[Code of Federal Regulations]
[Title 7, Volume 11]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1726.24]

[Page 250]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1726--ELECTRIC SYSTEM CONSTRUCTION POLICIES AND PROCEDURES--Table of Contents
 
                           Subpart A--General
 
Sec. 1726.24  Standard forms of contracts for borrowers.

    (a) General. The standard loan agreement between RUS and the 
borrowers provides that, in accordance with applicable RUS regulations 
in this chapter, the borrower shall use standard forms of contracts 
promulgated by RUS for construction, procurement, engineering services, 
and architectural services financed by a loan made or guaranteed by RUS. 
This part implements these provisions of the RUS loan agreement. 
Subparts A through H and J of this part prescribe when and how borrowers 
are required to use RUS standard forms of contracts in procurement and 
construction. Subpart I of this part prescribes the procedures that RUS 
follows in promulgating standard contract forms and identifies those 
contract forms that borrowers are required to use for procurement and 
construction.
    (b) Amendments to contracts--(1) Contract forms. The borrower must 
use RUS Form 180, Construction Contract Amendment, for any change or 
addition in a distribution line construction contract. The borrower must 
use RUS Form 238, Construction or Equipment Contract Amendment, for any 
change or addition in any other contract for construction, or for 
materials or equipment.
    (2) Special considerations. Each time an amendment to a construction 
contract is executed, the borrower must ensure that contractor's bond is 
adequate, that all necessary licenses and permits have been obtained, 
and that any environmental requirements associated with the proposed 
construction have been met.
    (3) Amendment approval requirements. (i) If a RUS approved form of 
contract is required by this part, an amendment must not alter the terms 
and conditions of the RUS approved form of contract without prior RUS 
approval.
    (ii) The borrower must make a contract amendment subject to RUS 
approval if the underlying contract was made subject to RUS approval and 
the total amended contract price exceeds 120 percent of the original 
contract price (excluding any escalation provision contained in the 
contract).
    (iii) Contract amendments, except as provided in paragraph 
(b)(3)(ii) of this section, are not subject to RUS approval and need not 
be submitted to RUS unless specifically requested by RUS on a case by 
case basis.

[60 FR 10155, Feb. 23, 1995, as amended at 63 FR 58286, Oct. 30, 1998]

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