RUS Form 545, Central Office Equipment Contract (Not Including Installation)

DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1755

RUS Form 545, Central Office Equipment Contract (Not Including

Installation)

AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule.

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

on Telecommunications Standards and Specifications for Materials,

Equipment, and Construction to revise RUS Form 545 Central Office

Equipment Contract (Not Including Installation). RUS is revising this

contract form in order to incorporate contractual and technological

changes.

EFFECTIVE DATE: November 4, 1999.

FOR FURTHER INFORMATION CONTACT: John J. Schell, Chief, Inside Plant

Branch, Telecommunications Standards Division, Rural Utilities Service,

Stop 1598, U.S. Department of Agriculture, 1400 Independence Ave., SW,

Washington DC, 20250-1598, telephone number (202) 720-0671.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This final rule has been determined to be not significant for

purposes of Executive Order 12866 and therefore has not been reviewed

by the Office of Management and Budget (OMB).

Executive Order 12372

This final rule is excluded from the scope of Executive Order

12372, Intergovernmental Consultation, which may require a consultation

with State and local officials. A final rule related Notice entitled,

``Department Programs and Activities Excluded from Executive Order

12372'' (50 FR 47034) exempts RUS and Rural Telephone Bank loans and

loan guarantees from coverage under this Order.

Executive Order 12988

This final 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. In

addition, all state and local laws and regulations that are in conflict

with this rule will be preempted, no retroactive effort will be given

to this rule, and, in accordance with Sec. 212(c) of the Department of

Agriculture Reorganization Act of 1994 (7 U.S.C. Sec. 6912(c)), appeal

procedures must be exhausted before an action against the Department or

its agencies may be initiated.

Regulatory Flexibility Act Certification

RUS has determined that this proposed rule will not have a

significant economic impact on a substantial number of small entities,

as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

The RUS telecommunications program provides loans to borrowers at

interest rates and terms that are more favorable than those generally

available from the private sector. RUS borrowers, as a result of

obtaining federal financing, receive economic benefits that exceed any

direct economic costs associated with complying with RUS regulations

and requirements.

Information Collection and Recordkeeping Requirements

This rule contains no new reporting or recordkeeping burdens under

OMB control number 0572-0059 that would require approval under the

Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

National Environmental Policy Act Certification

The Administrator of RUS has determined that this proposed rule

will not significantly affect the quality of the human environment as

defined by the National Environmental Policy Act of 1969 (42 U.S.C.

4321 et seq.). Therefore, this action does not require an environmental

impact statement or assessment.

Catalog of Federal Domestic Assistance

The program described by this proposed rule is listed in the

Catalog of Federal Domestic Assistance Programs under number 10.851,

Rural Telephone Loans and Loan Guarantees; and number 10.852, Rural

Telephone Bank Loans. This catalog is available on a subscription basis

from the Superintendent of Documents, the United States Government

Printing Office, Washington, DC 20402-9325.

Unfunded Mandates

This rule contains no Federal mandates (under the regulatory

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

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

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

Unfunded Mandates Reform Act of 1995.

Background

The last revision to the RUS Form 545 was September 1966. Since

that date, divestiture and competition legislation and regulation have

brought about many changes in the conduct of telecommunications

business. Notable advances of central office equipment technology such

as Signaling System No. 7 (SS7), Advanced Intelligent Network (AIN),

and Integrated Services Digital Network, have made many new services

available. In order to address the above, significant changes have been

made in the way business is conducted in the telecommunications

industry.

RUS Form 545 incorporates those changes into the Central Office

Equipment Contract. The main changes to the contract are new

requirements that: (1) Provide for a software license, (2) provide for

patent, copyright, and trademark infringement protection, (3) provide a

cap on consequential damages, and (4) provide Equal Employment

Opportunity requirements. In addition, it revises and updates

provisions for (1) delivery of equipment, (2) inspection and testing of

the completed installations, (3) payments to

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the contractor, (4) insurance, (5) liquidated damages, and (6)

completion of the project. The above actions will make it possible for

RUS telecommunications borrowers to continue to provide their

subscribers with the most modern and efficient telecommunications

service, implemented in a predictable and orderly fashion.

A proposed rule was issued in the Federal Register, on December 11,

1998, at 63 FR 68406, requesting comments on these changes and proposed

to codify revised RUS Form 545 in full text. The comment period closed

February 9, 1999, and no comments were received.

Following the issuance of this proposed rule, a direct final rule

was published in the Federal Register on February 10, 1999, at 64 FR

6501, establishing new policy on the manner in which RUS publishes the

standard forms of contracts that borrowers are required to use when

contracting for construction, procurement, engineering services, or

architectural services financed through loans made or guaranteed by

RUS. This form falls under this new policy. The full text will not be

codified in this rule. Borrowers can determine the appropriate standard

forms based on the issuance date of the form as identified by the most

recent published list set forth in Sec. 1755.30(c). A copy of RUS Form

545 can be obtained from the Rural Utilities Service, U.S. Department

of Agriculture, Program Development and Regulatory Analysis, Stop 1522,

Washington, DC, 20250-1522.

RUS has issued a series of 7 CFR chapter XVII parts, which serve to

implement the policies, procedures, and requirements for administering

its loan and loan guarantee programs and the loan documents and

security instruments that provide for and secure RUS financing. The

revision to 7 CFR part 1755 revises the issuance date of RUS Form 545,

Central Office Equipment Contract (Not Including Installation). RUS

telecommunications borrowers are required to use the RUS Form 545

contract where major central office facilities are being procured but

not installed under this contract. The present RUS Form 545 has become

outdated due to technological advancements and other reasons. Advanced

technology and equipment concepts have introduced new issues. Contract

terms and obligations have been modified and updated to more accurately

reflect present business practices.

List of Subjects in 7 CFR Part 1755

Loan programs--communications, Reporting and recordkeeping

requirements, Rural areas, Telephone.

For the reasons set out in the preamble, Chapter XVII of Title 7 of

the Code of Federal Regulations is amended as follows:

PART 1755--TELECOMMUNICATIONS STANDARDS AND SPECIFICATIONS FOR

MATERIALS, EQUIPMENT, AND CONSTRUCTION

1. The authority citation for part 1755 continues to read as

follows:

Authority: 7 U.S.C. 901 et seq., 1921 et seq., 7941 et seq.

2. Section 1755.30(c)(41) is revised to read as follows:

Sec. 1755. 30 List of telecommunications standard contract forms.

* * * * *

(c) * * *

(41) RUS Form 545, issued November 4, 1999, Central Office

Equipment Contract (Not Including Installation).

* * * * *

Dated: September 27, 1999.

Jill Long Thompson,

Under Secretary, Rural Development.

[FR Doc. 99-25720 Filed 10-4-99; 8:45 am]

BILLING CODE 3410-15-P