[Federal Register Volume 59, Number 116 (Friday, June 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14058]


[[Page Unknown]]

[Federal Register: June 17, 1994]


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DEPARTMENT OF AGRICULTURE
Rural Electrification Administration

7 CFR Parts 1753 and 1755

RIN 0572-AA20

 

REA Form 525, Central Office Equipment Contract (Including 
Installation)

AGENCY: Rural Electrification Administration, USDA.

ACTION: Final rule.

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SUMMARY: The Rural Electrification Administration (REA) hereby amends 
its regulations on Telecommunications Standards and Specifications for 
Materials, Equipment and Construction to add a Central Office Equipment 
Contract (Including Installation) and to announce a general revision of 
REA Form 525, Central Office Equipment Contract (Including 
Installation). REA is updating this contract in order to incorporate 
technological changes.

EFFECTIVE DATE: July 18, 1994.

FOR FURTHER INFORMATION CONTACT: John J. Schell, Chief, Central Office 
Equipment Branch, Telecommunications Standards Division, Rural 
Electrification Administration, room 2836, South Building, USDA, 
Washington, DC 20250-1500, telephone number (202) 720-0671.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This final rule has been determined to be not-significant for 
purposes of Executive Order 12866 and therefore has not been reviewed 
by OMB.

Executive Order 12372

    This final rule is excluded from the scope of Executive Order 
12372, Intergovernmental Consultation. A Notice of Final Rule entitled 
Department Programs and Activities Excluded from Executive Order 12372 
(50 FR 47034) exempts REA and RTB loans and loan guarantees, and RTB 
bank loans, to governmental and nongovernmental entities from coverage 
under this Order.

Executive Order 12778

    This final rule has been reviewed under Executive Order 12778, 
Civil Justice Reform. This final rule: (1) Will not preempt any state 
or local laws, regulations, or policies; (2) Will not have any 
retroactive effect; or (3) Will not require administrative proceedings 
before parties may file suit challenging the provisions of this rule.

Regulatory Flexibility Act Certification

    The Administrator of REA has determined that this final rule will 
not have a significant impact on a substantial number of small entities 
as defined by the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
The changes to the Central Office Equipment Contract in this final rule 
are updates which have been made so that REA telephone borrowers can 
continue to provide their subscribers with the most up-to-date and 
efficient telephone service.

Information Collection and Recordkeeping Requirements

    The reporting and recordkeeping requirements contained in this 
final rule have been submitted to the Office of Management and Budget 
(OMB) in accordance with the Paperwork Reduction Act of 1980 (44 U.S.C. 
3501 et seq.). Comments concerning these requirements should be 
directed to the Department of Agriculture, Clearance Office, Officer of 
Information Resources Management, room 404-W, Washington, DC 20250, and 
to the Office of Information and Regulatory Affairs of OMB, Attention: 
Desk Officer for USDA, room 3201, NEOB, Washington, DC 20503. When OMB 
has approved the information and recordkeeping requirement contained in 
this final rule, REA will publish an amendment to this final rule to 
add the OMB control number and statement to the regulatory text.

National Environmental Policy Act Certification

    The Administrator of REA has determined that this final rule will 
not significantly affect the quality of the human environment as 
defined by the National Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.). Therefore, this action does not require an environmental 
impact statement or assessment.

Catalog of Federal Domestic Assistance

    The program described by this final rule is listed in the 
Catalog of Federal Domestic Assistance Programs under No. 10.851, 
Rural Telephone Loans and Loan Guarantees, and 10.852, Rural 
Telephone Bank Loans. This catalog is available on a subscription 
basis from the Superintendent of Documents, the United States 
Government Printing Office, Washington, DC 20402.

Background

    The proposed rule for 7 CFR 1755.525 was first published in the 
Federal Register as a 7 CFR part 1762 proposed rule on October 29, 
1989, at 54 FR 43429. Since that time part 1762 has been incorporated 
into part 1755. Due to the pertinence of the comments received REA 
decided to incorporate many of them into the document. The revised rule 
was published as a 7 CFR part 1755 proposed rule on March 14, 1991, at 
56 FR 10827 with a 60 day comment period. During this period comments 
and suggestions were received from six major manufacturers of central 
office equipment. Many useful comments and suggestions were received 
and many of them have been incorporated into the revised Form 525 
Contract.
    The last revision to the Form 525 Contract was September 1966. 
Since that date, significant changes have been made in the telephone 
industry. The profound advancement in central office equipment 
technology has made possible many new services on a cost effective 
basis. Divestiture and competition, legislation and regulation have 
brought about many changes in the conduct of telecommunications 
business. The revised Form 525 Contract incorporates these changes into 
the Central Office Equipment Contract. The main changes to the Contract 
are new requirements that: (1) Provide for a software license, (2) 
provide for patent, copyright, and trademark infringement protection, 
(3) provide a cap on consequential damages, and (4) provide Equal 
Employment Opportunity requirements. In addition, it revises and 
updates provisions for (1) delivery and installation of equipment, (2) 
inspection and testing of the completed installations, (3) payments to 
the contractor, (4) insurance, (5) liquidated damages, and (6) 
completion of the project. This action will make it possible for REA 
telephone borrowers to continue to provide their subscribers with the 
most modern and efficient telephone service.
    REA has issued a series of 7 CFR chapter XVII parts which serve to 
implement the policies, procedures, and requirements for administering 
its loan and loan guarantee programs and the loan documents and 
security instruments which provide for and secure REA financing. The 
technical change to 7 CFR part 1753 updates the number of days allowed 
for acceptance testing in order to conform with REA Form 525 Central 
Office Equipment Contract (Including Installation). The revision to 7 
CFR part 1755 codifies REA Form 525, Central Office Equipment Contract 
(Including Installation). The 7 CFR part 1755 also describes where 
copies of the contract may be obtained. REA telephone borrowers are 
required to use the REA Form 525 Contract where major central office 
facilities are being procured and installed under contract. The present 
REA Form 525 has become outdated due to technological advancements and 
other reasons. Advanced technology and equipment concepts have 
introduced new issues. Contract terms and obligations need to be 
modified and updated to more accurately reflect present business 
practices. Some representative issues addressed in updating this 
contract are: Expansion of patent infringement protection to include 
copyrights, trademarks, etc.; software right-to-use licensing terms; 
warranty coverage; use of information; consequential damages; delays in 
project; liquidated damages; bonding and insurance; independent 
contractor provisions; and support of discontinued products. All these 
additions and changes have been made so that REA telephone borrowers 
can continue to provide their subscribers with the most up-to-date and 
efficient telephone service.

Comments

    Public comments were received from Alcatel Network Systems, Inc., 
AT&T Network Systems, Mitel Public Switching, Northern Telecom Inc., 
Redcom Laboratories, Inc., and Seimens Stromberg-Carlson. The comments, 
recommendations and responses are summarized as follows:

General Comments

    One commenter remarked that a telephone central office switch is a 
computer and should be purchased using a supply type contract rather 
than a construction contract and therefore, REA Form 525 should not 
apply.
    Response: REA feels that due to the very complex nature and 
individuality of each central office and the immense amount of 
coordination and development that must be done prior to, during, and 
after the installation a supply type contract would not be a suitable 
instrument to achieve the desired results. Further, REA feels a supply 
type contract does not provide the Borrower the same degree of 
protection as the REA Form 525 Contract. This lack of protection could 
be devastating to the Borrower and consequently, jeopardize REA loan 
security. The required use of REA Form 525, Central Office Equipment 
Contract (Including Installation), remains.

Notice and Instructions to Bidders

    Item 4: One commenter remarked that the Owner should be responsible 
for providing a notice that the state requires a license for bidding, 
if such a requirement exists.
    Response: Since the Bidder is the party who ultimately will have to 
abide by the State's licensing requirements, REA believes the Bidder 
should bear the responsibility for determining whether a license is 
required for bidding.
     Item 6: One commenter remarked that the method of bidding in the 
existing REA Form 525 makes bid bonds optional and the proposed REA 
Form 525 removes this option. They feel that the option should remain.
    Response: The existing REA Form 525, Notice and Instructions to 
Bidders, Item 5, and the proposed REA Form 525, Notice and Instructions 
to Bidders, Item 6, specifically state that each proposal must be 
accompanied by a Bid Bond or a certified check. No other option exists. 
The wording in both documents is essentially the same.
    Item 14: (b) One commenter remarked that this requirement adds 
complexity and administrative burden because the manufacturers are 
already required to comply with REA Form 525, Article VI.
    Response: Item 14(b) is required by the Office of Federal Contract 
Compliance Programs (OFCCP) requirement.

Bidder's Proposal To Engineer, Furnish, Deliver, and Install Equipment, 
Materials and Software

Article I, Bid Price
    Section 1: Two commenters questioned the use of the term ``Delivery 
Acceptance'' in column five of this section.
    Response: Column five is the time in calendar days between approval 
of the Contract and delivery of equipment. The term ``Acceptance'' has 
been removed from this column to more clearly define the requirement.
    Section 1: One commenter remarked that there should be some 
instruction as to how to identify each project.
    Response: REA agrees. REA has added Note 3 to Article I, section 1, 
as an instruction to leave a blank line between each Project listed in 
section 1.
    Section 3: One commenter remarked that the word ``substantial'' 
should be replaced and one commenter remarked that the language ``The 
Owner * * * may * * * make reasonable changes, additions to or 
subtractions from the Specifications * * *'' is ambiguous and should be 
changed.
    Response: This is the same language that is in the existing REA 
Form 525 Contract. It has worked well in the past and REA does not feel 
there is a need to change it.
Article II, Delivery and Installation
    Section 1: One commenter remarked that the draft REA Form 525 made 
the Completion of Installation of the essence. The commenter feels that 
Completion of the Project should be of the essence, since liquidated 
damages are measured from that event.
    Response: Completion of Installation is a scheduled date that must 
be met. The scheduled date for the Completion of the Project, as shown 
in Article I, Section 1, Column 7, is established by adding 60 days to 
the Completion of Installation. Liquidated Damages are measured from 
the scheduled date for Completion of the Project. Actual Completion of 
the Project may be a date earlier or later than the scheduled date of 
Completion of the Project as defined in Article VII, Section 1, 
Definitions. Therefore, REA believes that Completion of Installation 
must be of the essence.
    Section 1: One commenter remarked that if a remote switching 
terminal is scheduled independently of a central office, the Contract 
should reflect this as a separate Project.
    Response: Article I, Section 1, and the Contract in general, regard 
a central office, including all associated remote switching terminals, 
to be an indivisible unit for delivery, payment, turnover, closeout, 
liquidated damages, and other purposes. A host office and its remotes 
are interdependent and alterations to one may affect the others. 
Therefore, REA regards a host office and all associated remotes as one 
item under the Contract.
    Section 1: One commenter remarked that the reference to ``the 
satisfaction of the Owner and the Administrator'' is a subjective 
standard and should be removed.
    Response: If the language in question is deleted, the Section would 
require unconditional adherence to the terms of the Contract. The 
language is included here to allow the possibility of latitude, where 
the Owner and REA agree.
    Section 3: One commenter had the following remarks:
    (i) In the first sentence the wording ``give sufficient supervision 
to'' should be changed to ``supervise.''
    (ii) Also, this commenter feels the language ``using Bidder's best 
skill and attention'' is onus and unenforceable and should be deleted.
    (iii) The commenter also feels the second sentence should be 
expanded to include the following language ``but that the failure of 
the Bidder to discover these items shall not create any obligation or 
liability on the part of the Bidder, nor relieve the Owner of its 
performance or responsibilities.''
    Response: REA feels that the existing language is appropriate. REA 
disagrees with the expansion of the second sentence since REA believes 
it is reasonable for the Bidder to be responsible for the fulfillment 
of the Contract requirements.
    Section 4: One commenter had the following remarks:
    (i) The reference to ``manufacturing'' in the first paragraph 
should be replaced with ``other than cost information or any other 
information from which cost could be derived.''
    (ii) The commenter also suggests the language ``each central office 
(and its associated remote switching terminals), feature or service'' 
be replaced with the word ``Project'' as a potential exists for a 
remote to be scheduled as a separate Project.
    (iii) In addition, the commenter feels the word ``nonperformance'' 
in the fourth paragraph should be replaced with ``failure to 
satisfactorily resolve all such deficiencies as previously listed on 
the REA Form 517.''
    Response:
    (i) REA feels the language in the first paragraph offers sufficient 
protection to the Bidder as written. This language has not been 
changed.
    (ii) As previously responded to, Article I, Section 1, and the 
Contract in general, regard a central office, including all associated 
remote switching terminals, to be an indivisible unit. However, in the 
interest of brevity, this language has been replaced with the word 
``Project.''
    (iii) REA agrees and has revised Article II, section 4, paragraph 4 
to include the suggested language.
    Section 4: One commenter remarked that the fourth paragraph of this 
Section imposes an artificial thirty (30) day requirement for 
correction of deficiencies. They suggest the Section be amended to 
require corrections within thirty (30) days of receipt of the REA Form 
517 from the Borrower or by the scheduled date for Completion of the 
Project, whichever is longer.
    Response: REA feels this Section offers the Bidder and the Borrower 
equal protection by imposing specific time limits for the Borrower's 
tests and the Bidder's corrections. This language has not been changed.
    Section 7: One commenter remarked that the first paragraph of this 
Section should be modified to permit the Bidder either to correct the 
defect within 30 days or to agree with the Borrower during such 30 days 
on a course of correction reasonably designed to cure the defect.
    Response: REA agrees. This Section has been revised to allow an 
extension of time if agreed upon by the Owner and REA.
    Section 7: One commenter remarked that refund and credit options 
should be included in the event a defect cannot reasonably be 
corrected.
    Response: Such a provision would give the Bidder the right to 
simply ``buy back'' equipment or software when a problem is 
encountered. To the Borrower, this means that essential features or 
capability could be lost and would remain unavailable for the entire 
useful life of new switching equipment. The resulting reduction in 
value of the Contract to the borrower cannot be predicted. This option 
has not been added to Form 525.
    Section 7: One commenter remarked that minor ``bugs'' are inherent 
in all software and should not rise to the level of warranty defects.
    Another commenter remarked that the Form 522 Specifications and not 
other technical material provided by the Bidder should be the standard 
for software warranty.
    Response: REA feels the performance of the software must be in 
accordance with the Form 522 Specifications and Bidder documentation.
    The Bidder documentation is furnished to assist the borrower in the 
operation, administration and maintenance of the switch.
    Section 7: Three commenters remarked that this Section should be 
rewritten to add disclaimers and exclusive remedies and to limit the 
Bidder's liabilities and limit the Owner's remedies.
    Response: REA believes that the language as stated divides the 
risks equitably.
    Section 7(a): One commenter remarked that the reference to ``a 
central office and its associated remote switching terminals'' be 
deleted and replaced with the words ``each Project.''
    Response: As previously responded to, this language has been 
replaced with the word ``Project.''
    Section 7(b): Three commenters remarked that the warranty period 
for software should be shortened.
    Response: REA requires a five (5) year warranty period because 
software is information based and defects in seldom used programs would 
not be detected until the program is used. REA believes that over a 5 
year period even seldom used programs would be used and any defects 
corrected.
    Section 7(e): One commenter remarked that exceptions to the 
warranty in the subsection should also include fire, explosions, power 
failures, force majeure, and equipment which is normally consumed in 
operation, such as fuses.
    Response: The warranty must cover losses of whatever nature, 
resulting from causes covered by the warranty provided for in the 
formal Contract.
    Section 7(f): One commenter requested that the period after the 
word ``Owner'' in the last line in the subsection be deleted and the 
words ``during the warranty period, thereafter, all such costs and risk 
of shipping shall be borne by the Owner.'' be added.
    Response: The first paragraph of the Section specifically defines 
these conditions as applying ``Throughout the warranty period * * *.'' 
REA does not feel additional language is required to further define 
this.
Article III, Payments and Releases of Lien
    Section 1(a),(b): One commenter remarked that these subsections are 
unfair as written. Each central office and its associated remotes 
should be treated separately for payment purposes to allow the Bidder 
to get paid for his investment in a timely manner.
    Response: Article I, Section 1, and the Contract in general, regard 
a central office, including all associated remote switching terminals, 
to be an indivisible unit for delivery, payment, turnover, closeout, 
liquidated damages, and other purposes. A host office and its remotes 
are interdependent and alterations to one may affect the others. 
Therefore, REA regards a host office and all associated remotes as one 
item under the Contract.
    Section 1(c): One commenter remarked that the phrase ``Completion 
of the Contract'' in this subsection should be changed to read 
``Completion of the Project.'' This would enable the Bidder to receive 
the final ten percent (10%) for each Project as it is satisfactorily 
completed.
    Response: These have been the standard REA Contract terms for many 
years. REA feels it offers sufficient protection to the Borrower that 
the Contract will be completed in a satisfactory manner, while allowing 
the Bidder a return on its investment prior to satisfactory completion 
of the Contract. Also, the Bidder can receive the final ten percent 
(10%) of a Project if the partial closeout procedure is allowed.
    Section 1(a), (b), (c): One commenter remarked that unproven 
features and capabilities should not delay payments for the Project.
    Response: Unproven features and capabilities are listed as separate 
Projects in Article I, section 1, with separate time frames for 
delivery and installation of features and capabilities that cannot be 
provided at the time of Completion of the Project. If separate 
schedules are not part of the Contract, delays in delivery would cause 
delays in payments for the entire Project. This encourages a Bidder's 
disclosures as required in Article V, section 2.
    Section 1(e): One commenter remarked that the subsection should be 
reworded to require the Owner to pay the Bidder for each central office 
if the subsection is not struck out.
    Response: REA agrees with this comment. The language in Section 
1(e) has been changed to require the Owner to strike out this section 
if the partial closeout procedure is not to be allowed.
    Section 2: One commenter remarked that this section references a 
``Waiver and Release of Liens,'' a ``Certificate of Contractor'' and a 
``Certificate of Contractor and Indemnity Agreement'' but these 
documents were not made public at the time, consequently, they reserve 
their right to comment after they are issued.
    Response: The documents referred to by the commenter are existing 
and have not been revised. If any changes are made to the 
aforementioned documents they will be published as a Proposed Rule and 
comments will be requested at that time.
Article IV, Particular Undertakings of the Bidder
    Section 1(b): Two commenters remarked that this Section is unfair 
to the Bidder. They feel that the Bidder should only be responsible for 
damages caused by the Bidder and that the Borrower is in a much better 
position to protect its site, and guard against fire, flood and theft.
    Response: The Bidder is required by law to have insurance from 
commencement to completion of the Contract. The Bidder also has charge 
and control of all work, equipment, materials and software to be done 
or used therein. Therefore, REA feels the Bidder is in a better 
position during this time period to protect itself against risk of 
loss.
    Section 3: One commenter remarked that commercial insurance is 
unnecessary. Specifically, the coverage limits required are within the 
``deductible'' for large companies. Thus the risk is self retained.
    Response: Insurance requirements for contractors are set forth in 7 
CFR part 1788, subpart C, Insurance for Contractors, Engineers and 
Architects. Generally, this regulation is intended to set minimum 
coverage requirements for companies of all sizes.
    Section 5: One commenter remarked that the 525 Contract should be 
modified to include a Uniform Software Agreement.
    Response: REA agrees. A Uniform Software License was drafted and 
published for comments on May 20, 1993, at 58 FR 29363, and was 
published as a final rule on April 14, 1994, at 59 FR 17675. The final 
rule will be an addendum to any 525 or 545 Contract that requires a 
license.
    Section 6: One commenter remarked that some guarantees may not be 
transferable or assignable by the Bidder and this Section should be 
subject to any applicable restrictions on transfer or assignment.
    Response: Article IV, section 6 has been revised to allow for 
restrictions on transfer of warranties. However, regardless of 
restrictions upon transfer or assignment, the warranty coverage defined 
in Article II, section 7, is required.
    Section 7: Two commenters remarked that a buy back option should be 
allowed for infringement of intellectual property rights.
    Response: Such a provision would give the Bidder the right simply 
to ``buy back'' equipment or software when a copyright problem is 
encountered. To the Owner, this means that essential features or 
capability could be lost and would remain unavailable for the entire 
useful life of the new switching equipment. The resulting reduction in 
value of the Contract to the Owner cannot be predicted, and often would 
be greater than the amount the Owner paid for the price of the 
infringing equipment or software.
    Section 7: One commenter remarked that this Section should be 
limited to United States patents, trademarks, copyrights and trade 
secrets.
    Response: REA believes this would not provide sufficient 
protection.
    Section 7: One commenter remarked that the Bidder should be allowed 
to take pro-active steps to avoid an injunction, rather than always 
having to react to an injunction after it is imposed.
    Response: This section merely states the action the Bidder must 
take to protect the Owner after the use of the equipment or software is 
enjoined. It does not proscribe any action the Bidder may wish to take 
to protect its own interests and the Owner's interests before the 
injunction is granted.
Article V, Remedies
    Section 2: Three commenters remarked that the cap on liquidated 
damages is excessive and unrelated to any actual damage.
    Response: REA believes that if a limit is to be set it should not 
be less than the price of the affected central office and all 
associated remote switching units. This in many cases will be less than 
the total Contract price. This Section also instructs the Owner to 
notify the Bidder in writing how the liquidated damages were computed.
    Section 2: One commenter remarked that previous draft versions of 
the 525 Central Office Equipment Contract better defined ``placed in 
service'' and assumes liquidated damages are applied based on that 
date.
    Response: REA believes that the wording ``used by the Owner to earn 
revenue'' more clearly defines ``placed in service.'' Article V, 
sections 2 and 5, and Article VII, section 1, Definitions, clearly 
state that liquidated damages can only be assessed and are the 
exclusive remedy when the Bidder has failed to complete the Project on 
time and are not based on when a central office is placed in service.
    Section 2: One commenter remarked that the Bidder should not be 
assessed liquidated damages based on the entire Project when a only a 
portion is delayed.
    Response: As stated previously, the central office and all 
associated remote switching terminals are a unit for the purposes of 
this Contract. Liquidated damages are measured from ``Completion of 
Project.'' This gives the Bidder an incentive to complete the Project 
in a timely manner. If liquidated damages were assessed on each 
individual part of a Project, then in some cases the incentive to 
finish the Project on time would be removed.
    Section 2: One commenter remarked that liquidated damages should 
not apply to features or capabilities that are not fully developed or 
do not have a verifiable satisfactory field performance because they 
have been accepted by the Owner and by definition they are unproven. It 
was also felt that even if they are not exempt, liquidated damages 
should not apply if the central office has been placed in service.
    Response: The Owner allowed these unproven features to be bid based 
on a time period established by the Bidder for the availability of 
these features. A Bidder's responsibility to provide the features or 
capabilities bid on, in the time period established by the Bidder, 
cannot be diminished by notifying the Owner that they are not going to 
be available in the time promised. The language in Article V, section 
2, remains.
    Liquidated damages on unproven features are a measure of revenue 
that would be lost by that feature not being available on time. It does 
not have a bearing on, and should not be associated with, revenue from 
the rest of the Project that is in service. If it was as suggested in 
the comment, then it would be a penalty to the Owner in lost revenue 
for the Bidder not completing the feature or capability as scheduled.
    Section 2: One commenter remarked that additional language be added 
after the word ``Provided,'' to clarify this provision. It was also 
felt that the last line of this section seemed inappropriate and should 
be deleted.
    Response: REA feels the existing language clearly identifies the 
intent of this provision. Also, a Bidder's responsibility to complete 
the Project as originally bid should not be diminished because of 
neglect by the Bidder to notify the Owner of unproven or unavailable 
features or capabilities. The last sentence remains.
    Section 3: Four commenters remarked on this section. From the 
comments received, it appears this section is still of great concern to 
the equipment manufacturers. The comments and recommendations received 
are summarized below:
    (i) Two commenters remarked that ten times the Contract price is 
excessive. Three commenters remarked that they should be able to 
disclaim consequential damages. Two commenters remarked that that much 
exposure is probably not insurable but if it was, the premiums would be 
excessive and would be passed on to the Owner. One commenter 
recommended that consequential damages be the lesser of five times the 
purchase price of the affected central office and its associated remote 
terminals, or $5.0 million.
    (ii) One commenter recommended that the Owner retain the liability 
since the Owner is in a better position to prevent losses by properly 
maintaining its network. One commenter felt that consequential damages 
should only be available during the warranty period.
    Response:
    (i) The existing Form 525 does not limit the liability for 
incidental or consequential damages. REA's intent is to place a limit 
of liability on consequential and incidental damages, except for 
personal injury or tangible property damage, which will: enable Bidders 
to insure for a risk of known limit; provide Owners with protection 
against losses related to product failure; protect the government's 
loan security; and serve as a standard that Bidders and Owners alike 
can expect to see on every Contract so competitive bidding can be 
facilitated. REA has established a liability limit of ten times the 
total Contract amount, which will result in a limit in the range of 
$2.5 million to $10 million for typical REA Contracts.
    (ii) Consequential damages provide a measure of protection from 
loss due to product failure or other causes related to the Bidder's 
performance. Since the risk of loss still exists after the warranty 
period, consequential damages must also be available.
    Section 5: One commenter remarked that in order to make the 
proposed draft consistent with the suggested addition of exclusive 
remedies language in other sections, some minor language adjustments 
are needed for this section.
    Response: REA has not added exclusive remedy language so no 
language adjustments were made.
    Section 5: One commenter remarked that cumulative remedies should 
not apply for a normal warranty claim. The warranty provisions of the 
Contract provide for a remedy and course of conduct in the event of a 
product failure.
    Response: The warranty provisions may not fully protect the 
Borrower in some situations. For example, a defective component, 
serviced under Article II, section 6, could cause a consequential 
damages claim. The language in section 5 is unchanged.
Article VI, Equal Employment
    One commenter remarked that a number of large national employers 
have made direct arrangements with the Office of Federal Contract 
Compliance Programs (OFCCP) relating to the procedures to be followed 
in connection with EEO policies and language should be added to this 
Article VI to cover separately negotiated arrangements.
    Response: The language in Article VI, was provided by the Office of 
Federal Contract Compliance Programs (OFCCP) and cannot be changed by 
REA.
Article VII, Miscellaneous
    Section 1: One commenter felt the definition of Software should be 
expanded to clarify that Software means the Software provided to the 
Owner by the Bidder hereunder and the words ``and similar design level 
documentation'' should be inserted after the words ``source code'' in 
this subsection. It was also felt that the definition of Project should 
be expanded to include remote switching terminal(s).
    Response: REA feels the definition of the term ``Software'' is 
appropriate as written and will not be construed to mean any software 
other than the software furnished for the Contract in question. The 
words ``and similar design level documentation'' have not been added to 
the words ``source code.'' Source code is a definable commodity but 
``and similar * * *.'' is overly vague. REA also feels the definition 
of the word ``Project'' is sufficient. If a remote is to be a separate 
Project, it must be listed as such in Article 1, section 1.
    Section 1: One commenter is concerned that the Owner's failure to 
provide site availability and needed facilities for remotes can unduly 
hold up Completion of the Project. The commenter proposed adding 
language to cover that event.
    Response: REA feels the definition of ``Completion of the Project'' 
is appropriate. The concerns of ``Site availability or functionality'' 
not being available in a timely manner is covered under Article II, 
section 1, Time of Completion of Installation.
    Section 2: Two commenters remarked on this section. Their comments 
are summarized below:
    (i) One commenter remarked that this Section still requires that 
equipment and software support be provided for five or eight years from 
discontinuing the manufacture of that Equipment. The commenter feels 
this time period should commence upon Completion of the Contract. It is 
felt this provision as drafted would penalize Bidders which enhance and 
manufacture existing equipment and reward Bidders who discontinue 
manufacture of equipment and develop new and incompatible equipment.
    (ii) One commenter wanted to revise the language to change the 
intent of this paragraph and also add a provision for a one (1) year 
software warranty.
    Response: REA previously responded in the Federal Register on March 
14, 1991, at 56 FR 10827, that it concludes, based on previous 
comments, that this new Section strikes a reasonable balance for 
sellers and buyers.
    Section 3: One commenter remarked that its only area of concern 
arises in a two fold fashion. To begin with, the use of the word 
``and'' following the word ``substantially'' in the first sentence 
interferes with the intended meaning of the sentence, and as such, 
should be deleted. The specific concern arises from the wording of this 
section 3, Notwithstanding the possibility of authorization by the 
Administrator, it suggests that such authorization is permissive, not 
mandatory and that therefore the intent of REA Bulletin 344-3 is not 
met. The commenter submits that such authorization be mandatory in the 
event the valuation conditions of the Bulletin are met.
    Response: The word ``and'' following ``substantially'' in the first 
sentence is a typographical error and has been changed to ``all.'' In 
regard to the Administrator's authorization being permissive, the 
Administrator's authorization is not required when the conditions of 
Bulletin 344-3 are met. It is only required when the conditions of 
Bulletin 344-3, paragraph IV.B. or IV.C. are not met.
    Section 6: One commenter remarked that the proposed draft has added 
a new sentence to this section which releases the borrower from its 
obligation to maintain the confidentiality of the Bidder's proprietary 
information if the Bidder fails to fulfill its continuing support 
obligations. The commenter believes the proposed remedy for such a 
problem is overly broad and is punitive to the Bidder.
    Response: REA feels this section offers sufficient protection for 
the Bidder and the Owner. The only way the Owner can be released from 
the confidentiality requirement is by the Bidder's failure to meet the 
obligations of the Form 525 Contract. Article VI, section 6, as 
proposed, provides some incentive not to violate the obligations of the 
Contract.
    Section 12: One commenter suggested that the Bidder not be required 
to obtain the consent of its surety for all sub-contractors. It is felt 
that if the surety makes such a requirement on the Bidder, this 
language adds nothing to the Bidder's obligation to obtain proper 
protection. On the other hand, if such a condition is not required by 
the surety, there should be no need to retain this condition.
    Response: The only way the REA and the Owner can be assured that 
the surety allows subcontractors is by written consent. The language in 
this section remains unchanged.
    Section 12: One commenter remarked that either party should be 
permitted to subcontract the Agreement to an affiliate without the 
consent of the other party. A corporate restructuring of a Bidder 
should not be able to be arbitrarily held up by a single Owner.
    Response: REA does not feel that a Bidder should be allowed to 
arbitrarily subcontract an REA Contract without the proper consent, 
which will not be unreasonably withheld. This language has worked well 
in the past and REA feels it will continue to work well in the future.

List of Subjects

7 CFR Part 1753

    Communications equipment, Loan programs--communications, Reporting 
and recordkeeping requirements, Rural areas, Telephone.

7 CFR Part 1755

    Loan programs--communications, Reporting and recordkeeping 
requirements, Rural areas, Telephone.

    For the reasons set out in the preamble, chapter XVII of title 7 of 
the Code of Federal Regulations is amended as follows:

PART 1753--TELECOMMUNICATIONS SYSTEM CONSTRUCTION POLICIES AND 
PROCEDURES

    1. The authority citation for part 1753 continues to read as 
follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq.

    2. In Sec. 1753.39, paragraph (f)(1)(i) is revised to read as 
follows:


Sec. 1753.39  Closeout documents.

* * * * *
    (f) * * *
    (1) * * *
    (i) Immediately following completion of the last central office 
equipment installation, arrange with the contractor's installer, 
connecting company (where necessary), and the GFR for performance of 
the acceptance tests of offices not previously tested. The date for 
testing should be established so that the installer will not be 
required to return to the site for the sole purpose of assisting in 
these tests. Acceptance tests shall be performed within 30 days of 
completion of the installation, unless otherwise requested in writing 
by the contractor and approved in writing by the borrower.
* * * * *

PART 1755--TELECOMMUNICATIONS STANDARDS AND SPECIFICATIONS FOR 
MATERIALS, EQUIPMENT AND CONSTRUCTION

    1. The authority citation for part 1755 continues to read as 
follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq.

    2. Section 1755.93 is amended by revising the entry for Form 525 in 
the table and footnote 1 at the end of the table to read as follows:


Sec. 1755.93  List of standard forms of telecommunications contracts.

* * * * * 

----------------------------------------------------------------------------------------------------------------
                                                                                                     Source of  
    REA form No.             Issue date                   Title                   Purpose              copies   
----------------------------------------------------------------------------------------------------------------
                                                                                                                
                                                  * * * * ** *                                                  
525................  July 18, 1994.............  Central Office           Purchase and             REA.\1\      
                                                  Equipment Contract       Installation of                      
                                                  (Including               central office                       
                                                  Installation).           switching equipment.                 
                                                                                                                
                                                                                                                
                                                  * * * * ** *                                                  
----------------------------------------------------------------------------------------------------------------
\1\A limited number of copies of the publication will be furnished by REA upon request. As this document is     
  produced by the Federal Government and is, therefore, in the public domain, additional copies may be          
  duplicated locally by any user as desired. Requests for copies should be sent the Director, Administrative    
  Services Division, U.S. Department of Agriculture, Rural Electrification Administration, Washington, DC 20250.
  The telephone number of the REA Publication Office is (202) 720-8674.                                         

* * * * *
    3. Section 1755.525 is added to read as follows:


Sec. 1755.525  Form 525, central office equipment contract (including 
installation.)

    The REA Form 525, Central Office Equipment Contract (Including 
Installation), in this section shall be used for all purchases of 
central office equipment (other than such purchases of special 
equipment using Form 397) using REA financial assistance when the 
equipment is supplied and installed by the seller or installed by a 
firm under contract with the seller as defined in 7 CFR part 1753, 
subparts E and H. The REA Form 525 Central Office Equipment Contract 
follows:

Central Office Equipment Contract (Including Installation)

Notice and Instructions to Bidders; Central Office Equipment 
Project (Including Installation)

    1. Sealed Proposals for the engineering, furnishing, delivery, 
and installation of central office equipment, materials and software 
for the

----------------------------------------------------------------------

----------------------------------------------------------------------
(hereinafter called the ``Owner'') which is to be part of the system 
known as

----------------------------------------------------------------------

----------------------------------------------------------------------
to be financed pursuant to a loan contract between the Owner and the 
United States of America (hereinafter called the ``Government'') by 
the Administrator of the Rural Electrification Administration 
(hereinafter called the ``Administrator'') will be received by the 
Owner on or before ____________ o'clock, ________.M.,

----------------------------------------------------------------------

at---------------------------------------------------------------------

----------------------------------------------------------------------
at which time and place the Proposals will be publicly opened and 
read. The Rural Telephone Bank may also be a party to the loan 
contract.
    2. The Bid Documents (composed of plans, specifications and 
drawings), together with all necessary forms and other documents for 
Bidders, may be obtained from the Owner or from the Engineer, at the 
latter's office at

----------------------------------------------------------------------

----------------------------------------------------------------------
    The Specifications may be examined at the office of the Owner or 
at the office of the Engineer. A copy of the loan contract between 
the Owner and the Government may be examined at the office of the 
Owner.
    Each set of Bid Documents will have a serial number, assigned by 
the Engineer, and the number of each set with the name of the Bidder 
will be recorded by the Engineer. Bids will be accepted only from 
original Bidders, or from some other qualified Bidder to whom such a 
set has been transferred by the original Bidder with the approval of 
the Engineer prior to the pre-bid technical session.
    3. A pre-bid technical session will be held with each Bidder 
during the week of __________, 19______ at

----------------------------------------------------------------------
for the purpose of receiving the Bidder's Technical Proposal, 
discussing details of the Project(s), and considering suggestions 
from Bidders. The Owner shall attach to this Notice a list of the 
information required in the Bidder's Technical Proposal. Each Bidder 
will be given a specific time period for the pre-bid technical 
session. At the pre-bid technical session, the Bidder shall fully 
describe to the Owner any exceptions to the Specifications the 
Bidder may request. In addition, the Bidder shall identify all 
features and capabilities that are not fully developed or do not 
have a verifiable satisfactory field performance record. If the 
Owner decides to incorporate any changes into the Specifications, 
the Owner shall furnish all prospective Bidders a copy of the 
Specifications containing such revisions (the ``Revised 
Specifications'') and all Bids shall be made on the basis of the 
Revised Specifications. At this session, the Bidder shall identify 
all documentation and materials that it claims constitute agreed 
excluded documentation under section (2)(xi) of the Software 
License. The Bidder shall claim as agreed excluded documentation 
only those items it may be unable to provide to the Borrower as 
required by said section (2)(xi). The Engineer shall immediately 
provide a list of all items so identified to [appropriate REA 
office]. The Engineer shall inform the Bidder at least ________ days 
before the scheduled bid opening whether either the Engineer or 
[REA] will reject the Bid because of items so identified. Licensor 
agrees that certain Licensed Software cannot be excluded from the 
requirements of said section (2)(xi), including but not limited to 
software that would significantly impair the operation of the 
System, would significantly impair the ability of the Owner to 
generate revenue, or would pose a risk to REA loan security. If 
allowed, the agreed excluded documentation shall be individually 
identified in an attachment to the Bid. No bid shall be accepted 
from a Bidder who fails to attend the pre-bid technical session or 
fails to demonstrate to the Owner that its equipment meets the 
requirements of the Plans and Specifications.
    4. Proposals shall be submitted on the forms furnished by the 
Owner and must be delivered in a sealed envelope addressed to the 
Owner. The name and address of the Bidder, its license number, if a 
license is required for bidding on a project by the State, and the 
date and hour of the opening of bids must appear on the envelope in 
which the Proposal is submitted. Proposals must be in ink or 
typewritten. No alterations or interlineations will be permitted, 
unless made, initialed, and dated before submission.
    5. Prior to the submission of the Proposal, the Bidder shall 
make and shall be deemed to have made a careful examination of the 
Specifications, forms of Bidder's Proposal and Acceptance, and 
Contractor's Bond attached hereto, and shall become informed as to 
the location and characteristics of the proposed central office and 
remote terminal installations, features and services, the 
transportation facilities, the kind of facilities required before 
and during the delivery and installation of the equipment and 
materials, the general local conditions and all other matters that 
may affect the cost and the time of completion of the installations. 
Bidders will be required to comply with all applicable statutes, 
codes, and regulations, including those pertaining to the licensing 
of contractors and the ``Anti Kick-Back Acts,'' as amended, (40 
U.S.C. 276c; 41 U.S.C. 51 et seq.) and regulations issued pursuant 
thereto, and 18 U.S.C. 287, 874, 1001, as amended.
    6. Each Proposal must be accompanied by a Bid Bond, in the form 
attached, or a certified check on a bank that is a member of the 
Federal Deposit Insurance Corporation, payable to the order of the 
Owner, in an amount equal to ten percent (10%) of the maximum 
possible bid price. The maximum possible bid price is the sum of the 
total base bid, spare parts, maintenance tools and all positive 
amounts for alternates. Each Bidder agrees that, if its Proposal is 
one of the three low Proposals, its Bid Bond or check shall be held 
by the Owner until a Proposal is accepted and Contractor's Bond, 
when required, is furnished by the successful Bidder and such 
acceptance has been approved by the Administrator, or for a period 
not to exceed ninety (90) days from the date hereinbefore set for 
the opening of Proposals whichever period shall be the shorter. If 
such Proposal is not one of the three low Proposals, the Bid Bond or 
check will be returned to the Bidder within a period of thirty (30) 
days.
    7. The successful Bidder will be required to furnish to the 
Owner a Contractor's Bond in conformance with the requirements of 7 
CFR part 1788, subpart C, Insurance for Contractors, Engineers, and 
Architects.
    8. Should the successful Bidder fail or refuse to furnish a 
Contractor's Bond within thirty (30) days after written notification 
of the award of the Contract by the Owner, the Bidder will be 
considered to have abandoned the Proposal. In such event, the Owner 
shall be entitled (a) to enforce the Bid Bond in accordance with its 
terms, or (b) if a certified check has been delivered with the 
Proposal, to retain from the proceeds of the certified check the 
difference (not exceeding the amount of the certified check) between 
the amount of the Proposal and such larger amount for which the 
Owner may in good faith contract with another party to construct the 
Project(s). The term ``successful Bidder'' shall be deemed to 
include any Bidder whose Proposal is accepted after another Bidder 
has previously refused or has been unable to execute the Contract or 
to furnish a Contractor's Bond.
    9. If requested by the Owner or the Administrator, the Bidder 
shall furnish evidence, satisfactory to the Owner and the 
Administrator, that the Bidder has the necessary facilities, 
ability, and financial resources to perform the Contract.
    10. The Contract, when executed, shall be deemed to include the 
entire agreement between the parties thereto and neither party shall 
claim any modification thereof resulting from any representation or 
promise made at any time by any officer, agent, or employee of the 
other or by any other person.
    11. The Owner reserves the right to waive minor irregularities 
or minor errors in any Proposal, if it appears to the Owner that 
such irregularities or errors were made through inadvertence. Any 
such irregularities or errors so waived must be corrected on the 
Proposal in which they occur prior to the execution of any Contract 
which may be awarded thereon. Failure to provide a Bid Bond or check 
as specified in item six (6) above is not a minor irregularity.
    12. The Owner reserves the right to reject any or all Proposals.
    13. The equipment to be furnished for all central offices and 
remote switching terminals included in the Proposal is to be of one 
and the same basic design. A Proposal submitted on any other basis 
will not be considered.
    14. Equal Opportunity and Employment
    (a) The Offeror's or Bidders's attention is called to the 
``Equal Opportunity Clause'' and the ``Standard Federal Equal 
Employment Specifications'' set forth herein.
    (b) The goals and timetables for minority and female 
participation, expressed in percentage terms for the Contractor's 
aggregate workforce in each trade on all construction work in the 
covered area, are as follows:

------------------------------------------------------------------------
                            Goals for minority                          
       Timetables           participation for        Goals for female   
                                each trade        participation in trade
------------------------------------------------------------------------
                          (Insert goals for      (Insert goals for each 
                           each year)             year)                 
------------------------------------------------------------------------

    These goals are applicable to all the Contractor's construction 
work (whether or not it is federal or federally assisted) performed 
in the covered area. If the Contractor performs construction work in 
a geographical area located outside of the covered area, it shall 
apply the goals established for such geographical area where work is 
actually performed. With regard to this second area, the Contractor 
also is subject to the goals for both its federally involved and 
nonfederally involved construction.
    The Contractor's compliance with Executive Order 11246 (3 CFR, 
1963-1965 Comp., p. 340) and the regulations in 41 CFR part 60-4 
shall be based on its implementation of the Equal Opportunity 
Clause, specific affirmative action obligations required by the 
specifications set forth in 41 CFR 60-4.3(a), and its efforts to 
meet the goals. The hours of minority and female employment and 
training must be substantially uniform throughout the length of the 
contract, and in each trade, and the Contractor shall make a good 
faith effort to employ minorities and women evenly on each of its 
projects. Transfer of minority or female employees or trainees from 
Contractor to Contractor or from project to project for the sole 
purpose of meeting the Contractor's goals shall be a violation of 
the contract, Executive Order 11246 and the regulations in 41 CFR 
part 60-4. Compliance with the goals will be measured against the 
total work hours performed.
    (c) The Contractor shall provide written notification to the 
Director of the Office of Federal Contract Compliance Programs 
within 10 working days of award of any construction subcontract in 
excess of $10,000 at any tier for construction work under the 
contract resulting from this solicitation. The notification shall 
list the name, address and telephone number of the subcontractor; 
employer identification number of the subcontractor; estimated 
dollar amount of the subcontract; estimated starting and completion 
dates of the subcontract; and the geographical area in which the 
subcontract is to be performed.
    (d) As used in this Notice, and in the contract resulting from 
this solicitation, the ``covered area'' is

----------------------------------------------------------------------

----------------------------------------------------------------------
(insert description of the geographical areas where the contract is 
to be performed giving the state, county and city, if any).

    Note: Paragraph 14 is applicable to the extent required by law. 
If applicable, certain information needs to be inserted at 
subparagraphs (b) and (d). In determining whether and how this 
paragraph is applicable, reference should be made to Office of 
Federal Contract Compliance Programs regulations (41 CFR Chapter 
60).

----------------------------------------------------------------------

Date

----------------------------------------------------------------------

Owner

By---------------------------------------------------------------------

Title------------------------------------------------------------------

Bidder's Proposal to Engineer, Furnish, Deliver, and Install 
Equipment, Materials and Software

(Proposal shall be submitted in ink or typewritten)

To:--------------------------------------------------------------------

(Hereinafter called the ``Owner'')
    The undersigned (hereinafter called the ``Bidder'') hereby 
proposes to engineer, furnish, deliver, and install the equipment, 
materials and software for each Project listed under Column 1, 
``Project,'' in Article I, section 1, and described in the plans, 
specifications and drawings (hereinafter called the 
``Specifications'') prepared by the Owner and attached hereto and 
made a part hereof, financed by a loan to the Owner made or 
guaranteed by the United States of America, acting through the 
Administrator of the Rural Electrification Administration 
(hereinafter called the ``Administrator''), or by loans to the Owner 
by the United States of America and by the Rural Telephone Bank, and 
designated ____________.
    The Bidder has become informed as to the location and 
characteristics of the proposed installations, has become informed 
as to the kind of facilities required before and during the delivery 
and installation of the equipment, material, and software and has 
become acquainted with the labor conditions which would affect the 
work.
    The Bidder agrees that if its bid is accepted the following 
terms and conditions shall govern.
    If, in submitting this Proposal, the Bidder has taken any 
exception to the form of proposal furnished by the Owner, the Bidder 
understands that the Owner and the Administrator may evaluate the 
effect of such change as they see fit and they may exclude the 
Proposal from consideration in determining the award of the 
Contract.

                                                                        Article I                                                                       
  [Section 1. Bid Price. The Bidder will engineer, furnish, deliver, and install the equipment, materials, and software described in the Specifications 
                                                                for the following sums:]                                                                
                                                                                                                                                        
                                                                 Time in calendar days                                                                  
---------------------------------------------------------------------------------------------------------------------------------------------------------
                          Materials,                                                               Completion of                                        
 Project (see notes 1,    equipment,    Installation     Base bid       Delivery    Completion of   the project    Spare parts     Item     Maintenance 
       2 and 3)          and software                                                installation   (see note 4)                               tools    
(1)                     (2)            (3)            (4)            (5)            (6)            (7)            (8)                (9)   (10)         
                                                                                                                                                        
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        $              $              $              .............  .............  .............  $                    a   $            
                        $              $              $              .............  .............  .............  $                    b   $            
                        $              $              $              .............  .............  .............  $                    c   $            
                        $              $              $              .............  .............  .............  $                    d   $            
                        $              $              $              .............  .............  .............  $                    e   $            
                        $              $              $              .............  .............  .............  $                    f   $            
                        $              $              $              .............  .............  .............  $                    g   $            
                        $              $              $              .............  .............  .............  $                    h   $            
                        $              $              $              .............  .............  .............  $                    i   $            
                        $              $              $              .............  .............  .............  $                    j   $            
                       ---------------------------------------------------------------------------------------------------------------------------------
      Totals..........  $              $              XXXXXXXXXX     XXXXXXXXXX     XXXXXXXXXX     XXXXXXXXXX     $                  XXX   $            
                       =================================================================================================================================
      Total Base Bid..  .............  .............  $              XXXXXXXXXX     XXXXXXXXXX     XXXXXXXXXX     XXXXXXXXXX       XXXXX   XXXXXXXXXX   
Alternate No. 1.......  $              $              $              .............  .............  .............  $                    k   $            
Alternate No. 2.......  $              $              $              .............  .............  .............  $                    l   $            
Alternate No. 3.......  $              $              $              .............  .............  .............  $                    m   $            
Alternate No. 4.......  $              $              $              .............  .............  .............  $                    n   $            
Alternate No. 5.......  $              $              $              .............  .............  .............  $                    o   $            
Alternate No. 6.......  $              $              $              .............  .............  .............  $                    p   $            
Note 1: If a remote switching terminal, so designate and list after host office.                                                                        
Note 2: All items included in a Project shall have the same completion schedule.                                                                        
Note 3: Each Project shall be separated by a blank line.                                                                                                
Note 4: Time in calendar days for Completion of the Project shall be 60 days after the time established for Completion of Installation.                 

    Section 2. Acceptable Equipment. Unless otherwise specified by 
the Owner (and agreed to in advance in writing by REA), the Bidder 
agrees to furnish under this Proposal only equipment which is 
currently covered by a letter of acceptance issued by the Chairman, 
Committee ``A'' (Telephone). [Note: for convenience of borrowers and 
others, domestically manufactured products are included in REA 
Bulletin 17551-100.] The Bidder agrees also to furnish only 
materials, equipment and software which are new and of most recent 
issue and manufacture, as of the date of the bid opening, or of near 
future release for which the Bidder can assure timely delivery.
    Section 3. Changes in Project. The Owner, with the approval of 
the Administrator, may from time to time during the performance of 
the Contract effected by the acceptance of this Proposal, make 
reasonable changes, additions to or subtractions from the 
Specifications which are part of the Proposal as conditions may 
warrant. However, if substantial changes in the Project shall 
require an extension of time, a reasonable extension will be granted 
if the Bidder shall make a written request therefor to the Owner 
within thirty (30) days after any such change is made. Further, if 
the cost to the Bidder shall be increased or decreased by any such 
change or addition, the Contract price shall be increased or 
decreased by a reasonable amount in accordance with a contract 
amendment signed by the Owner and the Bidder and approved by the 
Administrator. No claim for additional compensation for any such 
change or addition will be considered unless the Bidder shall have 
made a written request therefor to the Owner prior to the 
commencement of work in connection with such change or addition. The 
Delivery or Completion of Installation times specified under Columns 
5, ``Delivery'', and 6, ``Completion of Installation,'' in Article 
I, section 1, can only be changed by a Contract amendment approved 
by the Bidder, the Owner and REA.
    Section 4. Taxes. The bid prices herein set forth do not include 
any amounts payable by the Bidder or the Owner on account of taxes 
imposed by any taxing authority upon the sale, purchase or use of 
materials, supplies, equipment or software to be incorporated in the 
Project(s). If any such tax is applicable to the sale, purchase or 
use of materials, supplies, equipment or software hereunder, the 
amount thereof shall be stated separately on all invoices and paid 
by the Owner.

Article II

Delivery and Installation

    Section 1. Time of Completion of Installation. The time of 
delivery of materials, equipment, and software and of Completion of 
Installation are of the essence of this Contract. The Bidder shall 
deliver the materials, equipment, and software required hereunder 
for each Project upon the time intervals established under Column 5, 
``Delivery,'' in Article I, section 1, after the Administrator shall 
have approved this Contract in writing, and shall prosecute 
diligently and complete the installation of materials, equipment and 
software for each Project in accordance with the terms of this 
Contract and Specifications to the satisfaction of the Owner and the 
Administrator within the number of calendar days specified under 
Column 6, ``Completion of Installation,'' in Article I, section 1. 
The times for such Delivery or such Completion of Installation shall 
be extended for the period of any reasonable delay due exclusively 
to causes beyond the control and without the fault of the Bidder, 
including, but not limited to, acts of God, fires, strikes, floods, 
changes in the Specifications as herein provided, and acts or 
omissions of the Owner with respect to matters for which the Owner 
is solely responsible. However, no such extension of time shall be 
granted the Bidder unless within thirty (30) days after Bidder 
becomes aware of the happening of any event relied upon by the 
Bidder for such an extension of time the Bidder shall have made a 
request therefor in writing to the Owner. Further, no delay in such 
time for delivery of materials, equipment and software or Completion 
of Installation or in the progress of the work shall result in any 
liability on the part of the Owner, except that the Owner shall be 
responsible for and shall pay the Bidder on demand all additional, 
supportable costs and expenses incurred by the Bidder due to delays 
to the extent such delays are caused by the Owner's failure to 
perform its obligations under this Contract unless the Owner's 
failure to perform is caused by forces beyond its control.
    Section 2. Sequence of Installation. All Projects shall be 
completed in the sequence in which they are listed under Column 1, 
``Project,'' in Article I, section 1.
    Section 3. Supervision and Inspection. The Bidder shall give 
sufficient supervision to the work at the site of the Project(s), 
using the Bidder's best skill and attention. The Bidder shall 
carefully study and compare all drawings, specifications, and other 
instructions and shall promptly report to the Owner any error, 
inconsistency or omission which Bidder may discover. The Bidder 
shall keep on the Project(s) during its progress a competent 
superintendent (hereinafter called the ``Superintendent'') and any 
necessary qualified assistants, all satisfactory to the Owner. The 
Superintendent shall represent the Bidder and all directions given 
to the Superintendent by the Owner shall be as binding as if given 
to the Bidder. When requested by the Bidder, such directions shall 
be confirmed in writing.
    Section 4. Inspection and Tests. The installation of materials, 
equipment and software hereunder and all materials, equipment and 
software used therein shall be subject to the inspection, test and 
approval of the Owner and Administrator, in accordance with the 
Specifications. The Bidder shall furnish all pertinent information 
required concerning the nature or source of materials. The Owner and 
the Administrator shall have the right to inspect pertinent records 
(other than manufacturing cost information) of the Bidder and of any 
subcontractor relevant to this Project(s). The Bidder shall provide 
all reasonable facilities necessary for such inspection and tests, 
except that the Bidder is not required to provide test equipment for 
the Owner's tests unless specifically required in the 
Specifications. Failure of the Owner to make inspections shall not 
release the Bidder from performance required hereunder.
    The Bidder shall notify the Owner in writing upon Completion of 
Installation of each Project and provide a copy of the results of 
tests, if any, conducted by the Bidder.
    The Owner shall make inspections and tests of each Project for 
compliance with the Specifications and provide the Bidder the 
results of such inspections and tests on REA Form 517, Results of 
Acceptance Tests. If the Owner has not completed its inspections and 
tests and provided the Bidder the results on REA Form 517 within 
thirty (30) days after the written notification of Completion of 
Installation from the Bidder, the Owner shall (1) pay to the Bidder 
the costs incurred by the Bidder as a result of this delay, and (2) 
grant an extension of time for the Completion of the Project equal 
to the number of days from the date of the end of the thirty (30) 
day period until the date the Owner provides the REA Form 517 to the 
Bidder.
    Within thirty (30) days of receipt of the REA Form 517 from the 
Owner, the Bidder shall correct all deficiencies, if any, listed on 
the REA Form 517 and notify the Owner in writing of such corrections 
and deliver to the Owner the documents set forth in Article III, 
section 2, at which time a final Owner's inspection and test of each 
Project shall be conducted. If tests subsequent to this are made 
necessary by the Bidder's failure to satisfactorily resolve all such 
deficiencies as previously listed on the REA Form 517, the Bidder 
shall pay the Owner for the cost incurred by the Owner for all such 
subsequent tests.
    Section 5. Delivery of Possession and Control to the Owner. The 
Bidder shall deliver to the Owner, and the Owner shall accept, full 
possession and control of each Project on the date of Completion of 
the Project or on an earlier date if agreed under Article IV, 
section 2.
    Section 6. Employees. The Owner shall have the right to require 
the removal of any employee of the Bidder from the Project site if 
in the judgment of the Owner such removal is necessary in order to 
protect the interest of the Owner.
    Section 7. Defective Workmanship, Materials or Software. 
Throughout the warranty period defined below the Bidder shall, 
within thirty (30) days of written notice from the Owner, and 
without charge to the Owner, at the Bidder's option, either remedy 
or replace any materials, equipment or software found to be 
defective in material, workmanship or installation, or not in 
conformity with the Specification. This is subject to the following 
definitions and conditions:
    (a) The warranty start date for a Project is the date of 
delivery of possession and control by the Bidder to the Owner of 
that Project included in the Contract. Refer to Article II, section 
5. The warranty period is twelve (12) months from the warranty start 
date, or six (6) months from Completion of the Project, whichever 
results in the longer period of coverage.
    (b) Without regard to the expiration of the warranty period set 
forth above, the Bidder warrants to the Owner that any Software 
furnished under this Contract shall function, for a period of five 
(5) years from the warranty start date defined in the Contract, in 
accordance with the specifications and any written or printed 
technical material provided by the Bidder to explain the operation 
of the Software and aid in its use. The Bidder shall correct all 
deficiencies within thirty (30) days from the date of receipt by the 
Bidder of written notice of such deficiencies from the Owner. An 
extension of this thirty (30) day period may be allowed only if 
agreed upon by the Owner. It shall be the Bidder's obligation to 
insert and thoroughly test, at no charge to the Owner, any software 
amendment or alteration provided to satisfy the obligations of this 
Section 7. If a deficiency is detected or a correction made within 
the final ninety (90) days of the warranty, the warranty shall be 
extended to a date ninety (90) days after the deficiency has been 
corrected.
    (c) The Owner shall pay the Bidder for any use of the Bidder's 
technical assistance center except for usage to diagnose defects 
covered by this warranty.
    (d) This warranty is not diminished by the acceptance of 
workmanship, materials, equipment, or software, or by the issuing of 
any certificate with respect to Completion of the Project.
    (e) This warranty does not cover defects in materials, equipment 
or software that are caused by modifications to or abuse of 
materials, equipment or software by the Owner.
    (f) The Owner shall bear the cost and risk of shipping defective 
components to the Bidder's designated repair center. The Bidder 
shall bear the cost and risk of shipping new or repaired replacement 
components to the Owner.

Article III

Payments and Releases of Lien

    Section 1. Payment to Bidder.
    (a) The Owner shall pay the Bidder upon the basis of written 
estimates of the materials, equipment, and software delivered at the 
site of the Project, presented by the Bidder, and approved by the 
Owner, the following percentages of the price of the materials, 
equipment, and software for each Project set forth under Column 2, 
``Materials, Equipment, and Software,'' in Article I, Section 1, as 
and if revised:
    (i) Forty-five percent (45%) when fifty percent (50%) of the 
materials, equipment, and software for each Project has been 
delivered at the site of the Project, and
    (ii) Ninety percent (90%) when all the materials, equipment, and 
software required to place each Project into operation has been 
delivered at the site of the Project.
    (b) Upon written notification of the Completion of Installation 
of each Project, the Owner shall pay the Bidder ninety percent (90%) 
of the Base Bid plus accepted alternates for that Project.
    (c) Upon the Completion of Installation, but prior to the 
payment to the Bidder of any amount in excess of ninety percent 
(90%) of the Total Contract Price, the Owner shall inspect the work 
performed hereunder and if the work shall be found to be in 
accordance with the Specifications and all provisions hereunder, the 
Owner shall certify as to that fact and as to the amount of the 
balance found to be due to the Bidder. No later than thirty (30) 
days after Completion of the Contract, as defined in Article VII, 
section 1, ``Definitions,'' the Owner shall submit such final 
certificate to the Administrator for approval and when such approval 
has been given, the Owner shall pay to the Bidder all unpaid amounts 
to which the Bidder shall be entitled hereunder; provided, however, 
such final payments shall be made not later than sixty (60) days 
after Completion of the Contract unless approval by the 
Administrator shall be withheld or delayed due to Bidder's actions 
or failure to act.
    (d) Payment on undisputed invoices submitted by the Bidder shall 
be due thirty (30) days after receipt. Any amounts of these invoices 
not paid when due shall accrue interest at a rate one and one-half 
percent (1\1/2\%) higher than the ``Prime Rate'' published in the 
Wall Street Journal in its first issue of the month in which payment 
becomes due and changing each subsequent month with the first issue 
published in the respective month.
    (e) Notwithstanding other provisions of this Article III, the 
Bidder, shall, at its request in writing, receive payment in full 
for each Project upon Completion of Installation of such and upon:
    (i) Completion of the final acceptance tests of such Project as 
certified on REA Form 754, Certificate of Completion, Central 
Office(s) and approved by the Owner.
    (ii) Submission to the Owner and Administrator of the releases 
of lien and Certificate of Contractor referred to in section 2 
hereof or in lieu thereof, where the Bidder is the manufacturer, the 
execution of the Certificate of Contractor and Indemnity Agreement 
on REA Form 754, all in respect of such Project.
    (iii) Approval by the Administrator of the Certificate of 
Completion, REA Form 754 in respect of such Project.
    Ten percent (10%) of the contract price of one central office 
shall be retained until the Bidder shall have furnished the 
certificates and releases of lien or indemnity agreement in respect 
of the Project required by section 2 of this Article III.
    (This Section 1(e) is to be used only if (1) the Contract 
includes at least one central office and (2) the Owner wishes to 
allow the partial closeout procedure. The Owner shall strike out 
this Section 1(e) if the partial closeout procedure is not to be 
allowed)
    (f) Acceptance by the Owner of equipment, materials, workmanship 
or software while the Bidder is in default under any provision of 
this Contract shall not be construed as a waiver by the Owner of any 
right hereunder including, without limitation, any right to 
liquidated damages the Owner may have by virtue of Article V, 
section 2.
    Section 2. Release of Liens. Upon the Completion of Installation 
by the Bidder, but prior to the payment to the Bidder of any amount 
in excess of ninety percent (90%) of the Total Contract Price, 
except as specified in Article III, section 1(e), the Bidder shall 
deliver to the Owner (a) two original Waiver and Release of Lien in 
the form attached hereto, from manufacturers, material suppliers and 
subcontractors who have furnished materials or services for the 
work, and (b) two original Certificate of Contractor, in the form 
attached hereto, to the effect that all labor has been paid and that 
all such releases have been submitted to the Owner; and the Owner 
shall deliver to the Administrator for approval one of the originals 
of each such release and certificate.
    In lieu of releases of lien where the Bidder is the manufacturer 
of the equipment, the Bidder may deliver to the Owner, in duplicate 
in the form attached hereto, a Certificate of Contractor and 
Indemnity Agreement, stating that all manufacturers, material 
suppliers and subcontractors who have furnished materials or 
services for the Project(s) have been paid in full, and agreeing to 
indemnify the Owner against any liens arising out of the Bidder's 
performance hereunder which may have been or may be filed against 
the Owner.
    In this Article III ``manufacturer'' shall mean a Bidder who 
makes, produces, or manufactures the equipment and whose interest, 
including non-contracted installation, represent more than fifty 
percent (50%) of the value of the Total Contract Price.

Article IV

Particular Undertakings of the Bidder

    Section 1. Protection to Persons and Property. At all times when 
equipment and materials are being delivered and installed the Bidder 
shall exercise reasonable precautions for the safety of employees on 
the job and of the public and shall comply with all applicable 
provisions of Federal, State and Municipal safety laws and building 
and construction codes. All machinery and equipment and other 
physical hazards shall be guarded in accordance with the ``Manual of 
Accident Prevention in Construction'' of the Associated General 
Contractors of America unless such instructions are incompatible 
with Federal, State or Municipal laws or regulations. The following 
provisions shall not limit the generality of the above requirements:
    (a) The Bidder shall at all times keep the premises free from 
accumulations of waste material or rubbish caused by its employees 
or work, and at the completion of the work the Bidder shall remove 
all rubbish from and about the Project(s) and all its tools, 
scaffolding and surplus materials and shall leave its work ``broom 
clean.''
    (b) The work, from its commencement to completion, or to such 
earlier date or dates when the Owner may take possession and 
control, shall be under the charge and control of the Bidder and 
during such period of control by the Bidder all risks in connection 
therewith, and in connection with the equipment, materials and 
software to be used therein, shall be borne by the Bidder. The 
Bidder shall make good and fully repair all injuries and damages to 
the equipment, materials and software under the control of the 
Bidder by reasons of any act of God, or any other casualty or cause 
whether or not the same shall have occurred by reason of the 
Bidder's negligence. The Bidder shall hold the Owner harmless from 
any and all claims for injuries of persons or for damage to property 
happening by reason of any negligence on the part of the Bidder or 
any of the Bidder's agents, subcontractors or employees during the 
control by the Bidder of the Project(s) or any part thereof. The 
Owner shall promptly notify the Bidder in writing of any such claims 
received and, except where the Owner is the claimant, shall give to 
the Bidder full authority and opportunity to settle such claims, and 
reasonably cooperate with the Bidder in obtaining information 
relative to such claims.
    (c) Monthly reports of all accidents shall be promptly submitted 
to the Owner by the Bidder giving such data as may be prescribed by 
the Owner.
    Section 2. Termination of Bidder's Risks and Obligations. The 
Bidder shall deliver to the Owner, and the Owner shall accept, full 
possession and control of each Project on the date of Completion of 
the Project. However, at any time after payment by the Owner to the 
Bidder of ninety percent (90%) of the Total Base Bid plus accepted 
alternates for that Project, but prior to Completion of the Project, 
the Owner and the Bidder may agree in writing to an earlier date of 
delivery of possession and control. Upon such delivery of possession 
and control of any Project the Bidder's risks and obligations as set 
forth in Article IV, section 1(b), pertaining to such Project shall 
be terminated; provided, however, that nothing herein contained 
shall relieve the Bidder of its obligation for full performance 
under the Specifications, or its liability with respect to defective 
workmanship or materials as specified in Article II, section 7 
hereof. The equipment shall not be placed in service until delivery 
of possession and control to the Owner has been accomplished, as set 
forth above.
    Section 3. Insurance. During the Bidder's performance hereunder, 
the Bidder shall take out and maintain fully paid insurance 
providing not less than the minimum coverage required by 7 CFR part 
1788, subpart C.
    The Owner shall have the right to require public liability 
insurance and property damage liability insurance in an amount 
greater than those required in 7 CFR part 1788, subpart C. If this 
requirement is included in the plans and specifications used for 
bidding, the added costs shall be included in the bid price. If the 
requirement is added after the Contract is approved, the additional 
premium or premiums payable solely as the result of such additional 
insurance shall be added to the Contract price, by Contract 
amendment.
    Upon request by the Administrator, the Bidder shall furnish to 
the Administrator a certificate in such form as the Administrator 
may prescribe evidencing compliance with the foregoing requirements.
    Section 4. Purchase of Materials. The Bidder shall purchase all 
materials and supplies except software outright and not subject to 
any conditional sales agreements, bailment lease or other agreement 
reserving unto the seller any right, title or interest therein. 
Materials and supplies other than software shall become the property 
of the Owner as the Owner makes payments therefor to the Bidder in 
accordance with Article III, Section 1(a).
    Section 5. Software License. The software licensing agreement, 
if required, covering the rights, terms and conditions of the use 
and assignability of all software integral to the operation of the 
Project(s), shall be in the form of Addendum 1 to this Contract.
    Section 6. Assignment of Guarantees. All guarantees of 
materials, equipment, workmanship and software running in favor of 
the Bidder shall be transferred and assigned to the Owner upon 
Completion of the Project and at such time as the Bidder receives 
final payment. Any such guarantees shall be in addition to the 
Bidder's warranty defined in Article II, section 7. This provision 
may be modified with respect to a particular warranty if the Bidder 
demonstrates to the satisfaction of REA and the Owner that a 
transfer is not possible.
    Section 7. Patent, Copyright, Trademark and Trade Secret 
Infringement. The Bidder shall hold harmless and indemnify the Owner 
from any and all claims, suits, and proceedings for the infringement 
of any patent, copyright, trademark or violation of trade secrets 
covering any equipment or software used in the work, except for 
items of the Owner's design or selection. If the Owner's use of 
equipment or software is enjoined, the Bidder shall promptly, at its 
own expense, modify or replace the infringing equipment or software 
so that it no longer infringes but remains functionally equivalent, 
or obtain for the Owner a license or other right to use. This shall 
be in addition to any other rights or claims which the Owner may 
have. The Bidder shall, at its own expense, (and the Owner agrees to 
permit Bidder to do so,) defend any suits which may be instituted by 
any party against the Owner for alleged infringement of patents, 
copyright, trademark or violation of trade secrets relative to the 
Bidder's performance hereunder. Either party shall notify the other 
promptly of any such claims, and the Owner shall give to the Bidder 
full authority and opportunity to settle such claims, and shall 
reasonably cooperate with the Bidder in obtaining information 
relative to such claims.
    Section 8. Compliance with Statutes and Regulations. The Bidder 
shall comply with all applicable laws, statutes, ordinances, rules 
and regulations. The Bidder acknowledges that it is familiar with 
the Rural Electrification Act of 1936, as amended (7 U.S.C. 901 et 
seq.), the Anti-Kickback Acts, as amended (40 U.S.C. 276c; 41 U.S.C. 
51 et seq.), and any rules and regulations issued pursuant thereto, 
and 18 U.S.C. 201, 286, 287, 641, 666, 874, 1001, 1361 and 1366, as 
amended. The Bidder understands that the obligations of the parties 
hereunder are subject to the applicable regulations and orders of 
the Governmental agencies having jurisdiction in the premises.
    The Bidder represents that to the extent required by Executive 
Orders 12549 (3 CFR, 1985-1988 Comp., p. 189) and 12689 (3 CFR, 1989 
Comp., p. 235), Debarment and Suspension, and 7 CFR part 3017, it 
has submitted to the Owner a duly executed certification in the form 
prescribed in 7 CFR part 3017.
    The Bidder represents that, to the extent required, it has 
complied with the requirements of Public Law 101-121, section 319, 
103 Stat. 701, 750-765 (31 U.S.C. 1352), entitled ``Limitation on 
use of appropriated funds to influence certain Federal contracting 
and financial transactions,'' and any rules and regulations issued 
pursuant thereto.

Article V

Remedies

    Section 1. Completion on Bidder's Default. If default shall be 
made by the Bidder in the performance of any of the work hereunder, 
the Owner, without in any manner limiting its legal and equitable 
remedies in the circumstances, may serve upon the Bidder and the 
surety or sureties upon the Bidder's Bond or Bonds a written notice 
requiring the Bidder to cause such default to be corrected 
forthwith. Unless within thirty (30) days after the service of such 
notice upon the Bidder such default shall be corrected or 
arrangements for the correction thereof, satisfactory to both the 
Owner and the Administrator, shall have been made by the Bidder or 
its surety or sureties, the Owner may take over the performance of 
the Bidder's obligations hereunder and prosecute the same to 
completion by contract or otherwise for the account and at the 
expense of the Bidder, and the Bidder and its surety or sureties 
shall be liable to the Owner for any supportable cost or expense in 
excess of the bid price occasioned thereby. In such event, the Owner 
may take possession of and utilize, in completing the Project(s), 
any tools, supplies, equipment, appliances and plant belonging to 
the Bidder which may be situated at the site of the Project(s). The 
Owner, in such contingency, may exercise any rights, claims or 
demands which the Bidder may have against third persons in 
connection herewith and for such purpose the Bidder does hereby 
assign, transfer and set over unto the Owner all such rights, claims 
and demands.
    Section 2. Liquidated Damages. Should the Bidder fail to 
complete any Project as shown under Column 7, ``Completion of the 
Project,'' in Article I, Section 1, within the time herein agreed 
upon, after giving effect to extensions of time, if any, herein 
provided, then, in that event and in view of the difficulty of 
estimating with exactness damages caused by such delay, the Owner 
shall, so long as the subject Project shall not have been placed in 
service, have the right to deduct from and retain out of such moneys 
which may be then due, or which may become due and payable to the 
Bidder, the sum of:

----------------------------------------------------------------------
dollars ($____________)

for--------------------------------------------------------------------
(Project)

for--------------------------------------------------------------------
dollars ($____________)

for--------------------------------------------------------------------
(Project)

dollars ($____________

for--------------------------------------------------------------------
per day for each and every day that such completion is delayed 
beyond the scheduled time for Completion of the Project, as 
liquidated damages and not as a penalty, up to the amount of the 
respective Base Bid plus accepted alternates for the affected 
Project: Provided, however, that the Owner shall promptly notify the 
Bidder in writing of the manner in which the amount claimed as 
liquidated damages was computed. The Bidder shall pay to the Owner 
the amount necessary to effect such payment in full. Such payment is 
not to be reduced by the value of any partial performance by the 
Bidder.
    At the technical sessions, each Bidder shall identify all 
features and capabilities that are not fully developed or do not 
have a verifiable satisfactory field performance record. If the 
Owner allows these features to be bid as separate Projects, then 
they are to be individually listed under Columns 1 through 10, in 
Article I, section 1. These unproven features and capabilities are 
to be individually listed in this section 2 also, with liquidated 
damages amounts determined by the Owner and stated for each. If a 
Bidder neglects to identify any such feature at the technical 
session, delay in providing the feature is considered a delay in 
completing the associated Project and the Owner may assess 
liquidated damages listed for that Project regardless of whether the 
Project is placed in service.
    Section 3. Consequential Damages. In no event shall the Bidder's 
liability for incidental or consequential loss or damage, except for 
personal injury or tangible property damage, exceed the amount of 
ten times the total contract price, as amended.
    Section 4. Enforcement of Remedies by Administrator. The 
Administrator may on behalf of the Owner exercise any right or 
enforce any remedy which the Owner may exercise or enforce 
hereunder.
    Section 5. Cumulative Remedies. Every right or remedy herein 
conferred upon or reserved to the Owner or the Administrator shall 
be cumulative and shall be in addition to every right and remedy now 
or hereafter existing at law or in equity or by statute and the 
pursuit of any right or remedy shall not be construed as an 
election. Provided, however, that the provisions of section 2 of 
this Article V shall be the exclusive measure of damages for failure 
by the Bidder to have effected the Completion of Project within the 
time herein agreed upon.

Article VI

Equal Employment

    Section 1. The Bidder.
    (a) The Bidder represents that:
    (1) It has, ______ does not have ______, 100 or more employees, 
and if it has, that
    (2) It has ______, has not ______, furnished the Equal 
Employment Opportunity Employers Information Report EEO-1, Standard 
Form 100, required of employers with 100 or more employees pursuant 
to Executive Order 11246 and Title VII of the Civil Rights Act of 
1964.
    (b) The Bidder agrees that it will obtain, prior to the award of 
any subcontract for more than $10,000 hereunder to a subcontractor 
with 100 or more employees, a statement, signed by the proposed 
subcontractor, that the proposed subcontractor has filed a current 
report on Standard Form 100.
    (c) The Bidder agrees that if it has 100 or more employees and 
has not submitted a report on Standard Form 100 for the current 
reporting year and that if this contract will amount to more than 
$10,000, the Bidder will file such report, as required by law, and 
notify the Owner in writing of such filing prior to the Owner's 
acceptance of this Proposal.
    (d) The Bidder certifies that it does not maintain or provide 
for its employees any segregated facilities at any of its 
establishments, and that it does not permit its employees to perform 
their services at any location, under its control, where segregated 
facilities are maintained. The Bidder certifies further that it will 
not maintain or provide for its employees any segregated facilities 
at any of its establishments, and that it will not permit its 
employees to perform their services at any location, under its 
control, where segregated facilities are maintained. The Bidder 
agrees that a breach of this certification is a violation of the 
Equal Opportunity Clause in this contract. As used in this 
certification, the term ``segregated facilities'' means any waiting 
rooms, work areas, restrooms and washrooms, restaurants and other 
eating areas, timeclocks, locker rooms and other storage or dressing 
areas, parking lots, drinking fountains, recreation or entertainment 
areas, transportation, and housing facilities provided for employees 
which are segregated by explicit directive or are in fact segregated 
on the basis of race, color, religion, or national origin, because 
of habit, local custom, or otherwise. The Bidder agrees that (except 
where it has obtained identical certifications from proposed 
subcontractors for specific time periods) it will obtain identical 
certifications from proposed subcontractors prior to the award of 
subcontracts exceeding $10,000 which are not exempt from the 
provisions of the Equal Opportunity Clause, and that it will retain 
such certifications in its files.
    Section 2. During the performance of this contract, the 
Contractor agrees as follows:
    (a) The Contractor will not discriminate against any employee or 
applicant for employment because of race, color, religion, sex or 
national origin. The Contractor will take affirmative action to 
ensure that applicants are employed, and that employees are treated 
during employment without regard to their race, color, religion, sex 
or national origin. Such action shall include, but not be limited 
to, the following: employment, upgrading, demotion or transfer; 
recruitment or recruitment advertising; layoff or termination; rates 
of pay or other forms of compensation; and selection for training, 
including apprenticeship. The Contractor agrees to post in 
conspicuous places available to employees and applicants for 
employment, notices to be provided setting forth the provisions of 
this nondiscrimination clause.
    (b) The Contractor will, in all solicitations or advertisements 
for employees placed by or on behalf of the Contractor, state that 
all qualified applicants shall receive consideration for employment 
without regard to race, color, religion, sex or national origin.
    (c) The Contractor will send to each labor union or 
representative of workers with which the Bidder has a collective 
bargaining agreement or other contract or understanding, a notice to 
be provided advising the said labor union or workers' representative 
of the Contractor's commitments under this section, and shall post 
copies of the notice in conspicuous places available to employees 
and applicants for employment.
    (d) The Contractor will comply with all provisions of Executive 
Order 11246 of September 24, 1965, and of the rules, regulations and 
relevant orders of the Secretary of Labor.
    (e) The Contractor will furnish all information and reports 
required by Executive Order 11246 of September 24, 1965, and by 
rules, regulations and orders of the Secretary of Labor, or pursuant 
thereto, and will permit access to the Contractor's books, records 
and accounts by the administering agency and the Secretary of Labor 
for purposes of investigation to ascertain compliance with such 
rules, regulations and orders.
    (f) In the event of the Contractor's noncompliance with the 
nondiscrimination clauses of this contract or with any of the said 
rules, regulations or orders, this contract may be canceled, 
terminated or suspended in whole or in part and the Contractor may 
be declared ineligible for further Government contracts or federally 
assisted construction contracts in accordance with procedures 
authorized in Executive Order 11246 of September 24, 1965, and such 
other sanctions as may be imposed and remedies invoked as provided 
in the said Executive Order 11246 of September 24, 1965, or by rule, 
regulation or order of the Secretary of Labor, or as otherwise 
provided by law.
    (g) The Contractor will include the portion of the sentence 
immediately preceding paragraph (a) and the provisions of paragraphs 
(a) through (g) in every subcontract or purchase order unless 
exempted by rules, regulations or orders of the Secretary of Labor 
issued pursuant to Section 204 of Executive Order 11246 of September 
24, 1965, so that such provisions will be binding upon each 
subcontractor or vendor. The Contractor will take such action with 
respect to any subcontract or purchase order as the administering 
agency may direct as a means of enforcing such provisions, including 
actions for noncompliance: Provided, however, that in the event a 
contractor becomes involved in, or is threatened with, litigation 
with a subcontractor or vendor as a result of such direction by the 
administering agency, the Contractor may request the United States 
to enter into such litigation to protect the interests of the United 
States.
    Section 3. Equal Employment Opportunity Specifications.
    (a) As used in these specifications:
    ``Covered area'' means the geographical area described in the 
solicitation from which this contract resulted;
    ``Director'' means Director, Office of Federal Contract 
Compliance Programs, United States Department of Labor, or any 
person to whom the Director delegates authority;
    ``Employer identification number'' means the Federal Social 
Security number used on the Employer's Quarterly Federal Tax Return, 
U.S. Treasury Department Form 941; and
    ``Minority'' includes:
    (i) Black (all persons having origins in any of the Black 
African racial groups not of Hispanic origin);
    (ii) Hispanic (all persons of Mexican, Puerto Rican, Cuban, 
Central or South American or other Spanish Culture or origin, 
regardless of race);
    (iii) Asian and Pacific Islander (all persons having origins in 
any of the original peoples of the Far East, Southeast Asia, the 
Indian Subcontinent, or the Pacific Islands); and
    (iv) American Indian or Alaskan Native (all persons having 
origins in any of the original peoples of North America and 
maintaining identifiable tribal affiliations through membership and 
participation or community identification).
    (b) Whenever the Contractor, or any Subcontractor at any tier, 
subcontracts a portion of the work involving any construction trade, 
it shall physically include in each subcontract in excess of $10,000 
the provisions of these specifications and the Notice which contains 
the applicable goals for minority and female participation and which 
is set forth in the solicitations from which this contract resulted.
    (c) If the Contractor is participating (pursuant to 41 CFR 60-
4.5) in a Hometown Plan approved by the U.S. Department of Labor in 
the covered area either individually or through an association, its 
affirmative action obligations on all work in the Plan area 
(including goals and timetables) shall be in accordance with that 
Plan for those trades which have unions participating in the Plan. 
Contractors must be able to demonstrate their participation in and 
compliance with the provisions of any such Hometown Plan. Each 
Contractor or Subcontractor participating in an approved Plan is 
individually required to comply with its obligations under the EEO 
clause, and to make a good faith effort to achieve each goal under 
the Plan in each trade in which it has employees. The overall good 
faith performance by other Contractors or Subcontractors toward a 
goal in an approved Plan does not excuse any covered Contractor's or 
Subcontractor's failure to take good faith efforts to achieve the 
Plan goals and timetables.
    (d) The Contractor shall implement the specific affirmative 
action standards provided in paragraphs (g) (i) through (xvi) of 
these specifications. The goals set forth in the solicitation from 
which this contract resulted are expressed as percentages of the 
total hours of employment and training of minority and female 
utilization the Contractor should reasonably be able to achieve in 
each construction trade in which it has employees in the covered 
area. Covered construction contractors performing construction work 
in geographical areas where they do not have a federal or federally 
assisted construction contract shall apply the minority and female 
goals established for the geographical area where the work is being 
performed. Goals are published periodically in the Federal Register 
in notice form, and such notices may be obtained from any Office of 
Federal Contract Compliance Programs office or from Federal 
procurement contracting officers. The Contractor is expected to make 
substantially uniform progress in meeting its goals in each craft 
during the period specified.
    (e) Neither the provisions of any collective bargaining 
agreement, nor the failure by a union with whom the Contractor has a 
collective bargaining agreement, to refer either minorities or women 
shall excuse the Contractor's obligations under these 
specifications, Executive Order 11246, or the regulations 
promulgated pursuant thereto.
    (f) In order for the nonworking training hours of apprentices 
and trainees to be counted in meeting the goals, such apprentices 
and trainees must be employed by the Contractor during the training 
period, and the Contractor must have made a commitment to employ the 
apprentices and trainees at the completion of their training, 
subject to the availability of employment opportunities. Trainees 
must be trained pursuant to training programs approved by the U.S. 
Department of Labor.
    (g) The Contractor shall take specific affirmative actions to 
ensure equal employment opportunity. The evaluation of the 
Contractor's compliance with these specifications shall be based 
upon its effort to achieve maximum results from its actions. The 
Contractor shall document these efforts fully, and shall implement 
affirmative action steps at least as extensive as the following:
    (i) Ensure and maintain a working environment free of 
harassment, intimidation, and coercion at all sites, and in all 
facilities at which the Contractor's employees are assigned to work. 
The Contractor, where possible, will assign two or more women to 
each construction project. The Contractor shall specifically ensure 
that all foremen, superintendents, and other on-site supervisory 
personnel are aware of and carry out the Contractor's obligation to 
maintain such a working environment, with specific attention to 
minority or female individuals working at such sites or in such 
facilities.
    (ii) Establish and maintain a current list of minority and 
female recruitment sources, provide written notification to minority 
and female recruitment sources and to community organizations when 
the Contractor or its unions have employment opportunities 
available, and maintain a record of the organizations' responses.
    (iii) Maintain a current file of the names, addresses and 
telephone numbers of each minority and female off-the-street 
applicant and minority or female referral from a union, a 
recruitment source or community organization and of what action was 
taken with respect to each such individual. If such individual was 
sent to the union hiring hall for referral and was not referred back 
to the Contractor by the union or, if referred, not employed by the 
Contractor, this shall be documented in the file with the reason 
therefore, along with whatever additional actions the Contractor may 
have taken.
    (iv) Provide immediate written notification to the Director when 
the union or unions with which the Contractor has a collective 
bargaining agreement has not referred to the Contractor a minority 
person or woman sent by the Contractor, or when the Contractor has 
other information that the union referral process has impeded the 
Contractor's efforts to meet its obligations.
    (v) Develop on-the-job training opportunities and/or participate 
in training programs for the area which expressly include minorities 
and women, including upgrading programs and apprenticeship and 
trainee programs relevant to the Contractor's employment needs, 
especially those programs funded or approved by the Department of 
Labor. The Contractor shall provide notice of these programs to the 
sources compiled under (g)(ii) above.
    (vi) Disseminate the Contractor's EEO policy by providing notice 
of the policy to unions and training programs and requesting their 
cooperation in assisting the Contractor in meeting its EEO 
obligations; by including it in any policy manual and collective 
bargaining agreement; by publicizing it in the company newspaper, 
annual report, etc.; by specific review of the policy with all 
management personnel and with all minority and female employees at 
least once a year; and by posting the company EEO policy on bulletin 
boards accessible to all employees at each location where 
construction work is performed.
    (vii) Review, at least annually, the company's EEO policy and 
affirmative action obligations under these specifications with all 
employees having any responsibility for hiring, assignment, layoff, 
termination or other employment decisions including specific review 
of these items with onsite supervisory personnel such as 
Superintendents, General Foremen, etc., prior to the initiation of 
construction work at any job site. A written record shall be made 
and maintained identifying the time and place of these meetings, 
persons attending, subject matter discussed, and disposition of the 
subject matter.
    (viii) Disseminate the Contractor's EEO policy externally by 
including it in any advertising in the news media, specifically 
including minority and female news media, and providing written 
notification to and discussing the Contractor's EEO policy with 
other Contractors and Subcontractors with whom the Contractor does 
or anticipates doing business.
    (ix) Direct its recruitment efforts, both oral and written, to 
minority, female and community organizations, to schools with 
minority and female students and to minority and female recruitment 
and training organizations serving the Contractor's recruitment area 
and employment needs. Not later than one month prior to the date for 
the acceptance of applications for apprenticeship or other training 
by any recruitment source, the Contractor shall send written 
notification to organizations such as the above, describing the 
openings, screening procedures, and tests to be used in the 
selection process.
    (x) Encourage present minority and female employees to recruit 
other minority persons and women and, where reasonable, provide 
after school, summer and vacation employment to minority and female 
youth both on the site and in other areas of a Contractor's work 
force.
    (xi) Validate all tests and other selection requirements where 
there is an obligation to do so under 41 CFR Part 60-3.
    (xii) Conduct, at least annually, an inventory and evaluation at 
least of all minority and female personnel for promotional 
opportunities and encourage these employees to seek or to prepare 
for, through appropriate training, etc., such opportunities.
    (xiii) Ensure that seniority practices, job classifications, 
work assignments and other personnel practices, do not have a 
discriminatory effect by continually monitoring all personnel and 
employment related activities to ensure that the EEO policy and the 
Contractor's obligations under these specifications are being 
carried out.
    (xiv) Ensure that all facilities and company activities are 
nonsegregated except that separate or single-user toilet and 
necessary changing facilities shall be provided to assure privacy 
between the sexes.
    (xv) Document and maintain a record of all solicitations of 
offers for subcontracts from minority and female construction 
contractors and suppliers, including circulation of solicitations to 
minority and female contractor associations and other business 
associations.
    (xvi) Conduct a review, at least annually, of all supervisors' 
adherence to and performance under the Contractor's EEO policies and 
affirmative action obligations.
    (h) Contractors are encouraged to participate in voluntary 
associations which assist in fulfilling one or more of their 
affirmative action obligations (g) (i) through (xvi). The efforts of 
a contractor association, joint contractor-union, contractor-
community, or other similar group of which the Contractor is a 
member and participant, may be asserted as fulfilling any one or 
more of its obligations under (g) (i) through (xvi) of these 
specifications provided that the Contractor actively participates in 
the group, makes every effort to assure that the group has a 
positive impact on the employment of minorities and women in the 
industry, ensures that the concrete benefits of the program are 
reflected in the Contractor's minority and female workforce 
participation, makes a good faith effort to meet its individual 
goals and timetables, and can provide access to documentation which 
demonstrates the effectiveness of actions taken on behalf of the 
Contractor. The obligation to comply, however, is the Contractor's 
and failure of such a group to fulfill an obligation shall not be a 
defense for the Contractor's noncompliance.
    (i) A single goal for minorities and a separate single goal for 
women have been established. The Contractor, however, is required to 
provide equal employment opportunity and to take affirmative action 
for all minority groups, both male and female, and all women, both 
minority and non-minority. Consequently, the Contractor may be in 
violation of Executive Order 11246 if a particular group is employed 
in a substantially disparate manner (for example, even though the 
Contractor has achieved its goals for women generally, the 
Contractor may be in violation of Executive Order 11246 if a 
specific minority group of women is underutilized).
    (j) The Contractor shall not use the goals and timetables or 
affirmative action standards to discriminate against any person 
because of race, color, religion, sex, or national origin.
    (k) The Contractor shall not enter into any Subcontract with any 
person or firm debarred from Government contracts pursuant to 
Executive Order 11246.
    (l) The Contractor shall carry out such sanctions and penalties 
for violation of these specifications and of the Equal Opportunity 
Clause, including suspension, termination and cancellation of 
existing subcontracts as may be imposed or ordered pursuant to 
Executive Order 11246, as amended, and its implementing regulations, 
by the Office of Federal Contract Compliance Programs. Any 
Contractor who fails to carry out such sanctions and penalties shall 
be in violation of these specifications and Executive Order 11246, 
as amended.
    (m) The Contractor, in fulfilling its obligations under these 
specifications, shall implement specific affirmative action steps, 
at least as extensive as those standards prescribed in paragraph (g) 
of these specifications, so as to achieve maximum results from its 
efforts to ensure equal employment opportunity. If the Contractor 
fails to comply with the requirements of Executive Order 11246, the 
implementing regulations, or these specifications, the Director 
shall proceed in accordance with 41 CFR 60-4.8.
    (n) The Contractor shall designate a responsible official to 
monitor all employment related activity to ensure that the company 
EEO policy is being carried out, to submit reports relating to the 
provisions hereof as may be required by the Government and to keep 
records. Records shall at least include for each employee the name, 
address, telephone numbers, construction trade, union affiliation if 
any, employee identification number when assigned, social security 
number, race, sex, status (e.g., mechanic, apprentice, trainee, 
helper, or laborer), dates of changes in status, hours worked per 
week in the indicated trade, rate of pay, and locations at which the 
work was performed. Records shall be maintained in an easily 
understandable and retrievable form; however, to the degree that 
existing records satisfy this requirement, contractors shall not be 
required to maintain separate records.
    (o) Nothing herein provided shall be construed as a limitation 
upon the application of other laws which establish different 
standards of compliance or upon the application of requirements for 
the hiring of local or other area residents (e.g. those under the 
Public Works Employment Act of 1977 and the Community Development 
Block Grant Program).
    Section 4. In this Article VI--
    (a) The term ``Contractor'' shall also mean ``Bidder'' or 
``Subcontractor'' as applicable.
    (b) The provisions of sections 2 & 3 are applicable to the 
extent required by law. In determining whether these Sections are 
applicable, reference should be made to Office of Federal Contract 
Compliance Programs regulations (41 CFR part 60).

Article VII

Miscellaneous

    Section 1. Definitions.
    The term ``Completion of the Contract'' shall mean 
accomplishment of Completion of the Project for all central offices 
(and associated remote switching terminals), features and services 
listed under Column 1, ``Project,'' in Article I, Section 1, and all 
alternates accepted by the Owner, on the Owner's Acceptance.
    The term ``Completion of Installation'' shall mean full 
performance by the Bidder of the Bidder's obligation under the 
Contract and all amendments and revisions thereof, for a Project, 
except that it shall not include the acceptance tests nor 
performance of the Bidder's obligations in respect of (i) releases 
of lien and Certificate of Contractor under Article III, section 2, 
hereof and (ii) other final documents. The actual date of Completion 
of Installation shall be the date the Bidder submits to the Owner 
written notification that the Project is completed in conformance 
with the Specifications and ready for the Owner's acceptance 
inspection and tests as provided for under Article II, section 4.
    The term ``Completion of the Project'' shall mean full 
performance by the Bidder of the Bidder's obligations herein set out 
and all amendments and revisions thereof for a central office (and 
all associated remote switching terminals), feature or service. The 
scheduled date for Completion of the Project is sixty (60) days 
after Completion of Installation as specified under Column 7, 
``Completion of Installation,'' in Article I, section 1, as amended 
or adjusted under Article II, section 1, and section 4. The 
scheduled date for Completion of the Project is the date from which 
liquidated damages are computed. The actual date of Completion of 
the Project shall be the date of the receipt by the Owner from the 
Bidder of (a) all documents listed in Article III, section 2, (b) 
other final documents, and (c) written notification that all 
deficiencies listed on the REA Form 517, Results of Acceptance Test, 
have been corrected; provided, that the final inspection and tests 
by the Owner finds the deficiencies satisfactorily resolved. If the 
deficiencies have not been satisfactorily resolved, the actual date 
of Completion of the Project shall be the date that the deficiencies 
are fully and satisfactorily resolved as determined by subsequent 
Owner's tests. The Certificate of Completion approved and signed by 
the Owner and approved in writing by the Administrator shall be 
conclusive evidence as to the fact of Completion of the Project and 
the date thereof. Full compliance with the procedure for 
``Completion of the Project'' and an individual Certificate of 
Completion is required for each Project listed under Column 1, 
``Project,'' in Article I, section 1.
    The Contract shall consist of the Notice and Instructions to 
Bidders, the Bidder's Proposal and the Owner's Acceptance, the 
Contractor's Bond and the Specifications.
    The term ``days'' shall mean calendar days.
    The term ``minor errors or irregularities'' shall mean a defect 
or variation in a Bidder's bid that is a matter of form and not of 
substance. Errors or irregularities are ``minor'' if they can be 
corrected or waived without being prejudicial to other Bidders and 
when they do not affect the price, quantity, quality, or timeliness 
of construction. Unless otherwise noted, the borrower determines 
whether an error or irregularity is ``minor.''
    The term ``placed in service'' shall mean used by the Owner to 
earn revenue.
    The term ``Project'' shall mean a central office and all 
associated remote switching terminals (if any), a remote switching 
terminal if purchased without a supporting central office, a feature 
(or group of features), or a service (or group of services), which 
is listed under Column 1, ``Project,'' in Article I, section 1. The 
only instance in which a remote switching terminal can constitute a 
separate Project is where such remote switching terminal is 
purchased with associated modifications to its supporting host 
switch but no other modifications to the host switch are specified. 
A Project will have a single completion schedule listed under Column 
7, ``Completion of Installation,'' in Article I, section 1, and a 
single liquidated damages amount shown in Article V, section 2. The 
Contract may consist of one or more Projects.
    The term ``Software'' shall mean computer programs contained on 
a tape, disc, semiconductor device or other memory device or system 
memory consisting of logic instructions and instruction sequences in 
machine-readable object code, which manipulate data in the central 
processor, control and perform input/output operations, perform 
error diagnostic and recovery routines, control call processing, and 
perform peripheral control, and administrative and maintenance 
functions; as well as associated documentation, excluding source 
code, used to describe, maintain and use the programs provided under 
the Contract.
    The term ``Specifications'' shall mean the minimum performance 
requirements of the Owner as contained in the documents listed 
below, which are either attached or become a part of the Contract by 
reference, as amended by specific written exceptions contained in 
the Bidder's proposal and accepted by the Owner and the 
Administrator:

REA Form __________, dated ________

REA Form __________, dated ________

    Section 2. Continuing Equipment Support--Parts, Service, and 
Software. In addition to warranty repairs and replacement, the 
Bidder shall offer repair service and repair parts to the Owner in 
accordance with the Bidder's practices and terms then in effect, for 
the Bidder's manufactured equipment furnished pursuant to this 
Agreement. Such repair service or repair parts shall be available 
for as long as the Bidder is manufacturing or stocking such 
equipment, or for no less than eight (8) years after the Bidder has 
ceased manufacturing or offering for sale such equipment. The Bidder 
shall also offer software support services to the Owner in 
accordance with the Bidder's practices, terms, and charges then in 
effect, but in any event for no less than five (5) years after the 
Bidder has ceased manufacturing or offering for sale such software.
    Section 3. Materials and Supplies. The Bidder shall use only 
such unmanufactured articles, materials and supplies as have been 
mined or produced in the United States, Mexico or Canada and only 
such manufactured articles, materials and supplies as have been 
manufactured in the United States, Mexico or Canada substantially 
all from articles, materials or supplies mined, produced or 
manufactured, as the case may be, in the United States, Mexico or 
Canada; provided that foreign articles, materials or supplies may be 
used in the event and to the extent that the Administrator shall 
expressly authorize in writing such use pursuant to the provisions 
of the Rural Electrification Act of 1938, being Title IV of Public 
Resolution No. 122, 75th Congress, approved June 21, 1938. The 
Bidder agrees to submit to the Owner such certificate or 
certificates, signed by the Bidder and all subcontractors, with 
respect to compliance with the foregoing provision as the 
Administrator from time to time may require.
    Section 4. Bond. The Bidder shall furnish to the Owner a 
Contractor's Bond in conformance with the requirements of 7 CFR part 
1788, subpart C.
    Section 5. Confidentiality. All information supplied by the 
Bidder to the Owner which bears a legend or notice restricting its 
use, copying, or dissemination, except insofar as it may be in the 
public domain through no acts attributable to the Owner, shall be 
treated by the Owner as confidential information, and the Owner 
shall not reproduce any such information except for its own internal 
use and as authorized by this Contract, and shall use any 
information only for archival backup, in-house training, operating, 
maintenance and administrative purposes and in conjunction with its 
use of the equipment, materials and software furnished hereunder. 
All information supplied to the Bidder by the Owner which bears a 
legend or notice restricting its use, copying, or dissemination, 
except insofar as it may be in the public domain through no acts 
attributable to the Bidder, shall be treated by the Bidder as 
confidential information, and shall not be used by the Bidder for 
any purpose adverse to the interests of the Owner, and shall not be 
reproduced or distributed by the Bidder except for the Bidder's use 
in its performance under this Contract. The foregoing 
confidentiality obligations do not apply to information which is 
independently developed by the receiving party or which is lawfully 
received by the receiving party free of restriction from another 
source having a right to so furnish such information, or is already 
known to the receiving party at the time of disclosure free of 
restriction. If the Bidder has failed to provide continuing 
equipment support as described in Article VII, section 2, the Owner 
is released from this obligation. This provision does not restrict 
release of information by the United States of America pursuant to 
the Freedom of Information Act or other legal process.
    Section 6. Entire Agreement. The terms and conditions of this 
Contract as approved by REA supersede all prior oral or written 
understandings between the parties. There are no understandings or 
representations, expressed or implied, not expressly set forth 
herein.
    Section 7. Survival of Obligations. The rights and obligations 
of the parties, which by their nature, would continue beyond the 
termination, cancellation, or expiration of this Contract, shall 
survive such termination or expiration.
    Section 8. Non-Waiver. No waiver of any terms or conditions of 
this Contract, or the failure of either party to enforce strictly 
any such term or condition on one or more occasions, shall be 
construed as a waiver of the same or of any other terms or 
conditions of this Contract on any other occasion.
    Section 9. Releases Void. Neither party shall require releases 
or waivers of any personal rights from representatives or employees 
of the other in connection with visits to its premises, nor shall 
such parties plead such releases or waivers in any action or 
proceeding.
    Section 10. License. The Bidder shall comply with all applicable 
construction codes.
    (a) The Bidder warrants that it possesses contractor's license 
number ________ issued to it by the State of ________ in which the 
project(s) is located, and said license expires on ________, 19____.
    (b) The Bidder warrants that no license is required in the state 
in which the Project(s) is located.
    (Bidder shall cross out that subsection that does not apply)
    Section 11. Nonassignment of Contract. The Bidder shall not 
assign the Contract, effected by acceptance of this Proposal, or any 
part hereof, or enter into any contract with any person, firm or 
corporation, for the performance of the Bidder's obligations 
hereunder, or any part hereof, without the approval in writing of 
the Owner, the Surety, and the Administrator. However, the Bidder 
may subcontract the whole or any part of the installation work to be 
performed at the installation site, (as distinguished from 
furnishing and delivery of equipment and materials), provided that; 
(a) the Bidder shall remain responsible for the performance thereof 
and (b) the Bidder shall obtain the consent of the surety to such 
subcontract. A copy of such consent shall be submitted to the Owner 
and the Administrator.
    Section 12. Choice of Law. The rights and obligations of the 
parties and all interpretations and performance of this Contract 
shall be governed in all respects by the laws of the State of 
__________ except for its rules with respect to the conflict of 
laws.
    Section 13. Approval of the Administrator. The acceptance of 
this proposal by the Owner shall not create a contract unless such 
acceptance shall be approved in writing by the Administrator within 
ninety (90) days after the date hereof:

By---------------------------------------------------------------------
(Signature of Bidder)

----------------------------------------------------------------------
(Name--Type or Print)

----------------------------------------------------------------------
(Title)

----------------------------------------------------------------------
(Company Name of Bidder)

----------------------------------------------------------------------

----------------------------------------------------------------------

(Address of Bidder)

Attest:

----------------------------------------------------------------------
(Secretary)

----------------------------------------------------------------------
(Date)

The Proposal must be signed with the full name of the Bidder. In the 
case of a partnership the Proposal must be signed in the firm name 
by each partner. In the case of a corporation the Proposal must be 
signed in the corporate name by a duly authorized officer and the 
Corporate seal affixed and attested by the Secretary of the 
Corporation.

(If executed by other than the President, a Vice-President, a 
partner or the individual owner, a power of attorney or other 
legally acceptable document authorizing execution shall accompany 
this contract, unless such power of attorney is on file with REA.)

Acceptance

    Subject to the approval of the Administrator, the Owner hereby 
accepts the Proposal of ____________________________

----------------------------------------------------------------------
for the Project(s) herein described for the Total Base Bid of
$ ______________ and 

Alternate For:                                                          
  Spare Parts, Item(s).................................  $ ________     
  Maintenance Tools, Item(s)...........................  $ ________     
Alternate No. 1 (add) (deduct).........................  $ ________     
Alternate No. 2 (add) (deduct).........................  $ ________     
Alternate No. 3 (add) (deduct).........................  $ ________     
Alternate No. 4 (add) (deduct).........................  $ ________     
Alternate No. 5 (add) (deduct).........................  $ ________     
Alternate No. 6 (add) (deduct).........................  $ ________     
    The total contract price is........................  $ ________     
                                                                        

By---------------------------------------------------------------------
OWNER

ATTEST:----------------------------------------------------------------
PRESIDENT

----------------------------------------------------------------------
SECRETARY

----------------------------------------------------------------------
DATE OF ACCEPTANCE

[End of clause]

    Dated: June 2, 1994.
Bob J. Nash,
Under Secretary, Small Community and Rural Development.
[FR Doc. 94-14058 Filed 6-16-94; 8:45 am]
BILLING CODE 3410-15-P