[Federal Register Volume 63, Number 137 (Friday, July 17, 1998)]
[Proposed Rules]
[Pages 38503-38511]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18759]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 63, No. 137 / Friday, July 17, 1998 /
Proposed Rules
[[Page 38503]]
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DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Part 1753
RIN 0572-AB34
Telecommunications System Construction Policies and Procedures
AGENCY: Rural Utilities Service, USDA.
ACTION: Proposed rule.
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SUMMARY: The Rural Utilities Service (RUS) proposes to revise its
regulations on telecommunications system construction policies and
procedures. This revision includes empowering the telecommunications
borrowers by reducing oversight by RUS with respect to preparation of
plans and specifications, bid approvals, and final document approvals.
In addition to reducing the requirements for facilities construction,
RUS will also make technical corrections and clarifications, and minor
technical changes.
DATES: Public comments must be received by RUS or bear a postmark or
equivalent, no later than September 15, 1998.
ADDRESSES: Written comments should be sent to Orren E. Cameron, III,
Director, Telecommunications Standards Division, Rural Utilities
Service, U.S. Department of Agriculture, 1400 Independence Ave., SW.,
Room 2835-S, STOP 1598, Washington, DC 20250-1598. Telephone: (202)
720-8663. RUS requires a signed original and three copies of all
comments (7 CFR 1700.4). Comments will be available for public
inspection during regular business hours (7 CFR 1.27(b)).
FOR FURTHER INFORMATION CONTACT: Orren E. Cameron III, Director,
Telecommunications Standards Division, Rural Utilities Service, U.S.
Department of Agriculture, 1400 Independence Avenue, SW, Room 2835-S,
Stop 1598, Washington, DC 20250-1598. Telephone (202) 720-8663. E-Mail:
ecameron@rus.usda.gov.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This proposed rule has been determined to be not significant for
purposes of Executive Order 12866 and therefore has not been reviewed
by OMB.
Executive Order 12778
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. RUS has determined that this proposed rule meets
the applicable standards provided in Sec. 3. of the Executive Order.
Regulatory Flexibility Act Certification
RUS had determined that this proposed rule will not have a
significant economic impact on a substantial number of small entities,
as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
The RUS telecommunications program provides loans to borrowers at
interest rates and terms that are more favorable than those generally
available from the private sector. RUS borrowers, as a result of
obtaining federal financing, receive economic benefits which exceed any
direct economic costs associated with complying with RUS regulations
and requirements. Moreover, this action liberalizes certain contract
requirements by changing contract limits thereby reducing RUS oversight
requirements and further offsetting economic costs.
Information Collection and Recordkeeping Requirements
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35, as amended) RUS is requesting comments on the information
collection incorporated in this proposed rule.
Comments on this information collection must be received by
September 15, 1998.
Comments are invited in: (a) whether the proposed collection of
information is necessary for the proper performance of the functions of
the agency, including whether the information will have practical
utility; (b) the accuracy of the agency's estimate of the burden of the
proposed collection of information; (c) ways to enhance the quality,
utility and clarity of the information to be collected; and (d) ways to
minimize the burden of the collection of information on respondents,
including through the use of automated collection techniques of other
forms of information technology.
For further information contact Orren E. Cameron III, Director,
Telecommunications Standards Division, Rural Utilities Service, U.S.
Department of Agriculture, 1400 Independence Ave., SW., Stop 1598,
Washington, DC 20250-1598. Telephone: (202) 720-8663. FAX: (202) 720-
4099. E-Mail: ecameron@rus.usda.gov.
Title: Telecommunications Standards/Specifications Acceptance,
Telecommunications Field Trials, and Telecommunications Contract Forms.
OMB Number: 0572-0059.
Type of Request: Amendment.
Abstract: The Rural Utilities Service (RUS) proposes to revise its
regulations on telecommunications system construction policies and
procedures. This revision includes empowering the telecommunications
borrowers by reducing oversight by RUS with respect to preparation of
plans and specifications, bid approvals, and final document approvals
and transferring those approval authorities to borrowers and their
consulting engineers. In addition, this revision updates the regulation
to include headquarters building financing which was reauthorized under
certain loan programs in the Rural Electrification Loan Restructuring
Act of 1993, and clarifies the manner in which RUS waives postloan
engineering and construction requirements.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 1 hour per response.
Respondents: Business or other for profit and non-profit
institutions.
Estimated Number of Respondents: 212.
Estimated Number of Responses per Respondents: 25.
Estimated Total Annual Burden on Respondents: 3,356 hours.
Copies of this information collection can be obtained from Dawn
Wolfgang, Program Development and Regulatory Analysis, Rural Utilities
Service. Telephone: (202) 720-0812.
Send comments regarding this information collection requirement to
F. Lamont Heppe, Jr., Director, Program Development and Regulatory
Analysis, USDA, Rural Utilities Service, 1400 Independence Ave., SW.,
Room 4034,
[[Page 38504]]
Stop 1522, Washington, DC 20250-1522.
Comments are best assured of having full effect if OMB receives
them within 30 days of publication in the Federal Register. All
comments will become a matter of public record.
National Environmental Policy Act Certification
RUS has determined that this proposed 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 proposed rule is listed in the
Catalog of Federal Domestic Assistance Programs under No. 10.851, Rural
Telephone Loans and Loan Guarantees, and No. 10.852, Rural Telephone
Bank Loans. This catalog is available on a subscription basis from the
Superintendent of Documents, United States Government Printing Office,
Washington, DC 20402-9325.
Executive Order 12372
This proposed rule is excluded from the scope of Executive Order
12372, Intergovernmental Consultation. A Notice of Proposed Rule
entitled Department Programs and Activities Excluded from Executive
Order 12372 (50 FR 47034) exempts RUS and RTB loans and loan guarantees
to governmental and nongovernmental entities from coverage under this
Order.
Unfunded Mandates
This rule contains no Federal Mandates (under the regulatory
provision of Title II of the Unfunded Mandate Reform Act) for State,
local, and tribal governments of the private sector. Thus today's rule
is not subject to the requirements of section 202 and 205 of the
Unfunded Mandate Reform Act.
Background
RUS has undertaken a strategic review of all policies and
procedures covering its preloan and postloan requirements of borrowers.
This review was part of RUS efforts in governmental streamlining and
empowering the recipients of the loans provided under the Rural
Electrification Act (RE Act) of 1936, (U.S.C. 901 et seq.), as amended.
As a result of this review, several procedures and policies were deemed
no longer necessary. Other policies and procedures have been
streamlined and RUS proposes to place more responsibility with the
borrowers to insure a more cost effective review process while
maintaining the required loan security. In view of this increased
reliance upon borrowers and their consultants, certain provisions have
been added to reduce the government's vulnerability to conflicts of
interest. Provisions have also been added for construction of
headquarters facilities pursuant to the Rural Electrification Loan
Restructuring Act of 1993 (107 Stat. 1356).
RUS further proposes to make technical corrections to final
regulations which were reorganized and redesignated on September 27,
1990, at 55 FR 39393. In particular, certain regulations contained
cross references which inadvertently had not been updated. This action
is simply a correction to these regulations with no change to
substance. Changes to regulatory text are merely to update cross
references. As currently published, the final regulations may prove to
be misleading.
List of Subjects in 7 CFR Part 1753
Communications equipment, Loan programs--communications, Reporting
and recordkeeping requirements, Rural areas, Telecommunication,
Telephone.
For reasons set forth in the preamble, 7 CFR chapter XVII is
amended as follows:
PART 1753--TELECOMMUNICATION 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.; 7 U.S.C. 1921 et seq.; Pub. L.
103-354, 108 Stat. 3178 (7 U.S.C. 6941 et seq.).
2. In Sec. 1753.1, paragraph (a) is revised to read as follows:
Sec. 1753.1 General
(a) The standard RUS Telecommunications Loan Documents contain
provisions regarding procurement of materials and equipment and
construction of telecommunications facilities by telecommunications
borrowers. This part 1753 implements certain of the provisions by
setting forth requirements and procedures. Borrowers shall follow these
requirements and procedures whenever using loan funds to purchase
materials and equipment or perform construction, unless they have
received the Administrator's written approval to do otherwise.
* * * * *
3. In Sec. 1753.2, a new definition of ``loan purposes'' is added,
and the definitions of ``major construction'', ``minor construction''
and ``modernization plan'' are revised, to read as follows:
Sec. 1753.2 Definitions.
* * * * *
Loan purposes--The high level objectives of the loan which is
funding the construction. These purposes are first stated in the
characteristics letter described in 7 CFR 1737.80, which is sent to the
applicant to offer a loan after RUS has completed its preloan studies.
These purposes are restated in the loan contract.
Major construction--A telecommunications plant project estimated to
cost more than $250,000, including all labor and materials.
Minor construction--A telecommunications plant project estimated to
cost $250,000 or less, including all labor and materials.
* * * * *
Modernization plan--A State plan, which has been approved by RUS,
for improving the telecommunications network of those
Telecommunications Providers covered by the plan. A Modernization Plan
must conform to the provisions of 7 CFR part 1751, subpart B.
* * * * *
4. The first word of Sec. 1753.3(a) is revised from ``prior'' to
read ``advance''.
5. In Sec. 1753.5, paragraph (b)(1) is revised, paragraph (b)(2) is
redesignated (b)(3), and a new paragraph (b)(2) is added, to read as
follows:
Sec. 1753.5 Methods of major construction.
* * * * *
(b) Contract construction. (1) RUS approval of the borrower's award
of the contract is not required if the contractor is selected through
sealed competitive bidding, the bid amount is $500,000 or less and the
contractor is not a company or organization affiliated with the
borrower. This does not relieve the borrower of the requirements for
bidding or bid evaluation set forth in this part.
(2) RUS approval of the borrower's award of the contract is
required for all other competitively-bid and for negotiated major
construction contracts.
* * * * *
6. In Sec. 1753.6, paragraph (e) is added to read as follows:
Sec. 1753.6 Standards, specifications, and general requirements.
* * * * *
(e) All software, software systems, and firmware financed with loan
funds must
[[Page 38505]]
be year 2000 compliant, as defined in 7 CFR 1732.22(e).
7. In Sec. 1753.7, paragraphs (c) and (e) are revised to read as
follows:
Sec. 1753.7 Plans and specifications (P&S).
* * * * *
(c) The appropriate standards and specifications listed in 7 CFR
part 1755 shall be included in the P&S. When RUS has not prepared
standards and specifications, the borrower shall use general
engineering requirements and specifications prepared by the borrower's
engineer. The specifications prepared by the borrower's engineer and
based on general engineering requirements shall be subject to review
and approval by RUS for all major construction, including major
projects which would be exempted from RUS approval under
Sec. 1753.7(e).
* * * * *
(e) RUS approval of the P&S is required for construction that is
estimated to cost over $500,000 or 25% of the total loan, whichever is
less, and for all building construction. P&S for all other construction
are exempt from RUS review and approval except that, at the time of
contract approval, RUS will examine the plans and specifications for
conformity with the loan purposes and to determine that they comply
with other requirements of this part.
* * * * *
8. In Sec. 1753.8, paragraphs (a)(1), (a)(11)(i), (a)(11)(ii)
introductory text, (a)(11)(iii) introductory text, and (a)(12)(i) are
revised, and a new paragraph (a)(11)(iv) is added, to read as follows:
Sec. 1753.8 Contract construction procedures.
(a) Sealed, competitive bidding--(1) Bid opening date: The borrower
is responsible for scheduling the bid opening date. If RUS review of
the P&S is required by Sec. 1753.7, the borrower shall wait until
approval has been received before setting the date. In setting the
date, sufficient time should be allowed for the bidders to examine the
project site and prepare their bids. The borrower shall notify the GFR
of the bid date and invite the GFR to attend.
* * * * *
(11) Award of contract: (i) The borrower shall obtain from the
engineer the determination of the lowest responsive bid, a tabulation
of all bids and the engineer's recommendation for award of the
contract. Contract award is subject to RUS approval if either the cost
of the project is over $500,000 or the contract is with an organization
affiliated with the borrower. Contract award of all other projects is
not subject to RUS approval.
(ii) If an award is made, the borrower shall award the contract to
the lowest responsive bidder. The borrower may award the contract
immediately upon determination of the lowest responsive bidder if the
following conditions are met:
* * * * *
(iii) If RUS approval of the award of contract is required under
this paragraph (a)(11), the borrower shall send to RUS for
consideration of approval of the award:
* * * * *
(iv) If RUS approval of the award of contract is not required under
this paragraph (a)(11), the borrower shall keep a file available for
inspection by RUS. The file shall be kept for at least two years and
shall include:
(A) One copy of all received bids.
(B) The engineer's recommendation and tabulation of all bids
including ``Buy American'' evaluations, if any, and all other
evaluations required by law.
(C) Evidence of acceptance of the low bid by the borrower, such as
a copy of the board resolution certified by the Secretary of the board.
(12) Execution of contract: (i) The borrower shall submit to RUS
three original counterparts of the contract executed by the contractor
and borrower.
* * * * *
9. In Sec. 1753.11, paragraphs (a)(3), (b) and (d) are revised to
read as follows:
Sec. 1753.11 Contract amendments.
(a) * * *
(3) The amendment causes an unbonded contract to require a
contractor's performance bond. This would occur when a contract that is
executed in an amount below that requiring a performance bond in 7 CFR
part 1788, subpart C, is amended to an amount above that amount.
(b) Advance RUS approval to execute other contract amendments is
not required. These amendments may be submitted to RUS at any time
prior to closeout. If a borrower wishes to receive an advance of funds
based on an amended contract amount (i.e., amendments that increase a
contract by less than 20%), the borrower may initiate an increase in
the amount approved for advance by submitting three copies of the
amendment to RUS for approval.
* * * * *
(d) Upon execution of any amendment that causes the amended
contract amount to exceed the original contract amount by 20% or more,
three copies of the amendment shall be submitted to RUS for approval.
* * * * *
10. In Sec. 1753.15, paragraphs (a)(1), (a)(4)(i) and (a)(4)(ii)
are revised, and a new paragraph (a)(2) is added, paragraphs (a)(2)
through (a)(5) are redesignated (a)(3) through (a)(6) respectively, and
a new paragraph (a)(2) is added, to read as follows:
Sec. 1753.15 General.
(a)(1) The standard RUS Loan Documents contain provisions regarding
engineering and architectural services performed by or for RUS
telephone borrowers. This part implements certain of the provisions by
setting forth the requirements and procedures to be followed by
borrowers in selecting architects and engineers and obtaining
architectural and engineering services by contract or by force account.
(2) Borrowers shall obtain architectural and engineering services
only from persons or firms which are not affiliated with, and have not
represented, a contractor, vendor or manufacturer who may provide
labor, materials, or equipment to the borrower under any current loan.
* * * * *
(5)(i) For major construction, services provided by architects and
engineers not on the borrower's staff must be provided under Form 220,
Architectural Service Contract, or Form 217, Postloan Engineering
Service Contract--Telecommunications. These contracts require RUS
approval.
(ii) For minor construction, borrowers may use the contracts in
paragraph (a)(5)(i) of this section for postloan architectural or
engineering services or any other form of contract, such as Form 245,
Engineering Service Contract, Special Services-Telephone. RUS approval
of contracts for postloan architectural or engineering services
associated with minor construction, except for buildings covered in
paragraph (a)(6) of this section, is not required.
* * * * *
11. In Sec. 1753.16, paragraphs (b)(1) through (b)(4) are revised,
to read as follows:
Sec. 1753.16 Architectural services.
(a) * * *
(b)(1) The borrower shall use Form 220 when contracting for
architectural services for major construction, except that the borrower
may use either Form 220 or Form 217 if the building is an unattended
central office building.
(2) The borrower and the architect negotiate the fees for services
under the Form 220 contract.
[[Page 38506]]
(3) Reasonable modifications or additions to the terms and
provisions in Form 220 may be made, subject to RUS approval, to obtain
the specific services needed for a building.
(4)(i) Three copies of Form 220, executed by the borrower and the
architect, shall be sent to the GFR to be forwarded to RUS for
approval. RUS will review the contract terms and conditions. RUS will
not approve the contract if, in RUS's judgement:
(A) Unacceptable modifications have been made to the contract form.
(B) The contract will not accomplish loan purposes.
(C) The architectural service fees are unreasonable.
(D) The contract presents unacceptable loan security risk to RUS.
(ii) If RUS approves the contract, RUS will send one copy to the
architect and one copy to the borrower.
* * * * *
12. In Sec. 1753.17(b)(1)(ii)(D), remove ``(See 7 CFR part 1758)''.
Paragraph (b)(1)(ii)(E), is added, and paragraphs (c)(1)(i)(C) and
(c)(2)(i)(A) are revised, to read as follows:
Sec. 1753.17 Engineering services.
* * * * *
(b) * * *
(1) * * *
(ii) * * *
(E) The consulting engineering firm is affiliated with or has
represented a contractor, vendor, or manufacturer who may provide
labor, materials, or equipment to the borrower under any current loan.
* * * * *
(c) * * *
(1) * * *
(i) * * *
(C) The names, qualifications, and responsibilities of other
principal employees who will be associated with providing the
engineering services.
* * * * *
(2) * * *
(i) * * *
(A) A copy of the employee's qualifications and experience record,
unless previously submitted. RUS requires a minimum of four years of
construction and inspection experience. The employee cannot be engaged
in the actual construction.
* * * * *
13. A new Sec. 1753.18 is added to read as follows:
Sec. 1753.18 Engineer/Architect contract closeout certifications.
A certification of completion and inspection of construction,
required elsewhere in this part, signed by the borrower and
countersigned in accordance with accepted professional engineering and
architectural practice, by the engineer or architect, shall be prepared
as evidence of completion of a major construction project. This
certification shall make reference to the contract number and contract
amount, and shall include the following:
(a) A statement that the construction is complete and was done in
accordance with the RUS approved system design or layout or subsequent
RUS approved changes.
(b) A statement that the construction was for loan purposes.
(c) A statement that construction used RUS-accepted materials and
was in accordance with specifications published by RUS covering the
construction which were in effect when the contract was executed, or in
the absence of such specifications, that it meets other applicable
specifications and standards (specify), and that it meets all
applicable national and local code requirements as to strength and
safety.
(d) A statement that the construction complies with the ``Buy
American'' provision (7 U.S.C. 903 note) of the Rural Electrification
Act of 1936, as amended (7 U.S.C. 901 et seq).
(e) A statement that all necessary approvals have been obtained
from regulatory bodies and other entities with jurisdiction over the
project.
(f) A statement that all closeout documents required in this part
have been examined and found complete such that the Contractor has
fulfilled all obligations under the contract except for warranty
coverage.
(g) A statement that the engineer or architect is not affiliated
with and does not represent the contractor, vendor, or manufacturer who
is a participant in the contract.
14. In Sec. 1753.25, paragraphs (a), (c) and (d) are revised as
follows:
Sec. 1753.25 General
(a) This subpart implements and explains the provisions of the Loan
Documents setting forth the requirements and the procedures to be
followed by borrowers in constructing headquarters, commercial office,
central office, warehouse, and garage buildings with loan funds.
* * * * *
(c) All plans and specifications for buildings to be constructed
with loan funds are subject to the approval of RUS. In addition,
preliminary plans and specifications for headquarters and commercial
office buildings to be constructed with loan funds are subject to RUS
approval.
(d) RUS Form 257, Contract to Construct Buildings, shall be used
for the construction of all headquarters, commercial office, central
office, warehouse, and garage buildings with loan funds. Refer to
Sec. 1753.26 for further instructions.
* * * * *
15. In Sec. 1753.26, paragraphs (a) through (d) are redesignated
(b) through (e) respectively, redesignated paragraph (b)(1 is revised,
and a new paragraph (a) is added, to read as follows:
Sec. 1753.26 Plans and specifications (P&S).
(a) For headquarters and commercial office buildings only, the
borrower shall prepare preliminary P&S showing the floor plan and
general architectural details of the building to be constructed using
loan funds. In particular, the preliminary P&S shall address the
requirements of Sec. 1753.25(f) and the Uniform Relocation Assistance
and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et
seq.). These P&S shall be submitted to the GFR and are subject to RUS
approval.
(b)* * *
(1) RUS Contract Form 257, Contract to Construct Buildings,
completed to the extent explained in paragraph (c) of this section.
* * * * *
16. In Sec. 1753.30, paragraphs (b), (c)(2), (c)(3) and (d) are
revised to read as follows:
Sec. 1753.30 Closeout procedures.
* * * * *
(b) RUS Form 257 Contract. (1) Whenever changes were made in the
plans and specifications which did not require immediate submission to
RUS of an amendment under Sec. 1753.11, a final contract amendment
showing the changes shall be prepared.
(2) Upon completion of the project, the borrower shall obtain
certifications from the licensed architect or engineer that the project
and all required documentation are satisfactory and complete. The
requirements for this certification are set forth in Sec. 1753.18.
(3) The engineer's or architect's contract closeout certification
and the final amendment shall be submitted to RUS as a basis for the
final advance of funds for the contract.
(c) * * *
(2) Complete, with the assistance of its architect or engineer, the
documents listed in the following table that are required for the
closeout of force account construction.
[[Page 38507]]
Documents Required to Closeout Construction of Buildings
--------------------------------------------------------------------------------------------------------------------------------------------------------
Use with No. of copies prepared Distribution
---------------------------- by -------------------------
RUS form No. Description --------------------------
Contract Force Architect/ Borrower Contractor
account. Contractor engineer
--------------------------------------------------------------------------------------------------------------------------------------------------------
238................................... Construction or Equipment X (3) ........... ...........
Contract Amendment (If not
previously submitted, send to
RUS for approval.).
(1) (to RUS)
181................................... Certificate of Completion X ............ ........... 2 1 1
(Contract Construction) \1\.
231................................... Certificate of Contractor....... X ............ 1 ........... 1 ...........
224................................... Waiver and Release of Lien from X ............ 1 ........... 1 ...........
each Supplier.
213................................... Certificate (Buy American)...... X ............ 1 ........... 1 ...........
None \2\.............................. ``As Built'' Plans and X X ........... 1 1 ...........
Specifications.
None.................................. Guarantees, Warranties, Bonds, X ............ 1 ........... 1 ...........
Operating or Maintenance
Instructions, et certera.
None.................................. Architect/Engineer seismic X X ........... 2 1 1
safety certification.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Cost of materials and services furnished by borrower are not to be included in Total Cost on RUS Form 181.
\2\ When only minor changes were made during construction, two copies of a statement to that effect from the Architect will be accepted instead of the
``as built'' Plans and Specifications.
(3) Make distribution of the completed documents as indicated in
the table in this section.
(d) After all required RUS approvals are obtained, final payment is
made in accordance with Article III of RUS Form 257 once the borrower
has received the architect's or engineer's certifications regarding
satisfactory completion of the project.
17. In Sec. 1753.37, paragraph (c) is revised to read as follows:
Sec. 1753.37 Plans and specifications (P&S).
* * * * *
(c) RUS review of P&S is required for construction estimated to
cost over $500,000 total or estimated to cost more than 25% of the
total loan.
(1) If RUS review is required, the borrower shall submit one copy
of the P&S to the GFR for RUS review.
(2) RUS will review the P&S and notify the borrower in writing of
approval or disapproval.
18. In Sec. 1753.38, paragraphs (a)(1)(i), (a)(1)(v), (a)(2)(i),
(a)(2)(v), (b)(1), (b)(3), (b)(5), (e)(2), and (e)(3) are revised, to
read as follows:
Sec. 1753.38 Procurement procedures.
(a) * * *
(1) Solicitation of bids. (i) After RUS approval of the
specifications and equipment requirements (required only for projects
exceeding $500,000 or 25% of the loan), the borrower shall send
``Notice and Instructions to Bidders'' to suppliers with central office
equipment included in the current Informational Publication (I.P.) 300-
4, ``List of Materials Acceptable for Use on Telecommunications Systems
of RUS Borrowers.'' I.P. 300-4 is a subscription item available from
the Superintendent of Documents, U.S. Government Printing Office, P.O.
Box 371954, Pittsburgh, PA 15250-7954. This ``Notice'' may also be sent
to suppliers of non-domestic equipment currently accepted by RUS as
meeting RUS technical standards. The ``Notice'' may also be sent to
suppliers of central office equipment accepted for field trial.
* * * * *
(v) At the request of an invited supplier, the borrower shall
provide two copies of the P&S.
(2) Technical sessions. (i) The borrower shall schedule individual
technical sessions by the suppliers, notify each supplier of its
scheduled date and time, notify the GFR of all scheduled dates and
times, and request the following be available at the technical session:
* * * * *
(v) After evaluation of the technical proposals and RUS approval of
the changes to the P&S (required only for projects that exceed $500,000
or 25% of the loan), sealed bids shall be solicited from only those
bidders whose technical proposals meet the P&S requirements. When fewer
than three bidders are adjudged qualified by the borrower to bid, RUS
approval must be obtained to proceed. Generally, RUS will grant such
approval only if the borrower can demonstrate to the satisfaction of
RUS that a good faith effort was made to obtain at least three
competitive bids. This would be demonstrated if all suppliers currently
listed in I.P. 300-4 were invited to submit technical proposals. This
could not be demonstrated if a listed supplier of central office
equipment was not invited.
* * * * *
(b) * * *
(1) After RUS approval of the P&S and equipment requirements
(required only for contracts expected to exceed $500,000 or 25% of the
loan), the borrower shall send two complete copies of the approved P&S
to the supplier and request that a proposal be submitted.
* * * * *
(3) If the contract is expected to exceed $500,000 or 25% of the
loan, changes in the P&S resulting from the technical session shall be
subject to RUS review and approval.
* * * * *
(5) The borrower shall obtain an award recommendation from its
engineer.
* * * * *
(e) * * *
(2) The borrower shall prepare a plan containing an outline of the
proposed use of the equipment, the proposal from the supplier and an
estimate of the installation cost. If the total cost exceeds $500,000,
RUS approval of the award of contract is required. The borrower shall
in this case submit its plan and the supplier's proposal to the GFR. If
the cost does not exceed $500,000, the borrower's award of contract is
not subject to RUS approval.
(3) If RUS approval was required in paragraph (e)(2) of this
section, upon RUS approval the purchase may be made using RUS Contract
Form 525 or 545, or when applicable, the procedures contained in
subpart I of this part.
* * * * *
[[Page 38508]]
19. In Sec. 1753.39, paragraphs (a), (e)(1), (e)(2), (f),
(f)(1)(ii)(A), (f)(1)(iii), (f)(1)(iv) and (g) are revised, paragraph
(e)(3) is deleted, and paragraph (h) is added, to read as follows:
Sec. 1753.39 Closeout documents.
* * * * *
(a) Contract amendments. Amendments that must be submitted to RUS
for approval, as required by Sec. 1753.11, shall be submitted promptly.
All other amendments may be submitted to RUS with the engineer's
contract closeout certification.
* * * * *
(e) * * *
(1) Obtain from the engineer a certification of partial closeout.
(2) Submit one copy of the summary to RUS with an FRS.
(f) Final contract closeout procedure. The documents required for
the final closeout of the central office equipment contracts, RUS
Contract Forms 525 and 545, are listed in the following table, which
also indicates the number of copies and their distribution. The
procedure to be followed is outlined as follows:
Documents Required to Closeout Central Office Equipment Contract
--------------------------------------------------------------------------------------------------------------------------------------------------------
Use with Prepared by Distribution
RUS form No. Description -------------------------------------------------------------------------------
RUS form 525 RUS form 545 Contractor Engineer Borrower Contractor
--------------------------------------------------------------------------------------------------------------------------------------------------------
238................................... Construction or Equipment X X ........... (3)
Contract Amendment (If not
previously submitted, send to
RUS for approval).
(1) (to RUS)
754................................... Certificate of Completion and X ............ 3 3 2 1
Certificate of Contractor and
Indemnity Agreement (if
submitted, Form 744 is not
required).
517................................... Results of Acceptance Tests X ............ ........... 2 1 1
(Prepare and distribute copies
immediately upon completion of
the acceptance tests of each
central office).
752a.................................. Certificate of Completion--Not ............ X ........... 2 1 1
Including Installation.
224................................... Waiver and Release of Lien (from X ............ 1 ........... 1
each supplier).
231................................... Certificate of Contractor....... X ............ 1 ........... 1
213................................... Certificate (Buy American)...... X X 1 ........... 1
None.................................. Switching Diagram, as installed. X X 2 ........... 2
None.................................. Set of Drawings (Each set to X X 2 ........... 2
include all the drawings
required under the
Specification, RUS Form 522).
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1) * * *
(ii) * * *
(A) Prepare and assemble the documents listed in the table in this
section, Documents Required to Close Out Central Office Equipment
Contracts.
* * * * *
(iii) Make the documents listed in the table available for GFR
review on the date of final inspection.
(iv) Distribute the documents as indicated in the table, including
submission to the GFR of all documents required by RUS.
* * * * *
(g) Once RUS approval has been obtained for any required
amendments, the borrower shall obtain certifications from the licensed
engineer that the project and all required documentation are
satisfactory and complete. The requirements for the final contract
certification are set forth in Sec. 1753.18.
(h) Once these certifications have been received, final payment
shall be made according to the payment terms of the contract. Copies of
the certifications shall be submitted with the FRS, requesting the
remaining funds on the contract.
20. In Sec. 1753.46, paragraphs (c)(2) and (c)(3) are revised to
read as follows:
Sec. 1753.46 General.
* * * * *
(c) * * *
(2) Contract Form 515, which is for less than $250,000, may, at the
borrower's option, be negotiated. See Sec. 1753.48(b).
(3) Form 773 may be used for minor outside plant projects which are
not competitively bid because they cannot be designed and staked at the
time of contract execution. Projects of this nature include routine
line extensions and placement of subscriber drops. See Subpart I of
this part.
21. In Sec. 1753.47, paragraph (c) is revised to read as follows:
Sec. 1753.47 Plans and specifications (P&S).
* * * * *
(c) Submission of plans and specifications to RUS. (1) If the
project does not exceed $500,000 or 25% of the loan, the borrower shall
furnish the GFR one set of the P&S and one copy of the ``Checklist for
Review of Plans and Specifications,'' RUS Form 553, signed by the
engineer. The borrower may then proceed with procurement in accordance
with Sec. 1753.48.
(2) If the project exceeds $500,000 or 25% of the loan, RUS
approval of the P&S is required. Two (2) sets of the P&S and one copy
of the ``Check List for Review and Plans and Specifications,'' RUS Form
553, signed by the borrower's engineer, shall be furnished to the GFR.
RUS will return one set to the borrower upon notice of approval. The
borrower may then proceed with procurement in accordance with
Sec. 1753.48.
22. In Sec. 1753.48, paragraphs (a)(4) and (b)(1) are revised to
read as follows:
Sec. 1753.48 Procurement procedures.
(a) * * *
(4) Bid openings. (i) Bid openings and award of the contract shall
be conducted in accordance with Sec. 1753.5(b)(1) and Sec. 1753.8(a).
(ii) If Sec. 1753.8 requires RUS approval of award of the bid, the
borrower shall submit to RUS two copies of the
[[Page 38509]]
assembly unit sections of the apparent lowest responsive bid accepted
by the borrower.
(b) Negotiated procurement. (1) Competitive bids are not required
for outside plant construction that is estimated to cost less than
$250,000 labor and materials. If the contract exceeds $500,000 or 25%
of the loan, the borrower shall obtain RUS approval of the plans and
specifications before it begins negotiating with a contractor.
* * * * *
23. In Sec. 1753.49, paragraphs (b), (c)(2) and (c)(3) are revised,
to read as follows:
Sec. 1753.49 Closeout documents.
* * * * *
(b) Documents required. The following table lists the documents
required to closeout the Form 515 construction contract.
Documents Required to Closeout Construction Contract RUS Form 515
----------------------------------------------------------------------------------------------------------------
No. of copies prepared Distribution
by -------------------------
RUS Form No. Description --------------------------
Contractor Engineer Borrower Contractor
----------------------------------------------------------------------------------------------------------------
724.......................... Final Inventory--Certificate ........... 2 1 1
of Completion.
724a......................... Final Inventory--Assembly ........... 2 1 1
Units.
None......................... Contractor's Bond Extension (3) ...........
(Send to RUS when required.).
(1) (to RUS)
281.......................... Tabulation of Materials 2 ........... 1 1
Furnished by Borrower.
213.......................... Certificate--``Buy American'' 1 ........... 1 ...........
None......................... Listing of Construction ........... 1 1 ...........
Change Orders.
224.......................... Waiver and Release of Lien 1 ........... 1 ...........
(from each supplier).
231.......................... Certificate of Contractor.... 1 ........... 1 ...........
527.......................... Final Statement of ........... 2 1 1
Construction.
None......................... Reports on Results of ........... 1 1 1
Acceptance Tests.
None......................... Set of Final Staking Sheets.. ........... 1 1 ...........
None......................... Tabulation of Staking Sheets. ........... 1 1 ...........
None......................... Correction Summary (legible ........... 1 1 ...........
copy).
None......................... Treated Forest Products ........... ........... 1 ...........
Inspection Reports or
Certificates of Compliance
(prepared by inspection
company or supplier).
None......................... Final Key Map (when ........... 1 1 ...........
applicable).
None......................... Final Central Office Area and ........... 1 1 ...........
Town Maps.
----------------------------------------------------------------------------------------------------------------
(c) * * *
(2) Final inventory documents. (i) The borrower shall obtain
certifications from the licensed engineer that the project and all
required documentation are satisfactory and complete. Requirements for
these contract closeout certifications are set forth in Sec. 1753.18.
(ii) The borrower shall prepare and distribute the final inventory
documents as indicated in the tables in this section. The documents
listed for RUS shall be retained by the borrower for inspection by RUS
for at least two years from the date of the engineer's contract
closeout certification.
Step-by-Step Procedure for Closeout of Construction Contract RUS Form 515
----------------------------------------------------------------------------------------------------------------
Sequence
-------------------------------------------------- By Procedure
Step No. When
----------------------------------------------------------------------------------------------------------------
1....................... Upon completion of Borrower's Engineer... Prepares the following: a set of
construction. Detail Maps and a set (when
applicable) of Key Maps which show
in red the work done under the 515
contract; a Tabulation of Staking
Sheets; and a tentative Final
Inventory, RUS Forms 724 and 724a.
2....................... After acceptance tests Borrower's Engineer... Forwards letter to the borrower with
made. copies to the GFR stating that the
project is ready for final
inspection. Schedules inspection
date.
3....................... Upon receipt of letter GFR................... Advises borrower whether attending
from Borrower's the final inspection will be
Engineer. possible.
4....................... By inspection date..... Borrower's Engineer... Obtains and makes available the
following documents: a set of ``as
constructed'' detail maps and (when
applicable) ``as built'' key maps; a
list of construction change orders;
the final staking sheets; the
tabulation staking sheets; the
treated forest products inspection
reports or certificates of
compliance; the tentative final
inventory, RUS Forms 724 and 724a;
the tentative tabulation, RUS Form
231(if borrower furnished part of
material); and, a report of results
of acceptance tests.
5....................... During inspection...... Borrower's Engineer... Issues instructions to contractor
covering corrections to be made in
construction as a result of
inspection.
6....................... During inspection...... Contractor............ Corrects construction on basis of
instructions from the borrower's
engineer. The corrections should
proceed closely behind the
inspection in order that the
borrower's engineer can check the
corrections before leaving the
system.
7....................... During inspection...... Borrower's Engineer... Inspects and approves corrected
construction. Marks inspected areas
on the key map, if available,
otherwise on the detail maps.
8....................... Upon completion of Borrower's Engineer... Prepares or obtains all the closeout
inspection. documents listed in Table 3.
[[Page 38510]]
9....................... After signing final Borrower.............. Prepares and submits to RUS the
inventory. engineer's certifications of
completion and a Financial
Requirement Statement, RUS Form 481,
requesting amount necessary to make
final payment due under contract.
10...................... On receipt of final Borrower.............. Promptly forwards check for final
advance. payment to contractor.
11...................... During subsequent loan RUS Field Accountant.. Examines borrower's construction
fund audit review records for compliance with the
following final construction contract and Subpart F,
payment. and examines RUS Form 281
(Tabulation of Materials Furnished
by Borrower) if any, for appropriate
costs.
----------------------------------------------------------------------------------------------------------------
(iii) When the total inventory price exceeds the maximum contract
by more than 20 percent, an extension to the contractor's bond is
required.
(iv) The borrower shall submit the engineer's contract closeout
certification with the FRS for the final advance of funds.
(3) Final payment shall be made according to the payment provisions
of Article III of RUS Form 515, except that certificates and other
documents required to be submitted to or approved by the Administrator
shall be submitted to and approved by the Owner.
24. Section 1753.50 is removed and reserved.
25. In Sec. 1753.58, paragraphs (b), (c)(2) and (c)(5) are revised
to read as follows:
Sec. 1753.58 Closeout documents.
* * * * *
(b) Documents. The documents required to close the FAP are listed
in the following table. The following is a brief description of the
closeout documents:
Documents Required to Closeout Force Account Outside Plant Construction
------------------------------------------------------------------------
RUS Form No. Description
------------------------------------------------------------------------
817, 817a, 817b........................ Final Inventory Force Account
Construction and Certificate
of Engineer. Submit one copy
to RUS, if required.\1\
213.................................... Certificate--``Buy American''
(as applicable from each
supplier).
None................................... Detail Maps.
None................................... Key map, if applicable.
None................................... Staking Sheets.
None................................... Tabulation of staking sheets.
None................................... Treated Forest Products
Inspection Reports or
Certificates of Compliance
(prepared by inspection
company or supplier).
------------------------------------------------------------------------
\1\ RUS Forms 817, 817a, and 817b are to be submitted to the GFR only if
required in paragraph (c)(5) of this section. Otherwise, the final
inventory documents are to be assembled and retained by the borrower
for at least two years.
(c) * * *
(2) The GFR shall be invited to make the final inspection
accompanied by the engineer and the borrower.
* * * * *
(5) After inspection, the final inventory documents shall be
assembled as indicated in the table in this section. RUS Forms 817,
817a, and 817b are to be submitted to the GFR only if the amount of the
closeout exceeds the original force account proposal by 20% or more.
Otherwise, the final inventory documents are to be assembled and
retained by the borrower for at least two years.
* * * * *
26. In Sec. 1753.68, paragraphs (b)(2)(i), (b)(2)(ii), (b)(2)(iii),
(b)(2)(iv), (b)(2)(v), (b)(4)(i), (b)(4)(ii), (c)(2), and (d)(3) are
revised to read as follows:
Sec. 1753.68 Purchasing special equipment.
* * * * *
(b) * * *
(2) Initial equipment purchase. (i) The borrower prepares the P&S
and, for projects estimated to exceed $500,000 or 25% of the loan,
whichever is less, sends two copies to the GFR for approval.
(ii) For projects estimated to exceed $500,000 or 25% of the loan,
RUS will either approve the P&S in writing or notify the borrower of
any reason for withholding approval.
(iii) For projects estimated to cost less than $500,000 or 25% of
the loan, the borrower may proceed with procurement upon completion of
the P&S.
(iv) If the borrower has employed full competitive bidding in the
selection, a contract may be executed with the successful bidder and
the borrower may proceed to paragraph (b)(2)(vi) of this section.
(v) If the borrower did not follow a fully competitive bidding
process as described in Sec. 1753.8, the selection, along with a
summary of all proposals and an engineer's recommendation, shall be
sent to RUS. RUS shall approve the proposal selection in writing or
notify the borrower of any reason for withholding approval.
* * * * *
(4) New system additions. (i) The borrower prepares the P&S and, if
the project is estimated to exceed $500,000 or 25% of the loan, sends
two copies to the GFR for approval. The borrower may request RUS
approval to negotiate for the purpose of standardization on a system
basis prior to preparing the P&S.
(ii) RUS notifies the borrower in writing as to whether the
borrower may negotiate for specific equipment. If P&S were required to
be submitted to RUS under paragraph (b)(4)(i) of this section, RUS
notifies the borrower in writing of P&S approval (or notifies the
borrower of any reason for withholding approval).
* * * * *
(c) * * *
(2) The borrower shall prepare any required amendments to the
special equipment contract, arrange for the execution by all parties,
and submit these amendments to RUS in accordance with Sec. 1753.11(d).
RUS Form 238 , Construction or Equipment Contract Amendment, shall be
used for this purpose.
* * * * *
(d) * * *
(3) Closeout documents. When the acceptance tests have been
completed
[[Page 38511]]
and all deficiencies have been corrected, the borrower:
(i) Assembles and distributes the documents listed in the following
table that are required for the closeout of the special equipment
contract. The documents listed for RUS shall be retained by the
borrower for inspection by RUS for at least two years from the date of
the engineer's contract closeout certification.
Documents Required to Closeout Special Equipment Contracts RUS Forms 397 and 398
--------------------------------------------------------------------------------------------------------------------------------------------------------
No. of copies prepared by
-----------------------------------------------------------------------------
RUS Form No. Description Form 397 Form 398 Distribution
-----------------------------------------------------------------------------
Contractor Engineer Contractor Engineer Borrower Contractor
--------------------------------------------------------------------------------------------------------------------------------------------------------
238.................................... Construction or Equipment ........... (3) ........... (3)
Contract Amendment (If not
previously submitted, send to
RUS for approval.).
(1) (to RUS)
396.................................... Certificate of Completion-- ........... 2 ........... ........... 1 1
Special Equipment Contract
(Including Installation).
396a................................... Certificate of Completion-- ........... ........... ........... 2 1 1
Special Equipment Contract (Not
Including Installation).
744.................................... Certificate of Contractor and 1 ........... ........... ........... 1 ...........
Indemnity Agreement.
213.................................... Certificate (Buy American)....... 1 ........... 1 ........... 1 ...........
None................................... Report in writing, including all 1 ........... ........... 1 1 ...........
measurements and other
information required under Part
II of the applicable
specifications.
None................................... Set of maintenance 1 ........... 1 ........... 1 ...........
recommendations for all
equipment furnished under the
contract.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(ii) Obtains certifications from the licensed engineer that the
project and all required documentation are satisfactory and complete.
Requirements for this contract closeout certification are set forth in
Sec. 1753.18.
(iii) Submits copies of the engineer's certifications to RUS with
the FRS requesting the remaining funds on the contract.
(iv) Makes final payment in accordance with the payment terms of
the contract.
27. In Sec. 1753.76, paragraph (a) is revised to read as follows:
Sec. 1753.76 General.
(a) This subpart implements and explains the provisions of the Loan
Documents setting forth the requirements and procedures to be followed
by borrowers for minor construction of telecommunications facilities
using RUS loan funds. Terms used in this subpart are defined in
Sec. 1753.2.
* * * * *
28. In Sec. 1753.80, paragraph (b) is revised to read as follows:
Sec. 1753.80 Minor construction procedure.
* * * * *
(b) RUS financing under Form 773 contracts dated in the same
calendar year is limited to the following amounts for the following
discrete categories of minor construction. The date of the Form 773
contract is the date the Form 773 contract is executed.
(1) For outside plant construction, the limit is $500,000 or ten
per cent (10%) of the borrower's previous calendar year's outside plant
total construction, whichever is greater.
(2) For central office equipment, the limit is $500,000.
(3) For special equipment and buildings, the limit is $250,000.
* * * * *
29. Appendices A through F are removed.
Dated: July 8, 1998.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 98-18759 Filed 7-16-98; 8:45 am]
BILLING CODE 3410-15-P
