Rd instruction 1942-a table of Contents




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ARTICLE A.7: CHANGES IN THE WORK




Insert the word ", Agency” after the word "Owner" in its first occurrence in subparagraph A.7.1.2.




A.7.2.1 Delete subparagraph A.7.2.1 and substitute the following:

A.7.2.1 A change order is a written order to the Design/Builder utilizing Form RD 1924-7, "Contract Change Order," signed by the Owner, Independent Inspector, Design/Builder, 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 Design/Builder's signing of the change order indicates complete agreement therein.

RD Instruction 1942-A

Guide 27


Attachment 6

Page 11


(Added 09-24-12, PN 458)


Add the following sentence to subparagraph A.7.3.1: “A Construction Change Directive may be used only for a change in response to an emergency, as described in Paragraph A.10.6.”




Delete subparagraph A.7.3.3.




Delete subparagraph A.7.3.4.




Delete subparagraph A.7.3.6.




ARTICLE A.9: payments and completion

Add the words, "using AIA Document G-702, 'Application and Certificate for Payment' or Form RD 1924-18, 'Partial Payment Estimate'," after "Application for Payment" in the first sentence of subparagraph A.9.3.1.




Under subparagraph A.9.3.1, add the following subparagraph:

A.9.3.1.3 The Design/Builder shall obtain Agency concurrence on all Applications of Payment before payment is made.


Add the following subparagraph to paragraph A.9.6:

A.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 Design/Builder.



Replace the word "seven" with the word "ten (10)" in the first sentence, second and third lines of subparagraph A.9.7.1.




Add the words ", in collaboration with the Agency Architect or Engineer," after "prepare" in the first sentence of subparagraph A.9.8.5.

(09-24-12) PN 458

RD Instruction 1942-A

Guide 27


Attachment 6

Page 12


(Added 09-24-12, PN 458)

Delete subparagraph A.9.8.6 and substitute the following:


A.9.8.6 When the Work has been substantially completed, except for the Work which cannot be completed because of weather conditions, lack of materials or other reasons, which, in the judgment 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 subparagraph A.9.9.1 and substitute the following subparagraphs:
A.9.9.1 The Design/Builder agrees to the use and occupancy of a portion or unit of the Project before formal acceptance by the Owner under the following conditions:
A.9.9.1.1 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 Inspecting Architect, the Design/Builder is chargeable with unwarranted delay in completing the Work or the Contract requirements, the signature of the Design/Builder will not be required. The Certificate of Substantial Completion shall be accompanied by copies of Design/Builder’s insurance policies, written endorsements of the Design/Builder's insurance carrier, and the surety permitting occupancy by the Owner during the remaining period of the Project Work. Occupancy and use by the Owner shall not commence until authorized by public authorities having jurisdiction over the Work.
A.9.9.1.2 Occupancy by the Owner shall not be construed by the Design/Builder as being an acceptance of that part of the Project to be occupied.
A.9.9.1.3 The Design/Builder shall not be held responsible for any damage to the occupied part of the Project resulting from the Owner's occupancy.
A.9.9.1.4 Occupancy by the Owner shall not be deemed to constitute a waiver of existing claims in behalf of the Owner or Design/Builder against each other.

RD Instruction 1942-A

Guide 27

Attachment 6

Page 13

(Added 09-24-12, PN 458)



A.9.9.1.5 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.
Delete subparagraph A.9.9.2 and substitute the following:
A.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 Design/Builder of the responsibility to maintain all insurance and bonds required of the Design/Builder under the Contract Documents until the Project is completed and accepted by the Owner.

Delete subparagraph A.9.10.1 and substitute the following:

A.9.10.1 Upon receipt of written notice that the Work is ready for final inspection and acceptance and upon receipt of a final Application for Payment, the Owner, Owner’s Independent Inspector and Agency representative shall promptly make such inspection and, and when the Owner finds the Work acceptable under the Design/Build documents and fully performed, the Owner with Agency concurrence shall, subject to Section A.9.10.2, promptly make final payment to the Design/Builder.


Delete the second and third sentences of subparagraph A.9.10.2.




ARTICLE A.11: INSURANCE AND BONDS

A.11.2.1 Add subparagraph A.11.2.1.9:

A.11.2.1.9 The Owner shall be named as co-insured on the liability insurance.


A.11.2 Add the following clauses to A.11.2.

A.11.2.4 The insurance required in subparagraph A.11.2 shall be written for not less than the following limits, or greater if required by law:

(09-24-12) PN 458

RD Instruction 1942-A

Guide 27

Attachment 6

Page 14

(Added 09-24-12, PN 458)



.1 Workers’ Compensation:
(a) State: Statutory

(b) Applicable Federal Statutory

(E.g. Longshoremen’s)

(c) Employer’s Liability: $ per Accident

$ Disease, Policy Limit

$ Disease, Each Employee


.2 Comprehensive or Commercial General Liability (Including Premises-Operations; Independent Design/Builders’ Protective; Products and Completed Operations; Broad Form Property Damage):
(a) Bodily Injury: $ Each Occurrence

$ Aggregate

(b) Property Damage $ Each Occurrence

$ Aggregate

(c) Products and Completed Operations to be maintained for years

after final payment:

$ Aggregate

(d) Property Damaged Liability Insurance shall provide X, C and U

coverage.

(e) Broad Form Property Damage Coverage shall include Completed

Operations.
.3 Contractual Liability:
(a) Bodily Injury $ Each Occurrence

$ Aggregate

(b) Property Damage $ Each Occurrence

$ Aggregate


.4 Personal Injury, with Employment Exclusion deleted:

$ Aggregate


.5 Business Auto Liability (including owned, non-owned and hired vehicles):
(a) Bodily Injury $ Each Person

$ Each Occurrence

(b) Property Damage $ Each Occurrence
RD Instruction 1942-A

Guide 27


Attachment 6

Page 15


(Added 09-24-12, PN 458)

.6 If the General Liability Coverages are provided by a Commercial Liability policy, the:


(a) General Aggregate shall be not less than $ and

it shall apply, in total, to this Project only.

(b) Fire Damage Limit shall be not less than $ on

any one fire.

(c) Medical Expense Limit shall be not less than $___________

on any one person


.7 Umbrella Excess Liability:

$ over primary insurance

$ retention for self-insured hazards each occurrence.
.8 If an exposure exists, Aircraft Liability (owned and non-owned) and Watercraft Liability (owned and non-owned) with limits approved by the Owner shall be provided.

Delete the last sentence in subparagraph A.11.4.3.




Delete subparagraph A.11.4.5.

Delete subparagraph A.11.4.7.

Add the following subparagraphs to subparagraph A.11.5.1:

A.11.5.1.1 The Design/Builder shall furnish the Owner Bonds covering faithful performance of the Contract and payment of obligations arising thereunder with such bonds dated on or before the date of this agreement. 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, as amended, and be authorized to transact business in the State where the Project is located. The Bonds (using the latest AIA forms) shall each be equal to the amount of the Contract Sum. The cost of these Bonds shall be included in the Contract Sum.


A.11.5.1.2 The Design/Builder 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.
(09-24-12) PN 458

RD Instruction 1942-A

Guide 27

Attachment 6

Page 16

(Added 09-24-12, PN 458)



A.11.5.1.3 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 Design/Builder 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 the Design/Builder. 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.

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