[Federal Register Volume 76, Number 95 (Tuesday, May 17, 2011)]
[Proposed Rules]
[Pages 28333-28335]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-11910]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 76, No. 95 / Tuesday, May 17, 2011 / Proposed
Rules
[[Page 28333]]
DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Parts 1724 and 1726
RIN 0572-AC20
Electric Engineering, Architectural Services, Design Policies and
Construction Standards
AGENCY: Rural Utilities Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Rural Utilities Service (RUS) proposes to amend the
contract threshold amounts that require borrowers to use certain
prescribed agency contract forms and to amend the contract dollar
amounts that require RUS review of contracts prior to the contract
being effective. Also, RUS proposes to raise the threshold amounts
requiring RUS borrowers to use certain required procurement methods for
materials, equipment and contract services that otherwise would require
RUS prior approval. The changes in the threshold amounts would reduce
the number of contracts reviewed by the RUS.
DATES: Written comments must be received by RUS or be postmarked no
later than July 18, 2011.
ADDRESSES: Submit comments by either of the following methods:
Federal eRulemaking Portal: Go to http://www.regulations.gov and,
in the lower ``Search Regulations and Federal Actions'' box, select
``Rural Utilities Service'' from the agency drop-down menu, then click
on ``Submit.'' In the Docket ID column, select RUS-10-Electric-0001 to
submit or view public comments and to view supporting and related
materials available electronically. Information on using
Regulations.gov, including instructions for accessing documents,
submitting comments, and viewing the docket after the close of the
comment period, is available through the site's ``User Tips'' link.
Postal Mail/Commercial Delivery: Please send your comment addressed
to Michele Brooks, Director, Program Development and Regulatory
Analysis, USDA--Rural Utilities Service, 1400 Independence Avenue, STOP
1522, Room 5162, Washington, DC 20250-1522. Please state that your
comment refers to Docket No. RUS-10-Electric-0001.
Other Information: Additional information about Rural Development
and its programs is available on the Internet at http://www.rurdev.usda.gov/index.html.
FOR FURTHER INFORMATION CONTACT: Lou Riggs, USDA--Rural Utilities
Service, 1400 Independence Avenue, SW., Stop 1569, Washington, DC
20250-1569. Telephone (202) 690-0551 or e-mail to
[email protected].
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This proposed 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.
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. RUS has determined that this proposed rule meets
the applicable standards in Sec. 3 of the Executive Order. In
addition, all state and local laws and regulations that conflict with
this proposed rule will be preempted; no retroactive effect will be
given to the proposed rule; and in accordance with Sec. 212(e) of the
Department of Agriculture Reorganization Act of 1994 (7 U.S.C.
6912(e)), administrative appeal procedures, if any, must be exhausted
before litigation against the Department or its agencies may be
initiated.
Regulatory Flexibility Act Certification
It has been determined that the Regulatory Flexibility Act is not
applicable to this proposed rule since the Agency is not required by 5
U.S.C. 551 et seq., or any other provision of law to publish a notice
of proposed rulemaking with respect to the subject matter of this rule.
Information Collection and Recordkeeping Requirements
This proposed rule contains no additional reporting or
recordkeeping burdens under Office of Management and Budget (OMB)
control numbers 0572-0107 and 0572-0118 that would require approval
under the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).
Executive Order 13132
This proposed rule will not have any substantial direct effect on
states, on the relationship between the national government and the
states, or on the distribution of power and responsibilities among the
various levels of government. Under Executive Order 13132, this
proposed rule does not have sufficient federalism implications
requiring the preparation of a Federalism Assessment.
Catalog of Federal Domestic Assistance
The program described by this proposed rule is listed in the
Catalog of Federal Domestic Assistance Programs under number 10.850,
Rural Electrification Loans and Loan Guarantees. This catalog is
available on the Internet and the General Services Administration's
(GSA) free CFDA Web site at http://www.cfda.gov. The CFDA Web site also
contains a PDF file version of the Catalog that, when printed, has the
same layout as the printed document that the Government Printing Office
(GPO) provides. GPO prints and sells the CFDA to interested buyers. For
information about purchasing the Catalog of Federal Domestic Assistance
from GPO, call the Superintendent of Documents at 202-512-1800 or toll
free at 866-512-1800, or access GPO's online bookstore at http://bookstore.gpo.gov.
Executive Order 12372
This proposed rule is not subject to the provisions of Executive
Order 12372, ``Intergovernmental Review of Federal Programs,'' as
implemented under USDA's regulations at 7 CFR Part 3015.
Unfunded Mandates
This proposed rule contains no Federal mandates (under the
regulatory provisions of Title II of the Unfunded Mandates Reform Act
of 1995) for State, local, and tribal governments for the private
sector. Thus, this proposed rule is not subject to the requirements of
Sec. Sec. 202 and 205 of the Unfunded Mandates Reform Act of 1995.
[[Page 28334]]
National Environmental Policy Act Certification
This proposed rule has been examined under RUS environmental
regulations at 7 CFR Part 1794. The Administrator has determined that
this proposed rule is not a major Federal action significantly
affecting the environment. Therefore, in accordance with the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), an
Environmental Impact Statement or Assessment is not required.
E-Government Act Compliance
RUS is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
Background
The Rural Electrification Act of 1936 (7 U.S.C. 901-950bb (REAct)),
as amended, establishes the authority for RUS to provide loans and loan
guarantees to eligible entities for furnishing electric service to
rural areas. The standard loan agreement between RUS and its electric
borrowers provides that, in accordance with applicable RUS regulations,
the borrower shall use standard forms of contracts promulgated by RUS
for construction, procurement, engineering services and architectural
services for transactions above the established threshold dollar levels
(``threshold levels'').
Electric borrowers are also expected to obtain RUS approvals for
procuring materials, equipment and contracting services for use in the
electric systems where the contract amount exceeds specified threshold
levels.
Threshold levels that apply to contracts entered into by borrowers
were initially established to capture significant transactions that
could adversely affect RUS loan security. The threshold levels were
most recently revised in 1995. Cost increases and inflation over time
have greatly increased the need for more approvals than is consistent
with the earlier threshold levels. The result has been increased delay
to the borrowers in receiving RUS approvals and increased workloads at
RUS. Inflation is not the only relevant variable in the RUS proposal to
modify the threshold levels. In this proposed rule RUS has also
considered the level of sophistication in borrowers' operations, RUS
staff constraints and competing priorities within RUS. The need to
adjust the threshold levels is a result of these considerations.
In response to borrowers' requests and mindful of the directives in
Executive Order 13563 of January 18, 2011, to determine if any
regulations should be modified to make agencies' regulations less
burdensome in achieving their objectives, RUS undertook an examination
of certain thresholds used in determining when the use of prescribed
forms and approvals would apply. RUS examined the number of contracts
it reviewed over the last several years. RUS also reviewed the rate of
inflation factors published in the Handy-Whitman Index of Public
Utility Construction Costs in order to adjust for inflation occurring
after the existing requirements were established.
As a result of this review, RUS determined that although it remains
necessary and appropriate to continue these requirements as one means
of oversight of its borrowers' financial and operational activities,
the existing threshold levels should be raised. Raising these threshold
levels will reduce the volume of contracts that borrowers will be
required to submit for RUS approvals. Doing so will reduce the
paperwork burdens on borrowers and the administrative burdens on RUS.
RUS is proposing to revise these threshold levels an average of 300
percent. RUS estimates that the revision will reduce the volume of
contracts it receives pursuant to these requirements by 50 percent.
List of Subjects
7 CFR Part 1724
Electric power, Loan programs--energy, Reporting and recordkeeping
requirements, Rural areas.
7 CFR Part 1726
Electric power, Loan programs--energy, Reporting and recordkeeping
requirements, Rural areas.
For reasons set forth in the preamble, RUS proposes to amend
chapter XVII of title 7 of the Code of Federal Regulations as follows:
PART 1724--ELECTRIC ENGINEERING, ARCHITECTURAL SERVICES AND DESIGN
POLICIES AND PROCEDURES
1. The authority citation for part 1724 continues to read as
follows:
Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.
Subpart E--Electric System Design
2. Section 1724.54 is amended by revising paragraph (e)(2) and
paragraph (g)(2) to read as follows:
Sec. 1724.54 Requirements for RUS approval of plans and
specifications.
* * * * *
(e) * * *
(2) The borrower shall obtain RUS approval, prior to issuing
invitations to bid, of the terms and conditions for all generating
plant equipment or construction contracts which will cost $5,000,000 or
more. Unless RUS approval is required by paragraph (a) of this section,
plans and specifications for generating plant equipment and
construction do not require RUS approval.
* * * * *
(g) * * *
(2) The borrower shall obtain RUS approval, prior to issuing
invitations to bid, of the terms and conditions for communications and
control facilities contracts which will cost $1,500,000 or more. Unless
RUS approval is required by paragraph (a) of this section, plans and
specifications for communications and control facilities do not require
RUS approval.
* * * * *
PART 1726--ELECTRIC SYSTEM CONSTRUCTION POLICIES AND PROCEDURES
3. The authority citation for part 1726 continues to read as
follows:
Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.
Subpart A--General
4. Section 1726.14 is amended by revising the definition of ``minor
modification or improvement'' to read as follows:
Sec. 1726.14 Definitions.
* * * * *
Minor modification or improvement means a project the cost of which
is $150,000 or less, exclusive of the cost of owner furnished
materials.
* * * * *
Subpart B--Distribution Facilities
5. Section 1726.50 is amended by revising paragraph (a) to read as
follows:
Sec. 1726.50 Distribution line materials and equipment.
(a) Contract forms. (1) The borrower shall use RUS Form 198,
Equipment Contract, for purchases of equipment where the total cost of
the contract is $1,000,000 or more.
(2) The borrower may, in its discretion, use RUS Form 198,
Equipment Contract, or a written purchase order equal to $1,000,000 or
[[Page 28335]]
less for purchases of equipment, and for all materials.
* * * * *
6. Section 1726.51 is amended by revising paragraphs (a)(1), (b)(1)
and (b)(2) to read as follows:
Sec. 1726.51 Distribution line construction.
(a) * * *
(1) The borrower may use RUS Form 790, Electric System Construction
Contract--Non-Site Specific Construction, under the following
circumstances:
(i) For contracts for which the borrower supplies all materials and
equipment; or
(ii) For non-site specific construction contracts accounted for
under the work order procedure; or
(iii) If neither paragraph (a)(1)(i) or (a)(1)(ii) of this section
are applicable, the borrower may use RUS Form 790 for contracts, up to
a cumulative total of $500,000 or one percent of net utility plant
(NUP), whichever is greater, per calendar year of distribution line
construction, exclusive of the cost of owner furnished materials and
equipment.
* * * * *
(b) * * *
(1) It is the responsibility of each borrower to determine the
procurement method that best meets its needs to award contracts in
amounts of up to a cumulative total of $750,000 or one percent of NUP,
whichever is greater, per calendar year of distribution line
construction (including minor modifications or improvements), exclusive
of the cost of owner furnished materials and equipment.
(2) In addition to the cumulative total stipulated in paragraph
(b)(1) of this section, a borrower may use Multiparty Unit Price
Quotations to award contracts in amounts of up to a cumulative total of
$1,000,000 or 1.5 percent of NUP, whichever is greater, per calendar
year of distribution line construction (including minor modifications
or improvements), exclusive of the cost of owner furnished materials
and equipment.
* * * * *
Subpart C--Substation and Transmission Facilities
7. Section 1726.76 is amended by revising paragraph (a) to read as
follows:
Sec. 1726.76 Substation and transmission line materials and
equipment.
(a) Contract forms. (1) The borrower shall use RUS Form 198,
Equipment Contract, for purchases of equipment where the total cost of
the contract is $1,000,000 or more.
(2) The borrower may, in its discretion, use RUS Form 198,
Equipment Contract, or a written purchase order for purchases of
equipment of less than $1,000,000 and for all materials.
* * * * *
8. Section 1726.77 is amended by revising paragraphs (b)(1) and (c)
to read as follows:
Sec. 1726.77 Substation and transmission line construction.
* * * * *
(b) * * *
(1) It is the responsibility of each borrower to determine the
procurement method that best meets its needs to award contracts not
requiring RUS approval in amounts of up to a cumulative total of
$750,000 or one percent of NUP (not to exceed $5,000,000), whichever is
greater, per calendar year of substation and transmission line
construction (including minor modifications or improvements), exclusive
of the cost of owner furnished materials and equipment.
* * * * *
(c) Contract approval. Individual contracts in the amount of
$750,000 or more or one percent of NUP (not to exceed $1,500,000 for
distribution borrowers or $4,500,000 for power supply borrowers),
whichever is greater, exclusive of the cost of owner furnished
materials and equipment, are subject to RUS approval.
Subpart D--Generation Facilities
9. Section 1726.125 is amended by revising paragraphs (a), (b)(1),
and (b)(2) to read as follows:
Sec. 1726.125 Generating plant facilities.
* * * * *
(a) Contract forms. (1) The borrower shall use RUS Form 198,
Equipment Contract, for the purchase of generating plant equipment in
the amount of $5,000,000 or more and for any generating plant equipment
contract requiring RUS approval.
(2) The borrower shall use RUS Form 200, Construction Contract--
Generating, for generating project construction contracts in the amount
of $5,000,000 or more and for any generating project construction
contract requiring RUS approval.
(3) The borrower may, in its discretion, use other contract forms
or written purchase order forms for those contracts in amounts of
$5,000,000 or less and that do not require RUS approval.
(b) Procurement procedures. (1) It is the responsibility of each
borrower to determine the procurement method that best meets its needs
to award contracts in amounts of less than $5,000,000 each.
(2) If the amount of the contract is $5,000,000 or more or if the
contract requires RUS approval, the borrower must use formal or
informal competitive bidding to award the contract.
* * * * *
Subpart E--Buildings
10. Section 1726.150 is amended by revising paragraph (b) to read
as follows:
Sec. 1726.150 Headquarters buildings.
* * * * *
(b) Procurement procedures. A borrower may use Multiparty Lump Sum
Quotations to award contracts in amounts of up to a cumulative total of
$750,000 or one percent of NUP (not to exceed $5,000,000), whichever is
greater, per calendar year of headquarters construction (including
minor modifications or improvements.) The borrower shall use formal
competitive bidding for all other headquarters contract construction.
* * * * *
Subpart F--General Plant
11. Section 1726.176 is amended by revising paragraphs (b)(2)(i)
and (b)(3) to read as follows:
Sec. 1726.176 Communications and control facilities.
* * * * *
(b) * * *
(2) Procurement procedures. (i) It is the responsibility of each
borrower to determine the procurement method that best meets its needs
to award contracts not requiring RUS approval in amounts of up to a
cumulative total of $750,000 or one percent of NUP (not to exceed
$5,000,000), whichever is greater, per calendar year of communications
and control facilities construction (including minor modifications or
improvements), exclusive of the cost of owner furnished materials and
equipment.
* * * * *
(3) Contract approval. Individual contracts in amounts of $750,000
or more or one percent of NUP (not to exceed $1,500,000 for
distribution borrowers or $4,500,000 for power supply borrowers),
whichever is greater, exclusive of the cost of owner furnished
materials and equipment, are subject to RUS approval.
Dated: May 6, 2011.
Jonathan Adelstein,
Administrator, Rural Utilities Service.
[FR Doc. 2011-11910 Filed 5-16-11; 8:45 am]
BILLING CODE P