Rd instruction 1924-a table of Contents




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47

(Revision 1)

(5-12-87) SPECIAL PN

RD Instruction 1924-A

§1924.13(e)(1)(i) (Con.)

(E) If there is no agreement by RHS and the applicant as to the construction cost, the State Director will cease any further action on the preapplication and inform the applicant of the right to appeal in accordance with subpart B of part 1900 of this chapter.
(Revised 10-30-96, PN 267.)
(ii) Contract documents. Contract documents will conform with recognized professional practices as prescribed in this paragraph. Such contract documents will contain substantially the following:
Item I Invitation for Bid (Construction Contract)

(Form RD 1924-5)


Item II Information for Bidders
Item III Bid
Item IV Bid Bond
Item V Agreement (Construction Contract)
Item VI Compliance Statement (Form RD 400-6)
Item VII General Conditions
Item VIII Supplemental General Conditions
Item IX Payment Bond (Exhibit F of this subpart)
Item X Performance Bond (Exhibit G of this subpart)
Item XI Notice of Award
Item XII Notice to Proceed
Item XIII Drawings and Specifications
Item XIV Addenda
Item XV Contract Change Order (Form RD 1924-7)
Item XVI Labor Standards Provisions (where applicable)

(Revised 10-30-96, PN 267.)



48

(Revision 1)


RD Instruction 1924-A

§1924.13 (e) (1) (ii) (Con.)


Item XVII Monthly Employment Utilization Report
(Form CC-257)
Item XVIII Partial Payment Estimate (Form
RD 1924-18)
Item XIX Builder's Warranty (Form RD 1924-19)
(A) Substitution of term "architect" for "engineer" may be necessary on some of the forms. Other modifications may be necessary in some cases to conform to the nature and extent of the project. All such contract documents and related items will be concurred with by the State Director, with the assistance of OGC prior to the release of invitations to bid.
(B) Items listed as I through IV and item XI of paragraph (e)(1)(ii) of this section may be omitted when an exception to the competitive bidding requirement is granted in accordance with paragraph (e)(1)(vii) of this section, thereby permitting a negotiated contract.
(C) All negotiated contracts shall include a provision to the effect that the borrower, USDA, the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any books, documents, papers, and records of the contractor which are directly pertinent to a specific Federal loan program for the purpose of making audit, examination, excerpts, and transcriptions.
(D) A provision for liquidated damages will be included in all contracts. The liquidated damage amount must be reasonable and represent the best estimate possible of how much interest or other costs will accrue on the loan, and also represent any loss of rent or other income which would result from a delay in the completion of the project beyond the estimated completion date.
(E) All contracts shall include a provision for compliance with the Copeland "Anti-Kickback" act (18 U.S.C. 874) as supplemented in Department of Labor regulations (29 CFR Part 3). This Act prohibits anyone from inducing any person in connection with the construction to give up any part of the compensation to which the person is otherwise entitled.

49

(Revision 1)

(5-12-87) SPECIAL PN

RD Instruction 1924-A

§1924.13 (e) (1) (ii) (Con.)

(F) All contracts will contain a certification by the applicant indicating that there is not now nor will there be an identity of interest between the applicant and any of the following: Contractor, architect, engineer, attorney, subcontractors, material suppliers, equipment lessors, or any of their members, directors, officers, stockholders, partners, or beneficiaries unless specifically identified to Rural Development in writing prior to the award of the contract. All contracts must also indicate that when any identity of interest exists or comes into being, the contractor agrees to have construction costs as reported to Rural Development on Form 1924-13, "Estimate and Certificate of Mutual Cost"- audited by a Certified Public Accountant (CPA) or Licensed Public Accountant (LPA) licensed prior to December 31, 1970, who will provide an opinion as to whether the Form RD 1924-13 presents fairly the costs of construction in conformity with eligible construction costs as prescribed in Rural Development regulations. (Revised 8-12-87,
PN 60.)
(G) All contracts on any form other than Form RD 1924-6, must contain the language of clause (D) of Form RD 1924-6, which is available in all Rural Development offices. The language of clause (D) of Form RD 1924-6 sets forth the Notice of Requirement for Affirmative Action to Ensure Equal Employment Opportunity required by Executive Order 11246, the Equal Opportunity clause published at 41 CFR 60-1.4 (a) and (b), and the Standard Federal Equal Employment Opportunity Construction Contract Specifications required by Executive Order 11246. For contract forms other than Form RD
1924-6, Form AD 767, "Equal Employment Opportunity Contract Compliance Notices," which can be obtained from the Finance Office, should be attached and made a part of the contract.
(H) All contracts will contain a provision that they are not in full force and effect until concurred with by the State Director or the State Director's delegate, in writing. Therefore, before loan closing or before the start of construction, whichever occurs first, the State Director or the State Director's delegate will concur in the contract form, content, and execution if acceptable, by including the following paragraph at the end of the contract:


50

(Revision 1)


RD Instruction 1924-A

§ 1924.13(e)(1)(ii)(H) (Con.)

Rural Development, as potential lender or insurer of funds to defray the costs of this contract, are without liability for any payments thereunder, hereby concurs in the form, content, and execution of this contract.
Date ___________ _________________________

Rural Development Official


_________________________

Title
(I) The requirements of §1924.6 (a)(11)(iv) of this subpart apply to all contracts or subcontracts in excess of $10,000.
(iii) Surety. When multiple advances of loan or grant funds are utilized, surety that guarantees both payment and performance in the full amount of the contract will be provided in accordance with §1924.6 (a)(3)(ii) of this subpart. Exceptions to the surety requirements shall be governed by the following:
(A) In accordance with the guidance and recommendations of OMB Circulars A-102 and A-110, exceptions to the surety requirements of §1924.6 (a)(3)(ii) of this subpart will not be granted for nonprofit organization or public body applicants.
(B) For loans or grants to applicants other than non- profit organizations or public bodies that are within the State Director's approval authority, the State Director may, upon request of the borrower or grantee, grant exceptions to the surety requirements in accordance with the provisions of §1924.6 (a)(3)(iii) of this subpart. Before granting such an exception, however, the State Director should be provided the following information from the proposed contractor in order to fully evaluate the experience and capabilities of the contractor:
(1) A resume indicating the contractor's history, ability and experience.

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