Rd instruction 1942-a table of Contents




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88

(Revision 2)


§ 1942.18 (l) (Con.) RD Instruction 1942-A

(j)(7) of this section. Alternate contracting methods which combine or rearrange design, inspection or construction services (such as design/build or construction management/constructor) may be used with Rural Development written approval. (Revised 09-24-12, PN 458.)


(1) The owner will request Rural Development approval by providing the following information to the State Office for review and approval by the State Architect: (Revised 09-24-12, PN 458.)
(i) The owner’s written request to use an unconventional contracting method with a description of the proposed method and the selection process used to acquire the CM or DB services. (Revised 09-24-12, PN 458.)
(ii) A proposed scope of work describing in clear, concise terms the technical requirements for the contract. This would include a nontechnical statement summarizing the work to be performed by the contractor and the results expected. Also include the sequence in which the work is to be performed and a proposed construction schedule. (Revised 09-24-12, PN 458.)
(iii) A proposed firm-fixed-price contract for the entire project which provides that the contractor shall be responsible for any extra cost which may result from errors or omissions in the services provided under the contract and compliance with all Federal, State, and local requirements effective on the contract execution date. (Revised 09-24-12, PN 458.)
(iv) An evaluation of the contractor's performance on previous similar projects in which the contractor acted in a similar capacity. (Revised 09-24-12, PN 458.) (Revised 09-24-12, PN 458.)
(v) A detailed listing and cost estimate of equipment and supplies not included in the construction contract but which are necessary to properly operate the facility. (Revised 09-24-12, PN 458.)
(vi) Evidence that a qualified construction inspector who is independent of the contractor has or will be hired. (Revised 09-24-12, PN 458.)


89

(Revision 2)


(2-6-85, PN 956)

RD Instruction 1942-A

§1942.18 (l) (Con.)

(vii) Preliminary plans and outline specifications. However, final plans and specifications must be completed and reviewed by Rural Development prior to the start of construction. (Revised 09-24-12, PN 458.)

(viii) The owner's attorney's opinion and comments regarding the legal adequacy of the proposed contract documents and evidence that the owner has the legal authority to enter into and fulfill the contract. (Revised 09-24-12, PN 458.)
(2) The State Office may approve design/build or construction management/constructor projects if the contract amount is equal to or less than $250,000. (Revised 09-24-12, PN 458.)
(3) If the contract amount exceeds $250,000, National Office prior concurrence must be obtained in accordance with § 1942.9(b) of this subpart. Only that information required under § 1942.9(b) of this subpart and Guide 27, Attachment 7, completed by the State Office must be provided to National Office Program Support Staff for review. Additional information, such as plans and specifications, may be submitted by the State Office, if a review of those items is desired. (Revised 09-24-12, PN 458.)
(4) The Design/Build method of construction is one in which the architectural and engineering services, normally provided by an independent consultant to the owner, are combined with those of the General Contractor under a single source contract. These services are commonly provided by a design/build firm, a joint venture between an architectural firm and a construction firm, or a company providing pre-engineered buildings and design services. (Revised 09-24-12, PN 458.)
(5) The Construction Management/constructor (CMc) acts in the capacity of a General Contractor and is actually responsible for the construction. This type of construction management is also referred to as Construction Manager “At Risk”. The construction contract is between the owner and the CMc. The CMc, in turn, may subcontract for some or all of the work. (Revised 09-24-12, PN 458.)

90

(Revision 3)

§ 1942.18 (l) (Con.) RD Instruction 1942-A

(7) All alternate contracting method projects must comply with the requirements for “maximum open and free competition” in paragraph (j)(2) of this section. Choosing an alternate contracting method is not a way to avoid competition. Further information on procurement methods, which must be followed, is provided in paragraph (k) of this section. (Revised 09-24-12, PN 458.)
(m) Contracts awarded prior to preapplications. Owners awarding construction or other procurement contracts prior to filing a preapplication with Rural Development must comply with the following:
(1) Evidence. Provide conclusive evidence that the contract was entered into without intent to circumvent the requirements of Rural Development regulations. The evidence will consist of at least the following:

90A

(Added 09-24-12, PN 458)


(2-6-85, PN 956)

RD Instruction 1942-A



§1942.18 (m)
(i) The lapse of a reasonable period of time between the date of contract award and the date of filing the preapplication which clearly indicates an irreconcilable failure of previous financial arrangements; or
(ii) A written statement explaining initial plans for financing the project and reasons for failure to obtain the planned credit.
(2) Modifications. Modify the outstanding contract to conform with the provisions of the subpart. Where this is not possible, modifications will be made to the extent practicable and, as a minimum, the contract must comply with all State and local laws and regulations as well as statutory requirements and executive orders related to the Rural Development financing. When all construction is complete and it is impracticable to modify the contracts, the owner must provide the certification required by paragraph (m)(4) of this section.
(3) Consultant's certification. Provide a certification by an engineer or architect that any construction performed complies fully with the plans and specifications.
(4) Owner's certification. Provide a certification by the owner that the contractor has complied with all statutory and executive requirements related to Rural Development financing for construction already performed even though the requirements may not have been included in the contract documents.
(n) Contract provisions. In addition to provisions defining a sound and complete contract, any recipient of Rural Development funds shall include the following contract provisions or conditions in all contracts.
(1) Remedies. Contracts other than small purchases shall contain provisions or conditions which will allow for administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms, and provide for such sanctions and penalties as may be appropriate. A realistic liquidated damage provision should also be included.
(2) Termination. All contracts exceeding $10,000, shall contain suitable provisions for termination by the owner including the manner by which it will be affected and the basis for settlement. In addition, such contracts shall describe conditions under which the contract may be terminated for default as well as conditions where the contract may be terminated because of circumstances beyond the control of the contractor.

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