Rd instruction 1924-a table of Contents




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(2-16-83) PN 869

RD Instruction 1924-A

Guide 1


Attachment 8

CONCURRENCE

The United States of America, as potential lender or insurer of funds to defray the costs of this Contract, and without liability for any payments thereunder, hereby concurs in the form, content, and execution of this Contract.
U.S. Department of Agriculture

Rural Development

Rural Housing Service

Date Rural Development Official


Title


This Contract shall not be in full force and effect until concurred with by the State Director or the State Director's delegate, Rural Development, U. S. Department of Agriculture.

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(08-26-98) PN 296

RD Instruction 1924-A

Guide 1, Attachment 9



NOTICE TO PROCEED


TO: _______________________________ DATE:___________________________


_______________________________ Project:________________________
_______________________________ ________________________________
_______________________________ ________________________________
You are hereby notified to commence WORK in accordance with the Agreement dated _______________, 19___, on or before _________________, 19___, and you are to complete the WORK within ____________ consecutive calendar days thereafter. The date of completion of all WORK is therefore ___________________, 19___.

_________________________

Owner

By _____________________


Title __________________

ACCEPTANCE OF NOTICE


Receipt of the above NOTICE TO PRO-
CEED is hereby acknowledged by _______
_____________________________________,
This the _____________________, 19____
______________________________________
By ___________________________________
Title ________________________________
Employer Identification

Number _______________________________




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(2-16-83) PN 869

RD Instruction 1924-A

Guide 1


Attachment 10

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ATTACHMENT TO AIA DOCUMENT A201-1997, General Conditions of the Contract for Construction
The provisions of this attachment shall delete, modify and supplement the provisions contained in the "General Conditions of the Contract for Construction,” AIA Document A201-1997 Edition. The provisions contained in this attachment will supersede any conflicting provisions of the AIA Document. The term "Agency,” as used in this Attachment, shall mean the United States of America, acting through the United States Department of Agriculture.

ARTICLE 1, GENERAL PROVISIONS


Add the following subparagraph:
1.2.4 Concurrence of the Contract by the Agency is required before it is effective and the "Concurrence" statement shall be attached to and made a part of the Agreement.

ARTICLE 2, OWNER


Delete subparagraph 2.2.5 and substitute the following:
2.2.5 The Contractor will be furnished, free of charge, five (5) copies of the Drawings and Projects Manuals necessary for execution of the Work. Additional copies will be available from the Architect at the cost of reproduction.

ARTICLE 3, CONTRACTOR


Delete subparagraph 3.7.1 and substitute the following:
The Owner shall secure and pay for the health and environmental impact fees due to water and sewer connections, and the zoning regulation fees and permits. The Contractor shall secure and pay for the building, mechanical, electrical, and plumbing permits and other governmental fees, licenses, and inspections necessary for proper execution of and completion of the Contract which are legally required when bids are received or negotiations concluded.

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Guide 1


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ARTICLE 4, ADMINISTRATION OF THE CONTRACT
Delete the last sentence of subparagraph 4.1.1 and substitute the following:
The term "Architect" means the Architect or the Engineer, when the nature of the work is within the authority granted engineers by the State licensure law, or an authorized representative.
Add the words "may be" after "on the parties but" in the last sentence of subparagraph 4.4.5.
Replace the word "shall" with the word "may" in the first and second sentences of subparagraph 4.6.1.
Delete subparagraph 4.6.2 and substitute the following:
4.6.2 The arbitration provisions of this section may be initiated by either party to this Contract by filing with the other party and the Architect a written request for arbitration. The other party may accept or reject the request by filing a written answering statement with the requesting party and the Architect within fourteen (14) calendar days of receipt of such request. If the request is accepted the provisions of this section will apply. If the request is rejected or an answering statement is not filed within the fourteen (14) day period, the provisions of this section will not apply.
4.6.2.1 Within fourteen (14) calendar days or any mutually agreeable time period thereafter, each party to this Contract will appoint one arbitrator. Within fourteen (14) calendar days or any mutually agreeable time period thereafter, the two arbitrators will select a third arbitrator. Failure to appoint the arbitrator(s) within the mutually agreeable time period will terminate further actions under this section.
4.6.2.2 The arbitrators will select a hearing location as close to the Owner's locale as possible.
4.6.2.3 The Procedure for conducting the hearings will follow the Construction Industry Arbitration Rules of the American Arbitration Association.
Delete subparagraphs 4.6.3, 4.6.4 and 4.6.5.

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ARTICLE 5, SUBCONTRACTORS


Delete the first sentence of subparagraph 5.2.2 and substitute the following:
The Contractor shall not contract with any party who is suspended or debarred by any Federal government agency from participating in Federally assisted construction projects or to whom the Owner or the Architect has made reasonable and timely objection.

ARTICLE 7, CHANGES IN THE WORK


Delete the words ", Construction Change Directive" from subparagraph 7.1.1.
Insert the words ", Agency " after the word "Owner,” and delete the words "; a Construction Change Directive requires agreement by the Owner and Architect and may or may not be agreed to by the Contractor" in subparagraph 7.1.2.
Delete the words "Construction Change Directive" from subparagraph 7.1.3.
Delete subparagraph 7.2.1 and substitute the following:
7.2.1 A Change Order is a written order to the Contractor utilizing Form RD 1924-7, "Contract Change Order," signed by the Owner, Architect, Contractor, and the Agency representative. It is issued after the execution of the Contract, authorizing a change in the Work or an adjustment in the Contract Sum or the Contract Time. The Contract Sum and the Contract Time may be changed only by Change Order. The Contractor's signing of a Change Order indicates complete agreement therein. When the Contract Sum is based on unit price, a unit bid quantity may be increased or decreased by a maximum of twenty percent (20%) without invalidating the unit price.

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Delete subparagraph 7.2.2 and substitute the following:
7.2.2 Methods used in determining adjustments to the Contract Sum may include any of the following:
.1 Mutual acceptance of a lump sum properly

itemized and supported by sufficient

substantiating data to permit evaluating.
.2 Unit prices stated in the Contract Documents

or subsequently agreed upon.


Delete paragraph 7.3 in its entirety.
ARTICLE 8, TIME
Add the following subparagraphs:
8.2.4 The Notice to Proceed shall be issued within twenty (20) calendar days of the execution of the Agreement by the Owner. Should there be reasons why the Notice to Proceed cannot be issued within such period, the time may be extended by mutual agreement the Owner and Contractor, with the concurrence of the Agency. If the Notice to Proceed has not been issued within the twenty (20) calendar day period or within the period mutually agreed, the Contractor may terminate the Agreement without further liability on the part of either party.
8.3.4 As outlined in Article 3 of the Agreement, the Contractor agrees to pay liquidated damages to the Owner for each calendar day the Contractor shall be in default.

ARTICLE 9, PAYMENTS AND COMPLETION


Delete clause 9.3.1.1 and substitute the following:
9.3.1.1 Work performed and materials supplied under a Change Order may be included for payment only after the Change Order has been approved by all appropriate parties, including the Agency.

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Delete Subparagraph 9.3.2 and substitute the following:


9.3.2 Unless otherwise provided in the Contract documents, payments shall be made on account of materials and equipment delivered and suitably stored at the site for subsequent incorporation in the Work. Payment shall be conditioned upon compliance by the Contractor with procedures satisfactory to the Owner to establish the Owner's title to such materials and equipment or otherwise protect the Owner's interest.
Add the words ", using AIA Document 702, 'Application and Certificate for Payment' or Form RD 1924-18, 'Partial Payment Estimate'," after "Certificate for Payment" in subparagraph 9.4.1.
Add the following subparagraph:
9.6.8 No progress payments will be made that deplete the retainage, nor place in escrow any funds that are required for retainage, nor invest the retainage for the benefit of the Contractor. Retainage will not be adjusted until after construction is substantially complete.
Replace the word "seven" with the words "thirty (30)" in the first sentence , third line of subparagraph 9.7.1.
Add the words ", in collaboration with the Agency," after "prepare" in the first sentence of subparagraph 9.8.4.
Delete subparagraph 9.8.5 and substitute the following:
9.8.5 When the Work has been substantially completed, except for Work which cannot be completed because of weather conditions, lack of materials or other reasons, which, in the judgement of the Owner, are valid reasons for non-completion, the Owner may make additional payments, retaining at all times an amount sufficient to cover the estimated cost of the Work still to be completed.
Delete subparagraphs 9.9.1 through 9.9.3 and substitute the following:
9.9.1 The Contractor agrees to the use and occupancy of a portion or unit of the Project before formal acceptance by the Owner under the following conditions:

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.1 A “Certificate of Substantial Completion” shall be prepared and executed as provided in subparagraph 9.8.4, except that when, in the opinion of the Architect, the Contractor is chargeable with unwarranted delay in completing the Work or other Contract requirements, the signature of the Contractor will not be required. The Certificate of Substantial Completion shall be accompanied by a written endorsement of the Contractor's insurance carrier and surety permitting occupancy by the Owner during the remaining period of the Project Work. Occupancy by the Owner shall also be authorized by public authorities having jurisdiction over the Work.
.2 Occupancy by the Owner shall not be construed by the Contractor as being an acceptance of that part of the Project to be occupied.
.3 The Contractor shall not be held responsible for any damage to the occupied part of the Project resulting from the Owner's occupancy.
.4 Occupancy by the Owner shall not be deemed to constitute a waiver of existing claims in behalf of the Owner or Contractor against each other.
1.5 If the Project consists of more than one building, and one of the buildings is to be occupied, the Owner, prior to occupancy of that building, shall secure permanent property insurance on the building to be occupied and necessary permits which may be required for use and occupancy.
9.9.2 With the exception of clause 9.9.1.5, use and occupancy by the Owner prior to Project acceptance does not relieve the Contractor of responsibility to maintain all insurance and bonds required of the Contractor under the Contract until the Project is completed and accepted by the Owner.
Delete the second and third sentences of subparagraph 9.10.2.

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ARTICLE 11, INSURANCE AND BONDS


Replace the words "the Contract Documents" with the words "subparagraph 11.1.4" in the first sentence of subparagraph 11.1.2.
Add the following subparagraph:
.1 Insurance shall be:
.2 Written with a limit of liability of not less than $500,000 for all damages arising out of bodily injury, including death, at any time resulting therefrom, sustained by any one person in any one accident; and a limit of liability of not less than $500,000 aggregate for any such damages sustained by two or more persons in any one accident. Insurance shall be written with a limit of liability of not less than $200,000 for all property damage sustained by any one person in any one accident; and a limit of liability of not less than $200,000 aggregate for any such damage sustained by two or more persons in any one accident, or,
.2 Written with a combined bodily injury and damage liability of not less than $700,000 per occurrence; and with an aggregate of not less than $700,000 per occurrence.
Add the following sentence to the end of subparagraph 11.4.1:
The policy shall name as the insured the Contractor and the Owner.
Insert the word "Owner" after the words "protect the interests of the" in the second sentence of clause 11.4.1.2.
Add the following sentence to the end of subparagraph 11.4.6:
The provisions of this subparagraph shall apply to the Contractor if the Contractor purchases and maintains said insurance coverage.
Delete subparagraph 11.4.7 in its entirety.

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Guide 1


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Delete subparagraph 11.5.1 and substitute the following:
11.5.1 The Contractor shall furnish the Owner bonds covering faithful performance of the Contract and payment of obligations arising thereunder within ten (10) calendar days after receipt of the Notice of Award. The surety company executing the bonds must hold a certificate of authority as an acceptable surety on Federal bonds as listed in Treasury Circular 570, and be authorized to transact business in the State where the Project is located. The bonds (using the forms included in the Bidding
Documents) shall each be equal to the amount of the Contract Sum. The cost of these bonds shall be included in the Contract Sum.
Add the following clauses:
11.5.1.1 The Contractor shall require the attorney-in-fact who executes the required bonds on behalf of the surety to affix thereto a certified and current power of attorney.
11.5.1.2 If at any time a surety on any such bond is declared bankrupt or loses its right to do business in the State in which the work is to be performed or is removed from the list of surety companies accepted on Federal Bonds, the Contractor shall within ten (10) calendar days after notice from the Owner to do so, substitute an acceptable bond in such form and sum and signed by such other surety or sureties as may be satisfactory to the Owner. The premiums of such bond shall be paid by any Contractor. No further payment shall be deemed due nor shall be made until the new surety or sureties shall have furnished an acceptable bond to the Owner.
Add the following paragraph:
11.6 LATENT DEFECTS PROTECTION
11.6.1 If the Contractor does not furnish payment and performance bonds, he or she shall agree to provide surety or guarantee acceptable to the Owner and the Agency against latent obligations and defects in connection with the construction.
.1 The Contractor shall furnish a properly executed corporate

latent defects bond, a maintenance bond, an unconditional and

irrevocable letter of credit, or a cash deposit into a

supervised bank account. Whichever instrument is used shall be

in the amount of 10 percent of the Contract Sum.

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.2 The period of protection against latent obligations and

defects shall be one year from the final acceptance of Work by

the Owner and the Agency.


.3 Final payment to the Contractor shall not be issued until the

provisions of clause 11.6.1.1 have been met.

ARTICLE 13, MISCELLANEOUS PROVISIONS
Add the following paragraphs:
13.8 FEDERAL INSPECTION
13.8.1 The authorized representatives and agents of the Federal
Government shall be permitted to inspect all work, materials, payrolls, records of personnel, invoices of materials, and other relevant data and records.
13.9 LANDS AND RIGHTS-OF WAY
13.9.1 Prior to the start of construction, the Owner shall obtain all lands and rights-of-way necessary for the execution and completion of work to be performed under this contract.
13.10 EQUAL OPPORTUNITY REQUIREMENTS
Non-discrimination in Employment by Federally Assisted Construction Contractors, by Executive Order 11246.
13.10.1 This section summarizes Executive Order 11246, which prohibits employment discrimination and requires employers holding non-exempt Federal contracts and subcontracts and federally-assisted construction contracts and subcontracts in excess of $10,000 to take affirmative action to ensure equal employment opportunity without regard to race, color, religion, sex, or national origin. The Executive Order requires, as a condition for the approval of any federally assisted construction contract, that the applicant incorporate nondiscrimination and affirmative action clauses into its non-exempt federally assisted construction contracts.

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Guide 1


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13.10.2 Executive Order 11246, is administered and enforced by the Office of Federal Contract Compliance Programs (OFCCP), an agency in the U.S. Department of Labor's Employment Standards Administration. OFCCP has issued regulations at 41 C.F.R. chapter 60 implementing the Executive Order. The regulations at 41 C.F.R. part 60-4 establish the procedures which the Agency, as an administering agency, must follow when making grants, contracts, loans, insurance or guarantees involving federally assisted construction which is not exempt from the requirements of Executive Order 11246. The regulations which apply to Federal or federally assisted construction contractors also are published at 41 C.F.R. part 60-4.
13.10.3 OFCCP has established numerical goals for minority and female utilization in construction work. The goals are expressed in percentage terms for the contractor's aggregate workforce in each trade. OFCCP has set goals for minority utilization based on the percentage of minorities in the civilian labor force in the relevant area. There is a single nationwide goal of 6.9 percent for utilization of women. The goals apply to all construction work in the covered geographic area, whether or not it is federal, federally assisted or non-federal. A notice advises bidders of the applicable goals for the area where the project is to be located.
13.10.4 Application. This section applies to all of a construction contractor's or subcontractor's employees who are engaged in on-site construction including those construction employees who work on a non-Federal or non-Federally assisted construction site.
13.10.4.1 Agency officials will notify the appropriate Regional Director of OFCCP that an Agency financed construction contract has been awarded, and that the equal opportunity clauses are included in the contract documents.
13.10.4.2 The Regional Director, OFCCP-DOL, will enforce the non-discrimination requirements of Executive Order 11246.
13.10.5 The prospective contractor or subcontractor must comply with the Immigration Reform and Control Act of 1986, by completing and retaining Form I-9, "Employment Eligibility Verification," for employees hired. This form is available from the Immigration and Naturalization Service, and Department of Justice.
13.10.6 The prospective contractor or subcontractor must submit Form RD 400-6, "Compliance Statement," to the applicant and an Agency official as part of the bid package, prior to any contract bid negotiations and comply with the Executive Order 11246 as stated in the contract documents.
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13.11 STATUTES
13.11.1 The Contractor and each Subcontractor shall comply with the following statutes (and with regulations issued pursuant thereto, which are incorporated herein by reference):
13.11.1.1 Copeland Anti-Kickback Act (18 U.S.C. 874) as supplemented in Department of Labor regulations (29 C.F.R. part 3). This Act provides that each Contractor shall be prohibited from inducing, by any means, any person in connection with construction to give up any part of the compensation to which the person is otherwise entitled.
13.11.1.2 Clean Air Act (42 U.S.C. 7414), section 114, and Water Pollution Control Act (33 U.S.C. 1813), section 308. Under Executive Order 11738 and Environmental Protection Agency (EPA) regulations 40 C.F.R. part 15, all Contracts in excess of $100,000 are required to comply with these Acts. The Acts require the Contractor to:
.1 Notify the Owner of the receipt of any communication from EPA indicating that a facility to be utilized in the performance of the Contract is under consideration to be listed on the EPA list of Violating Facilities.
.2 Certify that any facility to be utilized in the performance of any nonexempt Contractor or Subcontractor is not listed on the EPA list of Violating Facilities as of the date of the Contract Award.
.3 Include or cause to be included the above criteria and requirements of paragraphs .1 and .2 in every nonexempt subcontract, and that the Contractor will take such action as the Government may direct as a means of enforcing such provisions.
13.11.1.3 Davis-Bacon Act(40 U.S.C. 276a) as supplemented in Department of Labor regulations (29 C.F.R. part 5). If applicable, the Contractor must comply with the minimum rates for wages for laborers and mechanics as determined by the Secretary of Labor in accordance with the provision of this Act.

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13.11.1.4 Restrictions on Lobbying (Public Law 101-121, section 319) as supplemented in Department of Agriculture regulations (7 C.F.R. part 3018). This statute applies to the recipients of contracts or subcontracts that exceed $100,000 at any tier under a Federal loan that exceeds $150,000 or a Federal grant that exceeds $100,000. If applicable, the Contractor must complete a certification form on lobbying activities related to the specific Federal loan or grant that is a funding source for this contract. The certification and disclosure forms shall be provided by the Owner.
13.12 RECORDS
13.12.1 If the Contract is based on a negotiated Bid, the Owner, the Agency, 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 pertinent to a specific Federal loan program for the purpose of making audit, examination, excerpts, and transcriptions. The Contractor shall maintain records for at least three years after the Owner makes final payment and all other pending matters are closed.
13.13 IDENTITY OF INTEREST
13.13.1 The Owner will complete and sign Form RD 1944-30, "Identity of Interest (IOI) Disclosure Certificate." If applicable, the Contractor or any Subcontractor, Material Supplier, or Equipment Lessor sharing an identity of interest will, prior to receipt of any payment, complete and sign Form RD 1944-31, "Identity of Interest (IOI) Qualification."
13.13.2 If and when an identity of interest exists, the Contractor, Subcontractor, Material Suppliers, or Equipment Lessor:
13.13.2.1 Will, prior to receipt of any payment, provide the Owner and the Agency a written assertion that it has an accounting system suitably designed to provide for a line-item basis comparison of the actual cost with the estimated cost.
13.13.2.2 Will, prior to receipt of any payment, provide the Owner and the Agency with a detailed breakdown of the estimated cost amount for evaluation, using Form RD 1924-13, "Estimate and Certificate of Actual Cost."
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13.13.2.3 Will deduct any discounts or rebates from invoices provided to the Owner for payment. Any discounts or rebates received on invoices already paid by the Owner will be refunded to the Owner or subtracted from any payment retainage.
13.13.2.4 Will not be entitled to receive payment for general overhead, profit, or general requirements, respectively, in excess of the amounts represented on the estimate of cost breakdown in accordance with clause 13.13.2.2.
13.13.2.5 Will, prior to receipt of final payment, provide the Owner and the Agency with a detailed breakdown of the actual cost compared to the estimated cost, using Form RD 1924-13. When required, the actual cost will be audited by a Certified Public Accountant, or Licensed Public Accountant licensed on or before December 31, 1970, who will provide an opinion concerning whether the actual construction costs present fairly the costs of construction in conformity with eligible construction costs as prescribed in Rural Development regulations.
13.13.2.6 Will, prior to receipt of final payment, provide the Owner and the Agency with documentation on all Form RD 1924-13 actual cost line items that are a minimum of fifteen percent (15%) higher or lower than the estimated costs. The documentation will provide justification for the deviations.
13.13.3 If and when an identity of interest exists between the Owner and Contractor, the Contractor is entitled to receive a builder's fee (general overhead and profit) only when the highest subcontract Sum is no more than fifty percent (50%) of the Contract Sum, and the total of the highest three Subcontract Sums is no more than seventy-five percent (75%) of the Contract Sum. Any payments made to the Contractor for a builder's fee to which contractor is not entitled will be refunded to the Owner or subtracted from any payment retainage.

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13.14 ENVIRONMENTAL REQUIREMENTS
13.14.1 Mitigation Measures - The contractor shall comply with applicable mitigation measures established in the environmental assessment for the project. These may be obtained from the Agency representative.
13.14.2 Endangered Species - The Contractor shall comply with the Endangered Species Act. Should any evidence of the presence of endangered or threatened species or their critical habitat be brought to the attention of the Contractor, the Contractor will immediately report this evidence to the Architect and the Agency

representative. Construction shall be halted pending the notification process and further directions issued by the Agency after consultation with the U.S. Fish and Wildlife Service.


13.14.3 The Contractor, when constructing a Project involving trenching, excavating, or other earth moving activity, shall comply with the following environmental constraints:
13.14.3.1 Historic Preservation - Any excavation or other earth moving activity by the Contractor that uncovers a historical or archaeological artifact shall be immediately reported to the Architect and the Agency representative. Construction shall be halted pending the notification process and further directions issued by the Agency after consultation with the State Historic Preservation Officer or other appropriate historic preservation official.
13.14.3.2 Human Remains and Cultural Items - Any excavation or other earth moving activity by the Contractor that uncovers human remains or cultural items shall be immediately reported to the Architect and the Agency representative. Construction shall be halted pending the notification process and further directions issued by the Agency after consultation with the appropriate authorities.
13.14.3.3 Paleontology - Any excavation or other earth moving activity by the Contractor that uncovers a fossil or other paleontological materials that may have scientific significance shall be immediately reported to the Architect and the Agency representative. Construction shall be halted pending the notification process and further directions issued by the Agency after consultation with appropriate authorities.

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13.14.3.4 Wetlands - The Contractor, when disposing of excess, spoil, or other construction materials on public or private property, will not fill in wetlands.


13.14.3.5 Floodplains - The Contractor, when disposing of excess, spoil, or other construction materials on public or private property, will not fill in 100-year floodplain areas delineated on the latest Federal Emergency Management Administration floodplain maps.
13.14.4 Lead-Based Paint - The Contractor and Owner shall comply with applicable Agency requirements of the Lead-Based Paint Poisoning Prevention Act, as amended (42 U.S.C. 4821), and the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851) for rehabilitation work on residential property built prior to 1978.
13.15 DEBARMENT AND SUSPENSION
13.15.1 The Contractor shall comply with the requirements of 7 C.F.R. part 3017, which pertains to the debarment or suspension of a person from participating in a Federal program or activity.

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