[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: 7CFR1726.255]

[Page 266-267]
 
                          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. 1726.255  Prior approved contract modifications related to indemnification.

    (a) As an alternative to the indemnification provision required in 
RUS standard construction contract forms in those jurisdictions 
requiring specific language concerning the requirement that the 
indemnitor indemnify the indemnitee for the indemnitee's own negligence, 
the borrower may add the words ``otherwise this provision shall apply to 
any alleged negligence or condition caused by the Owner'' so that the 
first paragraph reads as follows:

    ``i. To the maximum extent permitted by law, Bidder shall defend, 
indemnify, and hold harmless Owner and Owner's directors, officers, and 
employees from all claims, causes of action, losses, liabilities, and 
expenses (including reasonable attorney's fees) for personal loss, 
injury, or death to persons (including but not limited to Bidder's 
employees) and loss, damage to or destruction of Owner's property or the 
property of any other person or entity (including but not limited to 
Bidder's property) in any manner arising out of or connected with the 
Contract, or the materials or equipment supplied or services performed 
by Bidder, its subcontractors and suppliers of any tier. But nothing 
herein shall be construed as making Bidder liable for any injury, death, 
loss, damage, or destruction caused by the sole negligence of Owner, 
otherwise this provision shall apply to any negligence or condition 
caused by the Owner.''

    (b) As an alternative to the indemnification provision required in 
RUS standard construction contract forms in those jurisdictions that 
have a legal prohibition against one party indemnifying another for the 
other's negligence, the borrower may replace the words ``defend, 
indemnify, and hold harmless'' with the words `` shall pay on behalf 
of'' so that the first paragraph reads as follows:

    ``i. To the maximum extent permitted by law, Bidder shall pay on 
behalf of Owner and Owner's directors, officers, and employees from all 
claims, causes of action, losses, liabilities, and expenses (including 
reasonable attorney's fees) for personal loss, injury, or death to 
persons (including but not limited to Bidder's employees) and loss, 
damage to or destruction of Owner's property or the property of any 
other person or entity (including but not limited to Bidder's property) 
in any manner arising out of or connected with the Contract, or the 
materials or equipment supplied or services performed by Bidder, its 
subcontractors and suppliers of any tier. But nothing herein shall be 
construed as making Bidder liable for any injury, death, loss, damage, 
or destruction caused by the sole negligence of Owner, otherwise this 
provision shall apply to any negligence or condition caused by the 
Owner.''


[[Page 267]]


    (c) If the alternative indemnification provision in paragraph (a) or 
(b) of this section is chosen by the borrower, the language of paragraph 
(a) or (b) of this section would be inserted in lieu of subsection (i) 
of the section indicated in the RUS standard construction contract forms 
as follows:

----------------------------------------------------------------------------------------------------------------
           RUS form No.                             Title                           Desiganted section
----------------------------------------------------------------------------------------------------------------
200...............................  Construction Contract--Generating...  Article IV, Section 1(c).
201...............................  Right-of-Way Clearing Contract......  Article IV, Section 1(e).
203...............................  Transmission System Right-of-Way      Article IV, Section 1(f).
                                     Clearing Contract.
257...............................  Contract to Construct Buildings.....  Article IV, Section 1(b).
764...............................  Substation and Switching Station      Article IV, Section 1(f).
                                     Erection Contract.
786...............................  Electric System Communications and    Article IV, Section 1(c).
                                     Control Equipment Line.
790...............................  Distribution Line Extension           Article IV, Section 1(f).
                                     Construction Contract (labor &
                                     materials).
792...............................  Distribution Line Extension           Article IV, Section 1(f).
                                     Construction Contract (labor only).
830...............................  Electric System Construction          Article IV, Section 1(f).
                                     Contract (labor & material).
831...............................  Electric Transmission Construction    Article IV, Section 1(f).
                                     Contract (labor & material).
----------------------------------------------------------------------------------------------------------------

    (d) In RUS Forms 201, 790, and 792, the word ``Contractor'' would 
replace the word ``Bidder'' in the alternative indemnification clause in 
paragraph (a) or (b) of this section.
    (e) In RUS Form 786, the word ``Seller'' would replace the word 
``Bidder'' and the word ``Purchaser'' would replace the word ``Owner'' 
in the alternative indemnification clause in paragraph (a) or (b) of 
this section.