Post-Loan Policies and Procedures Common to Guaranteed and Insured Telephone Loans; Telecommunications System Construction Policies and Procedures

DEPARTMENT OF AGRICULTURE

Rural Electrification Administration

7 CFR Parts 1744, 1753

Post-Loan Policies and Procedures Common to Guaranteed and

Insured Telephone Loans; Telecommunications System Construction

Policies and Procedures

AGENCY: Rural Electrification Administration, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Rural Electrification Administration (REA) proposes to

amend its post-loan regulations for telephone borrowers to ease

borrower reporting requirements and further clarify existing REA

policy. In addition, REA proposes to amend the telecommunications

system construction regulations to reflect minor technical changes such

as moving the definitions section from one subpart to another.

DATES: Comments concerning this proposed rule must be received by REA

or bear a postmark or its equivalent no later than May 3, 1994.

ADDRESSES: Submit written comments to Matthew P. Link, Director, Rural

Telephone Bank Management Staff, U.S. Department of Agriculture, Rural

Electrification Administration, 14th & Independence Avenue, SW., room

2832-S, Washington, DC 20250-1500. REA requests an original and three

copies of all comments (7 CFR part 1700). All comments received will be

made available for public inspection at room 2238-S, at the address

listed above, between 8:30 a.m. and 5 p.m. (7 CFR 1.27(b)).

FOR FURTHER INFORMATION CONTACT: Orren E. Cameron, III, Chief,

Northeast Engineering Branch, Eastern Regional Division, at the address

listed above, telephone number (202) 720-3299.

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 12778,

Civil Justice Reform. If adopted, this proposed rule will not:

(1) Preempt any State or local laws, regulations, or policies,

unless they present an irreconcilable conflict with this rule;

(2) Have any retroactive effect; and

(3) Require administrative proceedings before parties may file suit

challenging the provisions of this rule.

Regulatory Flexibility Act Certification

REA has 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 REA telephone program provides loans to REA borrowers at interest

rates and terms that are more favorable than those generally available

from the private sector. REA borrowers, as a result of obtaining

federal financing, receive economic benefits which exceed any direct

economic costs associated with complying with REA regulations and

requirements. Moreover, this action liberalizes certain contract

requirements by changing contract limits and allowing negotiation of

fee schedules which further offsets economic costs.

Information Collection and Recordkeeping Requirements

In compliance with the Office of Management and Budget (OMB)

regulations (5 CFR part 1320) which implement the Paperwork Reduction

Act of 1980 (Pub. L. 96-511) and section 3504 of that Act, the

information collection and recordkeeping requirements contained in this

proposed rule have been submitted to OMB for approval. Comments

concerning these requirements should be directed to the Office of

Information and Regulatory Affairs of OMB, Attention: Desk Officer for

USDA, room 3201, New Executive Office Building, Washington, DC 20503.

National Environmental Policy Act Certification

REA 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 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 20402-9325.

Executive Order 12372

This proposed 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 to

governmental and nongovernmental entities from coverage under this

Order.

Background

The proposed rules are primarily aimed at further clarifying and

relaxing existing REA regulations concerning post-loan and system

construction policies and procedures. Further clarification of REA

policy would ease borrower reporting requirements by clearly defining

certain post-loan construction procedures, such as contract

construction and closeout procedures.

In part 1744, subpart B is revised to explain what REA means by

``in the interests of the Government''. Also, definitions sections of

subpart B and subpart C are combined into a single list of definitions,

located in subpart B.

In part 1753, subpart B is revised to delete definitions which

merely repeat those in subpart A. Also, a monthly construction progress

reporting requirement is deleted because it contains information

reported elsewhere.

Subparts F and I are revised to increase the maximum allowable

dollar amount of the Form 773 contract. This requires miscellaneous

revisions throughout part 1753.

Minor and technical corrections are made throughout part 1753.

Appendices A through F are revised to change the requirement to

distribute certain documents to REA.

Specifically, Appendix A is amended by adding to the table the

distribution of Seismic Safety Certifications, required by 7 CFR part

1792, to the contractor and REA.

Appendix B is amended by removing from the table the distribution

of the Switching Diagram and Set of Drawings to REA, and to delete

reference to REA Form 744 which has been replaced by REA Form 754.

Appendix C is amended by removing from the table the distribution

of Final Key Maps and Final Central Office Area and Town Detail Maps to

REA, and to reduce to one copy the number of other final documents

required for REA.

Appendix D is amended to comply with the revisions proposed to

Appendix C.

Appendix E is amended by removing from the table the distribution

of Detail Maps and Key Maps to REA.

Appendix F is amended by adding to the table the distribution of

REA Form 213, Buy American Certificate to REA.

List of Subjects

7 CFR Part 1744

Accounting, Loan programs-communications, Reporting and

recordkeeping requirements, Rural areas, Telephone.

7 CFR Part 1753

Loan programs-communications, Telecommunications, Telephone.

For reasons set forth in the preamble, 7 CFR chapter XVII is

proposed to be amended as follows:

PART 1744--POST-LOAN POLICIES AND PROCEDURES COMMON TO GUARANTEED

AND INSURED TELEPHONE LOANS

1. The authority citation for part 1744 continues to read as

follows:

Authority: 7 U.S.C. 901 et seq., 1921 et seq.

2. In Sec. 1744.40, paragraph (a)(3) is revised to read as follows:

Sec. 1744.40 Non-act purposes.

(a) * * *

(3) Approval of the request is in the interests of the Government.

Generally, it would not be in the Government's interest if the

accommodation or subordination is being requested to enable the

borrower to avoid complying with such REA policies or procedures, as

competitive bid procedures or purchasing equipment acceptable to REA,

under 7 CFR part 1753.

* * * * *

Sec. 1744.21 [Amended]

Sec. 1744.61 [Removed and reversed]

3. The paragraph designations in Secs. 1744.21 and 1744.61 are

removed, the definition in Sec. 1744.21 are put in alphabetical order,

the definitions in Sec. 1744.61 are transferred to Sec. 1744.21 in

alphabetical order, and Sec. 1744.61 is removed and reserved.

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. 1753.5, paragraph (b)(1) is revised to read as follows:

Sec. 1753.5 Methods of major construction.

* * * * *

(b) Contract construction. (1) Whether the contractor is selected

through sealed competitive bidding or negotiation, as approved by REA,

award of the contract is subject to REA approval.

* * * * *

3. In Sec. 1753.6, paragraph (b) is revised to read as follows:

Sec. 1753.6 Standards, specifications, and general requirements.

* * * * *

(b) The borrower may use REA loan funds to finance nonstandard

construction materials or equipment only if approved by REA in writing

prior to purchase or commencement of construction.

* * * * *

4. In Sec. 1753.8, paragraphs (a)(11)(ii), (a)(12)(i), (b)(2),

(b)(3), and (b)(4) are revised, and paragraph (b)(5) is removed to read

as follows:

Sec. 1753.8 Contract construction procedures.

(a) * * *

(11) * * *

(ii) If an award is made, the borrower shall award the contract to

the lowest responsive bidder, subject to REA approval. The borrower may

award the contract immediately upon determination of the lowest

responsive bidder if the following conditions are met:

(A) The project is included in an approved loan and adequate funds

were budgeted in the loan and are available.

(B) All applicable REA procedures were followed, including those in

the Notice and Instructions to Bid in the standard forms of contract.

* * * * *

(12) Execution of contract: (i) Upon approval by REA of the award

of contract by the borrower, the borrower shall submit to REA three

original counterparts of the contract executed by the contractor and

borrower.

* * * * *

(b) * * *

(2) For negotiated purchases, borrowers shall use REA contract

forms, standards, and specifications.

(3) For all contract forms except REA Form 773:

(i) After a satisfactory negotiated proposal has been obtained, the

borrower shall submit it to REA for approval, along with the engineer's

recommendation, and evidence of acceptance by the borrower.

(ii) If REA approves the negotiated proposal, the borrower shall

submit three copies of the contract, executed by the contractor and

borrower, to REA for approval.

(iii) If REA approves the contract, REA shall return one copy of

the contract to the borrower and one copy to the contractor.

(4) For REA Form 773, the borrower is responsible for negotiating a

satisfactory proposal, executing contracts, and closing the contract.

See 7 CFR 1753, subparts F and I, for requirements for major and minor

construction, respectively, on Form 773.

5. In Sec. 1753.9, paragraphs (a) and (c) are revised to read as

follows:

Sec. 1753.9 Subcontracts.

(a) REA construction contract Forms 257, 397, 515, and 525 contain

provisions for subcontracting. Reference should be made to the

individual contracts for the amounts and conditions under which a

contractor may subcontract work under the contract.

* * * * *

(c) As stated in contract Forms 257, 397, 515, and 525, the

contractor shall bear full responsibility for the acts and omissions of

the subcontractor and is not relieved of any obligations to the

borrower and to the Government under the contract.

* * * * *

6. In Sec. 1753.16, paragraphs (b)(3), (b)(4) and (b)(5) are

redesignated as paragraphs (b)(4), (b)(5) and (b)(6), respectively, and

a new paragraph (b)(3) is added to read as follows:

Sec. 1753.16 Architectural services.

* * * * *

(b) * * *

(3) If the fee schedule has to be modified in order for the

borrower to obtain adequate architectural services, the borrower shall

obtain written REA approval of the revised fee schedule prior to

executing contracts.

* * * * *

7. In Sec. 1753.17, paragraph (e) is revised to read as follows:

Sec. 1753.17 Engineering services.

* * * * *

(e) The borrower shall obtain status of contract and force account

proposal reports from the engineer once each month. The report shall

show for each contract or FAP the approved contract or FAP amount, the

date of approval, the scheduled date construction was to begin and the

actual date construction began, the scheduled completion date, the

estimated or actual completion date, the estimated or actual date of

submission of closeout documents, and an explanation of delays or other

pertinent data relative to progress of the project. One copy of this

report shall be submitted to the GFR.

* * * * *

8. In Sec. 1753.25, a new paragraph (f)(4) is added to read as

follows:

Sec. 1753.25 General.

* * * * *

(f) * * *

(4) 7 CFR 1792, subpart C, which requires that the building design

comply with applicable seismic design criteria. Prior to the design of

buildings, borrowers shall submit to REA a written acknowledgement from

the architect or engineer that the design will comply.

* * * * *

9. In Sec. 1753.26, paragraph (b) introductory text is revised,

paragraph (c) is redesignated as paragraph (d), and new paragraph (c)

is added to read as follows:

Sec. 1753.26 Plans and specifications (P&S).

* * * * *

(b) REA Contract Form 257 shall be completed as follows:

* * * * *

(c) The plans and specifications shall show the identification and

date of the model code used for seismic safety design considerations,

and the seismic factor used. See 7 CFR 1792, subpart C.

* * * * *

Sec. 1753.29 [Amended]

10. In Sec. 1753.29, paragraph (a) is removed, and paragraphs (b),

(c), (d), and (e) are redesignated as paragraphs (a), (b), (c), and

(d).

11. In Sec. 1753.30, paragraphs (b)(2)(i) and (c)(2) are revised to

read as follows:

Sec. 1753.30 Closeout procedures.

* * * * *

(b) * * *

(2) * * *

(i) Arrange with its architect or engineer, contractor, and the GFR

for final inspection of the project.

* * * * *

(c) * * *

(2) Complete, with the assistance of its architect or engineer, the

documents listed in Appendix A that are required for the closeout of

force account construction.

* * * * *

12. In Sec. 1753.39, paragraph (g) is revised to read as follows:

Sec. 1753.39 Closeout documents.

* * * * *

(g) Final payment shall be made according to the payment terms of

the contract.

* * * * *

13. In Sec. 1753.46, paragraph (c) is added to read as follows:

Sec. 1753.46 General.

* * * * *

(c) The two contract forms which may be used for major outside

plant construction are Form 515 and Form 773. Limitations on the

applicability of these forms shall be as follows:

(1) Form 515 shall be used for major outside plant construction

projects which will be competitively bid. The contract contains plans

and specifications and has no dollar limitation. See Secs. 1753.47,

1753.48 and 1753.49.

(2) A Form 515 contract which is for less than $200,000, may, at

the borrower's option, be negotiated. See Sec. 1753.48(b).

(3) Form 773 shall be used for major outside plant projects which

may not be competitively bid, and which cannot be designed and staked

at the time of contract execution. Projects of this nature include

routine line extensions and placement of subscriber drops. The Form 773

contract is limited to a maximum of $200,000. REA will not finance more

than $400,000 in Form 773 contracts for a borrower in any twelve month

period. This $400,000 limitation includes all major and minor

construction performed under Form 773 contracts, and is determined by

the date the Form 773 contract is executed. See Sec. 1753.50.

14. In Sec. 1753.49, paragraph (c)(3) is revised to read as

follows:

Sec. 1753.49 Closeout documents.

* * * * *

(c) * * *

(3) Final payment shall be made according to the payment provisions

of Article III of Form 515.

15. Sec. 1753.50 is added to read as follows:

Sec. 1753.50 Construction by Form 773 contract.

(a) The borrower shall prepare the contract form and provide such

details of construction as may be available. Compensation may be based

upon unit prices, hourly rates, or another mutually agreeable basis.

(b) Neither the selection of the contractor nor the contract

requires REA approval.

(c) Borrowers are urged to obtain quotations from several

contractors before entering into a contract to be assured of obtaining

the lowest cost.

(d) The borrower must ensure that the contractor selected meets all

Federal and State requirements, and that the contractor maintains the

insurance coverage required by the contract for the duration of the

work. See 7 CFR part 1788.

(e) The borrower shall finance major construction under the Form

773 contract with general funds and obtain reimbursement with loan

funds when construction is completed and an executed Form 771 has been

submitted to REA.

(f) If the contract exceeds $100,000, a contractor's bond shall be

required. See 7 CFR part 1788.

(g) When the construction is completed to the borrower's

satisfaction, the borrower shall obtain from the contractor a final

invoice and an executed copy of REA Form 743, Certificate of Contractor

and Indemnity Agreement.

(h) The closeout document for the Form 773 contract is REA Form

771. See Sec. 1753.81 for the requirements for completing Form 771.

(i) An original and two copies of Form 771 shall be sent to the

GFR. The GFR may inspect the construction, and will initial and return

the original and one copy to the borrower.

(j) The original Form 771 shall be submitted with an FRS to REA

only in conjunction with a request for an advance of loan funds for the

work.

16. In Sec. 1753.68, paragraph (d)(3)(iii) is revised to read as

follows:

Sec. 1753.68 Purchasing special equipment.

* * * * *

(d) * * *

(3) * * *

(iii) Final payment shall be made according to the payment terms of

the contract.

17. In Sec. 1753.78, paragraph (a) is revised to read as follows:

Sec. 1753.78 Construction by contract.

(a) REA Form 773 shall be used for minor construction by contract.

Compensation may be based upon unit prices, hourly rates, or another

basis agreed to in advance by the borrower and the contractor. A single

work project may require more than one contractor.

* * * * *

18. In Sec. 1753.80, paragraph (a) is revised to read as follows:

Sec. 1753.80 Minor construction procedure.

(a) If the borrower performs minor construction financed with loan

funds, the borrower's regular work order procedure shall be used to

administer construction activities that may be performed entirely by a

contractor under Form 773 contract, by work order, or jointly by work

order and one or more contractors under Form 773 contracts. REA will

not finance more than $400,000 in Form 773 contracts for a borrower in

any twelve month period. This $400,000 limitation includes all major

and minor construction performed under Form 773 contracts, and is

determined by the date the Form 773 contract is executed.

* * * * *

19. Appendices A through F of part 1753 are revised to read as

follows:

Appendices to Part 1753

Appendix A.--Documents Required to Closeout Construction of Buildings

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Use with Prepared by Distribution

Form furnished ------------------------------------------------------------ Number -----------------------------------------

by REA Description Force Architect/ of

Contract account Contractor engineer Borrower copies Borrower REA Architect Contractor

--------------------------------------------------------------------------------------------------------------------------------------------------------

238............ Construction or x .......... .......... x .......... 3 ........ 3 ......... ..........

Equipment Contract

Amendment (Submit to

REA for approval, as

required).

181............ Certificate of x .......... .......... x .......... 3 1 1 ......... 1

Completion (Contract

Construction)\1\.

181a........... Certificate of .......... x .......... x .......... 2 1 1 ......... ..........

Completion (Force

Account Construction).

231............ Certificate of x .......... x .......... .......... 2 1 1 ......... ..........

Contractor.

224............ Waiver and Release of x .......... x .......... .......... 2 1 1 ......... ..........

Lien (2 copies from

each supplier).

213............ Certificate (Buy x .......... x .......... .......... 1 1 ....... ......... ..........

American).

284............ Statement of Architect's x x .......... x .......... 3 1 1 1 ..........

Fee.

Inventory--List x x .......... .......... x 3 1 1 1 ..........

Materials and Services

Furnished by Borrower

Upon Which

Architectural Services

Were Furnished. Show

Cost (See Form 284).

Inventory--List x x .......... .......... x 3 1 1 1 ..........

Materials and Services

Furnished by Borrower

Upon Which

Architectural Services

Were Not Performed Show

Cost.

(2)............ ``As Built'' Plans and x x .......... x .......... 1 1 ....... ......... ..........

Specifications.

Guarantees, Warranties, x .......... x .......... .......... 1 1 ....... ......... ..........

Bonds, Operating or

Maintenance

Instructions, et cetera.

Architect/Engineer x x .......... x .......... 3 1 1 ......... 1

Seismic Safety

Certification.

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\1\Cost of Materials and Services Furnished by Borrower not to be Included in total Cost on 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 in Lieu of the

``As-Built Plans and Specifications.

Appendix B.--Documents Required to Closeout Central Office Equipment Contract

--------------------------------------------------------------------------------------------------------------------------------------------------------

Use with Prepared by Distribution

Form furnished -------------------------------------------------------- Total -------------------------------

by REA Description REA form 525 REA form 545 No. of Borrower Contractor

Contractor Engineer copies REA

--------------------------------------------------------------------------------------------------------------------------------------------------------

238............ Construction or Equipment Contract x x ............ x 3 ........ .......... 3

Amendment (Submit to REA for

approval, if required, before

following documents).

754............ Certificate of Completion and x ............ x x 4 2 1 1

Certificate of Contractor and

Indemnity Agreement (If submitted,

Form 744 is not required).

517............ Results of Acceptance Tests (Prepare x ............ ............ x 2 1 1 ........

and distribute copies immediately

upon completion of the acceptance

tests of each central office).

752a........... Certificate of Completion--Not ............ x ............ x 3 1 1 1

Including Installation.

224............ Waiver and Release of Lien (Two x ............ x ............ 2 1 .......... 1

copies from each supplier).

231............ Certificate of Contractor............ x ............ x ............ 2 1 .......... 1

213............ Certificate (Buy American)........... x x x ............ 1 2 .......... 1

Switching Diagram, as installed...... x x x ............ 2 2 .......... ........

Set of Drawings (Each set to include x x x ............ 2 2 .......... ........

all the drawings required under the

Specification REA Form 522).

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Appendix C.--Documents Required to Closeout Telephone Construction Contract REA Form 515

--------------------------------------------------------------------------------------------------------------------------------------------------------

Prepared by Distribution

No. of Form -------------------------------------------------------------

REA Form No. Description Copies available Contractor

from REA Engineer Contractor Borrower REA

--------------------------------------------------------------------------------------------------------------------------------------------------------

724............ Final Inventory................................... 3 x x ............ 1 1 1

724a........... Final Inventory................................... 3 x x ............ 1 1 1

Contractor's Board Extension (When required)...... 3 ............ ............ x 1 1 1

281............ Tabulation of Materials Furnished by Borrower..... 3 ............ x ............ 1 1 1

213............ Certificate (``Buy American'').................... 1 x ............ x 1 .......... .........

Listing of Construction Change Orders............. 2 ............ ............ ......... .......... 1

224............ Waiver and Release of Lien (Two copies from each 2 x x........... x........... 1 .......... 1

supplier).

231............ Certificate of Contractor......................... 2 x ............ x 1 .......... 1

527............ Final Statement of Construction................... 3 x x ............ 1 1 1

Reports on Results of Acceptance Tests............ 2 ............ x ............ 1 1 .........

Set of Final Staking Sheets....................... 1 ............ x ............ 1 .......... .........

Tabulation of Staking Sheets...................... 1 ............ x ............ 1 .......... .........

Treated Forest Products Inspection Reports or 1 ............ ............ ............ 1 .......... .........

Certificates of Compliance (Prepared by

inspection company or supplier).

Final Key Map (when applicable)................... 1 ............ x ............ 1 .......... 1

Final Central Office Area and Town Detail Maps.... 1 ............ x ............ 1 .......... 1

--------------------------------------------------------------------------------------------------------------------------------------------------------

Appendix D.--Step-by-Step Procedure for Closing Out Telephone

Construction Contract--Labor and Materials, REA Form 515

------------------------------------------------------------------------

Sequence

------------------------

Step By Procedure

No. When

------------------------------------------------------------------------

1. Prior to Borrower's Receives instructions from the

completion of Engineer. GFR concerning the closeout

construction. procedure.

2. Upon completion Borrower's Prepares the following: 1 set

of Engineer. of Key Maps, when applicable,

construction. which show work done under

the construction contract

marked with red pencil. 1 set

of Detail Maps, which show

work done under the

construction contract marked

with red pencil. 1 copy of

Tabulation of Staking Sheets.

1 copy of tentative Final

Inventory, REA Forms 724,

724a.

3. After Borrower's Forwards letter to the

construction Engineer. borrower with copies to the

has been GFR stating that the project

completed and is ready for final

acceptance inspection.

tests made.

4. Upon receipt of GFR............ Promptly arranges with

letter from borrower, borrower's

borrower's engineer, and contractor for

engineer. final inspection of

construction. It is

contemplated that final

inspections will be made on

sections of line as

construction is completed,

leaving a minimum amount to

be inspected at this time.

5. When requested REA Field Audits REA Form 281, if

by the GFR. Accountant. borrower supplied part of the

materials.

6. Inspection date Borrower's Shall have the following

scheduled. Engineer. documents available for the

GFR: 1 set of ``as

constructed'' Key Maps (when

applicable). 1 set of ``as

constructed'' Detail Maps. 1

copy of the List of

Construction Change Orders. 1

set of Final Staking Sheets.

1 copy of Tabulation Staking

Sheets. 1 copy of Treated

Forest Products Inspection

Reports or Certificates of

Compliance. 1 copy of

tentative Final Inventory REA

Form 724, 724a. 1 copy of

tentative Tabulation, REA

Form 231, if borrower

furnished part of material. 1

copy of Report on Results of

Acceptance Tests.

7. During Borrower's Issues instructions to

inspection. Engineer. contractor covering

corrections in construction

found during inspection by

GFR in the company of the

borrower's engineer and the

contractor or his/her

representative.

8. During Contractor..... Corrects defects in

inspection. 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.

9. During Borrower's With GFR inspects and approves

inspection. Engineer. corrected construction.

10. During Borrower's Marks inspected areas on the

inspection. Engineer. Key Map, if available,

otherwise on the Detail Maps.

11. Upon completion Borrower's Prepares or obtains all the

of inspection. Engineer. closeout documents listed in

Appendix C. Makes

distribution of the copies of

the documents as indicated in

Appendix C. Forwards the

documents for REA to the GFR.

12. After reviewing REA GFR........ Reviews documents and

final distributes copies as

documents. indicated in Appendix C.

13. After signing Borrower....... Prepares and submits Financial

final Requirement Statement, REA

inventory. Form 481, requesting amount

necessary to make final

payment due under contract.

14. On receipt of Borrower....... Promptly forwards check for

final advance. final payment to contractor.

15. During next REA Field Makes an examination of

loan fund accountant. borrowers construction

audit review records for (1) compliance

after final with the construction

payment to contract and Subpart F and

contractor. (2) REA Form 281, Tabulation

of Materials Furnished by

Borrowers, if any, for

appropriate costs.

------------------------------------------------------------------------

Appendix E.--Documents Required to Close Out Force Account Outside Plant

Construction

------------------------------------------------------------------------

No. of copies required

and distribution of

Item REA form Description on title of documents

No. No. document --------------------------

Total

No. Owner REA

------------------------------------------------------------------------

a. 817, 817a, Final inventory force 2 1 1

817b account construciton and

certificate of engineer.

b. 213 Certificate, ``Buy 1 1 0

American'' (as

applicable--one from

each supplier).

c. Detail maps.............. 1 1 0

d. Key map if applicable.... 1 1 0

e. Staking sheets........... 1 1 0

f. Tabulation of staking 1 1 0

sheets.

g. Treated forest porducts 1 1 0

inspection reports, if

applicable.

------------------------------------------------------------------------

Appendix F.--Documents Required to Closeout Equipment Contracts

--------------------------------------------------------------------------------------------------------------------------------------------------------

No. of Prepared by Distribution

Form copies ----------------------------------------------------------------------------------

furnished by Description -------------- Form 397 Form 398

REA Form Form ---------------------------------------------------- Borrower Contractor REA

397 398 Contractor Engineer Contractor Engineer

--------------------------------------------------------------------------------------------------------------------------------------------------------

238 Construction or Equipment Contract 3 3 ........... x ........... x ........ .......... 3

Amendment (If required, submit to REA

for approval before other closeout

documents.).

396 Certificate of Completion--Special 3 ..... ........... x ........... x 1 1 1

Equipment Contract (Including

Installation).

396a Certificate of Completion--Special ..... 3 ........... x ........... x 1 1 1

Equipment Contract (Not Including

Installation).

744 Certificate of Contractor and Indemnity 2 ..... x ........... ........... ........... 1 .......... 1

Agreement.

213 Certificate (Buy American).............. 2 2 x ........... x ........... 1 .......... 1

Report in writing, including all 2 2 x ........... ........... x 1 .......... 1

measurements and other information

required under Part II of the

applicable specifications.

Set of maintenance recommendations for 1 1 x ........... x ........... 1 .......... .......

all equipment furnished under the

contract.

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Dated: February 25, 1994.

Bob J. Nash,

Under Secretary, Small Community and Rural Development.

[FR Doc. 94-4858 Filed 3-3-94; 8:45 am]

BILLING CODE 3410-15-P