Rd instruction 1924-a table of Contents




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Acceptable Warranty Companies

The warranty companies listed below claim authority to act as a risk retention group under the Products Liability Risk Retention Act of 1981 and as such, to operate in all states to provide 10-year home warranties. This authority remains subject to future challenges by any state insurance commissioner or regulatory agency; however, until such challenge is made, Rural Development accepts their warranty.




Name and Address

Area of Operation

Home Buyers Warranty Corporation (HBW or 2-10)

2675 S Abilene Street

Aurora, CO 80014

303-368-4805

800-488-8844


All States

Residential Warranty Corporation (RWC)

5300 Derry Street

Harrisburg, PA 17111

717-561-4480

800-247-1812


All States

Manufactured Housing Warranty Corporation

5300 Derry Street

Harrisburg, PA 17111

717-561-4480

800-247-1812


All States

StrucSure Home Warranty

6825 E. Tennessee Ave.

Suite #410

Denver, CO 80224

303-806-8688


AK, AL, AZ, CA, CO, FL, GA, HI, IA, ID, IN, KS, KY, LA, MA, MD, MO, MS, MT, NC, NE, NM, NV, NY, OH, OR, PA, SC, TN, TX, UT, VA, WA, WY


oOo

(01-12-11) PN 445


RD Instruction 1924-A

Exhibit M

SEVEN STEPS TO COST CERTIFICATION

(To be used with cost certification worksheet)


STEPS RECOMMENDED

RESPONSIBILITY


1. Think cost certification! Place District Office

more emphasis on obtaining (D/O)/State Office

acceptable certifications. (S/O) Specialists,

Architect

2. Preliminary estimates (preapplication):

a. Compare unit cost with historic D/O or S/O

unit cost.

b. Note concerns and forward to S/O. D/O or S/O


c. Compare with Marshall & Swift S/O Specialist,

cost data. Architect


d. Note concerns and return to D/O. S/O Specialist

Architect


e. Contact applicant re any discrepancies D/O or S/O

noted by D/O and S/O.


3. Final Form RD 1924-13 estimates

(application):
a. Determine if all previous discrepancies D/O or S/O

were corrected.


b. Check to see if all the types of D/O or S/O

materials which will be used in the

project are reflected in corresponding

line item entries.


If no entry in an applicable line D/O or S/O

item, make note for later action.


c. Recalculate totals to see if they D/O or S/O

agree with applicant's figures.

(03-16-94) SPECIAL PN

RD Instruction 1924-A

Exhibit M

Page 2
STEPS RECOMMENDED

RESPONSIBILITY
d. Calculate percentages for profit, D/O or S/O

overhead, and requirements to

determine if they are within

acceptable ranges.


e. Check to determine if contractor D/O or S/O

is qualified to build project.


f. Note results of steps a. through e. D/O or S/O

above and forward to S/O.


g. Compare line item costs with historic S/O, Architect

line item costs.


h. Match construction contract price S/O, Architect

with final cost estimates.


i. Reevaluate the cost estimates and D/O S/O Specialist,

comments to determine if proposal is Architect

acceptable. If time span since

preapplication exceeds 1 year, run

another Marshall & Swift.

j. Determine if cost estimates were S/O Specialist,

received from all identities of Architect

interest.


k. Check for applicant's attestation as S/O Specialist,

to adequacy of accounting system. Architect


l. Determine whether proposal is S/O Specialist,

acceptable as presented; if not, Architect

note and return to D/O for correction.
m. Contact applicant re any discrepancies D/O or S/O

noted by D/O and S/O.


n. Determine if all discrepancies have D/O or S/O

been corrected.


o. Determine if cost estimates can be D/O or S/O

approved.


RD Instruction 1924-A

Exhibit M

Page 3


STEPS RECOMMENDED

RESPONSIBILITY


4. Partial payments to contractor:
a. Recalculate arithmetic. D/O or S/O
b. Verify that project architect concurs D/O or S/O

with pay estimates.


c. Verify that accumulated total for D/O or S/O

general requirements does not exceed

final estimate.
d. Verify that accumulated total for D/O or S/O

overhead does not exceed final estimate.


e. Verify that accumulated total for D/O or S/O

profit does not exceed final estimate.


f. Verify that there are no expenses D/O or S/O

which were not shown on the final

estimates.
g. Determine if there are any changes in D/O or S/O

the contract sum due to change orders.


h. Compare the accumulated total with D/O or S/O

percentage of completion shown on last

Rural Development inspection report.

5. Change orders:


a. Recalculate arithmetic. D/O or S/O
b. Determine if change is justified. D/O or S/O
c. Determine if change involves an D/O or S/O

identity of interest subcontractor

or supplier.
d. Verify that the cost of the change D/O or S/O

is broken down between hard and soft

costs.

(03-16-94) SPECIAL PN



RD Instruction 1924-A

Exhibit M

Page 4

STEPS RECOMMENDED



RESPONSIBILITY
e. Determine if borrower has provided D/O or S/O

additional funds for increases in the

contract amount.
6. Cost certification document:

a. Recalculate contractor's arithmetic. D/O or S/O


b. Compare each certified line item cost D/O or S/O,

with the final estimated line item Architect

cost to determine whether total of

certified hard costs are more or less

than estimated.
c. Determine if net hard costs exceeded D/O or S/O

the estimated amount and if the total

contract amount was increased.

(i) If contract amount was not D/O, S/O

increased, determine if profit was

reduced to offset the increase in

costs.
(ii) If contract amount was increased, D/O, S/O

determine the source of additional

funds.
d. If net hard costs were decreased, D/O, S/O

determine if profit or overhead were

increase.
e. If overhead or general requirements

exceeds its estimate, determine if D/O, S/O

profit was reduced to offset the

increase.

f. If profit was decreased because of D/O, S/O

overruns in hard costs and soft

costs were lower than anticipated,

determine if profit was increased to

bring it back to the original estimates.
g. Calculate percentages for profit, D/O, S/O

overhead, and requirements.


RD Instruction 1924-A

Exhibit M

Page 5

STEPS RECOMMENDED



RESPONSIBILITY
h. Determine if all line items relating D/O or S/O

to general requirements and general Architect

overhead were recorded under their

proper categories.

i. Match certified costs with partial D/O or S/O

payments. Architect


j. Verify that all discrepancies between D/O or S/O

accumulated payments and certified Architect

costs have been resolved.
k. Check to see if cost certification D/O or S/O

was based on Generally Accepted

Government Audit Standards requirements.
l. Check qualifications of person D/O or S/O

doing cost certification. Record

name of Certified Public Accountant.
m. Determine if costs from all identities D/O or S/O

of interest were certified. Architect

n. Check amount of work which was D/O or S/O

subcontracted out to others. Architect


o. Determine if this was a Government D/O or S/O

contracted cost certification.


p. Check for disclosure of rebates and D/O or S/O

discounts.


q. Check opinion letter from CPA for D/O or S/O

identity of problems with audit.


7. Final payment to contractor:
a. Recalculate arithmetic. D/O or S/O
b. Verify that that project architect D/O or S/O

concurred with final pay request.

(03-16-94) SPECIAL PN

RD Instruction 1924-A

Exhibit M

Page 6


STEPS RECOMMENDED

RESPONSIBIITY


c. Verify that all construction work D/O or S/O

is completed.


d. Determine if releases of claimants were D/O or S/O

obtained.


e. Approve final payment to contractor. D/O or S/O

oOo


RD Instruction 1924-A

Guide 1


Page 1

(INSTRUCTION SHEET ONLY - NOT TO BE INCLUDED

AS PART OF THE CONTRACT DOCUMENTS)

CONTRACT DOCUMENTS


This guide is provided to assist USDA/Rural Development personnel and applicants in assembling and reviewing Contract Documents for more complex construction projects such as that administered under § 1924.13.
It is important when preparing or reviewing contract documents that all clauses are in conformance with Rural Development /Rural Housing Service (RHS) program requirements as well as those of State and local jurisdictions. These requirements may vary significantly depending on the relationship between the Owner and Contractor, the type of surety provided, if any, and the type of RHS financial assistance. All appropriate document modifications must be made before United States of America concurrence of the Contract.
Contract Documents may incorporate documents published by the American Institute of Architects (AIA) if they are the current editions and are used in accordance with copyright rules. A complete set of Contract Documents may include the following:



Item

Document

Advertisement for Bids

Attachment 1

Instructions to Bidders

AIA Document A701-1997

Attachment to Instructions to Bidders

Attachment 2

Bid

Attachment 3

Bid Bond

Attachment 4

Compliance Statement

Form RD 400-6

Notice of Award

Attachment 5

Standard Form of Agreement Between Owner and Contractor

AIA Document A101-1997

Attachment to Standard Form of Agreement Between Owner and Contractor

Attachment 6

Certificate of Owner's Attorney

Attachment 7

Contract Concurrence

Attachment 8

Payment Bond

RD Inst. 1924-A, Exh. F

Performance Bond

RD Inst. 1924-A, Exh. G

Notice to Proceed

Attachment 9

(continued next page)



(08-26-98) PN 296

RD Instruction 1924-A

Guide 1


Page 2


Item

Document

General Conditions of the Contract for Construction

AIA Document A201-1997

Attachment to General Conditions of the Contract for Construction

Attachment 10

Identity of Interest (IOI) Disclosure Certificate

Form RD 1944-30

Identity of Interest (IOI) Qualification

Form RD 1944-31

Contract Change Order

Form RD 1924-7

Application and Certificate for Payment

AIA Document G702-1992

Labor Standards Provisions

RD Inst. 1940-C, Exh. A

Wage Determinations

Department of Labor

Questions regarding the use of these documents should be referred to the State Office Architect or Engineer, or the RHS National Office Program Support Staff.


Attachments:


1. ADVERTISEMENT FOR BIDS
2. ATTACHMENT TO INSTRUCTIONS TO BIDDERS
3. BID
4. BID BOND
5. NOTICE OF AWARD
6. ATTACHMENT TO STANDARD FORM OF AGREEMENT

BETWEEN OWNER AND CONTRACTOR


7. CERTIFICATE OF OWNER'S ATTORNEY
8. CONTRACT CONCURRENCE
9. NOTICE TO PROCEED
10. ATTACHMENT TO GENERAL CONDITIONS OF THE

CONTRACT FOR CONSTRUCTION


o0o


RD Instruction 1924-A

Guide 1, Attachment 1




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