[Federal Register Volume 64, Number 27 (Wednesday, February 10, 1999)]
[Rules and Regulations]
[Pages 6498-6501]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3163]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1755


Telecommunications Program Standard Contract Forms

AGENCY: Rural Utilities Service, USDA.

ACTION: Direct final rule.

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SUMMARY: The Rural Utilities Service (RUS) is amending its regulations 
to change the manner in which it publishes the standard forms of 
contracts that borrowers are required to use when contracting for 
construction, procurement, engineering services, or architectural 
services financed through loans made or guaranteed by RUS. The required 
contract forms are currently published in the text format in the Code 
of Federal Regulations (CFR). This direct final rule will eliminate 
this unnecessary and burdensome publication in the CFR.

DATES: This rule will become effective March 29, 1999 unless we receive 
written adverse comments or written notice of intent to submit adverse 
comments on or before March 12, 1999. If we receive such comments or 
notice, we will publish a timely notice in the Federal Register stating 
that the rule will not become effective. A second public comment period 
will not be held. Parties interested in commenting on this action 
should do so at this time.

ADDRESSES: Submit adverse comments or notice of intent to submit 
adverse comments to Orren E. Cameron, III,

[[Page 6499]]

Director, Telecommunications Standards Division, Rural Utilities 
Service, U.S. Department of Agriculture, Stop 1598, Washington, DC 
20250-1598. RUS requires a signed original and three copies of all 
comments (7 CFR 1700.4). Comments will be available for public 
inspection during regular business hours (7 CFR 1.27(b)).

FOR FURTHER INFORMATION CONTACT: Norberto Esteves, Chairman, Technical 
Standards Committee A (Telecommunications), Telecommunications 
Standards Division, Rural Utilities Service, U.S. Department of 
Agriculture, Stop 1598, Washington, DC 20250-1598, telephone number 
202-720-0699, fax number 202-720-4099, E-mail [email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be not significant for purposes of 
Executive Order 12866 and, therefore, has not been reviewed by the 
Office of Management and Budget (OMB).

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. RUS has determined that this rule meets the applicable 
standards provided in section 3 of that Executive Order. In addition, 
all state and local laws and regulations that are in conflict with this 
rule will be preempted. No retroactive effect will be given to the, 
rule, and in accordance with Sec. 212(e) of the Department of 
Agriculture Reorganization Act of 1994 (7 USC Sec. 6912(e)) 
administrative appeal procedures, if any, must be exhausted before an 
action against the Department or its agencies may be initiated.

Regulatory Flexibility Act Certification

    RUS has determined that this final rule will not have a significant 
economic impact on a substantial number of small entities, as defined 
by the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The RUS 
telecommunications program provides loans to borrowers at interest 
rates and terms that are more favorable than those generally available 
from the private sector. RUS borrowers, as a result of obtaining 
federal financing, receive economic benefits that exceed any direct 
economic costs associated with complying with RUS regulations and 
requirements.

Information Collection and Recordkeeping Requirements

    This final rule contains no new information collection or 
recordkeeping requirements under the Paperwork Reduction Act of 1995 
(44 U.S.C. Chapter 35).

Catalog of Federal Domestic Assistance

    The program described by this rule is listed in the Catalog of 
Federal Domestic Assistance programs under No. 10.851, Rural Telephone 
Loans and Loan Guarantees; and No. 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.

Executive Order 12372

    This rule is excluded from the scope of Executive Order 12372, 
Intergovernmental Consultation, which may require consultation with 
State and local officials. A final rule related notice entitled 
``Department Programs and Activities Excluded from Executive Order 
12372,'' (50 FR 47034) exempted RUS loans and loan guarantees from 
coverage under this order determined that RUS loans and loan 
guarantees, and RTB bank loans, were not covered by Executive Order 
12372.

Unfunded Mandates

    This rule contains no Federal mandates (under the regulatory 
provision of Title II of the Unfunded Mandates Reform Act of 1995) for 
State, local, and tribal governments or the private sector. Thus, this 
rule is not subject to the requirements of sections 202 and 205 of the 
Unfunded Mandates Reform Act of 1995.

National Environmental Policy Act Certification

    The Administrator of RUS has determined that this 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.

Background

    RUS is changing the manner in which it publishes the standard 
contract forms borrowers are required to use when contracting for 
construction, procurement, architectural, or engineering services 
financed through loans made or guaranteed by RUS or RTB.
    The standard loan agreement between RUS and its borrowers provides 
that, in accordance with applicable RUS regulations, the borrower shall 
use standard contract forms promulgated by RUS for construction, 
procurement, engineering services, and architectural services financed 
by a loan made or guaranteed by RUS. Currently, RUS implements these 
provisions of its loan agreement through parts 1753 and 1755. Part 1753 
generally prescribes when and how borrowers are required to use RUS 
standard contract forms and part 1755 lists RUS standard contract 
forms. All of the contract forms are available, in a format suitable 
for use as a contract, from RUS or the Government Printing Office 
(GPO). An RUS borrower required by part 1753 to use a contract form 
must use the contract form in that format available from RUS or GPO. 
RUS believes that the current system of publishing the complete text of 
the contract forms in the CFR is unnecessary and that, consistent with 
the agency's objective to streamline regulatory text and to provide 
borrowers with a user-friendly regulatory system, the complete text of 
the required contract forms should no longer be published in the CFR.
    Rather than published the complete text in the CFR, RUS will 
identify in Sec. 1755.30(c) all required contract forms. To the extent 
the RUS may be required to publish its contract forms pursuant to 
section 552(a) of the Administrative Procedure Act (APA) (5 U.S.C. 
552(a)) or otherwise, such requirement is met by identification of the 
standard contract forms in part 1755. Moreover, RUS provides all 
borrowers actual notice of the contract forms they are required to use 
in contracting. As this rule states in part 1755, upon initially 
entering a loan agreement with RUS, borrowers are provided with copies 
of contract forms. Thereafter, should RUS promulgate new or revised 
standard contract form(s), following the procedures discussed below, 
RUS will revise the list of standard forms as set forth in part 1755 
and send the new or revised standard forms to all affected borrowers by 
regular or electronic mail. Borrowers, as well as the public, can 
obtain copies of all standard contract forms from RUS or GPO.
    In addition to identifying standard forms and eliminating full text 
publication of each standard contract form in the CFR, RUS is 
clarifying the procedures that will be followed when RUS promulgates a 
new or revised standard contract form. To the extent that RUS is 
required by section 553 of the APA (5 U.S.C. Sec. 553) or otherwise to 
provide notice in the Federal Register (FR) and an opportunity for 
public comment in promulgating standard contract forms, RUS will 
publish a FR notice of rulemaking announcing, as appropriate, a 
revision in, or a proposal to revise the list of standard contract

[[Page 6500]]

forms set forth in Sec. 1755.30(c). The revision may change the 
existing list by, for example, identifying a new required contract form 
or changing the issuance date of the form listed. The supplementary 
information section of the FR notice will describe the substantive 
change in the identified standard contract form and may append the 
standard contract form or relevant portions thereof. As appropriate, 
the notice will provide an opportunity for interested persons to 
provide comments. RUS will send a copy of such FR notice by regular or 
electronic mail to all borrowers.
    Finally, the final rule clarifies certain aspects of the 
requirement that borrowers use RUS standard contract forms. Absent an 
RUS waiver, borrowers are required to use those standard forms in 
effect as of the date the borrower issues the bid package to the 
bidders. Borrowers can determine the appropriate standard form based on 
the issuance date of the form as identified by the most recent 
published list set forth in Sec. 1755.30(c). RUS may waive for good 
cause, on a case-by-case basis, the requirement to use RUS standard 
contract forms pursuant to procedures set forth in the regulation. A 
failure on the part of the borrower to use standard contract forms as 
prescribed in part 1753 or 1755 is a violation of the terms of its loan 
agreement with RUS and RUS may exercise any and all remedies available 
under the terms of the loan agreement or otherwise. Consistent with the 
changes discussed above, RUS is amending those sections of existing 
regulations that currently set forth the full text of contracts for the 
purpose of deleting such text. Deletion of the full text from the CFR 
will not affect the requirement that borrowers use the prescribed 
contract forms.

List of Subjects in 7 CFR Part 1755

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

    For reasons set out in the preamble, part 1755 of chapter XVII of 
title 7 of the Code of Federal Regulations, is amended as follows:

PART 1755--TELECOMMUNICATIONS SYSTEM CONSTRUCTION POLICIES AND 
PROCEDURES

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

    Authority: 7 U.S.C. 901 et seq.; 1921 et seq.; 7 U.S.C. 6941 et 
seq.

    2. Sections 1755.26 through 1755.30 are added to read as follows:


Sec. 1755.26  RUS standard contract forms.

    (a) The standard loan agreement between RUS and its borrowers 
provides that, in accordance with applicable RUS regulations, borrowers 
shall use standard contract forms promulgated by RUS for construction, 
procurement, engineering services, and architectural services financed 
by a loan or guaranteed by RUS. This part implements these provisions 
of the RUS loan agreement and prescribes the procedures that RUS 
follows in promulgating standard contract forms that borrowers are 
required to use. Part 1753 prescribes when and how borrowers are 
required to use these standard forms of contracts.
    (b) Contract forms. RUS promulgates standard contract forms, 
identified in Sec. 1755.30(c), List of Standard Contract Forms, that 
borrowers are required to use.


Sec. 1755.27  Borrower contractual obligations.

    (a) Loan agreement. As a condition of a loan or loan guaranteed 
under the RE Act, borrowers are normally required to enter into RUS 
loan agreements pursuant to which the borrowers agree to use RUS 
standard contract forms for construction, procurement, engineering 
services, and architectural services financed in whole or in part by 
the RUS loan. To comply with the provisions of the loan agreements as 
implemented by this part, borrowers must use those contract forms 
identified in the list of telecommunications standard contract forms, 
set forth in Sec. 1755.30(c) of this part.
    (b) Compliance. (1) If a borrower is required by part 1753 to use a 
listed contract form, the borrower shall use the listed contract form 
in the format available from RUS. The forms shall not be retyped, 
changed, modified, or altered in any manner not specifically authorized 
in this part or approved by RUS in writing. Any modifications approved 
by RUS must be clearly shown so as to indicate the difference from the 
listed contract form.
    (2) The borrower may use electronic reproductions of a contract 
form if the contract documents submitted for RUS approval are exact 
reproductions of the RUS form and include the following certification 
by the borrower: I (Insert name of the person.), certify that the 
attached (Insert name of the contract form.), between (Insert name of 
the parties.), dated (Insert contract date.) is an exact reproduction 
of RUS Form (Insert form number), dated (Insert date of RUS form).

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  (Signature)

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  (Title)

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 (Employer's Address)

    (c) Amendment. Where a borrower has entered into a contract in the 
form required by 7 CFR part 1753, no change may be made in the terms of 
the contract, by amendment, waiver or otherwise, without the prior 
written approval of RUS.
    (d) Waiver. RUS may waive for good cause, on a case-by-case basis, 
the requirements imposed on a borrower pursuant to this part. Borrowers 
seeking an RUS waiver must provide RUS with a written request 
explaining the need for the waiver.
    (e) Violations. A failure on the part of the borrower to use listed 
contracts as prescribed in 7 CFR part 1753 is a violation of the terms 
of the loan agreement with RUS and RUS may exercise any and all 
remedies available under the terms of the agreement or otherwise.


Sec. 1755.28  Notice and publication of listed contract forms.

    (a) Notice. Upon initially entering a loan agreement with RUS, 
borrowers will be provided with all listed contract forms. Thereafter, 
new or revised listed contract forms promulgated by RUS, including RUS 
approved exceptions and alternatives, will be sent by regular or 
electronic mail to the borrower's address as identified in its loan 
agreement with RUS.
    (b) Availability. Listed contract forms are published by RUS. 
Interested parties may obtain the forms from the Rural Utilities 
Service, Program Development and Regulatory Analysis, U.S. Department 
of Agriculture, Stop 1522, Washington DC 20250-1522, telephone number 
(202) 720-8674. The list of contract forms can be found in 
Sec. 1755.30(c).


Sec. 1755.29  Promulgation of new or revised contract forms.

    RUS may, from time to time, promulgate new contract forms or revise 
or eliminate existing contract forms. In so doing, RUS shall publish a 
notice of rulemaking in the Federal Register announcing, as 
appropriate, a revision in, or a proposal to amend Sec. 1755.30(c), 
List of telecommunications standard contract forms. The amendment may 
change the existing identification of a listed contract form by, for 
example, changing the issuance date of the listed contract form or 
identifying a new required contract form. The notice of rulemaking will 
describe the new standard contract form or substantive change in the 
listed contract form, as the

[[Page 6501]]

case may be, and the issues involved. The standard contract form or 
relevant portions thereof may be appended to the supplementary 
information section of the notice of rulemaking. As appropriate, the 
notice of rulemaking shall provide an opportunity for interested 
persons to provide comments. RUS shall send, by regular or electronic 
mail, a copy of each such Federal Register document to all borrowers.


Sec. 1755.30  List of telecommunications standard contract forms.

    (a) General. The following is a list of RUS telecommunications 
program standard contract forms for procurement, construction, 
engineering services, and architectural services. Borrowers are 
required to use these contract forms by the terms of their RUS loan 
agreements implemented by part 1753 and this part.
    (b) Issuance Date. Where part 1753 requires the use of a standard 
contract form in connection with RUS financing, the borrower shall use 
the appropriate form identified in Sec. 1755.30(c), List of 
Telecommunications Standard Contract Forms, published as of the date 
the borrower releases the plans and specifications to solicit bids or 
price quotes.
    (c) List of telecommunications standard contract forms.
    (1) RUS Form 157, issued 10-77, Construction Work Plan and cost 
Distribution--Telephone.
    (2) RUS Form 158, issued 10-77, Certification of Contract or Force 
Account Approval.
    (3) RUS Form 159, issued 10-77, Summary of Completed Construction.
    (4) RUS Form 168b, issued 3-62, Contractor's Bond.
    (5) RUS Form 168c, issued 4-79, Contractor's Bond.
    (6) RUS Form 181, issued 4-72, Certificate of Completion, Contract 
Construction Buildings.
    (7) RUS Form 181a, issued 3-66, Certificate of Completion (Force 
Account Construction).
    (8) RUS Form 213, issued 8-52, Certificate (Buy American).
    (9) RUS Form 216, issued 7-67, Construction Change Order.
    (10) RUS Form 217, issued 3-97, Postloan Engineering Services 
Contract--Telecommunications Systems.
    (11) RUS Form 220, issued 6-98, Architectural Services Contract.
    (12) RUS Form 224, issued 3-55, Waiver and Release of Lien.
    (13) RUS Form 231, issued 4-72, Certificate of Contractor.
    (14) RUS Form 238, issued 4-72, Construction or Equipment Contract 
Amendment.
    (15) RUS Form 242, issued 11-58, Assignment of Engineering Service 
Contract.
    (16) RUS Form 245, issued 11-75, Engineering Services Contract, 
Special Services--Telephone.
    (17) RUS Form 257, issued 3-73, Contract to Construct Buildings.
    (18) RUS Form 257a, issued 10-69, Contractor's Bond.
    (19) RUS Form 274, issued 6-81, Bidder's Qualifications.
    (20) RUS Form 276, issued 5-59, Bidder's Qualifications for Buried 
Plant Construction.
    (21) RUS Form 281 issued 5-61, Tabulation of Materials Furnished by 
Borrower.
    (22) RUS Form 282, issued 11-53, Subcontract (Under Construction or 
Equipment Contracts).
    (23) RUS Form 284, issued 4-72, Final Statement of Cost for 
Architectural Service and Certificate of Architect.
    (24) RUS Form 307, issued 4-60, Bid Bond.
    (25) RUS Form 396, issued 3-64, Certificate of Completion--Special 
Equipment Contract (Including Installation).
    (26) RUS Form 396a, issued 3-64, Certificate of Completion--Special 
Equipment Contract (Not Including Installation).
    (27) RUS Form 397, issued 12-67, Special Equipment Contract 
(Including Installation).
    (28) RUS Form 397f, issued 2-63, Contractor's Bond (Special 
Telephone Equipment).
    (29) Addendum No. 1 to RUS Form 397, issued 7-78, Special Equipment 
Contract (Including Installation).
    (30) RUS Form 398, issued 11-62, Special Equipment Contract (Not 
Including Installation).
    (31) RUS Form 399, issued 8-82, Supplemental Agreement to Equipment 
Contract for Field Trial.
    (32) RUS Form 399a, issued 8-82, Supplemental Agreement to 
Equipment Contract for Field Trial (Secondary-Delivery, Installation, 
Operation).
    (33) RUS Form 506, issued 3-97, Statement of Engineering Fee--
Telecommunications.
    (34) RUS Form 515, issued 1-90, Telephone System Construction 
Contract (Labor and Materials).
    (35) RUS Form 517, issued 9-64, Results of Acceptance Tests
    (36) RUS Form 525, issued 7-94, Central Office Equipment Contract 
(Including Installation).
    (37) Addendum to RUS Form 525, issued 7-94, Central Office 
Equipment Contract (Including Installation) and RUS Form 545 Central 
Office Equipment Contract (Not Including Installation).
    (38) RUS Form 525a, issued 10-62, Contractor's Bond (Central Office 
Equipment).
    (39) RUS Form 526, issued 8-66, Construction Contract Amendment.
    (40) RUS Form 527, issued 3-71, Statement of Construction, 
Telephone System `` Outside Plant.
    (41) RUS Form 545, issued 9-66, Central Office Equipment Contract 
(Not including Installation).
    (42) RUS Form 553, issued 5-67, Check List for Review of Plans and 
Specifications.
    (43) RUS Form 724 issued 10-63, Final Inventory, Telephone 
Construction Contract.
    (44) RUS Form 724a issued 4-61, Final Inventory, Telephone 
Construction--Telephone Construction Contract (Labor and Materials), 
columns 1-8.
    (45) RUS Form 724b issued 3-61, Final Inventory, Telephone 
Construction Contract (Labor and Materials), columns 9-14.
    (46) RUS Form 744, issued 2-62, Certificate of Contractor and 
Indemnity Agreement.
    (47) RUS Form 752a, issued 5-66, Certificate of Completion Central 
Office Equipment-Not Including Installation.
    (48) RUS Form 754, issued 6-66, Certificate of Completion and 
Certificate of Contractor and Indemnity Agreement.
    (49) RUS Form 771, Issued 10-75, Summary of Work Orders (Inspected 
by RUS Field Engineer).
    (50) RUS Form 771a, issued 10-75, Summary of Work Orders (Inspected 
by Licensed Engineer or Borrower's Staff Engineer).
    (51) RUS Form 773, issued 12-90, Miscellaneous Construction Work 
and Maintenance Services Contract.
    (52) RUS Form 787, issued 8-63, Supplement A to Construction 
Contract.
    (53) RUS Form 817, issued 6-60, Final Inventory, Telephone Force 
Account Construction.
    (54) RUS Form 817a, issued 6-60, Final Inventory, Telephone Force 
Account Construction, columns 1-8.
    (55) RUS Form 817b, issued 6-60, Final Inventory, Telephone Force 
Account Construction, Columns 9-14.
    (56) RUS Form 835, issued 3-66, Preloan Engineering Service 
Contract, Telephone System Design.


Secs. 1755.93, 1755.217, and 1755.525  [Removed and Reserved]

    3. Sections 1755.93, 1755.217, and 1755.525 are removed and 
reserved.

    Dated: January 24, 1999.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 99-3163 Filed 2-9-99; 8:45 am]
BILLING CODE 3410-15-P