RUS Form 257

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U.S. Department of Agriculture
Rural Utilities Service

CONTRACT TO CONSTRUCT BUILDINGS
NOTICE AND INSTRUCTIONS TO BIDDERS
1.

Sealed proposals for the construction, including the supply of necessary labor, materials and equipment, of a
building project of _______________________________________________________________________ ,
RUS designation __________________ , (hereinafter called the “Owner”) will be received by the Owner on or
before ____________________ o'clock ____ M., _______________________________ , 20____ , at its office
at ______________________________________________ at which time and place the proposals will be
publicly opened and read. Any proposals received subsequent to the time specified will be promptly returned to
the Bidder unopened.

2.

Obtaining Documents. The Plans, Specifications and Construction Drawings, together with all necessary
forms and other documents for bidders may be obtained from the Owner, or from the Architect _____________
____________________ at the latter's office at __________________________________________________
upon the payment of $________________________ , which payment will not be subject to refund. The Plans,
Specifications, and Construction Drawings may be examined at the office of the Owner or at the office of the
Architect.

3.

Manner of Submitting Proposals. Proposals and all supporting instruments must be submitted on the forms
furnished by the Owner and must be delivered in a sealed envelope addressed to the Owner. The name and
address of the Bidder, its license number if a license is required by the State, and the date and hour of the
opening of bids must appear on the envelope in which the Proposal is submitted. Proposals must be completed
in ink or typewritten. No alterations or interlineations will be permitted, unless made before submission, and
initialed and dated. The successful Bidder will be required to execute two additional counterparts of the
Proposal.

4.

Due Diligence. Prior to the submission of the Proposal, the Bidder shall make and shall be deemed to have
made a careful examination of the site of the project and of the Plans, Specifications, Construction Drawings,
and forms of Contractor's Proposal and Contractor's Bond, and shall review the location and nature of the
proposed construction, the transportation facilities, the kind and character of soil and terrain to be
encountered, the kind of facilities required before and during the construction of the project, general local
conditions, environmental and historic preservation considerations, and all other matters that may affect the
cost and time of completion of the project. Bidder will be required to comply with all federal, state, and local
laws, rules, and regulations applicable to its performance, including those pertaining to the licensing of
contractors, and the Anti Kick-Back Act of 1986 (41 U.S.C. 51 et seq).

5.

Proposals will be accepted only from those prequalified bidders invited by the Owner to submit a proposal.

6.

The Time for Completion of Construction of the project is of the essence of the Contract and shall be as
specified by the Architect in the Proposal.

7.

Bid Bond. Each Proposal must be accompanied by a Bid Bond in the form attached hereto or a certified check
on a bank that is a member of the Federal Deposit Insurance Corporation, payable to the order of the Owner,
in an amount equal to ten percent (10%) of the maximum bid price. Each Bidder agrees, provided its Proposal
is one of the three low Proposals, that, by filing its Proposal together with such Bid Bond or check in
consideration of the Owner's receiving and considering such Proposals, said Proposal shall be firm and

RUS FORM 257 (Rev. 2-04)

binding upon each such Bidder and such Bid Bond or check shall be held by the Owner until a Proposal is
accepted and a satisfactory Contractor's Bond is furnished (where required) by the successful Bidder and such
acceptance has been approved by the Administrator, or for a period not to exceed sixty (60) days from the date
hereinbefore set for the opening of Proposals, whichever period shall be the shorter. If such Proposal is not
one of the three low Proposals, the Bid Bond or check will be returned in each instance within a period of ten
(10) days to the Bidder furnishing same.
8.

Contractor's Bond. For a Contract in excess of $100,000, the Bidder agrees to furnish a Contractor's Bond in
triplicate in the form attached hereto with sureties listed by the United States Treasury Department as
Acceptable Sureties, in a penal sum not less than the contract price.

9.

Failure to Furnish Contractor’s Bond. Should the successful Bidder fail or refuse to execute such
counterparts or to furnish a Contractor’s Bond (where required) within ten (10) days after written notification
of the acceptance of the Proposal by the Owner, the Bidder will be considered to have abandoned the
Proposal. In such event, the Owner shall be entitled (a) to enforce the Bid Bond in accordance with its terms,
or (b) if a certified check has been delivered with the Proposal, to retain from the proceeds of the certified
check, the difference (not exceeding the amount of the certified check) between the amount of the Proposal and
such larger amount for which the Owner may in good faith contract with another party to construct the project.
The term “Successful Bidder” shall be deemed to include any Bidder whose Proposal is accepted after another
Bidder has previously refused or has been unable to execute the counterparts or to furnish a satisfactory
Contractor’s Bond (where required.)

10 Debarment Certification. The Bidder must provide to the Owner a suspension and debarment certificate in
the form attached hereto.
11. Contract is Entire Agreement. The Contract to be effected by the acceptance of the Proposal shall be
deemed to include the entire agreement between the parties thereto, and the Bidder shall not claim any
modifications thereof resulting from any representation or promise made at any time by any officer, agent or
employee of the Owner or by any other person.
12. Minor Irregularities. The Owner reserves the right to waive minor irregularities or minor errors in any
Proposal, if it appears to the Owner that such irregularities or errors were made through inadvertence. Any
such irregularities or errors so waived must be corrected on the Proposal in which they occur prior to the
acceptance thereof by the Owner.
13. Bid Rejection. The Owner reserves the right to reject any or all Proposals.
14. Definition of Terms. The terms “Administrator,” “Architect,” “Completion of Construction,” and
“Completion of the Project” as used throughout this Contract shall be as defined in Article VI, Section 1, of the
Proposal.
15. The Owner Represents:
a.

If by provisions of the Proposal the Owner shall have undertaken to furnish any materials for the
construction of the project, such materials are on hand at locations specified or if such materials are not
on hand they will be made available by the Owner to the successful Bidder at the locations specified before
the time such materials are required for construction.

b.

Title to the property on which the Project is to be constructed has been obtained.

c.

All funds necessary for prompt payment for the construction of the project will be available.

If the Owner shall fail to comply with any of the undertakings contained in the foregoing representation or if
any of such representations shall be incorrect, the Bidder will be entitled to an extension of time of completion
for a period equal to the delay, if any, caused by the failure of the Owner to comply with such undertakings or
by any such incorrect representation; provided the Bidder shall have promptly notified the Owner in writing of
its desire to extend the time of completion in accordance with the foregoing; provided, however, that such

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2

extension, if any, of the time of completion shall be the sole remedy of the Bidder for the Owner's failure,
because of conditions beyond the control and without the fault of the Owner, to furnish materials in accordance
with subparagraph a. above.
__________________________________
Owner
By__________________________________

__________________________________
Title
__________________________ , 20____
Date

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PROPOSAL
TO:

(hereinafter called the “Owner”).

ARTICLE I--GENERAL
Section 1. Offer to Construct. The undersigned (hereinafter called the “Bidder”) hereby proposes to receive
and install such materials and equipment as may hereinafter be specified to be furnished by the
Owner, and to furnish all other materials and equipment, all machinery, tools, labor, transportation
and other means required to construct the project in strict accordance with the Plans, Specifications
and Construction Drawings for the prices hereinafter stated.
Item:____________________________________ Price:________________________________
Item:____________________________________ Price:________________________________
Item:____________________________________ Price:________________________________
Item:____________________________________ Price:________________________________
Section 2. Purchase of Materials. The Bidder will purchase all materials and equipment (other than Owner
Furnished Materials) outright and not subject to any conditional sales agreements, bailment, lease or
other agreement reserving unto the seller any right, title or interest therein. All such materials and
equipment shall be new and become the property of the Owner when erected in place.
Section 3. Description of Contract. The Notice and Instructions to Bidders, Plans, Specifications, and
Construction Drawings, which by this reference are incorporated herein, together with the Proposal
and Acceptance constitute the Contract. The Plans, Specifications, and Construction Drawings,
including maps, special drawings, and approved modifications in standard specifications are attached
hereto and identified as follows:

Section 4. Due Diligence. The Bidder has made a careful examination of the site of the project to be constructed
and of the Plans, Specifications, Construction Drawings, and form of Contractor's Bond attached
hereto, and has become informed as to the location and nature of the proposed construction, the
transportation facilities, the kind and character of soil and terrain to be encountered, and the kind of
facilities required before and during the construction of the project, and has become acquainted with
the labor conditions, federal, state, and local laws, rules, and regulations applicable to its
performance.
Section 5. License. The Bidder warrants that a Contractor's License is ___ , is not ___ required, and if
required,

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4

it possesses Contractor's License No. ________________ for the State of ______________________
in which the project is located and said license expires on _________________________ , 20___.
Section 6. Warranty of Good Faith. The Bidder warrants that this Proposal is made in good faith and without
collusion or connection with any person or persons bidding for the same work.
Section 7. Financial Resources.
a.

The Bidder warrants that it has or will obtain the financial resources necessary to ensure
completion of the project.

b.

The Bidder agrees that in the event this Proposal is accepted and a Contractor's Bond is required,
it will furnish a Contractor's Bond in the form attached hereto, in a penal sum not less than the
maximum Contract price, with a surety or sureties listed by the United States Department of
Treasury as Acceptable Sureties.

Section 8. Taxes. The prices in this Proposal include provisions for the payment of all monies which will be
payable by the Bidder or the Owner in connection with the construction of the project on account of
taxes imposed by any taxing authority upon the sale, purchase or use of materials, supplies and
equipment, or services or labor of installation thereof, to be incorporated in the project. The Bidder
agrees to pay all such taxes, except taxes upon the sale, purchase or use of Owner Furnished
Materials. The Bidder will furnish to the appropriate taxing authorities all required information and
reports pertaining to the project, except as to the Owner Furnished Materials.

ARTICLE II--CONSTRUCTION
Section 1. Time and Manner of Construction.
a.

The Bidder agrees to commence construction of the project on a date (hereinafter called the
“Commencement Date”) which shall be determined by the Architect after notice to the bidder in
writing of approval of the contract by the Administrator, if approval of the Administrator is
required, and notice in writing from the Bidder that the Bidder has sufficient materials to warrant
commencement and continuation of construction, but in no event will the Commencement Date be
later than ___________________________ calendar days after date of approval of the contract
by the Administrator, if approval of the Administrator is required. The Bidder further agrees to
prosecute diligently and to complete construction in strict accordance with the Plans,
Specifications and Construction Drawings within __________________________ calendar days
after Commencement Date.

b.

The time for Completion of Construction shall be extended for the period of any reasonable delay
which is due exclusively to causes beyond the control and without the fault of the Bidder,
including Acts of God, fires, floods, inability to obtain materials and acts or omissions of the
Owner with respect to matters for which the Owner is solely responsible: Provided, however that
no such extension of time for completion shall be granted the Bidder unless within ten (10) days
after the happening of any event relied upon by the Bidder for such an extension of time the
Bidder shall have made a request therefore in writing to the Owner, and provided further that no
delay in such time of completion or in the progress of the work which results from any of the
above causes except acts or omissions of the Owner, shall result in any liability on the part of the
Owner.

c.

The Owner, acting through the Architect with the approval of the Administrator, if approval of the
Administrator is required, may from time to time during the progress of the construction of the

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project make such changes, additions or subtractions from the Plans, Specifications, Construction
Drawings, and sequence of construction as conditions may warrant: Provided, however, that if
any change in the construction to be done shall require an extension of time, a reasonable
extension will be granted if the Bidder shall make a written request therefore to the Owner within
(10) days after any such change is made. And provided further, that if the cost to the Bidder of
construction of the project shall be materially increased by any such change or addition, the
Owner shall pay the Bidder for the reasonable cost thereof in accordance with a Construction
Contract Amendment signed by the Owner and the Bidder and approved by the Administrator, if
approval by the Administrator is required, but no claim for additional compensation for any such
change or addition will be considered unless the Bidder shall have made a written request
therefore to the Owner prior to the commencement of work in connection with such change or
addition.
Section 2. Environmental Protection. The Bidder shall perform the work in compliance with all applicable
Federal, State, and local Environmental Laws. For purposes of this Agreement, the term
“Environmental Laws” shall mean all Federal, state, and local laws including statutes, regulations,
ordinances, codes, rules, and other governmental restriction and requirements relating to the
environment or solid waste, hazardous substances, hazardous waste, toxic or hazardous material,
pollutants or contaminants including, but not limited to the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended, 42 U.S.C. §§ 9601, et seq., the Federal Water Pollution
Control Act, as amended, 33 U.S.C. §§ 1251, et seq., and the Solid Waste Disposal Act, as amended,
42 U.S.C. §§ 6901, et seq., now or at any time hereafter in effect.
Section 3. Tools, Equipment, and Qualified Personnel. The Bidder agrees that in the event this Proposal is
accepted it will make available for use in connection with the proposed construction all necessary
tools and equipment and qualified supervisors and workers.
Section 4. Supervision and Inspection.
a.

The Bidder shall give sufficient supervision to the work, using its best skill and attention. The
Bidder will carefully study and compare all drawings, specifications and other instructions and
will at once report to the Owner any error, inconsistency or omission which it may discover. The
Bidder shall cause the construction work on the project to receive constant supervision by a
competent superintendent (hereinafter called the “Superintendent”) who shall be present at all
times during working hours where construction is being carried on. The Bidder shall also
employ, in connection with the construction of the project, capable, experienced and reliable
supervisors and such skilled workers as may be required for the various classes of work to be
performed. The Bidder shall be solely responsible for the means and methods of construction and
for the supervision of the Bidder’s employees.

b.

The Owner reserves the right to require the removal from the project of any employee of the
Bidder if in the judgment of the Owner such removal shall be necessary in order to protect the
interest of the Owner. The Owner shall have the right to require the Bidder to increase the
number of its employees and to increase or change the amount or kind of tools and equipment if
at any time the progress of the work shall be unsatisfactory to the Owner; but the failure of the
Owner to give any such directions shall not relieve the Bidder of its obligations to complete the
work within the time and in the manner specified in this Proposal.

c.

The construction of the project and all materials and equipment used therein, shall be subject to
the inspection, tests, and acceptance by the Owner and the Administrator and the Bidder shall
furnish all information required by the Owner or by the Administrator concerning the nature or
source of any materials incorporated or to be incorporated in the project. All Bidder procedures
and records pertaining to the work shall be made available to the Owner and the Administrator
for review prior to such inspections and tests. The Bidder shall provide all reasonable facilities
necessary for such inspection and tests and shall maintain an office at the site of the project, with
telephone service where obtainable and at least one office employee to whom communications
from the Owner may be delivered. Delivery of such communications in writing to the employee of

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the Bidder at such office shall constitute delivery to the Bidder. The Bidder shall have an
authorized agent accompany the Architect when final inspection is made and, if requested by the
Owner, when any other inspection is made. The performance of such inspections or tests by the
Owner or the Administrator shall not relieve the Bidder of its obligations to perform the work in
accordance with the requirements of this Contract.
d.

In the event that the Owner, or the Administrator, shall determine that the construction contains
or may contain numerous defects, it shall be the duty of the Bidder and the Bidder's Surety or
Sureties, if any, to have an inspection made by an architect or engineer approved by the Owner
and the Administrator, if approval by the Administrator is required, for the purpose of
determining the exact nature, extent and location of such defects.

e.

The Architect may recommend to the Owner that the Bidder suspend the work wholly or in part
for such period or periods as the Architect may deem necessary due to unsuitable weather or such
other conditions as are considered unfavorable for satisfactory prosecution of the work or
because of the failure of the Bidder to comply with any of the provisions of the Contract:
Provided, however, that the Bidder shall not suspend work pursuant to this provision without
written authority from the Owner so to do. The time of completion hereinabove set forth shall be
increased by the number of days of any such suspension, except when such suspension is due to
the failure of the Bidder to comply with any of the provisions of this Contract. In the event that
work is suspended by the Bidder with the consent of the Owner, the Bidder before resuming work
shall give the Owner at least twenty-four (24) hours notice thereof in writing.

Section 5. Defective Materials and Workmanship.
a.

The acceptance of any materials, equipment (except Owner Furnished Materials) or any
workmanship by the Owner or the Architect shall not preclude the subsequent rejection thereof if
such materials, equipment, or workmanship shall be found to be defective after delivery or
installation, and any such materials, equipment or workmanship found defective before final
acceptance of the construction shall be replaced or remedied, as the case may be, by and at the
expense of the Bidder. Any such condemned material or equipment shall be immediately removed
from the site of the project by the Bidder at the Bidder's expense. The Bidder shall not be entitled
to any payment hereunder so long as any defective materials, equipment or workmanship in
respect to the project, of which the Bidder shall have had notice, shall not have been replaced or
remedied, as the case may be.

b.

Notwithstanding any certificate which may have been given by the Owner or the Architect, if any
materials, equipment (except Owner Furnished Materials) or any workmanship which does not
comply with the requirements of this Contract shall be discovered within one (1) year after
Completion of Construction of the project, the Bidder shall replace such defective materials or
equipment or remedy any such defective workmanship within thirty (30) days after notice in
writing of the existence thereof shall have been given by the Owner. If any such defective
materials, equipment, or workmanship so replaced or repaired is found to be defective within one
year after the completion of the replacement or repair, the Bidder shall replace or remedy such
defective materials , equipment, or workmanship. In the event of failure by the Bidder so to do,
the Owner may replace such defective materials or equipment or remedy such defective
workmanship, as the case may be, and in such event the Bidder shall pay to the Owner the cost
and expense thereof.

ARTICLE III--PAYMENTS AND RELEASE OF LIENS
Section 1. Payments to Bidder.
a.

On or before the fifth (5) day of each calendar month, the Bidder will make application for
payment, and the Owner, on or before the fifteenth (15) day of such month, shall make partial
payment to the Bidder for construction accomplished during the preceding calendar month and
certified to by the Bidder, recommended by the Architect and approved by the Owner solely for

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the purposes of payment: Provided, however, that such approval shall not be deemed approval of
the workmanship or materials. Only ninety percent (90%) of each such estimate approved during
the construction of the project shall be paid by the Owner to the Bidder prior to Completion of the
project. Upon completion by the Bidder of the construction of the project, the Architect will
prepare an inventory of the project showing the total number and character of Construction Units
and, after checking such inventory with the Bidder, will certify it to the Owner. Upon the
approval by the Owner and the Administrator, if the approval of the Administrator is required, of
a Certificate of Completion in the form attached hereto, showing the total cost of the construction
performed, the Owner shall make payment to the Bidder of all amounts to which the Bidder shall
be entitled thereunder which shall not have been paid: Provided, however, that such final
payment shall be made not later than ninety (90) days after the date of Completion of
Construction of the project, as specified in the Certificate of Completion, unless withheld because
of the fault of the Bidder.
b.

Interest at the rate of ________ percent1 (________%) per annum shall be paid by the Owner to
the Bidder on all unpaid balances due on monthly estimates, commencing fifteen (15) days after
the due date; provided the delay in payment beyond the due date is not caused by any condition
within the control of the Bidder. The due date for purposes of such monthly payment or interest
on all unpaid balances shall be the fifteenth (15) day of each calendar month provided (1) the
Bidder on or before the fifth (5) day of such month shall have submitted its certification of
Construction Units completed during the preceding month and (2) the Owner on or before the
fifteenth (15) day of such month shall have approved such certification. If, for reasons not due to
the Bidder's fault, such approval shall not have been given on or before the fifteenth (15) day of
such month, the due date for purposes of this subsection b shall be the fifteenth (15) day of such
month notwithstanding the absence of the approval of the certification.

c.

Interest at the rate of ________ percent2 (________%) per annum shall be paid by the Owner to
the Bidder on the final payment for the project or any completed Section thereof, commencing
fifteen (15) days after the due date. The due date for purposes of such final payment or interest on
all unpaid balances shall be the date of approval by the Owner of all of the documents requiring
such approval, as a condition precedent to the making of final payment, or ninety (90) days after
the date of Completion of Construction of the project, as specified in the Certificate of
Completion, whichever date is earlier.

d.

No payment shall be due while the Bidder is in default in respect of any of the provisions of this
Contract and the Owner may withhold from the Bidder the amount of any claim by a third party
against either the Bidder or the Owner based upon an alleged failure of the Bidder to perform the
work hereunder in accordance with the provisions of this Contract.

e.

The Owner and the Administrator shall have the right to inspect all payrolls, invoices of
materials, and other data and records of the Bidder and of any subcontractor, relevant to the
construction of the project.

Section 2. Release of Liens and Certificate of Contractor. Upon the completion by the Bidder of the
construction of the project but prior to final payment to the Bidder, the Bidder shall deliver to the
Owner, in duplicate, releases of all liens and of rights to claim any lien, in the form attached hereto
from all manufacturers, material suppliers, and subcontractors furnishing services or materials for the
project and a certificate in the form attached hereto to the effect that all labor used on or for the
project or such Section has been paid and that all such releases have been submitted to the Owner.
Section 3. Payments to Material Suppliers and Subcontractors. The Bidder shall pay each material supplier,
if any, within five (5) days after receipt of any payment from the Owner, the amount thereof allowed
the Bidder for and on account of materials furnished or construction performed by each material
supplier or each subcontractor.
1

2

The Owner shall insert a rate equal to the lowest "Prime Rate" listed in the "Money Rates" section of the Wall Street Journal on the date such
invitation to bid is issued.
See Footnote 1.

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ARTICLE IV--PARTICULAR UNDERTAKINGS OF THE BIDDER
Section 1. Protection to Persons and Property. The Bidder shall at all times take all reasonable precautions
for the safety of employees on the work and of the public, and shall comply with all applicable
provisions of federal, state, and local laws, rules, and regulations and building and construction
codes, in addition to the safety rules and procedures of the Owner.
The following provisions shall not limit the generality of the above requirements:
a.

The Bidder shall at all times keep the premises free from accumulations of waste materials or
rubbish caused by its employees or work, and at the completion of the work the Bidder shall
remove all rubbish from and about the Project and all its tools, scaffolding and surplus materials
and shall leave the work "broom clean". The Bidder shall dispose of waste material by burying it
on the work site or in a manner approved by local authorities, but shall not dispose of any waste
materials or rubbish by open burning. The Bidder shall provide chemical sanitary facilities
which may be required.

b.

The Bidder shall transport and store all material in facilities and vehicles which are designed to
protect the material from damage. The Bidder shall ensure that all vehicles, trailers, and other
equipment used comply with all applicable licensing, traffic, and highway requirements.

c.

The Bidder shall provide and maintain all such guard lights and other protection for the public as
may be required by applicable statutes, ordinances and regulations or by local conditions.

d.

The project, from the commencement of work to completion, or to such earlier date or dates when
the Owner may take possession and control in whole or in part as hereinafter provided shall be
under the charge and control of the Bidder and during such period of control by the Bidder all
risks in connection with the construction of the project and the materials to be used therein shall
be borne by the Bidder. The Bidder shall make good and fully repair all injuries and damages to
the project or any portion thereof under the control of the Bidder by reason of any act of God or
other casualty or cause whether or not the same shall have occurred by reason of the Bidder's
negligence.
(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.
(ii) To the maximum extent permitted by law, Bidder shall defend, indemnify, and hold harmless
Owner and Owner's directors, officers, and employees from all liens and claims filed or
asserted against Owner, its directors, officers, and employees, or Owner's property or
facilities, for services performed or materials or equipment furnished by Bidder, its
subcontractors and suppliers of any tier, and from all losses, demands, and causes of action
arising out of any such lien or claim. Bidder shall promptly discharge or remove any such
lien or claim by bonding, payment, or otherwise and shall notify Owner promptly when it has
done so. If Bidder does not cause such lien or claim to be discharged or released by
payment, bonding, or otherwise, Owner shall have the right (but shall not be obligated) to
pay all sums necessary to obtain any such discharge or release and to deduct all amounts so
paid from the amount due Bidder.

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(iii) Bidder shall provide to Owner's satisfaction evidence of Bidder's ability to comply with the
indemnification provisions of subparagraphs i and ii above, which evidence may include but
may not be limited to a bond or liability insurance policy obtained for this purpose through a
licensed surety or insurance company.
e.

Any and all excess earth, rock, debris, underbrush and other useless materials shall be removed
by the Bidder from the site of the project as rapidly as practicable as the work progresses.

f.

Upon violation by the Bidder of any of the provisions of this section, after written notice of such
violation given to the Bidder by the Architect or the Owner, the Bidder shall immediately correct
such violation. Upon failure of the Bidder so to do the Owner may correct such violation at the
Bidder's expense: Provided, however, that the Owner may, if it deems it necessary or advisable,
correct such violation at the Bidder's expense without such prior notice to the Bidder.

g.

The Bidder shall submit to the Owner monthly reports in duplicate of all accidents, giving such
data as may be prescribed by the Owner.

Section 2. Insurance. The Bidder shall take out and maintain throughout the period of this Agreement the
following types and minimum amounts of insurance:
a.

Workers' compensation and employers' liability insurance, as required by law, covering all its
employees who perform any of the obligations of the Bidder under the contract. If any employer
or employee is not subject to the workers' compensation laws of the governing state, then
insurance shall be obtained voluntarily to extend to the employer and employee coverage to the
same extent as though the employer or employee were subject to the workers' compensation laws.

b.

Public liability insurance covering all operations under the contract shall have limits for bodily
injury or death of not less than $1 million each occurrence, limits for property damage of not less
than $1 million each occurrence, and $1 million aggregate for accidents during the policy period.
A single limit of $1 million of bodily injury and property damage is acceptable. This required
insurance may be in a policy or policies of insurance, primary and excess including the umbrella
or catastrophe form.

c.

Automobile liability insurance on all motor vehicles used in connection with the contract, whether
owned, nonowned, or hired, shall have limits for bodily injury or death of not less than $1 million
per person and $1 million each occurrence, and property damage limits of $1 million for each
occurrence. A single limit of $1 million of bodily injury and property damage is acceptable. This
required insurance may be in a policy or policies of insurance, primary and excess including the
umbrella or catastrophe form.

The Owner shall have the right at any time to require public liability insurance and property damage
liability insurance greater than those required in subsection “b” and “c” of this Section. In any such
event, the additional premium or premiums payable solely as the result of such additional insurance
shall be added to the Contract price.
The Owner shall be named as Additional Insured on all policies of insurance required in subsections
“b” and “c” of this Section.
The policies of insurance shall be in such form and issued by such insurer as shall be satisfactory to
the Owner. The Bidder shall furnish the Owner a certificate evidencing compliance with the foregoing
requirements which shall provide not less than (30) days prior written notice to the Owner of any
cancellation or material change in the insurance.
Section 3. Delivery of Possession and Control to Owner. Upon written request of the Owner the Bidder shall
deliver to the Owner full possession and control of any portion of the project provided the Bidder shall
have been paid at least ninety percent (90%) of the cost of construction of such portion. Upon such
delivery of the possession and control of any portion of the project to the Owner, the risk and

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obligations of the Bidder as set forth in Article IV, Section 1.d hereof with respect to such portion of
the project so delivered to the Owner shall be terminated; Provided, however, that nothing herein
contained shall relieve the Bidder of any liability with respect to defective materials and workmanship
as contained in Article II, Section 5 hereof.
Section 4. Assignment of Guarantees. All guarantees of materials and workmanship running in favor of the
Bidder shall be transferred and assigned to the Owner prior to the time the Bidder receives final
payment.

ARTICLE V--REMEDIES
Section 1. Completion on Bidder's Default. If default shall be made by the Bidder or by any subcontractor in
the performance of any of the terms of this Proposal, the Owner, without in any manner limiting its
legal and equitable remedies in the circumstances, may serve upon the Bidder and the Surety or
Sureties, if any, upon the Contractor's Bond or Bonds a written notice requiring the Bidder to cause
such default to be corrected forthwith. Unless within twenty (20) days after the service of such notice
upon the Bidder such default shall be corrected or arrangements for the correction thereof
satisfactory to both the Owner and the Administrator shall be made by the Bidder or its Surety or
Sureties, if any, the Owner may take over the construction of the project and prosecute the same to
completion by Contract or otherwise for the account and at the expense of the Bidder, and the Bidder
and its Surety or Sureties, if any, shall be liable to the Owner for any cost or expense in excess of the
Contract price occasioned thereby. In such event the Owner may take possession of and utilize, in
completing the construction of the project, any materials, tools, supplies, equipment, appliances, and
plant belonging to the Bidder or any of its subcontractors, which may be situated at the site of the
project. The Owner in such contingency may exercise any rights, claims or demands which the Bidder
may have against third persons in connection with this Contract and for such purpose the Bidder does
hereby assign, transfer and set over unto the Owner all such rights, claims and demands.
Section 2. Liquidated Damages. The time of the Completion of Construction of the project is of the essence of
the Contract. Should the Bidder neglect, refuse or fail to complete the construction within the time
herein agreed upon, after giving effect to extensions of time, if any, herein provided, then, in that event
and in view of the difficulty of estimating with exactness damages caused by such delay, the Owner
shall have the right to deduct from and retain out of such moneys which may be then due, or which
may become due and payable to the Bidder the sum of _____________________ dollars (_________)
per day for each and every day that such construction is delayed in its completion beyond the specified
time, as liquidated damages and not as a penalty; if the amount due and to become due from the
Owner to the Bidder is insufficient to pay in full any such liquidated damages, the Bidder shall pay to
the Owner the amount necessary to effect such payment in full: Provided, however, that the Owner
shall promptly notify the Bidder in writing of the manner in which the amount retained, deducted or
claimed as liquidated damages was computed.
Section 3. Cumulative Remedies. Every right or remedy herein conferred upon or reserved to the Owner or the
Government or the Administrator shall be cumulative, shall be in addition to every right and remedy
now or hereafter existing at law or in equity or by statute and the pursuit of any right or remedy shall
not be construed as an election: Provided, however, that the provisions of Section 2 of this Article
shall be the exclusive measure of damages for failure by the Bidder to complete the construction of the
project within the time herein agreed upon.

ARTICLE VI--MISCELLANEOUS
Section 1. Definitions.
a.

The term “Administrator” shall mean the Administrator of the Rural Utilities Service of the
United States of America and his or her duly authorized representative or any other person in
whom or authority in which may be vested the duties and functions which the Administrator is

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now authorized by law to perform. If the project is financed wholly or in part by the Rural
Telephone Bank, an agency of the United States of America, the references in this Contract to the
“Administrator” shall mean the “Governor” of the Rural Telephone Bank as well.
b.

The term “Architect” shall mean the Architect employed by the Owner, to provide architectural
services for the project and said Architect's duly authorized assistants and representatives.

c.

The term “Completion of Construction” shall mean full performance by the Bidder of the Bidder's
obligations under the Contract and all amendments and revisions thereof except the Bidder's
obligations in respect of Releases of Liens and Certificate of Contractor under Article III, Section
2 hereof and other final documents. The term “Completion of the Project” shall mean full
performance by the Bidder of the Bidder's obligations under the Contract and all amendments
and revisions thereof. The Certificate of Completion, signed by the Architect and approved in
writing by the Owner and the Administrator, if approval by the Administrator is required, shall be
the sole and conclusive evidence as to the date of Completion of Construction and as to the fact of
Completion of the Project.

Section 2. Materials and Supplies. In the performance of this contract there shall be furnished only such
unmanufactured articles, materials, and supplies as have been mined or produced in the United States
or in any eligible country, and only such manufactured articles, materials, and supplies as have been
manufactured in the United States or in any eligible country substantially all from articles, materials,
or supplies mined, produced or manufactured, as the case may be, in the United States or in any
eligible country; provided that other articles, materials, or supplies may be used in the event and to
the extent that the Administrator shall expressly in writing authorize such use pursuant to the
provisions of the Rural Electrification Act of 1938, being Title IV of Public Resolution No. 122, 75th
Congress, approved June 21, 1938. For the purposes of this section, an “eligible country” is any
country that applies with respect to the United States an agreement ensuring reciprocal access for
United States products and services and suppliers to the markets of that country, as determined by the
Unites States Trade Representative. The Bidder agrees to submit to the Owner such certificates with
respect to compliance with the foregoing provision as the Administrator from time to time may
require.
Section 3. Patent Infringement. The Bidder shall hold harmless and indemnify the Owner from any and all
claims, suits and proceedings for the infringement of any patent or patents covering any materials or
equipment used in construction of the project.
Section 4. Permits for Explosives. All permits necessary for the handling or use of dynamite or other explosives
in connection with the construction of the project shall be obtained by and at the expense of the
Bidder.
Section 5. Compliance with Laws. The Bidder shall comply with all federal, state, and local laws, rules, and
regulations applicable to its performance under the contract and the construction of the project. The
Bidder acknowledges that it is familiar with the Rural Electrification Act of 1936, as amended, the
Anti Kick-Back Act of 1986 (41 U.S.C. 51 et seq), and 18 U.S.C. §§ 286, 287, 641, 661, 874, 1001,
and 1366, as amended.
The Bidder represents that to the extent required by Executive Orders 12549 (3 CFR, 1985-1988
Comp., p. 189) and 12689 (3 CFR, 1989 Comp., p. 235), Debarment and Suspension, and
7 CFR part 3017, it has submitted to the Owner a duly executed certification in the form prescribed in
7 CFR part 3017.
The Bidder represents that, to the extent required, it has complied with the requirements of
Pub. L. 101-121, Section 319, 103 Stat. 701, 750-765 (31 U.S.C. 1352), entitled “Limitation on use of
appropriated funds to influence certain Federal contracting and financial transactions,” and any
rules and regulations issued pursuant thereto.

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Section 6. Equal Opportunity Provisions.
a.

Bidder's Representations.
The Bidder represents that:
It has __ , does not have __ , 100 or more employees, and if it has, that it has __ , has not __ ,
furnished the Equal Employment Opportunity-Employers Information Report EEO-1, Standard
Form 100, required of employers with 100 or more employees pursuant to Executive Order 11246
of September 24, 1965, and Title VII of the Civil Rights Act of 1964.
The Bidder agrees that it will obtain, prior to the award of any subcontract for more than $10,000
hereunder to a subcontractor with 100 or more employees, a statement, signed by the proposed
subcontractor, that the proposed subcontractor has filed a current report on Standard Form 100.
The Bidder agrees that if it has 100 or more employees and has not submitted a report on
Standard Form 100 for the current reporting year and that if this Contract will amount to more
than $10,000, the Bidder will file such report, as required by law, and notify the owner in writing
of such filing prior to the Owner's acceptance of this Proposal.

b.

Equal Opportunity Clause. During the performance of this Contract, the Bidder agrees as
follows:
(1) The Bidder will not discriminate against any employee or applicant for employment because
of race, color, religion, sex or national origin. The Bidder will take affirmative action to
ensure that applicants are employed, and that employees are treated during employment
without regard to their race, color, religion, sex or national origin. Such action shall
include, but not be limited to, the following: Employment, upgrading, demotions or transfer;
recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of
compensation; and selection of training, including apprenticeship. The Bidder agrees to post
in conspicuous places, available to employees and applicants for employment, notices to be
provided setting forth the provisions of this Equal Opportunity Clause.
(2) The Bidder will, in all solicitations or advertisements for employees placed by or on behalf of
the Bidder, state that all qualified applicants will receive consideration for employment
without regard to race, color, religion, sex or national origin.
(3) The Bidder will send to each labor union or representative of workers, with which it has a
collective bargaining agreement or other contract or understanding, a notice to be provided
advising the said labor union or workers' representative of the Bidder's commitments under
this section, and shall post copies of the notice in conspicuous places available to employees
and applicants for employment.
(4) The Bidder will comply with all provisions of Executive Order 11246 of September 24, 1965,
and the rules, regulations and relevant orders of the Secretary of Labor.
(5) The Bidder will furnish all information and reports required by Executive Order 11246 of
September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or
pursuant thereto, and will permit access to its books, records, and accounts by the
administering agency and the Secretary of Labor for purposes of investigation to ascertain
compliance with such rules, regulations, and orders.
(6) In the event of the Bidder's noncompliance with the Equal Opportunity Clause of this
Contract or with any of the said rules, regulations, or orders, this Contract may be canceled,
terminated, or suspended in whole or in part, and the Bidder may be declared ineligible for
further Government contracts or federally assisted construction contracts in accordance with
procedures authorized in Executive Order 11246 of September 24, 1965, and such other

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sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of
September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as provided
by law.
(7) The Bidder will include this Equal Opportunity Clause in every subcontract or purchase
order unless exempted by the rules, regulations, or order of the Secretary of Labor issued
pursuant to Section 204 of Executive Order 11246 of September 24, 1965, so that such
provisions will be binding upon each subcontractor or vendor. The Bidder will take such
action with respect to any subcontract or purchase order as the administering agency may
direct as a means of enforcing such provisions, including sanctions for noncompliance;
Provided, however, that in the event Bidder becomes involved in, or is threatened with,
litigation with a subcontractor or vendor as a result of such direction by the administering
agency, the Bidder may request the United States to enter into such litigation to protect the
interests of the United States.
c.

Certificate of Nonsegregated Facilities. The Bidder certifies that it does not maintain or provide
for its employees any segregated facilities at any of its establishments, and that it does not permit
its employees to perform their services at any location, under its control, where segregated
facilities are maintained. The Bidder certifies further that it will not maintain or provide for its
employees any segregated facilities at any of its establishments, and that it will not permit its
employees to perform their services at any location, under its control, where segregated facilities
are maintained. The Bidder agrees that a breach of this certification is a violation of the Equal
Opportunity Clause in this Contract. As used in this certification, the term “segregated facilities”
means any waiting rooms, work areas, restrooms and washrooms, restaurants and other eating
areas, timeclocks, locker rooms and other storage or dressing areas, parking lots, drinking
fountains, recreation or entertainment areas, transportation, and housing facilities provided for
employees which are segregated by explicit directive or are in fact segregated on the basis of
race, color, religion, or national origin, because of habit, local custom, or otherwise. The Bidder
agrees that (except where it has obtained identical certifications from proposed subcontractors
for specific time periods) it will obtain identical certifications from proposed subcontractors prior
to the award of subcontracts exceeding $10,000 which are not exempt from the provisions of the
Equal Opportunity Clause, and that it will retain such certifications in its files.

Section 7. Nonassignment of Contract. The Bidder shall perform directly and without subcontracting not less
than twenty-five percent (25%) of the construction of the project, to be calculated on the basis of the
total Contract price. The Bidder shall not assign the Contract effected by an acceptance of this
Proposal or any interest in any funds that may be due or become due hereunder or enter into any
contract with any person, firm or corporation for the performance of the Bidder's obligations
hereunder or any part thereof, without the approval in writing of the Owner and of the Surety or
Sureties, if any, on any bond furnished by the Bidder for the faithful performance of the Bidder's
obligations hereunder. If the Bidder, with the consent of the Owner and any Surety or Sureties on the
Contractor's Bond or Bonds, shall enter into a subcontract with any subcontractor for the
performance of any part of this Contract, the Bidder shall be as fully responsible to the Owner and the
Government for the acts and omissions of such subcontractor and of persons employed by such
subcontractor as the Bidder would be for its own acts and omissions and those of persons directly
employed by it.
Section 8. Successors and Assigns. Each and all of the covenants and agreements herein contained shall extend
to and be binding upon the successors and assigns of the parties hereto. The Owner and Bidder
acknowledge that this Contract is assigned to the Government, acting through the Administrator, for
security purposes under the Owner’s mortgage and security instrument.
Section 9. Independent Contractor. The Bidder shall perform the work as an independent contractor, not as a
subcontractor, agent, or employee of the Owner. Upon acceptance of this Proposal, the successful
Bidder shall be the Contractor and all references in the Proposal to the Bidder shall apply to the
Contractor.

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Section 10. Approval by the Administrator: This contract does _____ , does not_____ , require approval of the
Administrator. No acceptance of a Proposal for a contract upon which approval of the Administrator
is required shall become effective until the contract has been approved by the Administrator; provided
that no obligation shall arise hereunder unless such approval is given within one-hundred twenty
(120) days after the date set for the opening of the proposals. The acceptance of a Proposal for a
contract upon which approval of the Administrator is not required shall become effective the date of
acceptance by the Owner.

ATTEST:
Bidder

Secretary

President

Dated
Address
The Proposal must be signed with the full name of the Bidder. If the Bidder is a partnership, the Proposal must be
signed in the partnership name by a partner. If the Bidder is a corporation, the Proposal must be signed in the
corporate name by a duly authorized officer and the corporate seal affixed and attested by the Secretary of the
Corporation.

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ACCEPTANCE

Subject to the approval of the Administrator, if approval of the Administrator is required, the Owner
hereby accepts the foregoing Proposal of the Bidder,
______________________________________________________________ , for the construction of the following:

for a total contract price of $ _____________________ (

dollars.)

__________________________________
Owner
By __________________________________
President

____________________________________
Secretary
_________________________ , 20_____
Date of Contract

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