Electric Engineering, Architectural Services and Design Policies and Procedures

Federal RegisterJun 29, 1998

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SUMMARY: The Rural Utilities Service (RUS) is amending its regulations

on engineering and architectural services. These policies and

procedures are presently contained in seven RUS bulletins, which will

be rescinded after this regulation becomes effective. This rule

simplifies and codifies RUS policy and procedures to be followed by

electric borrowers relating to architectural and engineering services.

This rule also simplifies and codifies RUS requirements for the

planning and design of electric distribution, transmission, and

generation systems and facilities owned by RUS borrowers.

DATES: Effective Date: July 29, 1998.

Incorporation by Reference: Incorporation by reference of certain

publications listed in this final rule is approved by the Director of

the Federal Register as of July 29, 1998.

FOR FURTHER INFORMATION CONTACT: Mr. Fred J. Gatchell, Deputy Director,

Electric Staff Division, Rural Utilities Service, U.S. Department of

Agriculture, Stop 1569, 1400 Independence Ave., SW., Washington, DC

20250-1569. Telephone: (202) 720-1398. FAX: (202) 720-7491. E-mail:

[email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12372

This rule is excluded from the scope of Executive Order 12372,

Intergovernmental Consultation, which may require consultation with

State and local officials. A Final Rule Related Notice entitled

``Department Programs and Activities Excluded from Executive Order

12372,'' (50 FR 47034) exempted RUS loans and loan guarantees from

coverage under this order.

Executive Order 12866

This rule has been determined to be not significant for the

purposes of Executive Order 12866 and, therefore, has not been reviewed

by the Office of Management and Budget (OMB).

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. RUS has determined that this rule meets the applicable

standards provided in section 3 of the Executive Order.

Regulatory Flexibility Act Certification

The Administrator of RUS has determined that a rule relating to the

RUS electric loan program is not a rule as defined in the Regulatory

Flexibility Act (5 U.S.C. 601 et seq.) and, therefore, the Regulatory

Flexibility Act does not apply to this rule.

National Environmental Policy Act Certification

The Administrator of RUS has determined that this 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 rule is listed in the Catalog of

Federal Domestic Assistance programs under No. 10.850, Rural

Electrification Loans and Loan Guarantees. This catalog is available on

a subscription basis from the Superintendent of Documents, the United

States Government Printing Office, Washington, DC 20402-9325.

National Performance Review

The regulatory action is being taken as part of the National

Performance Review program to eliminate unnecessary regulations and

improve those that remain in force.

Information Collection and Recordkeeping Requirements

The recordkeeping and reporting burdens contained in this rule will

be submitted to OMB for approval. The paperwork contained in this rule

will not be effective until approved by OMB.

Send questions or comments regarding any aspect of this collection

of information, including suggestions for reducing the burden, to F.

Lamont Heppe, Jr., Director, Program Development and Regulatory

Analysis, Rural Utilities Service, U.S. Department of Agriculture, Stop

1522, 1400 Independence Ave., SW., Washington, DC 20250-1522.

Unfunded Mandates

This rule contains no Federal mandates (under the regulatory

provision of Title II of the Unfunded Mandates Reform Act of 1995) for

State, local, and tribal governments or the private sector. Thus, this

rule is not subject to the requirements of sections 202 and 205 of the

Unfunded Mandates Reform Act of 1995.

Background

RUS has promulgated regulations pertaining to the design and

construction of RUS electric borrower's systems. These regulations are

contained in 7 CFR chapter XVII, part 1724, Electric Engineering,

Architectural Services and Design Policies and Procedures, which

describes policies and procedures pertaining to RUS electric borrower

procurement of architectural and engineering services for planning,

design, and construction management of buildings and electric utility

plant such as distribution and transmission lines, substations,

communications and control systems, and generating plants.

The policies and procedures covered by this rule are presently

contained in RUS Bulletins 41-1, Engineering Services for Electric

Borrowers; 42-1, Architectural Services for Electric Borrowers; 60-1,

Standards for the Preparation of Circuit Diagrams, Electrical Data

Sheets, and Other Drawings for Systems of Electrical Borrowers; 60-2,

Electric System Capacity; 80-11, Reports of Progress of Construction

and Engineering Services; 81-9, Preparation of Plans and Specifications

for Distribution and Transmission Facilities; and 86-2, Pre-

Construction Activities for Headquarters Facilities for Electric

Borrowers. The previous policies and procedures are being changed and

updated by this rule. Upon the effective date of this rule, RUS

Bulletins 41-1, 42-1, 60-1, 60-2, 80-11, 81-9, and 86-2 will be

superseded and rescinded.

The major substantive changes are as follows:

(a) This rule eliminates the requirement for RUS approval of the

borrower's selection of the architect and of the engineer.

(b) This rule eliminates the requirement for RUS approval of

architectural services contracts and distribution and transmission

engineering services contracts for all facilities, and generation

engineering services contracts if the facilities are not financed by

RUS.

closeout of architectural or engineering services contracts.

(d) This rule eliminates the requirement for submittal of progress

reports to RUS for facilities not financed by RUS.

(e) This rule eliminates the requirement for RUS approval of many

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plans and specifications. However, many requirements, such as the

National Electrical Safety Code (NESC), Occupational Safety and Health

Act of 1970 (29 U.S.C. 651 et seq.), building accessibility standards,

RUS standards, specifications, and use of acceptable materials, etc.,

apply regardless of the source of financing.

(f) Design data that have been approved by RUS may be used for new

facilities without further approval.

(g) This rule will simplify and clarify RUS requirements regarding

system design.

(h) This rule combines seven bulletins and three contracting forms.

Comments

On August 4, 1997, RUS published a proposed rule at 62 FR 41883.

Comments were received from 13 parties, including one cooperative

association, 2 engineering associations, 3 distribution borrowers, 3

power supply borrowers, and 4 engineering firms. RUS considered all

comments. All substantive comments are addressed herein.

Some commenters suggested that RUS eliminate the requirement that

RUS borrowers use RUS standards and RUS accepted materials, especially

when the project is financed from sources other than RUS, and to

eliminate all RUS approvals when the project is financed from sources

other than RUS. RUS disagrees with this approach. Any project that is

part of a borrower's interrelated electrical system can impact the

collateral that serves as security for loans and guarantees made by

RUS. Inadequate design or materials in one part of the system,

regardless of how financed, can adversely affect the entire system. RUS

considers the requirements that RUS borrowers use RUS standards and

accepted materials and for RUS approvals as proposed are in the

government's best interests as lender.

One commenter suggested that RUS clarify the applicability of prior

editions of the National Electrical Safety Code (NESC). Since the NESC

itself specifically addresses facilities that comply with prior

editions of the NESC, no change is needed in the rule.

Some commenters suggested that RUS allow non-licensed engineers to

do certain work and not require all employed engineers to be

registered. Nothing in the proposed rule requires each and every person

doing engineering work to be registered. Generally, the rule allows the

a borrower to use qualified non-licensed subordinates to do engineering

work to the same extent as allowed by applicable State engineering

regulations.

Several commenters suggested that RUS allow more than 6 months for

inspection of work order construction. RUS disagrees with this comment.

Inspection of work order construction is important to the safety of the

public and the borrower's employees, and should be completed as

expeditiously as possible. Where special circumstances (e.g., unusual

weather conditions) preclude inspection within six months, the borrower

may request a waiver of this time requirement.

Several commenters suggested that RUS not require that inspected

work orders be noted and initialed on the RUS Form 219. In response to

this comment, RUS has eliminated the requirement that the inspected

work orders be noted and initialed, requiring only that the inspected

work orders be indicated on the RUS Form 219.

One commenter suggested that RUS not require RUS Form 219 to be

used for work on facilities not financed by RUS. It is not RUS' intent

to require RUS Form 219 for work on facilities not financed by RUS. The

final rule clarifies this point.

One commenter suggested that RUS not prohibit the borrower's

manager from certifying the RUS Form 219. RUS believes that its long-

standing requirement for separation of responsibility continues to have

merit while causing little borrower inconvenience. No change has been

made in the final rule.

One commenter suggested that RUS allow as-built drawings as a

substitute for staking sheets in connection with work order inspection.

In response to this comment, RUS has changed the final rule

accordingly.

Some commenters suggested that RUS allow borrowers to use either an

architect or an engineer for the design of buildings and that RUS

should allow the borrower, instead of the architect or engineer, to do

the construction management. One commenter noted that RUS Form 220

requires electrical, mechanical, and structural expertise that an

architect may not have. It is RUS' intent that all work be done by

individuals and organizations well qualified to do the work. This could

include having an engineer design buildings with architectural

assistance, the borrower doing construction management with engineering

or architectural assistance, or an architect obtaining additional

electrical, mechanical, and structural expertise. Since nothing in the

rule is contrary to this interpretation, no change is needed in the

rule.

One commenter suggested that there should be specific time limits

placed on RUS in connection with the approval process. RUS understands

the commenter's concern, but disagrees with the commenter's solution.

While RUS makes every effort to support the borrower's schedule by

providing timely approvals, an automatic approval after a given period

of time is not consistent with the purpose of RUS approval. No change

has been made in the final rule.

Some commenters suggested that RUS use a standard form of

engineering services contract based on one prepared by the Engineers

Joint Contract Documents Committee in lieu of the RUS standard form,

while another commenter suggested that RUS rewrite the standard form of

engineering services contract to conform to current business practices.

Other commenters noted that the proposed rule's requirement that the

engineer's documents comply with all environmental regulations could be

construed as a warranty or guarantee of services and RUS should modify

the proposed rule to eliminate this express warranty or guarantee.

Other commenters suggested that RUS not require engineers to provide

construction management services nor to ``supervise'' construction. One

commenter suggested that RUS not require the engineer to ``inspect''

construction, and that the engineer's obligation should be to

``observe'' construction. RUS believes that the RUS standard form of

engineering services contract, based on many years of successful use by

RUS borrowers, is still fundamentally sound. Certain specific comments

have been addressed and changes made in the standard form of

engineering services contract to clarify certain provisions of the

contract.

One commenter noted that RUS stated that only 3 contract forms are

required, but Sec. 1724.70 lists 12 forms. The forms listed in

Sec. 1724.70 are available from RUS, but only those so indicated are

required to be used. The others forms are available for use by

borrowers but are not required. The final rule clarifies this point.

Some commenters suggested that RUS not require borrowers to use the

standard contract forms for small jobs (e.g., less then $75,000 or 5

percent of total utility plant.) RUS disagrees with this comment. A

small engineering job can have a significant impact on a much larger

project. Also, the standard contract forms are only required for RUS

financed facilities, which tend to be larger projects. No change has

been made in the final rule.

Several commenters suggested that RUS not require professional

liability insurance of $1, 000,000. In response to

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this comment, RUS has changed the required amount of insurance to

$500,000.

One commenter suggested that RUS allow computer generated forms in

lieu of the standard printed version, since ``reasonable modifications

and additions'' to the standard forms are permitted. RUS disagrees with

this. RUS believes that the most effective means of maintaining

accurate and recognizable forms is to continue to use the preprinted

version. No change has been made in the final rule.

One commenter suggested that RUS eliminate the sample compensation

schedule from the RUS Form 220. RUS has determined that the sample

compensation schedule is not necessary and has been eliminated.

One commenter suggested that the RUS Forms 220 and 236 require the

engineer to get the owner's permission to open bids if three or fewer

bids are received, as is the case in the RUS Form 211. This commenter

also suggested that RUS Form 220 should require the architect to

inspect materials and equipment prior to incorporation into the

project, and to reject those not in conformance with the specification,

as is the case in the RUS Forms 211 and 236. RUS agrees that the

standard forms of contract should be consistent in these areas and has

modified the forms accordingly.

List of Subjects in 7 CFR Part 1724

Electric power, Incorporation by reference, Loan programs--energy,

Reporting and recordkeeping requirements, Rural areas.

In view of the above, RUS hereby amends 7 CFR chapter XVII by

revising part 1724 to read as follows:

PART 1724--ELECTRIC ENGINEERING, ARCHITECTURAL SERVICES AND DESIGN

POLICIES AND PROCEDURES

Subpart A--General

Sec.

1724.1 Introduction.

1724.2 Waivers.

1724.3 Definitions.

1724.4 Qualifications.

1724.5 Submission of documents to RUS.

1724.6 Insurance requirements.

1724.7 Debarment and suspension.

1724.8 Restrictions on lobbying.

1724.9 Environmental compliance.

1724.10-1724.19 [Reserved]

Subpart B--Architectural Services

1724.20 Borrowers' requirements--architectural services.

1724.21 Architectural services contracts.

1724.22-1724.29 [Reserved]

Subpart C--Engineering Services

1724.30 Borrowers' requirements--engineering services.

1724.31 Engineering services contracts.

1724.32 Inspection and certification of work order construction.

1724.33-1724.39 [Reserved]

Subpart D--Electric System Planning

1724.40 General.

1724.41-1724.49 [Reserved]

Subpart E--Electric System Design

1724.50 Compliance with National Electrical Safety Code (NESC).

1724.51 Design requirements.

1724.52 Permitted deviations from RUS construction standards.

1724.53 Preparation of plans and specifications.

1724.54 Requirements for RUS approval of plans and specifications.

1724.55 Dam safety.

1724.56-1724.69 [Reserved]

Appendix A to subpart E of part 1724--Hazard Potential

Classification for Civil Works Projects

Subpart F--RUS Contract Forms

1724.70 List of RUS contract forms for architectural and

engineering services.

1724.71 Use of printed forms.

1724.72-1724.73 [Reserved]

1724.74 Engineering service contract for the design and

construction of a generating plant, RUS Form 211.

1724.75 Architectural service contract, RUS Form 220.

1724.76 Engineering service contract--electric system design and

construction, RUS Form 236.

1724.77-1724.99 [Reserved]

Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart A--General

Sec. 1724.1 Introduction.

(a) The policies, procedures and requirements in this part

implement certain provisions of the standard form of loan documents

between the Rural Utilities Service (RUS) and its electric borrowers.

(b) All borrowers, regardless of the source of financing, shall

comply with RUS' requirements with respect to design, construction

standards, and the use of RUS accepted material on their electric

systems.

facilities are financed by RUS.

Sec. 1724.2 Waivers.

The Administrator may waive, for good cause on a case-by-case

basis, requirements and procedures of this part.

Sec. 1724.3 Definitions.

Terms used in this part have the meanings set forth in Sec. 1710.2

of this chapter. References to specific RUS forms and other RUS

documents, and to specific sections or lines of such forms and

documents, shall include the corresponding forms, documents, sections

and lines in any subsequent revisions of these forms and documents. In

addition to the terms defined in Sec. 1710.2 of this chapter, the

following terms have the following meanings for the purposes of this

part:

Architect means a registered or licensed person employed by the

borrower to provide architectural services for a project and duly

authorized assistants and representatives.

Engineer means a registered or licensed person, who may be a staff

employee or an outside consultant, to provide engineering services and

duly authorized assistants and representatives.

Force account construction means construction performed by the

borrower's employees.

NESC means the National Electrical Safety Code.

Repowering means replacement of the steam generator or the prime

mover or both at a generating plant.

RUS approval means written approval by the Administrator or a

representative with delegated authority. RUS approval must be in

writing, except in emergency situations where RUS approval may be given

orally followed by a confirming letter.

RUS financed means financed or funded wholly or in part by a loan

made or guaranteed by RUS, including concurrent supplemental loans

required by Sec. 1710.110 of this chapter, loans to reimburse funds

already expended by the borrower, and loans to replace interim

financing.

Sec. 1724.4 Qualifications.

The borrower shall ensure that:

(a) All selected architects and engineers meet the applicable

registration and licensing requirements of the States in which the

facilities will be located;

(b) All selected architects and engineers are familiar with RUS

standards and requirements; and

experience with comparable work.

Sec. 1724.5 Submission of documents to RUS.

(a) Where to send documents. Documents required to be submitted to

RUS under this part are to be sent to the office of the borrower's

respective RUS Regional Director, the Power Supply Division Director,

or such other office of RUS as designated by RUS. (See part 1700 of

this chapter.)

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(b) Contracts requiring RUS approval. The borrower shall submit to

RUS three copies of each contract that is subject to RUS approval under

subparts B and C of this part. At least one copy of each contract must

be an original signed in ink (i.e., no facsimile signature). Each

contract submittal must be accompanied by a certified copy of the board

resolution awarding the contract.

submit to RUS three copies of each contract amendment (at least one

copy of which must be an original signed in ink) which is subject to

RUS approval. Each contract amendment submittal to RUS must be

accompanied by a certified copy of the board resolution approving the

amendment.

Sec. 1724.6 Insurance requirements.

(a) Borrowers shall ensure that all architects and engineers

working under contract with the borrower have insurance coverage as

required by part 1788 of this chapter.

(b) Borrowers shall also ensure that all architects and engineers

working under contract with the borrower have insurance coverage for

Errors and Omissions (Professional Liability Insurance) in an amount at

least as large as the amount of the architectural or engineering

services contract but not less than $500,000.

Sec. 1724.7 Debarment and suspension.

Borrowers shall comply with the requirements on debarment and

suspension in connection with procurement activities as set forth in

part 3017 of this title, particularly with respect to lower tier

transactions, e.g., procurement contracts for goods or services.

Sec. 1724.8 Restrictions on lobbying.

Borrowers shall comply with the restrictions and requirements in

connection with procurement activities as set forth in part 3018 of

this title.

Sec. 1724.9 Environmental compliance.

Borrowers shall comply with the requirements of part 1794 of this

chapter, Environmental Policies and Procedures for Electric and

Telephone Borrowers.

Secs. 1724.10-1724.19 [Reserved]

Subpart B--Architectural Services

Sec. 1724.20 Borrowers' requirements--architectural services.

The provisions of this section apply to all borrower electric

system facilities regardless of the source of financing.

(a) Each borrower shall select a qualified architect to perform the

architectural services required for the design and construction

management of headquarters facilities. The selection of the architect

is not subject to RUS approval unless specifically required by RUS on a

case by case basis. Architect's qualification information need not be

submitted to RUS unless specifically requested by RUS on a case by case

basis.

(b) The architect retained by the borrower shall not be an employee

of the building supplier or contractor, except in cases where the

building is prefabricated and pre-engineered.

Architectural Services Contract and under subpart E of this part, and,

as applicable, those duties assigned to the ``engineer'' for

competitive procurement procedures in part 1726 of this chapter.

(d) If the facilities are RUS financed, the borrower shall submit

or require the architect to submit one copy of each construction

progress report to RUS upon request.

(e) Additional information concerning RUS requirements for electric

borrowers' headquarters facilities are set forth in subpart E of this

part. See also RUS Bulletin 1724E-400, Guide to Presentation of

Building Plans and Specifications, for additional guidance. This

bulletin is available from Program Development and Regulatory Analysis,

Rural Utilities Service, U.S. Department of Agriculture, Stop 1522,

1400 Independence Ave., SW., Washington, DC 20250-1522.

Sec. 1724.21 Architectural services contracts.

The provisions of this section apply only to RUS financed electric

system facilities.

(a) RUS Form 220, Architectural Services Contract, must be used by

electric borrowers when obtaining architectural services.

(b) The borrower shall ensure that the architect furnishes or

obtains all architectural services related to the design and

construction management of the facilities.

conditions in the RUS contract form may be made to define the exact

services needed for a specific undertaking. Such modifications or

additions shall not relieve the architect or the borrower of the basic

responsibilities required by the RUS contract form, and shall not alter

any terms and conditions required by law. All substantive changes must

be approved by RUS prior to execution of the contract.

(d) Architectural services contracts are not subject to RUS

approval and need not be submitted to RUS unless specifically requested

by RUS on a case by case basis.

(e) Closeout. Upon completion of all services and obligations

required under each architectural services contract, including, but not

limited to, submission of final documents, the borrower must closeout

that contract. The borrower shall obtain from the architect a final

statement of cost, which must be supported by detailed information as

appropriate. For example, out-of-pocket expense and per diem types of

compensation should be listed separately with labor, transportation,

etc., itemized for each service involving these types of compensation.

RUS Form 284, Final Statement of Cost for Architectural Service, may be

used. All computations of the compensation must be made in accordance

with the terms of the architectural services contract. Closeout

documents need not be submitted to RUS unless specifically requested by

RUS on a case by case basis.

Secs. 1724.22-1724.29 [Reserved]

Subpart C--Engineering Services

Sec. 1724.30 Borrowers' requirements--engineering services.

The provisions of this section apply to all borrower electric

system facilities regardless of the source of financing.

(a) Each borrower shall select one or more qualified persons to

perform the engineering services involved in the planning, design, and

construction management of the system.

(b) Each borrower shall retain or employ one or more qualified

engineers to inspect and certify all new construction in accordance

with Sec. 1724.32. The engineer must not be the borrower's manager.

unless specifically required by RUS on a case by case basis. Engineer's

qualification information need not be submitted to RUS unless

specifically requested by RUS on a case by case basis.

(d) The engineer's duties are specified under the Engineering

Services Contract and under part 1726 of this chapter. The borrower

shall ensure that the engineer executes all certificates and other

instruments pertaining to the engineering details required by RUS.

(e) Additional requirements related to appropriate seismic safety

measures are contained in part 1792, subpart C, of this chapter,

Seismic Safety of Federally Assisted New Building Construction.

(f) If the facilities are RUS financed, the borrower shall submit

or require the engineer to submit one copy of each

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construction progress report to RUS upon RUS' request.

Sec. 1724.31 Engineering services contracts.

The provisions of this section apply only to RUS financed electric

system facilities.

(a) RUS contract forms for engineering services shall be used.

Reasonable modifications or additions to the terms and conditions in

the RUS contract form may be made to define the exact services needed

for a specific undertaking. Any such modifications or additions shall

not relieve the engineer or the borrower of the basic responsibilities

required by the RUS contract form, and shall not alter any terms and

conditions required by law. All substantive changes to the RUS contract

form shall be approved by RUS prior to execution of the contract.

(b) RUS Form 236, Engineering Service Contract--Electric System

Design and Construction, shall be used for all distribution,

transmission, substation, and communications and control facilities.

These contracts are not subject to RUS approval and need not be

submitted to RUS unless specifically requested by RUS on a case by case

basis.

Construction of a Generating Plant, shall be used for all new

generating units and repowering of existing units. These contracts

require RUS approval.

(d) Any amendments to RUS approved engineering services contracts

require RUS approval.

(e) Closeout. Upon completion of all services and obligations

required under each engineering services contract, including, but not

limited to, submission of final documents, the borrower must closeout

the contract. The borrower shall obtain from the engineer a completed

final statement of engineering fees, which must be supported by

detailed information as appropriate. RUS Form 234, Final Statement of

Engineering Fee, may be used. All computations of the compensation

shall be made in accordance with the terms of the engineering services

contract. Closeout documents need not be submitted to RUS unless

specifically requested by RUS on a case by case basis.

Sec. 1724.32 Inspection and certification of work order construction.

The provisions of this section apply to all borrower electric

system facilities regardless of the source of financing.

(a) The borrower shall ensure that all field inspection and related

services are performed within 6 months of the completion of

construction, and are performed by a licensed engineer, except that a

subordinate of the licensed engineer may make the inspection, provided

the following conditions are met:

(1) The inspection by the subordinate is satisfactory to the

borrower;

(2) This practice is acceptable under applicable requirements of

the States in which the facilities are located;

(3) The subordinate is experienced in making such inspections;

(4) The name of the person making the inspection is included in the

certification; and

(5) The licensed engineer signs such certification which appears on

the inventory of work orders.

(b) The inspection shall include a representative and sufficient

amount of construction listed on each RUS Form 219, Inventory of Work

Orders (or comparable form), being inspected to assure the engineer

that the construction is acceptable. Each work order that was field

inspected shall be indicated on RUS Form 219 (or comparable form.) The

inspection services shall include, but not be limited to, the

following:

(1) Determination that construction conforms to RUS specifications

and standards and to the requirements of the National Electrical Safety

Code (NESC), State codes, and local codes;

(2) Determination that the staking sheets or as-built drawings

represent the construction completed and inspected;

(3) Preparation of a list of construction clean-up notes and

staking sheet discrepancies to be furnished to the owner to permit

correction of construction, staking sheets, other records, and work

order inventories;

(4) Reinspection of construction corrected as a result of the

engineer's report;

(5) Noting, initialing, and dating the staking or structure sheets

or as-built drawings and noting the corresponding work order entry for

line construction; and

(6) Noting, initialing, and dating the as-built drawings or

sketches for generating plants, substations, and other major

facilities.

all inventories of work orders:

I hereby certify that sufficient inspection has been made of the

construction reported by this inventory to give me reasonable

assurance that the construction complies with applicable

specifications and standards and meets appropriate code requirements

as to strength and safety. This certification is in accordance with

acceptable engineering practice.

(2) A certification must also include the name of the inspector,

name of the firm, signature of the licensed engineer, the engineer's

State license number, and the date of signature.

Secs. 1724.33-1724.39 [Reserved]

Subpart D--Electric System Planning

Sec. 1724.40 General.

Borrowers shall have ongoing, integrated planning to determine

their short-term and long-term needs for plant additions, improvements,

replacements, and retirements for their electric systems. The primary

components of the planning system consist of long-range engineering

plans and construction work plans. Long-range engineering plans

identify plant investments required over a long-range period, 10 years

or more. Construction work plans specify and document plant

requirements for a shorter term, 2 to 4 years. Long-range engineering

plans and construction work plans shall be in accordance with part

1710, subpart F, of this chapter. See also RUS Bulletins 1724D-101A,

Electric System Long-Range Planning Guide, and 1724D-101B, System

Planning Guide, Construction Work Plans, for additional guidance. These

bulletins are available from Program Development and Regulatory

Analysis, Rural Utilities Service, U.S. Department of Agriculture, Stop

1522, 1400 Independence Ave., SW., Washington, DC 20250-1522.

Secs. 1724.41-1724.49 [Reserved]

Subpart E--Electric System Design

Sec. 1724.50 Compliance with National Electrical Safety Code (NESC).

The provisions of this section apply to all borrower electric

system facilities regardless of the source of financing.

(a) A borrower shall ensure that its electric system, including all

electric distribution, transmission, and generating facilities, is

designed, constructed, operated, and maintained in accordance with all

applicable provisions of the most current and accepted criteria of the

National Electrical Safety Code (NESC) and all applicable and current

electrical and safety requirements of any State or local governmental

entity. Copies of the NESC may be obtained from the Institute of

Electrical and Electronic Engineers, Inc., 445 Hoes Lane, Piscataway,

NJ 08855. This requirement applies to the borrower's electric system

regardless of the source of financing.

(b) Any electrical standard requirements established by RUS are in

addition to, and not in substitution for or a modification of, the most

current and accepted criteria of the NESC and

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any applicable electrical or safety requirements of any State or local

governmental entity.

less than the Grade C strength requirements as described in Section 26,

Strength Requirements, of the NESC when subjected to the loads

specified in NESC Section 25, Loadings for Grades B and C. Overhead

transmission circuits shall be constructed with not less than the Grade

B strength requirements as described in NESC Section 26.

Sec. 1724.51 Design requirements.

The provisions of this section apply to all borrower electric

system facilities regardless of the source of financing.

(a) Distribution. All distribution facilities must conform to the

applicable RUS construction standards and utilize RUS accepted

materials.

(b) Transmission lines. (1) All transmission line design data must

be approved by RUS.

(2) Design data consists of all significant design features,

including, but not limited to, transmission line design data summary,

general description of terrain, right-of-way calculations, discussion

concerning conductor and structure selection, conductor sag and tension

information, design clearances, span limitations due to clearances,

galloping or conductor separation, design loads, structure strength

limitations, insulator selection and design, guying requirements, and

vibration considerations. For lines composed of steel or concrete

poles, or steel towers, in which load information will be used to

purchase the structures, the design data shall also include loading

trees, structure configuration and selection, and a discussion

concerning foundation selection.

(3) Line design data for uprating transmission lines to higher

voltage levels or capacity must be approved by RUS.

(4) Transmission line design data which has received RUS approval

in connection with a previous transmission line construction project

for a particular borrower is considered approved by RUS for that

borrower, provided that:

(i) The conditions on the project fall within the design data

previously approved; and

(ii) No significant NESC revisions have occurred.

RUS.

(2) Design data consists of all significant design features,

including, but not limited to, a discussion of site considerations, oil

spill prevention measures, design considerations covering voltage,

capacity, shielding, clearances, number of low and high voltage phases,

major equipment, foundation design parameters, design loads for line

support structures and the control house, seismic considerations,

corrosion, grounding, protective relaying, and AC and DC auxiliary

systems. Reference to applicable safety codes and construction

standards are also to be included.

(3) Substation design data which has received RUS approval in

connection with a previous substation construction project for a

particular borrower is considered approved by RUS for that borrower,

provided that:

(i) The conditions on the project fall within the design data

previously approved; and

(ii) No significant NESC revisions have occurred.

(d) Generating facilities. (1) This section covers all portions of

a generating plant including plant buildings, the generator step-up

transformer, and the transmission switchyard at a generating plant.

Warehouses and equipment service buildings not associated with

generation plants are covered under paragraph (e) of this section.

Generation plant buildings must meet the requirements of paragraph

(e)(1) of this section.

(2) For all new generation units and for all repowering projects,

the design outline shall be approved by RUS, unless RUS determines that

a design outline is not needed for a particular project.

(3) The design outline will include all significant design

criteria. During the early stages of the project, RUS will, in

consultation with the borrower and its consulting engineer, identify

the specific items which are to be included in the design outline.

(e) Headquarters. (1) Applicable laws. The design and construction

of headquarters facilities shall comply with all applicable Federal,

State, and local laws and regulations, including, but not limited to:

(i) Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. 794),

which states that no qualified individual with a handicap shall, solely

by reason of their handicap, be excluded from participation in, be

denied the benefits of, or be subject to discrimination under any

program or activity receiving Federal financial assistance. The Uniform

Federal Accessibility Standards (41 CFR part 101-19, subpart 101-19.6,

appendix A) are the applicable standards for all new or altered

borrower buildings, regardless of the source of financing.

(ii) The Architectural Barriers Act of 1968 (42 U.S.C. 4151), which

requires that buildings financed with Federal funds are designed and

constructed to be accessible to the physically handicapped.

(iii) The Earthquake Hazards Reduction Act of 1977 (42 U.S.C. 7701

et seq.), and Executive Order 12699, Seismic Safety of Federal and

Federally Assisted or Regulated New Building Construction (3 CFR 1990

Comp., p. 269). Appropriate seismic safety provisions are required for

new buildings for which RUS provides financial assistance. (See part

1792, subpart C, of this chapter.)

(2) The borrower shall provide evidence, satisfactory in form and

substance to the Administrator, that each building will be designed and

built in compliance with all Federal, State, and local requirements.

(f) Communications and control. (1) This section covers microwave

and powerline carrier communications systems, load control, and

supervisory control and data acquisition (SCADA) systems.

(2) The performance considerations for a new or replacement master

system must be approved by RUS. A master system includes the main

controller and related equipment at the main control point. Performance

considerations include all major system features and their

justification, including, but not limited to, the objectives of the

system, the types of parameters to be controlled or monitored, the

communication media, alternatives considered, and provisions for future

needs.

Sec. 1724.52 Permitted deviations from RUS construction standards.

The provisions of this section apply to all borrower electric

system facilities regardless of the source of financing.

(a) Structures for raptor protection. (1) RUS standard distribution

line structures may not have the extra measure of protection needed in

areas frequented by eagles and other large raptors to protect such

birds from electric shock due to physical contact with energized wires.

Where raptor protection in the design of overhead line structures is

required by RUS; a Federal, State or local authority with permit or

license authority over the proposed construction; or where the borrower

voluntarily elects to comply with the recommendations of the U.S. Fish

and Wildlife Service or State wildlife agency, borrowers are permitted

to deviate from RUS construction standards, provided:

(i) Structures are designed and constructed in accordance with

[[Page 35318]]

``Suggested Practices for Raptor Protection on Powerlines: The State of

the Art in 1996'' (Suggested Practices for Raptor Protection); and,

(ii) Structures are in accordance with the NESC and applicable

State and local regulations.

(2) Any deviation from the RUS construction standards for the

purpose of raptor protection, which is not in accordance with the

Suggested Practices for Raptor Protection, must be approved by RUS

prior to construction. ``Suggested Practices for Raptor Protection on

Powerlines: The State of the Art in 1996,'' published by the Edison

Electric Institute/Raptor Research Foundation, is hereby incorporated

by reference. This incorporation by reference is approved by the

Director of the Office of the Federal Register in accordance with 5

U.S.C. 552(a) and 1 CFR part 51. Copies of this publication may be

obtained from the Raptor Research Foundation, Inc., c/o Jim

Fitzpatrick, Treasurer, Carpenter Nature Center, 12805 St. Croix Trail

South, Hastings, Minnesota 55033. It is also available for inspection

during normal business hours at RUS, Electric Staff Division, 1400

Independence Avenue, SW., Washington, DC, Room 1246-S, and at the

Office of the Federal Register, 800 North Capitol Street, NW., Suite

700, Washington, DC.

(b) Transformer neutral connections. Where it is necessary to

separate the primary and secondary neutrals to provide the required

electric service to a consumer, the RUS standard transformer secondary

neutral connections may be modified in accordance with Rule 97D2 of the

NESC.

(1) It is permissible to lower the neutral attachment on standard

construction pole-top assemblies an additional distance not exceeding

two feet (0.6 m) for the purpose of economically meeting the clearance

requirements of the NESC.

(2) It is permissible to lower the transformer and associated

neutral attachment up to two feet (0.6 m) to provide adequate clearance

between the cutouts and single-phase, conventional distribution

transformers.

(3) It is permissible to lower the neutral attachment on standard

construction pole-top assemblies an additional distance of up to six

feet (2 m) for the purpose of performing construction and future line

maintenance on these assemblies from bucket trucks designed for such

work.

Sec. 1724.53 Preparation of plans and specifications.

The provisions of this section apply to all borrower electric

system facilities regardless of the source of financing.

(a) General. (1) The borrower (acting through the engineer, if

applicable) shall prepare plans and specifications that adequately

represent the construction to be performed.

(2) Plans and specifications for distribution, transmission, or

generating facilities must be based on a construction work plan (as

amended, if applicable), engineering study or construction program

which has been approved by RUS if financing for the facilities will at

any time be requested from RUS.

(b) Composition of plans and specifications package. (1) Whether

built by force account or contract, each set of plans and

specifications must include:

(i) Distribution lines. Specifications and drawings, staking

sheets, key map and appropriate detail maps;

(ii) Transmission lines. Specifications and drawings, transmission

line design data manual, vicinity maps of the project, a one-line

diagram, and plan and profile sheets;

(iii) Substations. Specifications and drawings, including a one-

line diagram, plot and foundation plan, grounding plan, and plans and

elevations of structure and equipment, as well as all other necessary

construction drawings, in sufficient detail to show phase spacing and

ground clearances of live parts;

(iv) Headquarters. Specifications and drawings, including:

(A) A plot plan showing the location of the proposed building plus

paving and site development;

(B) A one line drawing (floor plan and elevation view), to scale,

of the proposed building with overall dimensions shown; and

of frame, exterior finish, foundation, insulation, etc.); and

(v) Other facilities (e.g., generation and communications and

control facilities). Specifications and drawings, as necessary and in

sufficient detail to accurately define the scope and quality of work

required.

(2) For contract work, the appropriate standard RUS construction

contract form shall be used as required by part 1726 of this chapter.

Sec. 1724.54 Requirements for RUS approval of plans and

specifications.

The provisions of this section apply only to RUS financed electric

system facilities.

(a) For any contract subject to RUS approval in accordance with

part 1726 of this chapter, the borrower shall obtain RUS approval of

the plans and specifications, as part of the proposed bid package,

prior to requesting bids. RUS may require approval of other plans and

specifications on a case by case basis.

(b) Distribution lines. RUS approval of the plans and

specifications for distribution line construction is not required if

standard RUS drawings, specifications, RUS accepted material, and

standard RUS contract forms (as required by part 1726 of this chapter)

are used. Drawings, plans and specifications for nonstandard

distribution construction must be submitted to RUS and receive approval

prior to requesting bids on contracts or commencement of force account

construction.

transmission construction projects which are not based on RUS approved

line design data or do not use RUS standard structures must receive RUS

approval prior to requesting bids on contracts or commencement of force

account construction.

(2) Unless RUS approval is required by paragraph (a) of this

section, plans and specifications for transmission construction which

use previously approved design data and standard structures do not

require RUS approval. Plans and specifications for related work, such

as right-of-way clearing, equipment, and materials, do not require RUS

approval unless required by paragraph (a) of this section.

(d) Substations. (1)(i) Plans and specifications for all new

substations must receive RUS approval prior to requesting bids on

contracts or commencement of force account construction, unless:

(A) The substation design has been previously approved by RUS; and

(B) No significant NESC revisions have occurred.

(ii) The borrower shall notify RUS in writing that a previously

approved design will be used, including identification of the

previously approved design.

(2) Unless RUS approval is required by paragraph (a) of this

section, plans and specifications for substation modifications and for

substations using previously approved designs do not require RUS

approval.

(e) Generation facilities. (1) This paragraph (e) covers all

portions of a generating plant including plant buildings, the generator

step-up transformer, and the transmission

[[Page 35319]]

switchyard at a generating plant. Warehouses and equipment service

buildings not associated with generation plants are covered under

paragraph (f) of this section.

(2) The borrower shall obtain RUS approval, prior to issuing

invitations to bid, of the terms and conditions for all generating

plant equipment or construction contracts which will cost $1,500,000 or

more. Unless RUS approval is required by paragraph (a) of this section,

plans and specifications for generating plant equipment and

construction do not require RUS approval.

(f) Headquarters buildings. (1) This paragraph (f) covers office

buildings, warehouses, and equipment service buildings. Generating

plant buildings are covered under paragraph (e) of this section.

(2) The borrower shall obtain RUS approval of the plans and

specifications for all headquarters buildings prior to issuing

invitations to bid. The borrower shall also submit two copies of RUS

Form 740g, Application for Headquarters Facilities. The application

must show surface area and estimated cost breakdown between office

building space and space for equipment warehousing and service

facilities. This form is available from Program Development and

Regulatory Analysis, Rural Utilities Service, U.S. Department of

Agriculture, Stop 1522, 1400 Independence Ave., SW., Washington, DC

20250-1522.

(g) Communications and control facilities. (1) This paragraph (g)

covers microwave and powerline carrier communications systems, load

control, and supervisory control and data acquisition (SCADA) systems.

(2) The borrower shall obtain RUS approval, prior to issuing

invitations to bid, of the terms and conditions for communications and

control facilities contracts which will cost $500,000 or more. Unless

RUS approval is required by paragraph (a) of this section, plans and

specifications for communications and control facilities do not require

RUS approval.

(h) Terms and conditions include the RUS standard form of contract,

general and special conditions, and any other non-technical provisions

of the contract. Terms and conditions which have received RUS approval

in connection with a previous contract for a particular borrower are

considered approved by RUS for that borrower.

Sec. 1724.55 Dam safety.

(a) The provisions of this section apply only to RUS financed

electric system facilities.

(1) (i) Any borrower that owns or operates a RUS financed dam must

utilize the ``Federal Guidelines for Dam Safety,'' (Guidelines), as

applicable. A dam, as more fully defined in the Guidelines, is

generally any artificial barrier which either:

(A) Is 25 feet (8 m) or more in height; or

(B) Has an impounding capacity at maximum water storage elevation

of 55 acre-feet (68,000 m3) or more.

(ii) The ``Federal Guidelines for Dam Safety,'' FEMA 93, June,

1979, published by the Federal Emergency Management Agency (FEMA), is

hereby incorporated by reference. This incorporation by reference is

approved by the Director of the Office of the Federal Register in

accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies of the

``Federal Guidelines for Dam Safety'' may be obtained from the Federal

Emergency Management Agency, Mitigation Directorate, PO Box 2012,

Jessup, MD 20794. It is also available for inspection during normal

business hours at RUS, Electric Staff Division, 1400 Independence

Avenue, SW., Washington, DC, Room 1246-S, and at the Office of the

Federal Register, 800 North Capitol Street, NW., Suite 700, Washington,

DC.

(2) The borrower shall evaluate the hazard potential of its dams in

accordance with Appendix E of the U.S. Army Corps of Engineers

Engineering and Design Dam Safety Assurance Program, ER 1110-2-1155,

July 31, 1995. A summary of the hazard potential criteria is included

for information as Appendix A to this subpart. The U.S. Army Corps of

Engineers Engineering and Design Dam Safety Assurance Program, ER 1110-

2-1155, July 31, 1995, published by the United States Army Corps of

Engineers, is hereby incorporated by reference. This incorporation by

reference is approved by the Director of the Office of the Federal

of the U. S. Army Corps of Engineers Engineering and Design Dam Safety

Assurance Program may be obtained from the U. S. Army Corps of

Engineers, Publications Depot, 2803 52nd Ave., Hyattsville,

MD 20781. It is also available for inspection during normal business

hours at RUS, Electric Staff Division, 1400 Independence Avenue, SW.,

Washington, DC, Room 1246-S, and at the Office of the Federal Register,

800 North Capitol Street, NW., Suite 700, Washington, DC.

(3) For high hazard potential dams, the borrower must obtain an

independent review of the design and critical features of construction.

The reviewer must have demonstrated experience in the design and

construction of dams of a similar size and nature. The reviewer must be

a qualified engineer not involved in the original design of the dam or

a Federal or State agency responsible for dam safety. The reviewer must

be approved by RUS.

(4) The independent review of design must include, but not

necessarily be limited to, plans, specifications, design calculations,

subsurface investigation reports, hydrology reports, and redesigns

which result from encountering unanticipated or unusual conditions

during construction.

(5) The independent review of construction shall include:

(i) Foundation preparation and treatment. When the foundation has

been excavated and exposed, and before critical structures such as

earth embankments or concrete structures are placed thereon, the

borrower shall require the reviewer to conduct an independent

examination of the foundation to ensure that suitable foundation

material has been reached and that the measures proposed for treatment

of the foundation are adequate. This examination must extend to the

preparation and treatment of the foundation for the abutments.

(ii) Fill placement. During initial placement of compacted fill

materials, the borrower shall require the reviewer to conduct an

independent examination to ensure that the materials being used in the

various zones are suitable and that the placement and compaction

procedures being used by the contractor will result in a properly

constructed embankment.

(6) If the reviewer disagrees with any aspect of the design or

construction which could affect the safety of the dam, then the

borrower must meet with the design engineer and the reviewer to resolve

the disagreements.

(7) Emergency action plan. For high hazard potential dams, the

borrower must develop an emergency action plan incorporating preplanned

emergency measures to be taken prior to and following a potential dam

failure. The plan should be coordinated with local government and other

authorities involved with the public safety and be approved by the

borrower's board of directors.

(b)(1) For more information and guidance, the following

publications regarding dam safety are available from FEMA:

(i) ``Emergency Action Planning Guidelines for Dams,'' FEMA 64.

[[Page 35320]]

(ii) ``Federal Guidelines for Earthquake Analysis and Design of

Dams,'' FEMA 65.

(iii) ``Federal Guidelines for Selecting and Accommodating Inflow

Design Floods for Dams,'' FEMA 94.

(iv) ``Dam Safety: An Owner's Guidance Manual,'' FEMA 145, August,

1987.

(2) These publications may be obtained from the Federal Emergency

Management Agency, Mitigation Directorate, PO Box 2012, Jessup, MD

20794.

Secs. 1724.56--1724.69 [Reserved]

Appendix A to Subpart E of Part 1724--Hazard Potential

Classification for Civil Works Projects

The source for this appendix is U. S. Army Corps of Engineers

Engineering and Design Dam Safety Assurance Program, ER 1110-2-1155,

Appendix E. Appendix E is available from the address listed in

Sec. 1724.55(a)(2).

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

Category \1\ Low Significant High

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

Direct Loss of Life \2\.......... None expected (due to Uncertain (rural Certain (one or more

rural location with no location with few extensive residential,

permanent structures for residences and only commercial or

human habitation). transient or industrial industrial

development). development).

Lifeline Losses \3\.............. No disruption of Disruption of essential Disruption of critical

services--repairs are facilities and access. facilities and access.

cosmetic or rapidly

repairable damage.

Property Losses \4\.............. Private agricultural Major public and private Extensive public and

lands, equipment and facilities. private facilities.

isolated buildings.

Environmental Losses \5\......... Minimal incremental Major mitigation Extensive mitigation

damage. required. cost or impossible to

mitigate.

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

Notes:

\1\ Categories are based upon project performance and do not apply to individual structures within a project.

\2\ Loss of life potential based upon inundation mapping of area downstream of the project. Analysis of loss of

life potential should take into account the extent of development and associated population at risk, time of

flood wave travel and warning time.

\3\ Indirect threats to life caused by the interruption of lifeline services due to project failure, or

operation, i.e., direct loss of (or access to) critical medical facilities or loss of water or power supply,

communications, power supply, etc.

\4\ Direct economic impact of value of property damages to project facilities and down stream property and

indirect economic impact due to loss of project services, i.e., impact on navigation industry of the loss of a

dam and navigation pool, or impact upon a community of the loss of water or power supply.

\5\ Environmental impact downstream caused by the incremental flood wave produced by the project failure, beyond

which would normally be expected for the magnitude flood event under a without project conditions.

Subpart F--RUS Contract Forms

Sec. 1724.70 List of RUS contract forms for architectural and

engineering services.

The following RUS contract forms for architectural and engineering

services are available:

(a) RUS Form 179, Rev. 9-66, Architects and Engineers

Qualifications (optional form);

(b) RUS Form 211, Rev. 6-98, Engineering Service Contract for the

Design and Construction of a Generating Plant (required form);

Planning (optional form);

(d) RUS Form 220, Rev. 6-98, Architectural Services Contract

(required form);

(e) RUS Form 234, Rev. 3-57, Final Statement of Engineering Fee

(optional form);

(f) RUS Form 236, Rev. 6-98, Engineering Service Contract--Electric

System Design and Construction (required form);

(g) RUS Form 241, Rev. 3-56, Amendment of Engineering Service

Contract (optional form);

(h) RUS Form 244, Rev. 12-55, Engineering Service Contract--Special

Services (optional form);

(i) RUS Form 258, Rev. 4-58, Amendment of Engineering Service

Contract--Additional Project (optional form);

(j) RUS Form 284, Rev. 284, Final Statement of Cost for

Architectural Service (optional form);

(k) RUS Form 297, Rev. 12-55, Engineering Service Contract--

Retainer for Consultation Service (optional form); and

(l) RUS Form 459, Rev. 9-58, Engineering Service Contract--Power

Study (optional form).

Sec. 1724.71 Use of printed forms

(a) Persons wishing to obtain forms referred to in this part should

contact: Program Development and Regulatory Analysis, U.S. Department

of Agriculture, Stop 1522, 1400 Independence Ave., SW., Washington, DC

20250-1522. These forms may be reproduced as needed.*

(b) If a RUS contract form is required by this part, the borrower

shall use the form in the format available from RUS (photocopying or

other exact reproduction is acceptable.) The RUS contract forms are not

to be retyped, changed, modified, or altered in any manner not

specifically authorized in this part or approved by RUS in writing. Any

modifications approved by RUS must be clearly shown indicating that

they are different from the standard form.

Secs. 1724.72--1724.73 [Reserved]

Sec. 1724.74 Engineering service contract for the design and

construction of a generating plant, RUS Form 211.

The contract form in this section shall be used when required by

this part.

ENGINEERING SERVICE CONTRACT FOR THE DESIGN AND CONSTRUCTION OF A

GENERATING PLANT

AGREEMENT, made ________, ________, between ________

(hereinafter called the ``Owner'') and ________ of ________

hereinafter called the ``Engineer'').

Whereas, the Administrator of the Rural Utilities Service

(hereinafter called the ``Administrator'') of the United States of

America (hereinafter called the ``Government'') has approved the

making of a loan or loan guarantee of not in excess of $________ by

the Government to the Owner pursuant to the Rural Electrification

Administration Act of 1936, as amended, approximately $________ of

which is intended to finance, in whole or in part, the construction

and operation of an electrical generating plant which is estimated

to cost $________ and consists of ________ in the State of ________,

having the Rural Utilities Service project designation of ________,

(hereinafter called the ``Project''), located at such place as the

Owner with the approval of the Administrator shall designate;

Now, therefore, in consideration of the mutual undertakings

herein contained, the parties hereto agree as follows:

[[Page 35321]]

Article I

General Obligation of Engineer

In accordance with the normal standards and practices used in

the profession, the Engineer shall diligently and competently render

all engineering services which shall be necessary or advisable for

the expeditious, economical, and sound design and construction of

the Project with due consideration to applicable ecological and

environmental requirements. The enumeration of specific duties and

obligations to be performed by the Engineer hereunder shall not be

construed to limit the general undertakings of the Engineer.

Article II

Design of Project

Section 1. The Engineer shall prepare and within ________ days

after the approval hereof by the Administrator submit in duplicate

to the Owner for approval and to the Administrator for approval, if

approval of the Administrator is required, a ``Project Design

Manual'' which shall consist of, but not necessarily be limited to,

the following items:

(a) A detailed statement covering the procedures to be followed

by the Engineer in the performance of this Agreement, including,

without limitation, such matters as the routing and distribution of

copies of correspondence and reports, the furnishing of lists of

plans and specifications, procedures relating to the awarding of

construction and equipment contracts, identification of persons to

be called by telephone with respect to various subject matters,

contract closeouts, and meetings.

(b) A design outline which includes all design criteria for the

Project, including, without limitation, plant site, equipment,

building requirements, environmental equipment and other

environmental factors, civil, electrical, and mechanical

requirements. The outline shall comply with the requirements of RUS

Environmental Policies and Procedures.

design and selection of equipment, including, without limitation,

turbine throttle and exhaust conditions, boiler feed pump, air

quality equipment, and condenser.

(d) Testing procedures which outline the responsibilities to be

assumed by the Owner, Engineer, and contractor and include, without

limitation, acceptance testing, concrete tests, laboratory testing,

radiographic inspection, electrical checkout, and testing.

Section 2. In addition, the Engineer shall prepare and within

________ days after the approval hereof by the Administrator submit

in duplicate to the Owner for approval and to the Administrator for

approval, if approval of the Administrator is required, preliminary

plans (hereinafter called the ``Preliminary Plans'') which shall

consist of:

(a) A single-line diagram of proposed main and auxiliary

electrical connections, including all major equipment, switching and

substations.

(b) A single-line flow diagram of proposed steam, water, gas,

oil, and air connections, including all major equipment.

Administrator, showing by months the estimated time required for

each major subdivision of the Project for design, fabrication, and

installation, and the estimated date the project will be available

for commercial service. Such schedule shall specify, in percentages,

the portion of the total design performance of the Engineer under

this Agreement which each item of design represents.

(d) The Engineer's estimate of the total cost of the completed

Project, by components, together with the forecast of the amounts of

money needed by the Owner each month until completion of the

Project.

Section 3. Promptly upon receipt of approval by the Owner and by

the Administrator, if the approval of the Administrator is required,

of the Project Design Manual and Preliminary Plans, the Engineer

shall proceed with preparation of and shall submit, in duplicate, to

the Owner and to the Administrator, if approval of the Administrator

is required, complete and detailed plans and specifications,

drawings, maps, and other engineering documents required for the

construction of the Project (all of the foregoing being hereinafter

sometimes collectively called the ``Plans and Specifications''). In

the preparation of the Plans and Specifications, the Engineer shall

consult with the Owner to the end that the Project shall serve the

purposes intended by the Owner. The Engineer shall diligently make

such necessary changes in the Plans and Specifications as may be

required by the Owner and the Administrator. The Plans and

Specifications shall include the following:

(a) Detailed drawings showing the complete design and layout of

the Project.

(b) The form of construction contract (hereinafter called the

``Construction Contract'') to be entered into between the Contractor

and Owner for the construction of the Project, including forms of

notice and instructions to bidders, material and construction

specifications, contractor's proposal, bidder's qualifications,

contractor's bond, and construction drawings. If the Owner or the

Administrator shall direct that the Project shall be constructed

under more than one contract, the Engineer shall submit forms of all

necessary Construction Contracts and shall also prepare and submit

in connection with each such contract all that is hereinabove

required of the Engineer in connection with the Construction

Contract. All maps, drawings, plans, specifications, estimates, and

other documents required to be prepared or submitted by the Engineer

under this section or other sections of the Agreement shall conform

to applicable environmental requirements related to the project,

including those commitments contained in the RUS Final Environmental

Statement, standard specifications, and other forms prescribed by

the Administrator, unless deviation therefrom shall be permitted by

the Administrator in writing.

Section 4. The Engineer shall also proceed to procure and submit

to the Owner and to the Administrator, if approval of the

Administrator is required, forms of other contracts and documents

for the equipment and materials proposed to be purchased by the

Owner for use in connection with the construction of the Project or

any services necessary or desirable in connection therewith.

Section 5. The Engineer, immediately upon receipt of notice from

the Owner and from the Administrator, if approval of the

Administrator is required, of their approval for bidding purposes of

the form of Construction Contract or any contracts for materials,

equipment, and services, as the case may be, shall, unless otherwise

instructed by the Owner with the prior approval of the

Administrator, take all appropriate and necessary action to procure

full, free, and competitive bidding for the award of such contracts.

In fulfilling this responsibility, the Engineer shall prepare and

submit to the Owner for approval a recommended bidders' list. Upon

approval of such list by the Owner, the Engineer, in collaboration

with the Owner, shall fix a date for the opening of bids for such

contracts. The Engineer shall be available to each prospective

bidder for consultation with respect to the details of the Plans and

Specifications and all other matters pertaining to the preparation

of the Proposals for the construction of the Project or the supply

of materials, equipment, or services therefor.

Section 6. The Engineer shall attend all openings of bids for

the construction of the Project, or any part thereof, or for the

furnishing of materials, equipment, and services therefor. In case

fewer than three (3) bids are received for the construction of the

Project or component parts of the Project, the Owner shall be

notified immediately and such bids shall remain unopened unless

permission is obtained from the Owner for the opening of such bids.

If bids are opened, the Engineer shall carefully check and prepare

tabulations of all bids received and shall render to the Owner all

such assistance as shall be required in connection with

consideration of the bids so that contracts may be prudently and

properly awarded. The Engineer shall submit in writing to the Owner

its first, second, and third choice of bidders, materials, and

equipment to be used in each case, with its recommendation and

reasons for the selection. When the Owner has indicated its choice

of bidders, materials, and equipment, the Engineer shall forward a

tabulation of the bids, copies of the recommendation, and the

Owner's selection to the Administrator, if approval of the

Administrator is required. If requested by the Administrator, the

Engineer shall forward one complete copy of all original bids

received. Upon approval by the Administrator, if approval of the

Administrator is required, of the selection of a bidder, materials,

and equipment, the Engineer shall prepare three counterparts of the

contract to be executed by the Owner and the Contractor and shall

forward such executed counterparts to the Administrator for

approval, if approval of the Administrator is required.

Section 7. The Engineer shall furnish to the Owner all

engineering information, services, data, and drawings required for

procuring all necessary or desirable permits, licenses, franchises,

titles, rights, and authorizations

[[Page 35322]]

and shall cooperate with the Owner's attorney in the procuring

thereof.

Article III

Construction Management

Section 1. The Engineer shall supervise the construction of the

Project and shall make a diligent effort to ensure the expeditious

and economical construction thereof in accordance with the Plans and

Specifications and the terms of the Construction Contract and

equipment or material contracts and the loan contract (hereinafter

called the ``Loan Contract'') entered into between the Owner and the

Government or any other lenders specifying the terms upon which the

Project shall be constructed and financed. The Engineer shall

carefully inspect all materials and equipment prior to their

incorporation in the Project and shall promptly reject those not in

compliance with the Specifications. The Engineer shall also

supervise and inspect the incorporation of the materials in the

Project and the workmanship with which such materials are

incorporated. The Engineer, as representative of the Owner, shall

have sole responsibility for requiring the Contractor to perform the

Construction Contract in accordance with its terms and the Plans and

Specifications, and, in performing the duties incident to such

responsibility, the Engineer shall issue to the Contractor such

directives and impose such restrictions as may be required to obtain

reasonable and proper compliance by the Contractor with the terms of

the Construction Contract and the Plans and Specifications in the

construction of the Project; provided that the Engineer shall not be

required to exercise any actual control over employees of the

Contractor. The term ``supervise'' when used herein shall not confer

upon the Engineer responsibility for the Contractor's construction

means, methods, or techniques. The obligations of the Engineer

hereunder run to and are for the benefit of only the Owner and the

Administrator.

Section 2. If, after the Construction Contract has been approved

by the Administrator, if approval of the Administrator is required,

it shall be determined that any change or changes in the Plans and

Specifications are advisable, the Engineer shall prepare and submit

to the Owner and the Contractor all necessary details in connection

with such change or changes. The execution of such changes by the

Engineer shall be within the intent of the Engineer's general

undertakings as outlined elsewhere in this contract. Upon approval

of the change or changes by the Owner and the Contractor, the

proposed change or changes shall be submitted by the Engineer to the

Administrator, if approval of the Administrator is required, in the

form of a contract amendment.

Section 3. The Engineer shall prepare all estimates,

certificates, reports, and other documents required to be executed

by the Engineer pursuant to the terms of the Construction Contract,

equipment or material contracts, or the Loan Contract. When any bid

specification is forwarded to RUS for review, an updated cost

estimate for the proposed contract shall also be included. After all

major equipment contracts have been awarded and all permits have

been received, and after approximately forty percent (40%) of the

project design has been completed and construction has commenced,

the Engineer shall update, on a quarterly basis, unless more

frequently requested by the Owner, the information required under

Article II, Section 2(d) hereof.

Section 4. The Engineer shall, upon completion of construction

of component parts of the Project, make a complete inspection and

conduct, utilizing the Owner's operating personnel and/or the

manufacturer's representatives, such component and system tests as

shall be necessary to assure conformance with the Plans and

Specifications, the standards required by the Construction Contract,

equipment and materials contracts, and the guarantees given in

connection therewith.

Section 5. The Engineer shall schedule and coordinate the start-

up activities for placing the plant in service. This shall include

preparation of system operating schedules, written system start-up

procedures, and operating manuals describing the various plant

systems and operating procedures.

Section 6. The Engineer shall prepare written procedures for

final acceptance tests of major equipment, such procedures being

subject to the Owner's concurrence. Furthermore, the Engineer shall

conduct, utilizing the Owner's operating personnel, final acceptance

tests of major equipment. Such tests shall be made in the presence

of duly qualified representatives of the Owner and the

Administrator, if the Administrator elects to attend, and the time

and procedure of such tests shall be agreed upon by the Engineer,

the Owner, and the Administrator. After completion of each final

acceptance test, the Engineer shall prepare copies of the test

results and recommendations as to acceptability of equipment and

submit them to the Owner for review.

Section 7. A competent resident engineer with full authority to

act for the Engineer shall be maintained by the Engineer at the site

of the Project during the entire period of any construction

activity. The Engineer shall maintain at the site of the Project and

under the direct supervision of the resident engineer a sufficient

number of qualified engineering field inspectors to fully discharge

the responsibilities of the Engineer pursuant to Article III,

Section 1 hereof.

Article IV

Final Documents

The Engineer shall, upon the completion of the inspection and

tests in respect of the Project provided in Sections 4 and 6 of

Article III, obtain or prepare and deliver to the Owner the

following:

(a) A nameplate inventory and summary in triplicate of all

equipment and facilities incorporated in the Project together with a

breakdown of contract costs arranged by Standard List of Retirement

Units, RUS Bulletin 181-2.

(b) Two complete sets of final inventory (record) drawings

showing the location and layout of the Project in accordance with

revisions to design drawings and field records of construction. All

information required by this Agreement to be included in the maps

and drawings shall be included in the record drawings. One complete

set of the record drawings shall be in reproducible form

satisfactory to the Owner. The Engineer shall also provide the Owner

with any other original manufacturer's equipment drawings not

otherwise available to the Owner.

by the Owner under all contracts for the construction of the Project

and the furnishing of materials, equipment, and services thereof.

(d) A certificate in triplicate to the effect that the Project

has been fully constructed substantially in accordance with the

Plans and Specifications if and as amended.

(e) A detailed report in duplicate of all tests, in a form

satisfactory to the Owner.

(f) All maps, tracings, and drawings prepared or used by the

Engineer in connection with the performance of the duties of the

Engineer under this Agreement.

(g) Operating and maintenance manuals received from

manufacturers.

When the Owner has determined that the Project is available for

commercial service, the Engineer shall report to the Owner and the

Administrator, for depreciation purposes, the estimated total

contract cost of the Project, plus the Owner's other related

overhead cost, as obtained from the Owner, showing as a separate

item the cost of land (a non-depreciable item).

Article V

Compensation

Section 1. The Owner shall pay the Engineer for the services

performed hereunder as indicated in the attached Schedule A.

Section 2. The total compensation to be paid in connection with

this Agreement shall not exceed $________ (________ Dollars.)

Section 3. The Engineer shall submit to the Owner each month a

certified statement in duplicate of the amounts due for services

hereunder, which statement shall be in accordance with the

applicable reports of engineering progress required by Article VI,

Section 1 hereof, and shall be in such detail and contain such

supporting data as the Owner may request. The Owner shall review and

approve each statement within thirty (30) days or inform the

Engineer of the reasons the statement cannot be approved. Upon

approval of each such statement by the Owner, ninety (90) percent of

the amount thereof shall be due and payable. The balance of the

compensation payable under Section 1 hereof shall be due and payable

within thirty (30) days after completion of the Project. The Project

shall be deemed complete for the purposes of the Agreement when all

required final documents, including a certificate of completion,

have been submitted by the Engineer and approved by the Owner and by

the Administrator, if approval of the Administrator is required.

Section 4. In the event that this Agreement at any time be

terminated pursuant to Article VI, Section 2 hereof, the

compensation which shall be payable by the Owner to the Engineer for

services rendered prior to such termination shall be computed as

follows:

(a) Compensation for services in respect of the Design of the

Project shall be determined

[[Page 35323]]

in accordance with Section 1 of this Article V, using the final

report of engineering progress referred to in Article VI, Section 1

hereof to determine the percentage of completion of the services in

respect of design of the Project as of the effective date of

termination.

(b) Compensation for services in respect of supervision and

inspection of construction of the Project and all other services

shall be computed at the rate of $________ per staff hour of

supervision and inspection of construction performed by the Engineer

prior to the effective date of termination, but in no event shall

such compensation exceed an amount computed in accordance with the

provisions of Section 1 of this Article V. The Engineer shall submit

to the Owner, in duplicate, a statement of the staff hours of

supervision and inspection of construction in such detail and with

such supporting data as may be requested by the Owner.

Section 5. Compensation payable to the Engineer under any of the

Articles of this Agreement shall be in addition to taxes or levies

(excluding Federal, State, and Local Income Taxes) which may be

assessed against the Engineer by any State or political subdivision

directly on services performed or payments for services performed by

the Engineer pursuant to this Agreement. Such taxes or levies which

the Engineer may be required to collect or pay, shall, in turn, be

added by the Engineer to invoices submitted to the Owner pursuant to

this Agreement.

Section 6. At or prior to the time when any payments shall be

made to the Engineer pursuant to this Agreement, the Engineer if

requested by the Owner shall furnish to the Owner, as a condition

precedent to such payment, a certificate to the effect that all

salaries or wages earned by the employees of the Engineer in

connection with the Project have been fully paid by the Engineer up

to and including a date not more than fifteen (15) days prior to the

date when such payment shall be made. At or before the time when the

final payment provided to be made hereunder shall be made to the

Engineer by the Owner, the Engineer shall also furnish to the Owner,

as a condition precedent to such payment, a certificate in form

satisfactory to the Administrator that all the employees of the

Engineer have been paid for services rendered by them in connection

with the Project and that all other obligations which might become a

lien on the Project have been paid.

Section 7. Interest at the rate of ________ percent ( ________

%) per annum [percentage is not to exceed any applicable State usury

laws] shall be paid by the Owner to the Engineer on all unpaid

balances due the Engineer, commencing thirty (30) days after the due

date, provided that the delay in payment beyond the due date shall

not have been caused by any condition within the control of the

Engineer. Such compensation shall be paid ten (10) days after the

amount of the interest has been determined by the Engineer and the

Owner.

Article VI

Miscellaneous

Section 1. The Engineer shall prepare and execute in such form

and detail as the Owner and the Administrator shall direct all

estimates, certificates, reports, and other documents required to be

executed by the Engineer pursuant to the Construction Contract or

the Loan Contract, including, without limitation, a monthly report

of engineering progress on the form of schedule referred to in

Article II, Section 2(c) hereof, showing the percentage of

completion of each of the subdivisions thereof and the overall

percentage of completion of engineering services in respect of the

design and construction of the Project as of the date of each such

report; Monthly Cost Estimates and Forecasts of Cash Requirements in

the form referred to in Article II, Section 2(d) hereof, which shall

contain explanations of changes, if any, from prior Monthly Cost

Estimates and Forecasts of Cash Requirements. From time to time the

Engineer shall prepare and submit to the Owner for approval and to

the Administrator for approval, if approval of the Administrator is

required, all necessary changes in the schedule referred to in

Article II, Section 2(c) hereof; provided, however, that no changes

shall be made in the percentages assigned to each item of design in

the original schedule approved by the Owner and by the

Administrator, if approval of the Administrator is required,

pursuant to Article II, Section 2(c) hereof.

Section 2. The Owner may at any time terminate this Agreement by

giving notice to the Engineer in writing to that effect, delivered

or mailed to the Engineer's last known address not less than twelve

(12) calendar days prior to the effective date of termination

specified in the notice. From and after the effective date specified

in such notice, this Agreement shall be terminated, except that the

Engineer shall be entitled to receive compensation for services

hereunder as provided in Section 3 of Article V hereof, and the

Engineer shall be obligated forthwith to deliver to the Owner all

maps, tracings, and drawings of the Project and all other letters,

documents, and other material including all records pertaining

thereto. If this Agreement shall be terminated, the Engineer shall

prepare and submit to the Owner and the Administrator a final report

of engineering progress as of the date of termination.

Section 3. Insurance. The Engineer shall take out and maintain

throughout the period of this Agreement insurance of the following

types and minimum amounts:

(a) Workers' compensation and employers' liability insurance, as

required by law, covering all of the Engineer's employees who

perform any of the obligations of the Engineer under the Agreement.

If any employer or employee is not subject to the workers'

compensation laws of the governing State, then insurance shall be

obtained voluntarily to extend to the employer and employee coverage

to the same extent as though the employer or employee were subject

to the workers' compensation laws.

(b) Public liability insurance covering all operations under the

Agreement shall have limits for bodily injury or death of not less

than $1 million each occurrence, limits for property damage of not

less than $1 million each occurrence, and $1 million aggregate for

accidents during the policy period. A single limit of $1 million of

bodily injury and property damage is acceptable. This required

insurance may be in a policy or policies of insurance, primary and

excess including the umbrella or catastrophe form.

connection with the Agreement, whether owned, nonowned, or hired,

shall have limits for bodily injury or death of not less than $1

million per person and $1 million per occurrence, and property

damage limits of $1 million for each occurrence. This required

insurance may be in a policy or policies of insurance, primary and

excess including the umbrella or catastrophe form.

(d) Errors and Omissions (Professional Liability) Insurance in

an amount at least as large as the maximum compensation specified in

Article V, Section 2, but not less than $500,000.

The Owner shall have the right at any time to require public

liability insurance and property damage liability insurance greater

than those required in subsections ``b'' and ``c'' of this Section.

In any such event, the additional premium or premiums payable solely

as the result of such additional insurance shall be added to the

total compensation to be paid under this Agreement.

The Owner shall be named as Additional Insured on all policies

of insurance required in subsections ``b'' and ``c'' of this

Section.

The policies of insurance shall be in such form and issued by

such insurer as shall be satisfactory to the Owner. The Engineer

shall furnish the Owner a certificate evidencing compliance with the

foregoing requirements which shall provide not less than thirty (30)

days prior written notice to the Owner of any cancellation or

material change in the insurance.

The Engineer shall also follow the requirements of 7 CFR part

1788, RUS Fidelity and Insurance Requirements for Electric and

Telephone Borrowers.

Section 4. The obligations and duties to be performed by the

Engineer under this Agreement shall be performed by persons

qualified to perform such duties efficiently. The Engineer, if the

Owner shall so direct in writing, shall replace any resident

engineer or other persons employed by the Engineer in connection

with the Project. For the information of the Owner and the

Administrator, the Engineer shall file with the Owner and the

Administrator a statement, signed by the Engineer, of the

qualifications, including specific experience of each engineer and

inspector assigned to the Project and the duties assigned to each.

Section 5. Approvals, directions, and notices provided to be

given hereunder by the Administrator to the Engineer or the Owner

shall be deemed to be properly given if given by the Administrator

or by any person authorized by the Administrator to give such

approvals, directions, or notices.

Section 6. The Engineer shall follow all applicable RUS rules

and regulations.

Section 7. This Agreement may be simultaneously executed and

delivered in three or more counterparts, each of which so executed

and delivered shall be deemed to be

[[Page 35324]]

an original, and all constitute but one and the same instrument.

Section 8. The obligations of the Engineer under this Agreement

shall be assigned without the approval in writing of the Owner and

of the Administrator.

Section 9. This Agreement shall be effective only from and after

the time when it shall be approved by the Administrator in writing.

Neither this Agreement nor any provision thereof shall be modified,

amended, rescinded, waived, or terminated without the approval of

the Administrator.

Section 10. The Engineer shall comply with applicable statutes

pertaining to engineering and warrants that ________ (Name of

Engineer) who will be in responsible charge of the Project possesses

license number ________ issued by the State of ________ on the

________ day of ________, ______.

In witness whereof, the parties hereto have caused this

Agreement to be duly executed.

________ Owner

By ________ President

ATTEST: ________ Secretary

________ Engineer

________ President, Partner [Strike out inapplicable designation.]

ATTEST: ________ Secretary

Schedule A--Compensation

[End of clause]

Sec. 1724.75 Architectural service contract, RUS Form 220.

The contract form in this section shall be used when required by

this part.

ARCHITECTURAL SERVICES CONTRACT

AGREEMENT, made ________, ________, between ________

(hereinafter called the ``Owner'') and ________ of ________

(hereinafter called the ``Architect'').

Whereas, the Owner owns and operates a rural electric or

telecommunications system, having the Rural Utilities Service

designation of ________, financed in whole or in part with loans

made or guaranteed by the United States of America acting through

the Administrator of the Rural Utilities Service (hereinafter called

the ``Administrator''). If the project is financed wholly or in part

by the Rural Telephone Bank, an agency of the United States of

America, the references in this Agreement to the ``Administrator''

shall mean the ``Governor'' of the Rural Telephone Bank as well; and

Whereas, the Owner desires to ________ (hereinafter called the

``Project'') at an estimated cost of construction not to exceed:

________ dollars ($________) for new work, and/or ________ dollars

($________) for remodeling, which aggregate ________ dollars

($________), hereinafter called the ``Anticipated Cost,'' is

exclusive of the cost of land, legal, architectural, accounting, or

other professional services, or of interest.

Now, therefore, in consideration of the mutual undertakings

herein contained, the parties hereto agree as follows:

Article I

General Obligation of Architect

The Architect shall render, diligently and competently in

accordance with the normal standards used in the profession, all

architectural services which shall be necessary or advisable for the

expeditious, economical, and sound design, construction, and

satisfactory completion of the Project. The enumeration of specific

duties and obligations to be performed by the Architect hereunder

shall not be construed to limit the general undertakings of the

Architect. The obligations of the Architect hereunder run to, and

are for the benefit of, only the Owner and the Administrator and

shall not relieve the Contractor of its own responsibility under its

agreement with the Owner.

Article II

Preconstruction Period

Section 1.

(a) The Architect shall prepare: (1) preliminary drawings, (2) a

general description of materials and types of construction, and (3)

an overall estimate of the cost of construction (all of the

foregoing hereinafter collectively called the ``Preliminary

Documents''), and not later than ________ days after the date of

execution of this Agreement, shall submit them in triplicate to the

Owner for approval. Any changes in the Preliminary Documents

required as a condition of approval shall be promptly made by the

Architect.

(b) After receipt of notice of approval of the Preliminary

Documents from the Owner, the Architect will proceed with the

preparation of:

(1) Detailed plans showing the complete design of the Project

including, but not limited to, architectural, structural,

electrical, mechanical, and site development features.

(2) Complete and detailed specifications describing the design

requirements of the Project, including all matters referred to in

subparagraph (1) above, and any materials to be incorporated

therein.

(3) The Construction Contract, RUS Form 257, ``Contract to

Construct Buildings,'' (hereinafter called the ``Construction

Contract''), which includes the Notice and Instructions to Bidders,

Bid Bond, Bidders' Proposal, Owners' Acceptance, and Contractors'

Bond, to be entered into between a bidder and the Owner for the

construction of the Project. (All of the foregoing, including any

revisions thereof, being hereinafter collectively called the ``Plans

and Specifications.'')

Within ________ days after receipt of such approval of the

Preliminary Documents, the Architect shall prepare and submit to the

Owner, in duplicate, for its approval, complete and detailed

``Final'' Plans and Specifications as required for the construction

of the Project. All documents required to be prepared and submitted

by the Architect hereunder shall be on the applicable standard forms

prescribed by the Administrator. In the preparation of the Plans and

Specifications, the Architect shall consult with the Owner to

ascertain the requirements of the project. Upon approval by the

Owner of the Plans and Specifications, such approval being noted

thereon under the corporate seal of the Owner attesting the approval

thereof by the Owner, the Architect shall diligently make such

changes in the Plans and Specifications as may be required as a

condition of approval thereof.

Section 2. So far as it shall be necessary in the preparation of

the Plans and Specifications and in the construction of the Project,

the Owner shall furnish the Architect information and data in

respect of the following:

(a) A complete and accurate survey of the building site,

including grades and lines of streets, pavements, and adjoining

properties;

(b) The rights, restrictions, easements, boundaries, and

contours of the building site;

and

(d) Test borings and pits, and chemical, mechanical, and other

tests.

Section 3. If the Owner shall direct that the Project shall be

constructed under more than one contract, the Architect shall submit

all necessary Construction Contract forms and shall also prepare and

submit in connection with each such contract all of the information

and documents that shall be required for construction of the

Project.

Section 4. Immediately after the Architect has received approval

of the Plans and Specifications from the Owner, the Architect,

unless otherwise instructed by the Owner, shall take all appropriate

and necessary action to procure full, free, and competitive bidding

for the award of the Construction Contract. Any public notices which

by law are required of the Owner shall be published at the expense

of the Owner.

Section 5. The Architect shall prepare and furnish to each

qualified bidder requesting them one set of the Plans and

Specifications together with all necessary forms and other documents

upon payment of the amount stipulated by the Architect, which

payment will be refunded to each bona fide bidder within ten (10)

days after the bid opening. The Architect shall also prepare and

furnish to bidders requesting them additional sets of the Plans and

Specifications together with all necessary forms and other documents

upon payment of an amount stipulated by the Architect, which payment

will not be subject to refund.

Section 6. The Architect shall address to each prospective

bidder a written response to inquiries from any prospective bidder

with respect to the details of the Plans and Specifications and all

other matters pertaining to the preparation of proposals for the

construction of the Project or the furnishing of materials or

services therefor. Under some circumstances the Architect may

request that the inquiries from the prospective bidders be submitted

in writing. The Architect or a competent representative of the

Architect shall attend all openings of bids for the construction of

the Project or any part thereof. In case fewer than three (3) bids

are received for the construction of the Project or component parts

of the Project, the Owner shall be notified immediately and such

bids shall remain unopened unless permission is obtained from the

Owner for the opening of such bids. If bids are opened, the

Architect shall carefully check and

[[Page 35325]]

prepare tabulations of all bids received and shall render to the

Owner a recommendation and all such assistance as shall be required

in connection with consideration of the bids received so that

contracts may be prudently awarded in accordance with the policy and

procedure prescribed by the Owner and the Administrator.

Section 7. The Architect shall furnish to the Owner all

architectural information, data, and drawings required for procuring

all necessary or desirable permits, licenses, franchises, and

authorizations, and shall cooperate with the Owner's attorney in the

procuring thereof.

Section 8. If, after the Construction Contract has been

approved, it shall be determined by the Owner that a change or

changes in the Plans and Specifications are advisable, the Architect

shall prepare and submit to the Owner all necessary details in

connection with such change or changes, the Construction Contract

shall be amended accordingly, and the Architect shall immediately

proceed in respect of any construction required thereby in like

manner as though such construction were originally required under

the Construction Contract.

Article III

Construction Period

Section 1. The Architect shall conduct inspection activities,

and for projects involving multiple construction contracts, shall

provide project coordination and inspection activities, and shall

make a diligent effort to secure for the Owner the expeditious and

economical construction of the Project in accordance with the

approved Plans and Specifications and the terms of the Construction

Contract. The Architect, unless otherwise directed in writing by the

Owner, shall have and exercise sole responsibility for the issuance

of supplemental directives to the Contractor regarding the

Contractor's performance in accordance with the terms of the

Construction Contract. In fulfilling the above responsibility, the

Architect shall:

(a) Issue to the Contractor such directives and impose such

restrictions as may be necessary to obtain reasonable and proper

compliance by the Contractor with the terms of the Construction

Contract and the Plans and Specifications.

(b) Visit the Project site at intervals appropriate to the stage

of construction, but in no event (except for periods of prolonged

work stoppage or construction delay) less than once per week, to

inspect construction of the Project, to inspect excavations prior to

placing of concrete, and to inspect other work prior to it being

covered from view.

of materials, colors, finishes, designs, or devices for use in the

Project.

(d) Periodically inspect materials prior to their incorporation

into the Project and promptly reject those not in compliance with

the Specifications.

(e) Observe the manner of incorporation of materials into the

Project and the workmanship with which such materials are

incorporated.

(f) Review and if acceptable approve material and/or equipment

substitutions for compliance with contract documents.

(g) Observe results of specified tests.

(h) Be available to the Owner and the Contractor during office

hours for consultation.

(i) Review completed construction, direct the Contractor to

correct observed defects, and approve payments to the Contractor for

correctly completed construction.

(j) Prepare such change orders as may be required for the

Project.

Section 2. The Architect shall review and, if acceptable,

approve shop drawings, samples, schedules, and other submissions of

the Contractor for conformance with the design concept of the

Project and for compliance with requirements of the Plans and

Specifications.

Section 3. The Architect shall prepare and execute all

estimates, certificates, and other documents required to be executed

by the Architect pursuant to the Construction Contract. Unless

otherwise provided in the Construction Contract, the Architect will

furnish to the Contractor, free of charge, copies of the Plans and

Specifications as may be reasonably necessary for the execution of

the work.

Section 4. The Architect shall prepare and submit to the Owner

monthly construction progress reports.

Section 5. The Architect shall, upon notice by the Contractor of

completion of the work and a request for a final inspection of the

Project:

(a) Make a careful and thorough inspection to determine that the

construction of the Project has been completed in accordance with

the Plans and Specifications and the terms of the Construction

Contract and any amendments thereto.

(b) Prepare and deliver to the Owner complete and detailed final

documents, including, without limitation, the following:

(1) An itemized statement of the amounts payable by the Owner

under all contracts for the construction of the Project and the

furnishing of materials and services therefor.

(2) A Certificate of Completion on the form approved by the

Administrator, to the effect that the Project has been fully

constructed in accordance with the Plans and Specifications, if and

as amended.

(3) One complete set of ``as-constructed'' Plans and

Specifications of the Project in reproducible form satisfactory to

the Owner.

(4) A Certificate of Architect and a Final Statement of

Architect's Fee due hereunder.

(1) To obtain from the Contractor releases of all liens and of

rights to claim any lien from manufacturers, material suppliers, and

subcontractors that have furnished materials or services for the

construction of the Project.

(2) To obtain a Certificate of Contractor, on the form approved

by the Administrator, to the effect that all labor has been paid.

(3) To obtain and deliver to the Owner all material and

workmanship warranties or bonds required by the Plans and

Specifications and service and operating manuals furnished by

manufacturers or suppliers.

Article IV

Compensation

Section 1. The Owner shall pay the Architect for all services

performed hereunder, except as provided in Section 3 hereof, a sum

calculated as follows. (The Owner and Architect should agree upon

the compensation schedule to be inserted in Tables Nos. 1 and 2

below.)

Table No. 1

NEW CONSTRUCTION

COST OF NEW CONSTRUCTION ________

COMPENSATION FOR ARCHITECTURAL SERVICES ________

TABLE NO. 2

REMODELING WORK

COST OF REMODELING WORK ________

COMPENSATION FOR ARCHITECTURAL SERVICES

If a Project shall consist of new construction and remodeling

work, the Architect and the Owner shall agree on an equitable

distribution of the final cost of construction between new

construction and remodeling work, which shall be used to determine

the applicable compensation from the two tables in this Section 1.

For the purpose of computing compensation due the Architect under

this Agreement for services rendered, ``remodeling,'' shall be

defined for this project as follows: ________

The sum shall be due and payable as follows:

(a) Twenty percent (20%) thereof (using the Anticipated Cost in

lieu of the Cost of Construction) within thirty (30) days after the

date of approval of the Preliminary Documents.

(b) An additional fifty percent (50%) thereof (using the

Anticipated Cost in lieu of the Cost of Construction) within thirty

(30) days after the date of approval of the Plans and

Specifications.

progresses, in monthly installments each bearing the same ratio to

the total amount payable under this subsection (c) as the

corresponding monthly payment to the Contractor bears to the total

amount payable to the Contractor.

(d) The balance, if any, of the compensation due under this

Section 1 and all other provisions of this Agreement, shall be

payable within thirty (30) days after Completion of the Project in

accordance with the provisions of Section 2 of this Article IV.

For the purpose of this Article, the term ``Cost of Construction

of the Project,'' shall mean the Construction Contract Price

including amendments thereto, plus the cost of labor and materials

furnished for the Project by the Owner and in respect of which the

Architect shall have rendered services hereunder. Extra drafting or

other services performed shall be paid for as provided in Section 3

of this Article IV.

The term ``Completion of the Project'' shall mean full

performance of all obligations under this Agreement and all

amendments and revisions thereof.

Section 2. Prior to the time when any payment shall be made to

the Architect pursuant to this Agreement, the Architect, if

requested by the Owner, shall furnish to the Owner, as a condition

precedent to such payment, a certificate to the effect that all

salaries or wages earned by the employees of the Architect in

connection with the Project have been fully paid by the Architect up

[[Page 35326]]

and including a date not more than fifteen (15) days prior to the

date when such payment shall be due. Before the time when the final

payment provided to be made pursuant to this Article IV shall be

made to the Architect by the Owner, the Architect shall also furnish

to the Owner as a condition precedent to such payment (a) a

Certificate of Architect stating that all the employees of the

Architect have been paid for services rendered by them in connection

with the Project and that all other obligations which might become a

lien upon the Project have been paid, and (b) a Final Statement of

Architect's Fee showing the Cost of Construction of the Project and

the amount due the Architect under this Agreement.

Section 3. If the Architect shall, at the request of the Owner,

perform any of the services outlined in Section 2 of Article II or

if, after approval of the Construction Contract the Architect shall

perform extra drafting or other services because of changes ordered

by the Owner or default of the Contractor, the Architect shall be

paid, in respect thereof, a sum equal to the Architect's reasonable

out-of-pocket expenses, plus ________ percent (____%) (not to exceed

fifty percent (50%)) thereof for office overhead plus reasonable

subsistence, transportation, and communication expenses, if any,

paid to, or on behalf of, employees; which amount shall be due and

payable ten (10) days after approval by the Owner of the services

performed and the invoice of the Architect. The compensation due the

Architect under this paragraph shall be decreased by the amount of

any increase in the compensation due the Architect under Section 1

of this Article IV. The Architect shall submit to the Owner a

statement of out-of-pocket expenses in respect of extra drafting or

other services to be compensated for pursuant to this Section 3.

Out-of-pocket expenses shall be limited to money paid by the

Architect for direct labor, labor taxes, labor insurance, prorated

sick leave, vacation, holiday, retirement, and medical insurance

benefits, all applicable to such direct labor, except that, in the

case of services performed with the prior approval of the Owner by

the following officers, partners, or others having ownership

interests in the Architect, the rates corresponding to ``direct

labor'' set forth below shall apply: ________.

Section 4. If this Agreement shall be terminated pursuant to the

provisions of Section 1 or Section 2 of Article V hereof, the

compensation for services rendered prior to such termination shall

be computed as follows:

(a) One-fifth of the compensation set forth in Section 1 of this

Article IV based upon the Anticipated Cost (or of the Cost of

Construction of the Project if termination is effective after

approval of the Construction Contract) shall represent compensation

for the Preliminary Documents and such compensation shall be

prorated on the basis of the percentage of completion of such

Preliminary Documents as of the effective date of termination.

(b) One-half of the compensation set forth in Section 1 of this

Article IV based upon the Anticipated Cost (or of the Cost of

Construction of the Project if termination is effective after

approval of the Construction Contract) shall represent compensation

for the Plans and Specifications and such compensation shall be

prorated on the basis of the percentage of completion of such Plans

and Specifications as of the effective date of termination.

Article IV based upon the Anticipated Cost shall represent

compensation for the coordination and inspection of construction of

the Project and such compensation shall be prorated on the basis of

the percentage of such services determined by the value of the

Project constructed prior to the effective date of termination.

(d) One-tenth of the compensation set forth in Section 1 of this

Article IV based upon the Cost of Construction of the Project shall

represent compensation for the services provided for in Section 5 of

Article III and such compensation shall be prorated on the basis of

the percentage of such services performed prior to the effective

date of termination.

(e) Compensation for the services referred to in Section 2 of

Article II, which may be performed by the Architect at the request

of the Owner and for extra drafting and other services because of

changes ordered by the Owner, shall be computed in accordance with

the provisions of Section 3 of this Article IV.

Section 5. Interest shall be paid by the Owner to the Architect

on all unpaid balances due the architect, commencing thirty (30)

days after the due date, provided that the delay in payment beyond

the due date shall not have been caused by any condition within the

control of the Architect. Such interest shall be at the rate of ____

percent (____%). [Percentage is not to exceed any applicable State

usury laws.] Such compensation shall be paid ten (10) days after the

amount of the interest has been determined by the Architect and the

Owner.

Article V

Miscellaneous

Section 1. The Owner may at any time terminate this Agreement by

giving notice to the Architect in writing to that effect, delivered

and mailed to the Architect's last known address not less than ten

(10) days prior to the effective date of termination specified in

the notice. From and after the effective date of termination

specified in such notice, this Agreement shall be terminated,

provided, however, that the Architect shall be entitled to receive

compensation for services theretofore rendered pursuant to this

Agreement, computed in accordance with the provisions of Article IV,

Section 4, hereof.

Section 2. The Architect shall have the right, by giving to the

Owner not less than thirty (30) days notice in writing, to terminate

this Agreement if the Architect shall have been prevented by

conditions beyond the control and without the fault of the Architect

(a) from commencing performance of this Agreement for a period of

twelve (12) months from the date of this Agreement, or (b) from

proceeding with the completion of full performance of any remaining

services required of the Architect pursuant to this Agreement for a

period of six (6) months from the date of last performance by the

Architect of other services required pursuant to this Agreement.

From and after the effective date specified in such notice this

Agreement shall be terminated, except that the Architect shall be

entitled to receive compensation for services performed hereunder,

computed and payable in the same manner as set forth in Section 1 of

this Article.

Section 3. Upon Completion of the Project or termination of this

Agreement, the Architect shall be obligated forthwith to deliver to

the Owner all maps, tracings, and drawings of the Project and all

letters, documents, and other material including all records

pertaining thereto.

Section 4. Insurance. The Architect shall take out and maintain

throughout the period of this Agreement insurance of the following

types and minimum amounts:

(a) Workers' compensation and employers' liability insurance, as

required by law, covering all of the Architect's employees who

perform any of the obligations of the Architect under the Agreement.

If any employer or employee is not subject to the workers'

compensation laws of the governing State, then insurance shall be

obtained voluntarily to extend to the employer and employee coverage

to the same extent as though the employer or employee were subject

to the workers' compensation laws.

(b) Public liability insurance covering all operations under the

Agreement shall have limits for bodily injury or death of not less

than $1 million each occurrence, limits for property damage of not

less than $1 million each occurrence, and $1 million aggregate for

accidents during the policy period. A single limit of $1 million of

bodily injury and property damage is acceptable. This required

insurance may be in a policy or policies of insurance, primary and

excess including the umbrella or catastrophe form.

connection with the Agreement, whether owned, nonowned, or hired,

shall have limits for bodily injury or death of not less than $1

million per person and $1 million per occurrence, and property

damage limits of $1 million for each occurrence. This required

insurance may be in a policy or policies of insurance, primary and

excess including the umbrella or catastrophe form.

(d) Errors and Omissions (Professional Liability) Insurance in

an amount at least as large as the maximum compensation specified in

Article IV, Section 1, but not less than $500,000.

The Owner shall have the right at any time to require public

liability insurance and property damage liability insurance greater

than those required in subsections ``b'' and ``c'' of this Section.

In any such event, the additional premium or premiums payable solely

as the result of such additional insurance shall be added to the

total compensation to be paid under this Agreement.

The Owner shall be named as Additional Insured on all policies

of insurance required in subsections ``b'' and ``c'' of this

Section.

[[Page 35327]]

The policies of insurance shall be in such form and issued by

such insurer as shall be satisfactory to the Owner. The Architect

shall furnish the Owner a certificate evidencing compliance with the

foregoing requirements which shall provide not less than thirty (30)

days prior written notice to the Owner of any cancellation or

material change in the insurance.

The Architect shall also follow the requirements of 7 CFR part

1788, RUS Fidelity and Insurance Requirements for Electric and

Telephone Borrowers.

Section 5. The obligations and duties to be performed by the

Architect under this Agreement shall be performed by persons

qualified to perform such duties efficiently. The Architect, if the

Owner shall so direct, shall replace any person employed by the

Architect in connection with the Project.

For the information of the Owner and the Administrator, the

Architect shall, upon request, file with the Owner and the

Administrator, on forms approved by the Administrator, statements of

the qualifications, including specific experience, of each person

assigned to the Project and the duties assigned to each, and

certifications of insurance coverage.

Section 6. The Architect shall follow all applicable RUS rules

and regulations.

Section 7. This Agreement shall be simultaneously executed and

delivered in three counterparts, each of which when so executed and

delivered shall be deemed to be an original, and all shall

constitute but one and the same instrument.

Section 8. The obligations of the Architect under this Agreement

shall not be assigned without the approval in writing of the Owner.

Section 9. The Architect shall comply with applicable statutes

pertaining to the practice of the profession. It is hereby warranted

that the Architect possesses license number ________ issued by the

State of ________ on the ________ day of ________, ________.

In Witness Whereof, the parties hereto have caused this

Agreement to be duly executed and their respective corporate seals

to be affixed and attested by their duly authorized representatives

all as of the date first above written.

________ Owner

By ________ President

ATTEST: ________ Secretary

________ Architect

By ________

________ Title

ATTEST: ________ Secretary

[End of clause]

Sec. 1724.76 Engineering service contract--electric system design and

construction, RUS Form 236.

The contract form in this section shall be used when required by

this part.

ENGINEERING SERVICE CONTRACT

ELECTRIC SYSTEM DESIGN AND CONSTRUCTION

AGREEMENT made ________, 19 ____, between ________ (hereinafter

called the ``Owner''), and ________ of ________ (hereinafter called

the ``Engineer'').

Whereas, the Owner has obtained loans made or guaranteed by the

United States of America, acting through the Administrator of the

Rural Utilities Service (hereinafter called the ``Administrator''),

to finance in whole or in part a rural electric system pursuant to

the Rural Electrification Act of 1936, as amended, and plans the

construction of a project designated ________, being hereinafter

called the ``Project,'' consisting of approximately the following

facilities:

Distribution and Transmission Lines:

________ miles (________ km) of ________ kV line,

________

Substations:

Name ________ ________ MVA ________ kV to ________ kV

________ ________ MVA ________ kV to ________ kV

Switching Stations:

Name ________ ________ kV

Other:

________ miles (________ km) of line conversion, ________ miles

(________ km) of line removal, and the following: ________

Now, therefore, in consideration of the mutual undertakings

herein contained, the parties hereto agree as follows:

Article I

General Obligations

In accordance with the normal standards and practices used in

the profession, the Engineer shall render diligently and competently

all engineering services which shall be necessary or advisable for

the expeditious, economical, and sound design and construction of

the Project, with due consideration given to applicable ecological

and environmental requirements. The enumeration of specific duties

and obligations to be performed by the Engineer hereunder shall not

be construed to limit the general undertakings of the Engineer.

Article II

Preconstruction Period

Section 1. The Engineer shall give thorough consideration to

aesthetics and the protection of the environment in all phases of

construction of the Project, including line routing and station

locations. Where RUS or the Owner has prepared an environmental

document or the Owner must comply with the conditions of a Special

Use Permit imposed by a Federal land management agency, the Engineer

shall incorporate all environmental commitments of the applicable

documents that specifically relate to the facilities to be

constructed.

Section 2. The Engineer shall, within thirty (30) days after the

date of execution of this Agreement, make a complete field

inspection and investigation for the purpose of determining the most

economical and practicable location of the proposed lines.

The Engineer shall cooperate with the Owner's right-of-way agent

and attorney in developing a schedule of right-of-way procurement

and assist the Owner in developing suitable property maps for use by

the Owner's easement solicitors.

Section 3. Prior to the preparation of Plans and Specifications

by the Engineer, the Owner shall furnish to the Engineer the

following as may be applicable:

(a) Copies of pertinent Engineering Studies, including

Construction Work Plans when available, on which to base the design

of the electrical facilities to be built; key maps of the Owner's

present and proposed facilities and detail or vicinity maps showing

location of existing lines, consumers served, and easements

obtained.

(b) Detailed lists of materials, if any, on hand or on order

which are to be furnished by the Owner in the construction of the

Project, together with the quantity and the value of each item of

such material.

indicated for removal, a list showing values of individual material

items for which the Contractor will be credited with respect to

salvaged materials returned to the Owner if not included in item (b)

above.

Section 4. Sufficient soil test data to ensure adequate

foundation designs shall be provided by the ________ Owner ________

the Engineer [check one].

Section 5. If requested by the Owner, the Engineer shall prepare

and submit to the Owner estimates of quantities of materials to be

furnished by the Owner for use in connection with the construction

of the Project. The Engineer shall procure and submit to the Owner

forms of contracts and other documents for such materials and for

such other services as may be necessary or desirable in connection

with the construction of the Project.

Section 6. For transmission lines, the Engineer shall prepare

and submit to the Owner for approval and to the Administrator for

approval, if approval of the Administrator is required, a summary of

transmission line and substation design data with supporting

calculations. The Plans and Specifications and the Plan and Profile,

if any, shall be based on the design data approved by the Owner and

by the Administrator, if approval of the Administrator is required.

Section 7. The Engineer shall prepare and submit to the Owner

for approval and to the Administrator for approval, if approval of

the Administrator is required, plan and profile sheets for all

transmission lines.

Section 8. In specifying right-of-way clearing for transmission

lines where ``feathering'' and/or undulating boundaries are

required, the Engineer shall mark all brush and trees to be removed

unless such marking is the responsibility of another authority. The

Engineer shall also compute all clearing units, and show all

clearing units on the plan and profile drawings or on separate

drawings prepared for this purpose.

Section 9. The Engineer shall prepare, and within ________ days

after the date of execution of this Agreement submit to the Owner

for approval and to the Administrator for approval, if approval of

the Administrator is required, two copies of complete and detailed

plans and specifications, drawings,

[[Page 35328]]

maps, and other documents required for the construction of the

Project (all of the foregoing being hereinafter collectively called

the ``Plans and Specifications''). In the preparation of the Plans

and Specifications, the Engineer shall consult with the Owner to the

end that the Project shall serve the purpose intended by the Owner.

Unless otherwise directed by the Owner, the Engineer shall use

Construction Work Plans and Engineering Studies, as furnished by the

Owner, as a basis for the preparation of the Plans and

Specifications. The Engineer shall diligently make such changes in

the Plans and Specifications as may be required by the Owner or the

Administrator as a condition of approval thereof.

Section 10. The Engineer shall, for each substation, prepare and

furnish for the Owner's approval and for the Administrator's

approval, if approval of the Administrator is required, the

following drawings and such others as may be necessary or desirable

for the construction of the Project:

One line diagram (relays, breakers, transformers, switches, etc.)

Three line diagram (PT, CT, phasing, etc.)

Plot plan (excluding land surveys and plots necessary in acquisition

of property)

Grading plan, fence layout and details

Structure plan and details

Structure elevations (with section views)

Footing plan and details

Grounding plan and details

Cable trench and layout plan

Lighting plan and details

Control house plan and details

Control house elevations and details

Material lists

________

Section 11. All maps, drawings, plan and profile sheets, plans

and specifications, contract forms, addenda, estimates, studies, and

other documents required to be prepared or submitted by the Engineer

under this Article II or other articles of this Agreement shall

conform to the applicable standard specifications and other forms

prescribed by the Administrator, unless deviation therefrom shall

have been approved by the Administrator.

Section 12. The Engineer shall furnish to the Owner all

engineering information, data, and drawings required for procuring

all necessary or desirable permits, licenses, franchises, and

authorizations from public bodies, and all necessary or desirable

permits, licenses, or agreements with respect to the crossing of

navigable streams, railroads, and power lines, and with respect to

the paralleling or crossing of communications lines and signal

circuits, and shall assist the Owner to the extent necessary to

obtain such permits, licenses, franchises, authorizations, and

agreements. The Engineer shall also furnish to the Owner all

engineering information, data, and drawings required for procuring

transmission line right-of-way through condemnation proceedings. If

requested by the Owner, the Engineer shall attend, or appear as a

witness in, hearings or other proceedings before public service

commissions or other regulatory bodies in connection with procuring

of the foregoing.

Section 13. When notified by the Administrator (if approval of

the Administrator is required) and by the Owner of their approval of

the form of Construction Contract, the Engineer shall immediately

take all appropriate and necessary action to procure full, free, and

competitive bidding for the award of such contract or contracts, and

when requested assist the Owner with the purchase of material and

equipment. The term ``Construction Contract'' as used herein shall

also include right-of-way clearing contracts, equipment contracts,

or materials contracts if such contracts are utilized in the

construction of the project. In fulfilling this responsibility, the

Engineer shall prepare and submit to the Owner for approval a

recommended list of qualified bidders to construct the project. Upon

approval of such list by the Owner, the Engineer, in collaboration

with the Owner, shall fix a date for the opening of bids for such

contracts. The Engineer shall prepare and furnish to the qualified

bidders the Plans and Specifications and Construction Drawings

together with all necessary forms and other documents.

Section 14. The Engineer shall be available to each prospective

bidder for consultation with respect to the details of the Plans and

Specifications and all other matters pertaining to the preparation

of the proposals for the construction of the Project or the supply

of materials or services therefor. The Engineer, or a competent

representative of the Engineer, shall attend and supervise all

openings of bids for the construction of the Project or for the

furnishing of materials or services therefor. In case fewer than

three (3) bids are received for the construction of the Project or

component parts of the Project, the Owner shall be notified

immediately and such bids shall remain unopened unless permission is

obtained from the Owner for the opening of such bids. If bids are

opened, the Engineer shall carefully check and prepare detailed

assembly unit price tabulations of all bids received, and shall

render to the Owner all such assistance as shall be required in

connection with consideration of the bids received so that contracts

may be prudently and properly awarded in accordance with the policy

and procedure prescribed by the Owner and the Administrator.

Section 15. If any change is to be made in the Plans and

Specifications after the Construction Contract has been approved by

the Owner and by the Administrator, if approval of the Administrator

is required, the Engineer shall prepare and submit the necessary

details for a contract amendment in accordance with the procedure

prescribed by the Owner and the Administrator.

Article III

Staking

Section 1. The Engineer, with the approval of the Owner, shall

determine when staking of the Project shall begin; provided,

however, that the Engineer shall not commence staking until the

Owner shall have certified that all right-of-way authorizations and

easements reasonably required for the construction of the Project

have been procured. The Owner shall furnish qualified persons to

negotiate with landowners or tenants with respect to such right-of-

way authorizations and easements and the locations of meter poles or

service entrances. The Engineer shall proceed diligently with such

staking and continue therewith in such manner as not to retard the

progress of construction of the Project.

The staking shall be done in a thorough and workmanlike manner

and in accordance with the latest revision of the National

Electrical Safety Code, applicable State codes, plans and

specifications, and approved transmission line plan and profile

sheets. The Engineer shall in no case stake lines other than those

authorized by the Owner. The Engineer shall replace all stakes lost

or removed prior to or during construction of the Project. All

costs, including costs of stakes, equipment, and other material used

in connection with the staking, shall be borne by the Engineer. All

stakes shall be marked to show the pole number. Where practicable,

all stakes shall be driven in such manner that the pole number shall

be visible from the pole hauling truck when poles are being

distributed. Each transmission structure stake shall be marked with

the station number and the height and class of pole. Where it is

probable that the Contractor will have difficulty in locating

stakes, the Engineer shall drive a four-foot (1.2 m) building lath

or equivalent in addition and adjacent to the stake. The Engineer

shall give due consideration to the location of the consumer's load

center and service termination in staking pole locations on or near

the consumer's premises so that the service entrance cable or low

voltage conductors to buildings will be as short as possible.

Section 2. The Engineer shall cause staking sheets or structure

lists to be maintained in such form as the Owner shall require, on

which shall be accurately entered all pertinent and useful

information and directions concerning the construction of the

Project. Five counterparts of the staking sheets or structure lists

shall be supplied by the engineer to the Contractor and two copies

shall be supplied to the Owner. When revisions in staking sheets or

structure lists are necessary, the Engineer shall cause all copies

of the staking sheets or structure lists to be corrected to reflect

such revisions in the information or directions previously

incorporated thereon.

Section 3. The Engineer shall prepare and submit to the Owner a

report showing the quantity, kind, price, and extended total of all

units of construction for each portion of the Project at the time

such portion is released to the Contractor for construction.

Section 4. A competent resident engineer, with full authority to

act for the Engineer, shall be maintained by the Engineer at the

site of the Project at all times when staking is being performed.

Article IV

Construction Management

Section 1. The Engineer shall supervise the construction of the

Project and shall make a diligent effort to ensure the expeditious

and economical construction thereof in accordance with the Plans and

Specifications and the terms of the Construction Contract or

[[Page 35329]]

contracts and ensure that all specified environmental criteria are

followed. The Engineer shall carefully inspect all materials and

equipment prior to their incorporation in the Project and shall

promptly reject those not in compliance with the Specifications. The

Engineer shall also supervise and inspect the incorporation of the

materials in the Project and the workmanship with which such

materials are incorporated. Such inspection shall be deemed to be

adequate if a reasonable percentage of all construction units are

inspected at the time of installation. The Engineer, as

representative of the Owner, shall have sole responsibility for

requiring the Contractor to perform the Construction Contract in

accordance with its terms and the Plans and Specifications; and, in

performing the duties incident to such responsibility, the Engineer

shall issue to the Contractor such directives and impose such

restrictions as may be required to obtain reasonable and proper

compliance by the Contractor with the terms of the Construction

Contract and the Plans and Specifications, in construction of the

Project; provided that the Engineer shall not be required to

exercise any actual control over employees of the Contractor. The

term ``supervise'' when used herein shall not confer upon the

Engineer responsibility for the Contractor's construction means,

methods, or techniques. The obligations of the Engineer hereunder

run to and are for the benefit of only the Administrator and the

Owner.

Section 2. The Engineer shall measure ground resistance at all

substation ground fields prior to bonding the ground field to the

substation structure. In addition, upon recommendation by the

Engineer and authorization by the Owner, the Engineer shall measure

the ground resistance at the following locations:

(a) At all transmission structures with overhead ground wire

prior to the installation of the overhead ground wire.

(b) At all transmission structures with pole grounds prior to

the installation of power conductor. The Engineer shall prepare a

report of the ground resistance measurements mentioned above and

submit such report to the Owner together with recommendations for

changes, if any, required to ensure satisfactory operation. To the

extent such changes are approved, the Engineer shall make

appropriate changes in the Plans and Specifications in accordance

with the provisions of Section 15 of Article II.

Section 3. The Engineer shall maintain at the site of the

Project during the entire period of construction a competent

resident engineer with full authority to act for the Engineer,

unless specifically directed otherwise by the Owner in writing. When

necessary to assure adequate inspection, one or more competent

inspectors shall also be maintained when construction units are

being installed or corrective work is being performed, the number of

inspectors being subject to approval by the Owner. The Engineer

shall report, in writing, defects in workmanship or materials to the

Contractor and the Owner and shall instruct the Contractor to

correct such defects immediately, in accordance with the terms of

the Construction Contract. A resident engineer shall be present

during the final inspection of completed construction.

Section 4. The Engineer shall test along lines, immediately

after they have been energized, for objectionable radio

interference. All cases of radio interference due to faulty

construction of or defective equipment in the Project shall be

reported to the Contractor for correction.

Article V

Final Documents

Section 1. The Engineer shall prepare and, within twenty (20)

days after the completion of construction of the Project by the

Contractor, submit complete and detailed final documents to the

Owner for approval and to the Administrator for approval, if

approval of the Administrator is required.

Article VI

Compensation

Section 1. The Owner shall pay the Engineer for the services

performed hereunder as indicated in the attached Schedule A.

Section 2. The total compensation to be paid in connection with

this Agreement shall not exceed $________ (________ Dollars.)

Section 3. Compensation payable to the Engineer under this

Agreement shall be in addition to taxes or levies (excluding

Federal, State and local income taxes) which may be assessed against

the Engineer by any State or political subdivision directly on

services performed or payments for services performed by the

Engineer pursuant to this Agreement. Such taxes or levies, which the

Engineer may be required to collect or pay, shall, in turn, be added

by the Engineer to invoices submitted to the Owner pursuant to this

Agreement.

Section 4. Interest at the rate of ________ percent ( ________

%) per annum [percentage is not to exceed any applicable State usury

laws] shall be paid by the Owner to the Engineer on all unpaid

balances due the Engineer commencing thirty (30) days after the due

date; provided that the delay in payment beyond the due date is not

caused by any condition within the control of the Engineer. Such

compensation shall be paid ten (10) days after the amount of

interest has been determined by the Engineer and the Owner.

Section 5. Prior to the time when any payment shall be made to

the Engineer pursuant to this Agreement, the Engineer, if requested

by the Owner, shall furnish to the Owner, as a condition precedent

to such payment, a certificate to the effect that all salaries or

wages earned by the employees of the Engineer in connection with the

Project, have been fully paid by the Engineer up to and including a

date not more than fifteen (15) days prior to the date when such

payment shall be made. Before the time when the final payment shall

be made to the Engineer by the Owner, the Engineer shall also

furnish to the Owner, as a condition precedent to such payment, a

certificate that all the employees of the Engineer have been paid

for services rendered by them in connection with the Project and

that all other obligations which might become a lien upon the

Project have been paid.

Article VII

Miscellaneous

Section 1. The Owner may at any time terminate this Agreement by

giving notice to the Engineer in writing to that effect not less

than ten (10) days prior to the effective date of termination

specified in the notice. Such notice shall be deemed given if

delivered or mailed to the last known address of the Engineer. From

and after the effective date specified in such notice, this

Agreement shall be terminated, except that the Engineer shall be

entitled to receive compensation for services hereunder as provided

in Section 2 of this Article VII.

Section 2. In the event that this Agreement at any time be

terminated pursuant to Section 1 of this Article VII, the

compensation which shall be payable to the Engineer by the Owner

shall be computed so far as possible in accordance with the

provisions of Article VI. To the extent that the provisions of

Section 1 of Article VI cannot be applied because construction is

incomplete at the effective date of such termination, the Engineer

shall be paid for engineering services in respect of incomplete

construction a sum which shall bear the same ratio of the

compensation which would have been payable under the provisions of

Section 1 of Article VI, if such construction had been completed, as

the engineering services in respect of such incomplete construction

bear to the engineering services which would have been rendered if

construction had been completed.

If requested by the Owner, the Engineer shall submit to the

Owner in duplicate a verified statement of actual expenses in

respect of such incomplete construction. All compensation payable

under this Section 2 shall be due and payable thirty (30) days after

the approval by the Owner of the amount due hereunder.

Section 3. The Engineer shall have the right, by giving the

Owner not less than thirty (30) days notice in writing, to terminate

this Agreement if the Engineer shall have been prevented by

conditions beyond the control and without the fault of the Engineer

(a) from commencing performance of this Agreement for a period of

twelve (12) months from the date of this Agreement, or (b) from

proceeding with the completion of full performance of any remaining

services required of the Engineer pursuant to this Agreement for a

period of six (6) months from the date of last performance by the

Engineer of other services required pursuant to this Agreement. From

and after the effective date specified in such notice this Agreement

shall be terminated, except that the Engineer shall be entitled to

receive compensation for services performed hereunder, computed and

payable in the same manner as set forth in Section 2 of this

Article.

Section 4. Upon completion of the Project or termination of the

Contract, the Engineer shall be obligated forthwith to deliver to

the Owner all maps, tracings, and drawings of the Project and all

letters, documents, and other material, including all records

pertaining thereto.

The term ``Completion of the Project'' shall mean full

performance of all obligations

[[Page 35330]]

under this Contract and all amendments and revisions thereof as

evidenced by the approval of the final documents by the Owner and by

the Administrator, if approval of the Administrator is required.

Section 5. The Engineer shall follow all applicable RUS rules

and regulations.

Section 6. The Engineer shall prepare and execute in such form

and detail as the Owner and the Administrator shall direct all

estimates, certificates, reports, and other documents required to be

executed by the Engineer pursuant to the terms of the Construction

Contract or the Loan Contract, including progress reports of

engineering services and reports of the progress of construction.

Section 7. The Engineer shall approve each monthly estimate of

the Contractor prior to payment by the Owner. Such approval shall

include a certification by the Engineer that all construction for

which payment is requested has been completed in accordance with the

terms of the Construction Contract and that all defective

construction, of which the Contractor shall have received fifteen

(15) or more days written notice, has been corrected. The Engineer

shall also maintain at the site of the Project a cumulative

inventory of all units of construction incorporated in the Project.

Section 8. The Engineer shall notify the Owner when the Project,

or any section thereof, shall be ready to be energized. When

requested by the Administrator, such notice shall also be given to

the Administrator. The Engineer shall assist the Owner in causing

the Project, or such section thereof, to be energized.

Section 9. Insurance. The Engineer shall take out and maintain

throughout the period of this Agreement insurance of the following

types and minimum amounts:

(a) Workers' compensation and employers' liability insurance, as

required by law, covering all of the Engineer's employees who

perform any of the obligations of the Engineer under the Agreement.

If any employer or employee is not subject to the workers'

compensation laws of the governing State, then insurance shall be

obtained voluntarily to extend to the employer and employee coverage

to the same extent as though the employer or employee were subject

to the workers' compensation laws.

(b) Public liability insurance covering all operations under the

Agreement shall have limits for bodily injury or death of not less

than $1 million each occurrence, limits for property damage of not

less than $1 million each occurrence, and $1 million aggregate for

accidents during the policy period. A single limit of $1 million of

bodily injury and property damage is acceptable. This required

insurance may be in a policy or policies of insurance, primary and

excess including the umbrella or catastrophe form.

connection with the Agreement, whether owned, nonowned, or hired,

shall have limits for bodily injury or death of not less than $1

million per person and $1 million per occurrence, and property

damage limits of $1 million for each occurrence. This required

insurance may be in a policy or policies of insurance, primary and

excess including the umbrella or catastrophe form.

(d) Errors and Omissions (Professional Liability) Insurance in

an amount at least as large as the maximum compensation specified in

Article VI, Section 2, but not less than $500,000.

The Owner shall have the right at any time to require public

liability insurance and property damage liability insurance greater

than those required in subsections ``b'' and ``c'' of this Section.

In any such event, the additional premium or premiums payable solely

as the result of such additional insurance shall be added to the

total compensation to be paid under this Agreement.

The Owner shall be named as Additional Insured on all policies

of insurance required in subsections ``b'' and ``c'' of this

Section.

The policies of insurance shall be in such form and issued by

such insurer as shall be satisfactory to the Owner. The Engineer

shall furnish the Owner a certificate evidencing compliance with the

foregoing requirements which shall provide not less than thirty (30)

days prior written notice to the Owner of any cancellation or

material change in the insurance.

The Engineer shall also follow the requirements of 7 CFR part

1788, RUS Fidelity and Insurance Requirements for Electric and

Telephone Borrowers.

Section 10. The obligations and duties to be performed by the

Engineer under this Agreement shall be performed by persons

qualified to perform such duties efficiently. The Engineer, if the

Owner shall so direct, shall replace any resident engineer or other

persons employed by the Engineer in connection with the Project. The

Engineer shall file with the Owner and the Administrator a

statement, signed by the Engineer, of the qualifications, including

specific experience of each engineer and inspector assigned to the

Project and the duties assigned to each.

Section 11. Approvals, directions, and notices provided to be

given hereunder by the Administrator to the Engineer or the Owner

shall be deemed to be properly given if given by any person

authorized by the Administrator to give approvals, directions, or

notices.

Section 12. The Engineer shall establish and maintain an office

at the site of the Project, with telephone service where available,

when staking or construction is in progress. Any notice,

instructions, or communications delivered to such office shall be

deemed to have been delivered to the Engineer.

Section 13. This Agreement may simultaneously be executed and

delivered in two or more counterparts each of which so executed and

delivered shall be deemed to be an original, and all shall

constitute but one and the same instrument.

Section 14. The obligations of the Engineer under this Agreement

shall not be assigned without the approval in writing of the Owner.

Section 15. The Engineer shall comply with applicable statutes

pertaining to engineering and warrants that ________ [Name of

Engineer] who will be in responsible charge of the Project possesses

license number ________ issued by the State of ________ on the

________ day of ________, 19____.

In witness whereof, the Parties hereto have caused this

Agreement to be duly executed.

________ Owner

By ________ President

ATTEST: ________ Secretary

________ Engineer

By ________ President, Partner [Strike out inapplicable designation]

ATTEST: ________ Secretary

Schedule A--Compensation

[End of clause]

Secs. 1724.77-1724.99 [Reserved]

Dated: June 17, 1998.

Jill Long Thompson,

Under Secretary, Rural Development.

[FR Doc. 98-16792 Filed 6-26-98; 8:45 am]

BILLING CODE 3410-15-P

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.