[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: 7CFR1726.252]

[Page 263]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1726--ELECTRIC SYSTEM CONSTRUCTION POLICIES AND PROCEDURES--Table of Contents
 
         Subpart H--Modifications to RUS Standard Contract Forms
 
Sec. 1726.252  Prior approved contract modification related to liability for special and consequential damages.

    This section applies only to transmission equipment purchases and 
generation contracts. Where the borrower anticipates difficulty in 
obtaining responsive bids on RUS standard contract forms due to a lack 
of limitation with respect to special and consequential damages, and 
where the borrower believes that such a modification will encourage 
competition through the receipt of an alternative bid which limits the 
bidder's liability for special and consequential damages, the borrower 
may make the following approved phrase modifications in the RUS standard 
contract form on which the borrower solicits bids:
    (a) Insert new paragraphs in the ``Notice and Instructions to 
Bidders'' as follows:

    ``Proposals are invited on the basis of alternative Liability 
Clauses Numbers 1 and 2. The Owner will determine on which Liability 
Clause basis the award will be made. Any other liability clauses in the 
proposal or any other modifications will be considered not responsive 
and unacceptable. These Liability Clauses are defined as follows:
    Liability Clause Number 1. This will include unmodified all of the 
standard terms and conditions of the form of contract furnished by the 
Owner and attached hereto.
    Liability Clause Number 2. This will include the following 
paragraph, in addition to all of the standard terms and conditions, 
otherwise unmodified, of the form of contract furnished by the Owner and 
attached hereto:
    `Except for the Seller's willful delay or refusal to perform the 
contract in accordance with its terms, the Seller's liability to the 
Owner for special or consequential damages on account of breach of this 
contract shall not exceed in total an amount equal to ---- percent [the 
borrower will insert an appropriate percentage between 0 and 100 
percent, inclusive] of the contract price.' ''

    (b) Insert the following in the contract documents under the 
``Proposal'' section:

``Price $ (Based on Liability Clause 1)--------
Price $ (Based on Liability Clause 2)--------''

    (c) Insert the following in the acceptance section of the standard 
contract form:

    ``This contract is based on Liability Clause Number--------.''

    (d) In RUS Form 200, the word ``Bidder'' would replace the word 
``Seller'' in the Liability Clause in paragraph (a) of this section.

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