of any such claims
received and, except where the Owner is the claimant, shall give to
the Bidder full authority and opportunity to settle such claims, and
reasonably cooperate with the Bidder in obtaining information
relative to such claims.
(c) Monthly reports of all accidents shall be promptly submitted
to the Owner by the Bidder giving such data as may be prescribed by
the Owner.
Section 2. Termination of Bidder's Risks and Obligations. The
Bidder shall deliver to the Owner, and the Owner shall accept, full
possession and control of each Project on the date of Completion of
the Project. However, at any time after payment by the Owner to the
Bidder of ninety percent (90%) of the Total Base Bid plus accepted
alternates for that Project, but prior to Completion of the Project,
the Owner and the Bidder may agree in writing to an earlier date of
delivery of possession and control. Upon such delivery of possession
and control of any Project the Bidder's risks and obligations as set
forth in Article IV, section 1(b), pertaining to such Project shall
be terminated; provided, however, that nothing herein contained
shall relieve the Bidder of its obligation for full performance
under the Specifications, or its liability with respect to defective
workmanship or materials as specified in Article II, section 7
hereof. The equipment shall not be placed in service until delivery
of possession and control to the Owner has been accomplished, as set
forth above.
Section 3. Insurance. During the Bidder's performance hereunder,
the Bidder shall take out and maintain fully paid insurance
providing not less than the minimum coverage required by 7 CFR part
1788, subpart C.
The Owner shall have the right to require public liability
insurance and property damage liability insurance in an amount
greater than those required in 7 CFR part 1788, subpart C. If this
requirement is included in the plans and specifications used for
bidding, the added costs shall be included in the bid price. If the
requirement is added after the Contract is approved, the additional
premium or premiums payable solely as the result of such additional
insurance shall be added to the Contract price, by Contract
amendment.
Upon request by the Administrator, the Bidder shall furnish to
the Administrator a certificate in such form as the Administrator
may prescribe evidencing compliance with the foregoing requirements.
Section 4. Purchase of Materials. The Bidder shall purchase all
materials and supplies except software outright and not subject to
any conditional sales agreements, bailment lease or other agreement
reserving unto the seller any right, title or interest therein.
Materials and supplies other than software shall become the property
of the Owner as the Owner makes payments therefor to the Bidder in
accordance with Article III, Section 1(a).
Section 5. Software License. The software licensing agreement,
if required, covering the rights, terms and conditions of the use
and assignability of all software integral to the operation of the
Project(s), shall be in the form of Addendum 1 to this Contract.
Section 6. Assignment of Guarantees. All guarantees of
materials, equipment, workmanship and software running in favor of
the Bidder shall be transferred and assigned to the Owner upon
Completion of the Project and at such time as the Bidder receives
final payment. Any such guarantees shall be in addition to the
Bidder's warranty defined in Article II, section 7. This provision
may be modified with respect to a particular warranty if the Bidder
demonstrates to the satisfaction of REA and the Owner that a
transfer is not possible.
Section 7. Patent, Copyright, Trademark and Trade Secret
Infringement. The Bidder shall hold harmless and indemnify the Owner
from any and all claims, suits, and proceedings for the infringement
of any patent, copyright, trademark or violation of trade secrets
covering any equipment or software used in the work, except for
items of the Owner's design or selection. If the Owner's use of
equipment or software is enjoined, the Bidder shall promptly, at its
own expense, modify or replace the infringing equipment or software
so that it no longer infringes but remains functionally equivalent,
or obtain for the Owner a license or other right to use. This shall
be in addition to any other rights or claims which the Owner may
have. The Bidder shall, at its own expense, (and the Owner agrees to
permit Bidder to do so,) defend any suits which may be instituted by
any party against the Owner for alleged infringement of patents,
copyright, trademark or violation of trade secrets relative to the
Bidder's performance hereunder. Either party shall notify the other
promptly of any such claims, and the Owner shall give to the Bidder
full authority and opportunity to settle such claims, and shall
reasonably cooperate with the Bidder in obtaining information
relative to such claims.
Section 8. Compliance with Statutes and Regulations. The Bidder
shall comply with all applicable laws, statutes, ordinances, rules
and regulations. The Bidder acknowledges that it is familiar with
the Rural Electrification Act of 1936, as amended (7 U.S.C. 901 et
seq.), the Anti-Kickback Acts, as amended (40 U.S.C. 276c; 41 U.S.C.
51 et seq.), and any rules and regulations issued pursuant thereto,
and 18 U.S.C. 201, 286, 287, 641, 666, 874, 1001, 1361 and 1366, as
amended. The Bidder understands that the obligations of the parties
hereunder are subject to the applicable regulations and orders of
the Governmental agencies having jurisdiction in the premises.
The Bidder represents that to the extent required by Executive
Orders 12549 (3 CFR, 1985-1988 Comp., p. 189) and 12689 (3 CFR, 1989
Comp., p. 235), Debarment and Suspension, and 7 CFR part 3017, it
has submitted to the Owner a duly executed certification in the form
prescribed in 7 CFR part 3017.
The Bidder represents that, to the extent required, it has
complied with the requirements of Public Law 101-121, section 319,
103 Stat. 701, 750-765 (31 U.S.C. 1352), entitled ``Limitation on
use of appropriated funds to influence certain Federal contracting
and financial transactions,'' and any rules and regulations issued
pursuant thereto.
Article V
Remedies
Section 1. Completion on Bidder's Default. If default shall be
made by the Bidder in the performance of any of the work hereunder,
the Owner, without in any manner limiting its legal and equitable
remedies in the circumstances, may serve upon the Bidder and the
surety or sureties upon the Bidder's Bond or Bonds a written notice
requiring the Bidder to cause such default to be corrected
forthwith. Unless within thirty (30) days after the service of such
notice upon the Bidder such default shall be corrected or
arrangements for the correction thereof, satisfactory to both the
Owner and the Administrator, shall have been made by the Bidder or
its surety or sureties, the Owner may take over the performance of
the Bidder's obligations hereunder and prosecute the same to
completion by contract or otherwise for the account and at the
expense of the Bidder, and the Bidder and its surety or sureties
shall be liable to the Owner for any supportable cost or expense in
excess of the bid price occasioned thereby. In such event, the Owner
may take possession of and utilize, in completing the Project(s),
any tools, supplies, equipment, appliances and plant belonging to
the Bidder which may be situated at the site of the Project(s). The
Owner, in such contingency, may exercise any rights, claims or
demands which the Bidder may have against third persons in
connection herewith and for such purpose the Bidder does hereby
assign, transfer and set over unto the Owner all such rights, claims
and demands.
Section 2. Liquidated Damages. Should the Bidder fail to
complete any Project as shown under Column 7, ``Completion of the
Project,'' in Article I, Section 1, within the time herein agreed
upon, after giving effect to extensions of time, if any, herein
provided, then, in that event and in view of the difficulty of
estimating with exactness damages caused by such delay, the Owner
shall, so long as the subject Project shall not have been placed in
service, have the right to deduct from and retain out of such moneys
which may be then due, or which may become due and payable to the
Bidder, the sum of:
----------------------------------------------------------------------
dollars ($____________)
for--------------------------------------------------------------------
(Project)
for--------------------------------------------------------------------
dollars ($____________)
for--------------------------------------------------------------------
(Project)
dollars ($____________
for--------------------------------------------------------------------
per day for each and every day that such completion is delayed
beyond the scheduled time for Completion of the Project, as
liquidated damages and not as a penalty, up to the amount of the
respective Base Bid plus accepted alternates for the affected
Project: Provided, however, that the Owner shall promptly notify the
Bidder in writing of the manner in which the amount claimed as
liquidated damages was computed. The Bidder shall pay to the Owner
the amount necessary to effect such payment in full. Such payment is
not to be reduced by the value of any partial performance by the
Bidder.
At the technical sessions, each Bidder shall identify all
features and capabilities that are not fully developed or do not
have a verifiable satisfactory field performance record. If the
Owner allows these features to be bid as separate Projects, then
they are to be individually listed under Columns 1 through 10, in
Article I, section 1. These unproven features and capabilities are
to be individually listed in this section 2 also, with liquidated
damages amounts determined by the Owner and stated for each. If a
Bidder neglects to identify any such feature at the technical
session, delay in providing the feature is considered a delay in
completing the associated Project and the Owner may assess
liquidated damages listed for that Project regardless of whether the
Project is placed in service.
Section 3. Consequential Damages. In no event shall the Bidder's
liability for incidental or consequential loss or damage, except for
personal injury or tangible property damage, exceed the amount of
ten times the total contract price, as amended.
Section 4. Enforcement of Remedies by Administrator. The
Administrator may on behalf of the Owner exercise any right or
enforce any remedy which the Owner may exercise or enforce
hereunder.
Section 5. Cumulative Remedies. Every right or remedy herein
conferred upon or reserved to the Owner or the Administrator shall
be cumulative and shall be in addition to every right and remedy now
or hereafter existing at law or in equity or by statute and the
pursuit of any right or remedy shall not be construed as an
election. Provided, however, that the provisions of section 2 of
this Article V shall be the exclusive measure of damages for failure
by the Bidder to have effected the Completion of Project within the
time herein agreed upon.
Article VI
Equal Employment
Section 1. The Bidder.
(a) The Bidder represents that:
(1) It has, ______ does not have ______, 100 or more employees,
and if it has, that
(2) It has ______, has not ______, furnished the Equal
Employment Opportunity Employers Information Report EEO-1, Standard
Form 100, required of employers with 100 or more employees pursuant
to Executive Order 11246 and Title VII of the Civil Rights Act of
1964.
(b) The Bidder agrees that it will obtain, prior to the award of
any subcontract for more than $10,000 hereunder to a subcontractor
with 100 or more employees, a statement, signed by the proposed
subcontractor, that the proposed subcontractor has filed a current
report on Standard Form 100.
(c) The Bidder agrees that if it has 100 or more employees and
has not submitted a report on Standard Form 100 for the current
reporting year and that if this contract will amount to more than
$10,000, the Bidder will file such report, as required by law, and
notify the Owner in writing of such filing prior to the Owner's
acceptance of this Proposal.
(d) The Bidder certifies that it does not maintain or provide
for its employees any segregated facilities at any of its
establishments, and that it does not permit its employees to perform
their services at any location, under its control, where segregated
facilities are maintained. The Bidder certifies further that it will
not maintain or provide for its employees any segregated facilities
at any of its establishments, and that it will not permit its
employees to perform their services at any location, under its
control, where segregated facilities are maintained. The Bidder
agrees that a breach of this certification is a violation of the
Equal Opportunity Clause in this contract. As used in this
certification, the term ``segregated facilities'' means any waiting
rooms, work areas, restrooms and washrooms, restaurants and other
eating areas, timeclocks, locker rooms and other storage or dressing
areas, parking lots, drinking fountains, recreation or entertainment
areas, transportation, and housing facilities provided for employees
which are segregated by explicit directive or are in fact segregated
on the basis of race, color, religion, or national origin, because
of habit, local custom, or otherwise. The Bidder agrees that (except
where it has obtained identical certifications from proposed
subcontractors for specific time periods) it will obtain identical
certifications from proposed subcontractors prior to the award of
subcontracts exceeding $10,000 which are not exempt from the
provisions of the Equal Opportunity Clause, and that it will retain
such certifications in its files.
Section 2. During the performance of this contract, the
Contractor agrees as follows:
(a) The Contractor will not discriminate against any employee or
applicant for employment because of race, color, religion, sex or
national origin. The Contractor will take affirmative action to
ensure that applicants are employed, and that employees are treated
during employment without regard to their race, color, religion, sex
or national origin. Such action shall include, but not be limited
to, the following: employment, upgrading, demotion or transfer;
recruitment or recruitment advertising; layoff or termination; rates
of pay or other forms of compensation; and selection for training,
including apprenticeship. The Contractor agrees to post in
conspicuous places available to employees and applicants for
employment, notices to be provided setting forth the provisions of
this nondiscrimination clause.
(b) The Contractor will, in all solicitations or advertisements
for employees placed by or on behalf of the Contractor, state that
all qualified applicants shall receive consideration for employment
without regard to race, color, religion, sex or national origin.
(c) The Contractor will send to each labor union or
representative of workers with which the Bidder has a collective
bargaining agreement or other contract or understanding, a notice to
be provided advising the said labor union or workers' representative
of the Contractor's commitments under this section, and shall post
copies of the notice in conspicuous places available to employees
and applicants for employment.
(d) The Contractor will comply with all provisions of Executive
Order 11246 of September 24, 1965, and of the rules, regulations and
relevant orders of the Secretary of Labor.
(e) The Contractor will furnish all information and reports
required by Executive Order 11246 of September 24, 1965, and by
rules, regulations and orders of the Secretary of Labor, or pursuant
thereto, and will permit access to the Contractor's books, records
and accounts by the administering agency and the Secretary of Labor
for purposes of investigation to ascertain compliance with such
rules, regulations and orders.
(f) In the event of the Contractor's noncompliance with the
nondiscrimination clauses of this contract or with any of the said
rules, regulations or orders, this contract may be canceled,
terminated or suspended in whole or in part and the Contractor may
be declared ineligible for further Government contracts or federally
assisted construction contracts in accordance with procedures
authorized in Executive Order 11246 of September 24, 1965, and such
other sanctions as may be imposed and remedies invoked as provided
in the said Executive Order 11246 of September 24, 1965, or by rule,
regulation or order of the Secretary of Labor, or as otherwise
provided by law.
(g) The Contractor will include the portion of the sentence
immediately preceding paragraph (a) and the provisions of paragraphs
(a) through (g) in every subcontract or purchase order unless
exempted by rules, regulations or orders of the Secretary of Labor
issued pursuant to Section 204 of Executive Order 11246 of September
24, 1965, so that such provisions will be binding upon each
subcontractor or vendor. The Contractor will take such action with
respect to any subcontract or purchase order as the administering
agency may direct as a means of enforcing such provisions, including
actions for noncompliance: Provided, however, that in the event a
contractor becomes involved in, or is threatened with, litigation
with a subcontractor or vendor as a result of such direction by the
administering agency, the Contractor may request the United States
to enter into such litigation to protect the interests of the United
States.
Section 3. Equal Employment Opportunity Specifications.
(a) As used in these specifications:
``Covered area'' means the geographical area described in the
solicitation from which this contract resulted;
``Director'' means Director, Office of Federal Contract
Compliance Programs, United States Department of Labor, or any
person to whom the Director delegates authority;
``Employer identification number'' means the Federal Social
Security number used on the Employer's Quarterly Federal Tax Return,
U.S. Treasury Department Form 941; and
``Minority'' includes:
(i) Black (all persons having origins in any of the Black
African racial groups not of Hispanic origin);
(ii) Hispanic (all persons of Mexican, Puerto Rican, Cuban,
Central or South American or other Spanish Culture or origin,
regardless of race);
(iii) Asian and Pacific Islander (all persons having origins in
any of the original peoples of the Far East, Southeast Asia, the
Indian Subcontinent, or the Pacific Islands); and
(iv) American Indian or Alaskan Native (all persons having
origins in any of the original peoples of North America and
maintaining identifiable tribal affiliations through membership and
participation or community identification).
(b) Whenever the Contractor, or any Subcontractor at any tier,
subcontracts a portion of the work involving any construction trade,
it shall physically include in each subcontract in excess of $10,000
the provisions of these specifications and the Notice which contains
the applicable goals for minority and female participation and which
is set forth in the solicitations from which this contract resulted.
(c) If the Contractor is participating (pursuant to 41 CFR 60-
4.5) in a Hometown Plan approved by the U.S. Department of Labor in
the covered area either individually or through an association, its
affirmative action obligations on all work in the Plan area
(including goals and timetables) shall be in accordance with that
Plan for those trades which have unions participating in the Plan.
Contractors must be able to demonstrate their participation in and
compliance with the provisions of any such Hometown Plan. Each
Contractor or Subcontractor participating in an approved Plan is
individually required to comply with its obligations under the EEO
clause, and to make a good faith effort to achieve each goal under
the Plan in each trade in which it has employees. The overall good
faith performance by other Contractors or Subcontractors toward a
goal in an approved Plan does not excuse any covered Contractor's or
Subcontractor's failure to take good faith efforts to achieve the
Plan goals and timetables.
(d) The Contractor shall implement the specific affirmative
action standards provided in paragraphs (g) (i) through (xvi) of
these specifications. The goals set forth in the solicitation from
which this contract resulted are expressed as percentages of the
total hours of employment and training of minority and female
utilization the Contractor should reasonably be able to achieve in
each construction trade in which it has employees in the covered
area. Covered construction contractors performing construction work
in geographical areas where they do not have a federal or federally
assisted construction contract shall apply the minority and female
goals established for the geographical area where the work is being
performed. Goals are published periodically in the Federal Register
in notice form, and such notices may be obtained from any Office of
Federal Contract Compliance Programs office or from Federal
procurement contracting officers. The Contractor is expected to make
substantially uniform progress in meeting its goals in each craft
during the period specified.
(e) Neither the provisions of any collective bargaining
agreement, nor the failure by a union with whom the Contractor has a
collective bargaining agreement, to refer either minorities or women
shall excuse the Contractor's obligations under these
specifications, Executive Order 11246, or the regulations
promulgated pursuant thereto.
(f) In order for the nonworking training hours of apprentices
and trainees to be counted in meeting the goals, such apprentices
and trainees must be employed by the Contractor during the training
period, and the Contractor must have made a commitment to employ the
apprentices and trainees at the completion of their training,
subject to the availability of employment opportunities. Trainees
must be trained pursuant to training programs approved by the U.S.
Department of Labor.
(g) The Contractor shall take specific affirmative actions to
ensure equal employment opportunity. The evaluation of the
Contractor's compliance with these specifications shall be based
upon its effort to achieve maximum results from its actions. The
Contractor shall document these efforts fully, and shall implement
affirmative action steps at least as extensive as the following:
(i) Ensure and maintain a working environment free of
harassment, intimidation, and coercion at all sites, and in all
facilities at which the Contractor's employees are assigned to work.
The Contractor, where possible, will assign two or more women to
each construction project. The Contractor shall specifically ensure
that all foremen, superintendents, and other on-site supervisory
personnel are aware of and carry out the Contractor's obligation to
maintain such a working environment, with specific attention to
minority or female individuals working at such sites or in such
facilities.
(ii) Establish and maintain a current list of minority and
female recruitment sources, provide written notification to minority
and female recruitment sources and to community organizations when
the Contractor or its unions have employment opportunities
available, and maintain a record of the organizations' responses.
(iii) Maintain a current file of the names, addresses and
telephone numbers of each minority and female off-the-street
applicant and minority or female referral from a union, a
recruitment source or community organization and of what action was
taken with respect to each such individual. If such individual was
sent to the union hiring hall for referral and was not referred back
to the Contractor by the union or, if referred, not employed by the
Contractor, this shall be documented in the file with the reason
therefore, along with whatever additional actions the Contractor may
have taken.
(iv) Provide immediate written notification to the Director when
the union or unions with which the Contractor has a collective
bargaining agreement has not referred to the Contractor a minority
person or woman sent by the Contractor, or when the Contractor has
other information that the union referral process has impeded the
Contractor's efforts to meet its obligations.
(v) Develop on-the-job training opportunities and/or participate
in training programs for the area which expressly include minorities
and women, including upgrading programs and apprenticeship and
trainee programs relevant to the Contractor's employment needs,
especially those programs funded or approved by the Department of
Labor. The Contractor shall provide notice of these programs to the
sources compiled under (g)(ii) above.
(vi) Disseminate the Contractor's EEO policy by providing notice
of the policy to unions and training programs and requesting their
cooperation in assisting the Contractor in meeting its EEO
obligations; by including it in any policy manual and collective
bargaining agreement; by publicizing it in the company newspaper,
annual report, etc.; by specific review of the policy with all
management personnel and with all minority and female employees at
least once a year; and by posting the company EEO policy on bulletin
boards accessible to all employees at each location where
construction work is performed.
(vii) Review, at least annually, the company's EEO policy and
affirmative action obligations under these specifications with all
employees having any responsibility for hiring, assignment, layoff,
termination or other employment decisions including specific review
of these items with onsite supervisory personnel such as
Superintendents, General Foremen, etc., prior to the initiation of
construction work at any job site. A written record shall be made
and maintained identifying the time and place of these meetings,
persons attending, subject matter discussed, and disposition of the
subject matter.
(viii) Disseminate the Contractor's EEO policy externally by
including it in any advertising in the news media, specifically
including minority and female news media, and providing written
notification to and discussing the Contractor's EEO policy with
other Contractors and Subcontractors with whom the Contractor does
or anticipates doing business.
(ix) Direct its recruitment efforts, both oral and written, to
minority, female and community organizations, to schools with
minority and female students and to minority and female recruitment
and training organizations serving the Contractor's recruitment area
and employment needs. Not later than one month prior to the date for
the acceptance of applications for apprenticeship or other training
by any recruitment source, the Contractor shall send written
notification to organizations such as the above, describing the
openings, screening procedures, and tests to be used in the
selection process.
(x) Encourage present minority and female employees to recruit
other minority persons and women and, where reasonable, provide
after school, summer and vacation employment to minority and female
youth both on the site and in other areas of a Contractor's work
force.
(xi) Validate all tests and other selection requirements where
there is an obligation to do so under 41 CFR Part 60-3.
(xii) Conduct, at least annually, an inventory and evaluation at
least of all minority and female personnel for promotional
opportunities and encourage these employees to seek or to prepare
for, through appropriate training, etc., such opportunities.
(xiii) Ensure that seniority practices, job classifications,
work assignments and other personnel practices, do not have a
discriminatory effect by continually monitoring all personnel and
employment related activities to ensure that the EEO policy and the
Contractor's obligations under these specifications are being
carried out.
(xiv) Ensure that all facilities and company activities are
nonsegregated except that separate or single-user toilet and
necessary changing facilities shall be provided to assure privacy
between the sexes.
(xv) Document and maintain a record of all solicitations of
offers for subcontracts from minority and female construction
contractors and suppliers, including circulation of solicitations to
minority and female contractor associations and other business
associations.
(xvi) Conduct a review, at least annually, of all supervisors'
adherence to and performance under the Contractor's EEO policies and
affirmative action obligations.
(h) Contractors are encouraged to participate in voluntary
associations which assist in fulfilling one or more of their
affirmative action obligations (g) (i) through (xvi). The efforts of
a contractor association, joint contractor-union, contractor-
community, or other similar group of which the Contractor is a
member and participant, may be asserted as fulfilling any one or
more of its obligations under (g) (i) through (xvi) of these
specifications provided that the Contractor actively participates in
the group, makes every effort to assure that the group has a
positive impact on the employment of minorities and women in the
industry, ensures that the concrete benefits of the program are
reflected in the Contractor's minority and female workforce
participation, makes a good faith effort to meet its individual
goals and timetables, and can provide access to documentation which
demonstrates the effectiveness of actions taken on behalf of the
Contractor. The obligation to comply, however, is the Contractor's
and failure of such a group to fulfill an obligation shall not be a
defense for the Contractor's noncompliance.
(i) A single goal for minorities and a separate single goal for
women have been established. The Contractor, however, is required to
provide equal employment opportunity and to take affirmative action
for all minority groups, both male and female, and all women, both
minority and non-minority. Consequently, the Contractor may be in
violation of Executive Order 11246 if a particular group is employed
in a substantially disparate manner (for example, even though the
Contractor has achieved its goals for women generally, the
Contractor may be in violation of Executive Order 11246 if a
specific minority group of women is underutilized).
(j) The Contractor shall not use the goals and timetables or
affirmative action standards to discriminate against any person
because of race, color, religion, sex, or national origin.
(k) The Contractor shall not enter into any Subcontract with any
person or firm debarred from Government contracts pursuant to
Executive Order 11246.
(l) The Contractor shall carry out such sanctions and penalties
for violation of these specifications and of the Equal Opportunity
Clause, including suspension, termination and cancellation of
existing subcontracts as may be imposed or ordered pursuant to
Executive Order 11246, as amended, and its implementing regulations,
by the Office of Federal Contract Compliance Programs. Any
Contractor who fails to carry out such sanctions and penalties shall
be in violation of these specifications and Executive Order 11246,
as amended.
(m) The Contractor, in fulfilling its obligations under these
specifications, shall implement specific affirmative action steps,
at least as extensive as those standards prescribed in paragraph (g)
of these specifications, so as to achieve maximum results from its
efforts to ensure equal employment opportunity. If the Contractor
fails to comply with the requirements of Executive Order 11246, the
implementing regulations, or these specifications, the Director
shall proceed in accordance with 41 CFR 60-4.8.
(n) The Contractor shall designate a responsible official to
monitor all employment related activity to ensure that the company
EEO policy is being carried out, to submit reports relating to the
provisions hereof as may be required by the Government and to keep
records. Records shall at least include for each employee the name,
address, telephone numbers, construction trade, union affiliation if
any, employee identification number when assigned, social security
number, race, sex, status (e.g., mechanic, apprentice, trainee,
helper, or laborer), dates of changes in status, hours worked per
week in the indicated trade, rate of pay, and locations at which the
work was performed. Records shall be maintained in an easily
understandable and retrievable form; however, to the degree that
existing records satisfy this requirement, contractors shall not be
required to maintain separate records.
(o) Nothing herein provided shall be construed as a limitation
upon the application of other laws which establish different
standards of compliance or upon the application of requirements for
the hiring of local or other area residents (e.g. those under the
Public Works Employment Act of 1977 and the Community Development
Block Grant Program).
Section 4. In this Article VI--
(a) The term ``Contractor'' shall also mean ``Bidder'' or
``Subcontractor'' as applicable.
(b) The provisions of sections 2 & 3 are applicable to the
extent required by law. In determining whether these Sections are
applicable, reference should be made to Office of Federal Contract
Compliance Programs regulations (41 CFR part 60).
Article VII
Miscellaneous
Section 1. Definitions.
The term ``Completion of the Contract'' shall mean
accomplishment of Completion of the Project for all central offices
(and associated remote switching terminals), features and services
listed under Column 1, ``Project,'' in Article I, Section 1, and all
alternates accepted by the Owner, on the Owner's Acceptance.
The term ``Completion of Installation'' shall mean full
performance by the Bidder of the Bidder's obligation under the
Contract and all amendments and revisions thereof, for a Project,
except that it shall not include the acceptance tests nor
performance of the Bidder's obligations in respect of (i) releases
of lien and Certificate of Contractor under Article III, section 2,
hereof and (ii) other final documents. The actual date of Completion
of Installation shall be the date the Bidder submits to the Owner
written notification that the Project is completed in conformance
with the Specifications and ready for the Owner's acceptance
inspection and tests as provided for under Article II, section 4.
The term ``Completion of the Project'' shall mean full
performance by the Bidder of the Bidder's obligations herein set out
and all amendments and revisions thereof for a central office (and
all associated remote switching terminals), feature or service. The
scheduled date for Completion of the Project is sixty (60) days
after Completion of Installation as specified under Column 7,
``Completion of Installation,'' in Article I, section 1, as amended
or adjusted under Article II, section 1, and section 4. The
scheduled date for Completion of the Project is the date from which
liquidated damages are computed. The actual date of Completion of
the Project shall be the date of the receipt by the Owner from the
Bidder of (a) all documents listed in Article III, section 2, (b)
other final documents, and (c) written notification that all
deficiencies listed on the REA Form 517, Results of Acceptance Test,
have been corrected; provided, that the final inspection and tests
by the Owner finds the deficiencies satisfactorily resolved. If the
deficiencies have not been satisfactorily resolved, the actual date
of Completion of the Project shall be the date that the deficiencies
are fully and satisfactorily resolved as determined by subsequent
Owner's tests. The Certificate of Completion approved and signed by
the Owner and approved in writing by the Administrator shall be
conclusive evidence as to the fact of Completion of the Project and
the date thereof. Full compliance with the procedure for
``Completion of the Project'' and an individual Certificate of
Completion is required for each Project listed under Column 1,
``Project,'' in Article I, section 1.
The Contract shall consist of the Notice and Instructions to
Bidders, the Bidder's Proposal and the Owner's Acceptance, the
Contractor's Bond and the Specifications.
The term ``days'' shall mean calendar days.
The term ``minor errors or irregularities'' shall mean a defect
or variation in a Bidder'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.''
The term ``placed in service'' shall mean used by the Owner to
earn revenue.
The term ``Project'' shall mean a central office and all
associated remote switching terminals (if any), a remote switching
terminal if purchased without a supporting central office, a feature
(or group of features), or a service (or group of services), which
is listed under Column 1, ``Project,'' in Article I, section 1. The
only instance in which a remote switching terminal can constitute a
separate Project is where such remote switching terminal is
purchased with associated modifications to its supporting host
switch but no other modifications to the host switch are specified.
A Project will have a single completion schedule listed under Column
7, ``Completion of Installation,'' in Article I, section 1, and a
single liquidated damages amount shown in Article V, section 2. The
Contract may consist of one or more Projects.
The term ``Software'' shall mean computer programs contained on
a tape, disc, semiconductor device or other memory device or system
memory consisting of logic instructions and instruction sequences in
machine-readable object code, which manipulate data in the central
processor, control and perform input/output operations, perform
error diagnostic and recovery routines, control call processing, and
perform peripheral control, and administrative and maintenance
functions; as well as associated documentation, excluding source
code, used to describe, maintain and use the programs provided under
the Contract.
The term ``Specifications'' shall mean the minimum performance
requirements of the Owner as contained in the documents listed
below, which are either attached or become a part of the Contract by
reference, as amended by specific written exceptions contained in
the Bidder's proposal and accepted by the Owner and the
Administrator:
REA Form __________, dated ________
REA Form __________, dated ________
Section 2. Continuing Equipment Support--Parts, Service, and
Software. In addition to warranty repairs and replacement, the
Bidder shall offer repair service and repair parts to the Owner in
accordance with the Bidder's practices and terms then in effect, for
the Bidder's manufactured equipment furnished pursuant to this
Agreement. Such repair service or repair parts shall be available
for as long as the Bidder is manufacturing or stocking such
equipment, or for no less than eight (8) years after the Bidder has
ceased manufacturing or offering for sale such equipment. The Bidder
shall also offer software support services to the Owner in
accordance with the Bidder's practices, terms, and charges then in
effect, but in any event for no less than five (5) years after the
Bidder has ceased manufacturing or offering for sale such software.
Section 3. Materials and Supplies. The Bidder shall use only
such unmanufactured articles, materials and supplies as have been
mined or produced in the United States, Mexico or Canada and only
such manufactured articles, materials and supplies as have been
manufactured in the United States, Mexico or Canada substantially
all from articles, materials or supplies mined, produced or
manufactured, as the case may be, in the United States, Mexico or
Canada; provided that foreign articles, materials or supplies may be
used in the event and to the extent that the Administrator shall
expressly authorize in writing such use pursuant to the provisions
of the Rural Electrification Act of 1938, being Title IV of Public
Resolution No. 122, 75th Congress, approved June 21, 1938. The
Bidder agrees to submit to the Owner such certificate or
certificates, signed by the Bidder and all subcontractors, with
respect to compliance with the foregoing provision as the
Administrator from time to time may require.
Section 4. Bond. The Bidder shall furnish to the Owner a
Contractor's Bond in conformance with the requirements of 7 CFR part
1788, subpart C.
Section 5. Confidentiality. All information supplied by the
Bidder to the Owner which bears a legend or notice restricting its
use, copying, or dissemination, except insofar as it may be in the
public domain through no acts attributable to the Owner, shall be
treated by the Owner as confidential information, and the Owner
shall not reproduce any such information except for its own internal
use and as authorized by this Contract, and shall use any
information only for archival backup, in-house training, operating,
maintenance and administrative purposes and in conjunction with its
use of the equipment, materials and software furnished hereunder.
All information supplied to the Bidder by the Owner which bears a
legend or notice restricting its use, copying, or dissemination,
except insofar as it may be in the public domain through no acts
attributable to the Bidder, shall be treated by the Bidder as
confidential information, and shall not be used by the Bidder for
any purpose adverse to the interests of the Owner, and shall not be
reproduced or distributed by the Bidder except for the Bidder's use
in its performance under this Contract. The foregoing
confidentiality obligations do not apply to information which is
independently developed by the receiving party or which is lawfully
received by the receiving party free of restriction from another
source having a right to so furnish such information, or is already
known to the receiving party at the time of disclosure free of
restriction. If the Bidder has failed to provide continuing
equipment support as described in Article VII, section 2, the Owner
is released from this obligation. This provision does not restrict
release of information by the United States of America pursuant to
the Freedom of Information Act or other legal process.
Section 6. Entire Agreement. The terms and conditions of this
Contract as approved by REA supersede all prior oral or written
understandings between the parties. There are no understandings or
representations, expressed or implied, not expressly set forth
herein.
Section 7. Survival of Obligations. The rights and obligations
of the parties, which by their nature, would continue beyond the
termination, cancellation, or expiration of this Contract, shall
survive such termination or expiration.
Section 8. Non-Waiver. No waiver of any terms or conditions of
this Contract, or the failure of either party to enforce strictly
any such term or condition on one or more occasions, shall be
construed as a waiver of the same or of any other terms or
conditions of this Contract on any other occasion.
Section 9. Releases Void. Neither party shall require releases
or waivers of any personal rights from representatives or employees
of the other in connection with visits to its premises, nor shall
such parties plead such releases or waivers in any action or
proceeding.
Section 10. License. The Bidder shall comply with all applicable
construction codes.
(a) The Bidder warrants that it possesses contractor's license
number ________ issued to it by the State of ________ in which the
project(s) is located, and said license expires on ________, 19____.
(b) The Bidder warrants that no license is required in the state
in which the Project(s) is located.
(Bidder shall cross out that subsection that does not apply)
Section 11. Nonassignment of Contract. The Bidder shall not
assign the Contract, effected by acceptance of this Proposal, or any
part hereof, or enter into any contract with any person, firm or
corporation, for the performance of the Bidder's obligations
hereunder, or any part hereof, without the approval in writing of
the Owner, the Surety, and the Administrator. However, the Bidder
may subcontract the whole or any part of the installation work to be
performed at the installation site, (as distinguished from
furnishing and delivery of equipment and materials), provided that;
(a) the Bidder shall remain responsible for the performance thereof
and (b) the Bidder shall obtain the consent of the surety to such
subcontract. A copy of such consent shall be submitted to the Owner
and the Administrator.
Section 12. Choice of Law. The rights and obligations of the
parties and all interpretations and performance of this Contract
shall be governed in all respects by the laws of the State of
__________ except for its rules with respect to the conflict of
laws.
Section 13. Approval of the Administrator. The acceptance of
this proposal by the Owner shall not create a contract unless such
acceptance shall be approved in writing by the Administrator within
ninety (90) days after the date hereof:
By---------------------------------------------------------------------
(Signature of Bidder)
----------------------------------------------------------------------
(Name--Type or Print)
----------------------------------------------------------------------
(Title)
----------------------------------------------------------------------
(Company Name of Bidder)
----------------------------------------------------------------------
----------------------------------------------------------------------
(Address of Bidder)
Attest:
----------------------------------------------------------------------
(Secretary)
----------------------------------------------------------------------
(Date)
The Proposal must be signed with the full name of the Bidder. In the
case of a partnership the Proposal must be signed in the firm name
by each partner. In the case of a corporation the Proposal must be
signed in the corporate name by a duly authorized officer and the
Corporate seal affixed and attested by the Secretary of the
Corporation.
(If executed by other than the President, a Vice-President, a
partner or the individual owner, a power of attorney or other
legally acceptable document authorizing execution shall accompany
this contract, unless such power of attorney is on file with REA.)
Acceptance
Subject to the approval of the Administrator, the Owner hereby
accepts the Proposal of ____________________________
----------------------------------------------------------------------
for the Project(s) herein described for the Total Base Bid of
$ ______________ and
Alternate For:
Spare Parts, Item(s)................................. $ ________
Maintenance Tools, Item(s)........................... $ ________
Alternate No. 1 (add) (deduct)......................... $ ________
Alternate No. 2 (add) (deduct)......................... $ ________
Alternate No. 3 (add) (deduct)......................... $ ________
Alternate No. 4 (add) (deduct)......................... $ ________
Alternate No. 5 (add) (deduct)......................... $ ________
Alternate No. 6 (add) (deduct)......................... $ ________
The total contract price is........................ $ ________
By---------------------------------------------------------------------
OWNER
ATTEST:----------------------------------------------------------------
PRESIDENT
----------------------------------------------------------------------
SECRETARY
----------------------------------------------------------------------
DATE OF ACCEPTANCE
[End of clause]
Dated: June 2, 1994.
Bob J. Nash,
Under Secretary, Small Community and Rural Development.
[FR Doc. 94-14058 Filed 6-16-94; 8:45 am]
BILLING CODE 3410-15-P
