7 C.F.R. §§ 4280.112–4280.125

§4280.112. Applicant eligibility.

7 C.F.R. § 4280.112

To receive a RES or EEI grant under this subpart, an applicant must meet the requirements specified in paragraphs (a) through (g) of this section.

(a)

Type of applicant. The applicant must be an agricultural producer or rural small business at the time of application.

(b)

Ownership and control. The applicant must at the time of application and, if an award is made, for the useful life of the project as described in the Financial Assistance Agreement:

(1)

Own the project; and

(2)

Own or control the site for the project. If the grantee does not maintain ownership of the project and ownership or control of the site, then grant funds may be recovered from the grantee by the Agency in accordance with Departmental Regulations.

(c)

End Users. If the controlling interest in the applicant entity is otherwise eligible and a legal transaction between two parties for the sale of energy in an open market is being proposed, the Agency will not consider the energy end-users as part of the analysis of the eligibility of the applicant. If the proposed end-user would be an ineligible applicant, such as an entity which is residential in nature or a non-profit entity, and the REAP applicant entity is a newly formed special-purpose entity with substantially the same ownership as the sole proposed end-user, then the REAP applicant entity is not eligible.

(d)

Revenues and expenses. The applicant must have available at the time of application satisfactory sources of revenue in an amount sufficient to provide for the operation, management, maintenance, and any debt service of the project for the useful life of the project. In addition, the applicant must control the revenues and expenses of the project, including its operation and maintenance. Notwithstanding the provisions of this paragraph, the applicant may employ a qualified consultant under contract to manage revenues and expenses of the project and its operation and/or maintenance.

(e)

Legal authority and responsibility. Each applicant must have the legal authority necessary to apply for and carry out the purpose of the grant.

(f)

Unique Entity Identifier (UEI). All applicants must register for a UEI as part of the registration process. Generally, the UEI number is included on Standard Form-424, “Application for Federal Assistance.”

(g)

System for Awards Management (SAM). Unless exempt under 2 CFR 25.110, the applicant must:

(1)

Be registered in the SAM prior to submitting an application;

(2)

Maintain an active SAM registration with current information at all times while an application is pending and until final fund disbursement has been made.

Notes, amendments, and revision history

Source

Source: 86 FR 22309, Apr. 27, 2021, unless otherwise noted.

Authority

Authority: 7 U.S.C. 1989(a), 7 U.S.C. 2008s.

Source

Source: 70 FR 41303, July 18, 2005, unless otherwise noted.

§4280.113. Project eligibility.

7 C.F.R. § 4280.113

For a project to be eligible to receive a RES or EEI grant under this subpart, the proposed project must meet each of the requirements specified in paragraphs (a) through (e) of this section. Subsequent EEI projects must meet the requirements specified in paragraph (a)(5)(ii) of this section. The applicant is cautioned against taking any actions or incurring any obligations prior to the Agency completing the environmental review that would either limit the range of alternatives to be considered or that would have an adverse effect on the environment, such as the initiation of construction. If the applicant takes any such actions or incurs any such obligations, it could result in project ineligibility.

(a)

The project must be for:

(1)

The purchase of a new RES;

(2)

The purchase of a refurbished RES;

(3)

The retrofitting of an existing RES;

(4)

For the purposes of this subpart, only those hydroelectric sources with a rated power of 30 megawatts or less are eligible, or

(5)

Making an EEI that will allow less energy to be used on an annual basis than the original building and/or equipment being improved or replaced as provided in a vendor/installer certification or as demonstrated in an energy assessment or energy audit as applicable.

(i)

Types of improvements. Eligible EEI include, but are not limited to:

(A)

Efficiency improvements to existing RES; and

(B)

Construction of a new energy efficient building only when the building is used for the same purpose as the existing building, and, based on an energy assessment or energy audit, as applicable, it will be more cost effective to construct a new building and will use less energy on annual basis than improving the existing building.

(ii)

Subsequent EEI projects. A proposed EEI project that replaces an EEI project previously funded under this subpart may or may not be eligible for funding.

(A)

If the proposed EEI project would replace the same specific EEI equipment that had previously received funds under this subpart prior to the end of the useful life, as specified in the Financial Assistance Agreement, then the proposed improvement project, even if it is more energy efficient than the previously funded improvement, is ineligible.

(B)

If the proposed EEI project would replace the same specific EEI equipment that had previously received funds under this subpart at or after the end of the useful life, as specified in the Financial Assistance Agreement, then the proposed improvement is eligible for funding under this subpart provided the EEI is more energy efficient than the previously funded improvement. If the proposed EEI is not more energy efficient than the previously funded improvement, then it is not eligible for funding under this subpart.

(b)

The project must utilize commercially available technology;

(c)

The project must have technical merit, as determined using the procedures specified in § 4280.117; and

(d)

The project must be located in a rural area in a State if the type of applicant is a rural small business, or in a rural or non-rural area in a State if the type of applicant is an agricultural producer and the application supports the production, processing, vertical integration, or marketing of agricultural products. If the agricultural producer's operation is in a non-rural area, then the application can only be for RES or EEI components of the business operation that are directly related to and their use and purpose is limited to the agricultural production operation, such as vertically integrated operations, and are part of and co-located with the agricultural production operation.

(e)

For a RES project, where a residence is closely associated with and shares an energy metering device with an agricultural operation or rural small business to be served by the RES project, 50 percent or more of the energy to be generated by the RES project must be used by the agricultural operation or rural small business. This also includes projects which will virtually net meter or credit energy to be generated by the RES project to a residence off-site from the project and owned by the applicant. The application must contain sufficient documentation to evaluate this provision which may include using either of the methods identified in paragraphs (e)(1) through (2) of this section.

(1)

Provide a renewable energy site assessment or other documentation including calculations that demonstrate, based on historical energy use, that 50 percent or more of the energy to be produced by the RES project will be used in the agricultural operation or rural small business. This includes documentation on historical residential energy use. The Agency may request additional data to determine residential versus business or agricultural operation usage. The actual percentage of energy determined to benefit the rural small business or agricultural operation will be used to determine eligible project costs; or

(2)

The applicant may install, or elect to conditionalize funding upon the installation of, a device (such as a second meter) that restricts 100 percent of the energy generated by the RES project to be used only by the agricultural operation or rural small business.

(f)

An applicant is permitted to use up to 10 percent of the amount provided under this subpart to construct, improve, or acquire broadband infrastructure, subject to the requirements of 7 CFR 1980, Subpart M, Special Authority to Enable Funding of Broadband and Smart Utility Facilities Across Select Rural Development Programs.

Notes, amendments, and revision history

Source

Source: 86 FR 22309, Apr. 27, 2021, unless otherwise noted.

Authority

Authority: 7 U.S.C. 1989(a), 7 U.S.C. 2008s.

Source

Source: 70 FR 41303, July 18, 2005, unless otherwise noted.

§4280.114. Ineligible projects.

7 C.F.R. § 4280.114

The Agency will not award funding under this part for any projects identified in this section, unless otherwise noted.

(a)

Research and development projects and projects that involve technology that is not commercially available;

(b)

Business operations that derive more than 10 percent of annual gross revenue from gambling activity. Gambling activities include any lease income from space or machines used for gambling activities. State or Tribal-authorized lottery proceeds, as approved by the Agency, conducted for the purpose of raising funds for the approved project are excluded;

(c)

Business operations deriving income from activities of a sexual nature or illegal activities;

(d)

Residential RES or EEI projects, including farm labor housing, apartment complexes, and owner-occupied bed and breakfasts, except for-profit nursing homes and assisted living facilities that provide full-time medical care for residents, and for-profit hotels that provide short-term housing;

(e)

Racetracks or facilities for conducting either professional or amateur races of animals, or by professional or amateur drivers or jockeys, or any other type of racing;

(f)

RES projects that co-fire with fossil fuels, natural gas or petroleum-based products or materials such as coal and other non-renewable fuels, oils, and chemicals, and tires or plastic;

(g)

Projects where 50 percent or more of the costs are ineligible or where project costs as defined in the application do not meet the definition of a renewable energy system or energy efficiency improvement, including projects submitted for labor costs only. Project costs associated with an EEI that are not clearly identified in the energy assessment or audit will be considered ineligible costs; and

(h)

Projects proposing two or more different types of RES technologies that are not incorporated into a unified system and projects proposing two or more different types of RES technologies at two or more locations.

Notes, amendments, and revision history

Source

Source: 86 FR 22309, Apr. 27, 2021, unless otherwise noted.

Authority

Authority: 7 U.S.C. 1989(a), 7 U.S.C. 2008s.

Source

Source: 70 FR 41303, July 18, 2005, unless otherwise noted.

§4280.115. RES and EEI grant funding.

7 C.F.R. § 4280.115

(a)

Grant amounts. The amount of grant funds that will be made available to an eligible RES or EEI project under this subpart will not exceed 25 percent of eligible project costs. Eligible project costs are specified in paragraph (c) of this section.

(1)

Minimum request. Unless otherwise specified in a Federal Register notice, the minimum request for a RES grant application is $2,500 and the minimum request for an EEI grant application is $1,500.

(2)

Maximum request. Unless otherwise specified in a Federal Register notice, the maximum request for a RES grant application is $500,000 and the maximum request for an EEI grant application is $250,000.

(3)

Maximum grant assistance. Unless otherwise specified in a Federal Register notice, the maximum amount of grant assistance to one person or entity under this subpart will not exceed $750,000 per Federal fiscal year.

(b)

Matching funds and other funds. The applicant is responsible for securing the remainder of the total project costs not covered by grant funds.

(1)

Without specific statutory authority, other Federal grant funds cannot be used to meet the matching funds requirement. A copy of the statutory authority must be provided to the Agency to verify if the other Federal grant funds can be used to meet the matching funds requirement under this subpart.

(2)

Passive third-party equity contributions are acceptable for RES projects, including equity raised from the sale of Federal tax credits.

(c)

Eligible Project Costs. Eligible project costs are only those costs incurred after a complete application has been received by the Agency and are associated with the items identified in paragraphs (c)(1) through (6) of this section. Each item identified in paragraphs (c)(1) through (6) of this section is only an eligible project cost if it is directly related to and its use and purpose is limited to the RES or EEI.

(1)

Purchase and installation of new or refurbished equipment.

(2)

Construction, retrofitting, replacement, and improvements.

(3)

EEI identified by vendor/installer certification or in the applicable energy assessment or energy audit.

(4)

Fees for construction permits and licenses and fees required by an interconnection agreement.

(5)

Professional service fees related to the project for qualified consultants, contractors, installers, and other third-party services.

(6)

For an eligible RES in which a residence is closely associated with the rural small business or agricultural operation the installation of a second meter to separate the residence from the portion of the project that benefits the rural small business or agricultural operation, as applicable.

(d)

Ineligible project costs. Ineligible project costs for RES and EEI projects include, but are not limited to:

(1)

Costs for agricultural tillage equipment, used equipment, and vehicles;

(2)

Construction or equipment costs that would be incurred regardless of the installation of a RES or EEI.

(3)

Lease payments, including lease to own or capitalized leases;

(4)

Any project cost that creates a conflict of interest or an appearance of a conflict of interest as provided in § 4280.106;

(5)

Funds used for political or lobbying activities; and

(6)

Funds used to pay off any Federal direct or guaranteed loans or other Federal debts.

(e)

Award amount considerations. In determining the amount of a RES or EEI grant awarded, the Agency will take into consideration the following six criteria:

(1)

The type of RES to be purchased;

(2)

The estimated quantity of energy to be generated by the RES;

(3)

The expected environmental benefits of the RES;

(4)

The quantity of energy savings expected to be derived from the activity, as certified by the vendor/installer as applicable, or demonstrated by an energy audit or energy assessment;

(5)

The estimated period of time for the energy savings generated by the activity to equal the cost of the activity; and

(6)

The expected energy efficiency of the RES.

Notes, amendments, and revision history

Source

Source: 86 FR 22309, Apr. 27, 2021, unless otherwise noted.

Authority

Authority: 7 U.S.C. 1989(a), 7 U.S.C. 2008s.

Source

Source: 70 FR 41303, July 18, 2005, unless otherwise noted.

§4280.116. Grant applications—general.

7 C.F.R. § 4280.116

(a)

General. Separate applications must be submitted for RES and EEI projects. An original, hardcopy or electronic, of each application is required.

(b)

Application content. Applications for RES projects or EEI projects must contain the information specified in § 4280.118 unless the requirements of either § 4280.119(a) or § 4280.120(a) are met. If the requirements of § 4280.119(a) are met, the application may contain the information specified in § 4280.119(b). If the requirements of § 4280.120(a) are met, the application may contain the information specified in § 4280.120(b). For RES Projects only, the Agency may require a feasibility study based on the scope of the project to the applicant's overall operations, including new facilities with significant impacts on an existing operation, or when the application information or technical report does not provide sufficient documentation and analysis of the project's engineering, technical, financial, or market feasibility, or the economic viability of the project including any feedstock or off-take agreements, that are needed to evaluate whether a project will be successful. The elements of an acceptable feasibility study may vary by project scope and should be prepared by a qualified and independent third party.

(c)

Evaluation of applications. The Agency will evaluate each RES and EEI grant application and make a determination as to whether the application meets the criteria specified in paragraphs (c)(1) through (4).

(1)

The application is complete, as defined in § 4280.103;

(2)

The Applicant is eligible according to § 4280.112;

(3)

The project is eligible according to § 4280.113; and

(4)

The proposed project has technical merit as determined under § 4280.117.

Notes, amendments, and revision history

Source

Source: 86 FR 22309, Apr. 27, 2021, unless otherwise noted.

Authority

Authority: 7 U.S.C. 1989(a), 7 U.S.C. 2008s.

Source

Source: 70 FR 41303, July 18, 2005, unless otherwise noted.

§4280.117. Determination of technical merit.

7 C.F.R. § 4280.117

The Agency will determine the technical merit of all proposed projects for which complete applications are submitted under §§ 4280.118, 4280.119, and 4280.120 under this subpart using the procedures specified in this section. Only projects that have been determined by the Agency to have technical merit are eligible for funding under this subpart.

(a)

General. The Agency will use the information provided in the applicant's application and/or technical report to determine whether or not the project has technical merit. In making this determination, the Agency may engage the services of other Government agencies or other recognized industry experts in the applicable technology field, at its discretion, to evaluate and rate the technical report. The technical report can also be provided in the technical feasibility section of the feasibility study, when required, instead of completing a separate technical report.

(b)

Technical report areas. The areas that the Agency will evaluate in the technical reports when making the technical merit determination are specified in paragraphs (b)(1) through (5) of this section.

(1)

EEI whose total project costs are $80,000 or less. The following areas will be evaluated in making the technical merit determination:

(i)

Project description;

(ii)

Qualifications of EEI provider(s); and

(iii)

Vender/Installer certification, energy assessment, or energy audit.

(2)

RES whose total project costs are $80,000 or less. The following areas will be evaluated in making the technical merit determination:

(i)

Project description;

(ii)

Resource assessment;

(iii)

Project economic assessment; and

(iv)

Qualifications of key service providers.

(3)

EEI whose total project costs are greater than $80,000. The following areas will be evaluated in making the technical merit determination:

(i)

Project information;

(ii)

Energy assessment or energy audit; and

(iii)

Qualifications of the contractor or installers.

(4)

RES whose total project costs are less than $200,000, but more than $80,000. The following areas will be evaluated in making the technical merit determination:

(i)

Project description;

(ii)

Resource assessment;

(iii)

Project economic assessment;

(iv)

Project construction and equipment; and

(v)

Qualifications of key service providers.

(5)

RES whose total project costs are $200,000 and greater. The following areas will be evaluated in making the technical merit determination:

(i)

Qualifications of the project team;

(ii)

Agreements and permits;

(iii)

Resource assessment;

(iv)

Design and engineering;

(v)

Project development;

(vi)

Equipment procurement and installation; and

(vii)

Operations and maintenance.

(c)

Pass/Pass with conditions/fail assignments. The Agency will assign each area of the technical report, as specified in paragraph (b) of this section, a “pass,” “pass with conditions,” or “fail.” An area will receive a “pass” if the information provided for the area has no weaknesses and meets or exceeds any requirements specified for the area. An area will receive a “pass with conditions” if the information provided for the area has minor weaknesses which could be conditionalized and reasonably resolved by the applicant. Otherwise, if the information provided for the area is conclusively deemed to be a major weakness or if the area has not been addressed by the applicant, the area will receive a “fail.”

(d)

Determination. The Agency will compile the results for each area of the technical report to determine if the project has technical merit.

(1)

A project whose technical report receives a “pass” in each of the applicable technical report areas will be considered to have “technical merit.”

(2)

A project whose technical report receives a “pass with conditions” in one or more the applicable areas will be considered to have “conditional technical merit.”

(3)

A project whose technical report receives a “fail” in any one technical report area will be considered to be without technical merit.

(e)

Further processing of applications. A project that is determined to have “technical merit” or “conditional technical merit” is eligible for further consideration for funding. Projects with “conditional technical merit” would be subject to funding conditions that would need to be met to ensure full technical merit prior to completion of the project. A project that is determined to be “without technical merit” is considered to be an incomplete application and therefore is not eligible to compete for funding.

Notes, amendments, and revision history

Source

Source: 86 FR 22309, Apr. 27, 2021, unless otherwise noted.

Authority

Authority: 7 U.S.C. 1989(a), 7 U.S.C. 2008s.

Source

Source: 70 FR 41303, July 18, 2005, unless otherwise noted.

§4280.118. Grant applications for RES and EEI projects with total project costs of $200,000 and greater.

7 C.F.R. § 4280.118

Grant applications for RES and EEI projects with total project costs of $200,000 and greater must provide the information specified in paragraphs (a) through (c) of this section, as applicable. Each applicant is encouraged, but is not required, to self-score the project using the evaluation criteria in § 4280.121.

(a)

Forms and certifications. Each application must contain the forms and certifications specified in paragraphs (a)(1) through (10), as applicable, of this section, except paragraph (a)(5) is optional.

(1)

Form RD 4280-3C, “Application for Renewable Energy Systems and Energy Efficiency Improvement Projects Total Project Costs of $200,000 or Greater”.

(2)

Form SF-424, “Application for Federal Assistance.”

(3)

Form SF-424C, “Budget Information— Construction Programs.”

(4)

Form SF-424D, “Assurances— Construction Programs.”

(5)

Identify the ethnicity, race, and gender of the applicant. Identify if the borrower is a veteran. This information is optional and is not required for a complete application but may be used by the Agency to award priority points.

(6)

Environmental documentation in accordance with 7 CFR part 1970. The applicant should contact the Agency to determine what documentation is required to be provided.

(7)

The applicant must identify whether or not the applicant has a known relationship or association with an Agency employee. If there is a known relationship, the applicant must identify each Agency employee with whom the applicant has a known relationship.

(8)

Certification that the applicant is a legal entity in good standing (as applicable) and operating in accordance with the laws of the State(s) or Tribe(s) where the applicant has a place of business.

(9)

Certification by the applicant that the equipment required for the project is available, can be procured and delivered within the proposed project development schedule, and will be installed in conformance with manufacturer's specifications and design requirements. This would not be applicable when equipment is not part of the project.

(10)

Certification by the applicant that the project will be constructed in accordance with applicable laws, regulations, agreements, permits, codes, and standards.

(b)

Applicant information. Provide information specified in paragraphs (b)(1) through (4) of this section to allow the Agency to determine the eligibility of the applicant.

(1)

Type of applicant. Eligible applicants must meet the definition of agricultural producer or rural small business as defined in § 4280.103. Agricultural producers seeking funding for a RES or EEI project may apply as either a rural small business or as an agricultural producer, provided they meet the applicable eligibility requirements. The applicant must provide the primary North American Industry Classification System (NAICS) code applicable to the applicant's business concern and certify on the Agency approved application form that they meet the definition of agricultural producer or rural small business. The Agency reserves the right to request supporting documentation to verify applicant eligibility.

(2)

Applicant description. Describe the ownership of the applicant, including the information specified in paragraphs (b)(2)(i) and (ii) of this section as applicable. Include a description of the applicant's farm/ranch/business operation, including how long the applicant has been in operation.

(i)

Describe how the applicant meets the ownership and control requirements as identified in § 4280.112(b).

(ii)

For each entity(ies) it controls or entity(ies) it is controlled by, provide a list of the individual owners with their contact information. Describe the relationship between the applicant and the other entity(ies), including percent ownership and control, management, passive investor ownership, and as applicable products exchanged. Organizational charts to demonstrate structure should be submitted when applicable.

(3)

Financial information. Financial information is required on the total operation of the applicant and all entity(ies) it controls or entity(ies) that control the applicant.

(i)

All financial information (e.g., financial statements, balance sheets, financial projections, income statements) must be submitted in accordance with accounting practices acceptable to the Agency. Such practices can include, but are not limited to, Generally Accepted Accounting Principles (GAAP) and the industry's standard accounting practice.

(ii)

For sole proprietorships and other situations where business assets are held personally, financial statements must be prepared using only the assets and liabilities directly attributable to the business. Assets, plus any improvements must be valued at the lower of cost or market value.

(iii)

The Agency may request additional financial statements, financial models, cash flow information, updated financial statements, and other related financial information to determine the financial feasibility of a Project. Required financial statements:

(A)

Historical financial statements. Provide Agency-acceptable historical balance sheets and income statements the lesser of the last 3 fiscal years or all years of operation.

(B)

Current balance sheet and income statement. Provide a current Agency-acceptable balance sheet and year-to-date income statement dated within 90 days of submission of the complete application.

(C)

Pro forma financial statements. Provide balance sheets, income statements, and cash flow statements or financial model starting from the current financial statements through a minimum of 2 years of the project performing at full operational capacity or stable operations. Financial projections must be supported by a list of assumptions showing the basis for the projections.

(4)

Previous grants and loans. State whether the applicant has received and accepted any grants or guaranteed loan commitments under this subpart or any guaranteed loans under 7 CFR 5001. If the applicant has, identify each such grant award or guaranteed loan commitment and describe the progress the applicant has made on each project for which the grant or loan was received, including projected schedules and actual completion dates.

(c)

Project information. Provide information concerning the proposed project as a whole and its relationship to the applicant's operations, including the following:

(1)

Identification as to whether the project is for a RES or an EEI project. Include a description and the location of the project.

(2)

A description of the process that will be used to conduct all procurement transactions to demonstrate compliance with § 4280.125(a)(1).

(3)

Indicate if the proposed project will have a positive effect on resource conservation (e.g., water, soil, forest), public health (e.g., potable water, air quality), and the environment (e.g., compliance with the U.S. Environmental Protection Agency's (EPA) renewable fuel standard(s), greenhouse gases, emissions, particulate matter).

(4)

Identify the amount of funds and the source(s) the applicant is proposing to use for the project. Provide written commitments for funds at the time the application is submitted to receive points under this scoring criterion.

(i)

If financial resources come from the applicant, documentation may include bank statements that demonstrates availability of funds.

(ii)

If a third party is providing financial assistance, the applicant must submit a commitment letter signed by an authorized official of the third party. The letter must be specific to the project and must identify the dollar amount and any applicable rates and terms. If the third-party commitment is a loan, the commitment must be firm; a letter-of-intent or pre-qualification letter subject to underwriting requirements or contingencies are not acceptable. An acceptable condition may be based on the receipt of the REAP grant or an appraisal.

(d)

Technical report. Each application must contain a technical report prepared in accordance with § 4280.110(g) and Appendix A or C, as applicable, of this subpart.

(e)

Construction planning and performing development. Each application submitted must be in accordance with § 4280.125 for planning, designing, bidding, contracting, and constructing RES and EEI projects as applicable.

Notes, amendments, and revision history

Source

Source: 86 FR 22309, Apr. 27, 2021, unless otherwise noted.

Authority

Authority: 7 U.S.C. 1989(a), 7 U.S.C. 2008s.

Source

Source: 70 FR 41303, July 18, 2005, unless otherwise noted.

§4280.119. Grant applications for RES and EEI projects with total project costs of less than $200,000, but more than $80,000.

7 C.F.R. § 4280.119

Grant applications for RES and EEI projects with total project costs of less than $200,000, but more than $80,000, may provide the information specified in this section or, if the applicant elects to do so, the information specified in § 4280.118. In order to submit an application under this section, the criteria specified in paragraph (a) of this section must be met. The content for applications submitted under this section is specified in paragraph (b) of this section. Unless otherwise specified in this subpart, the construction planning and performing development procedures and the payment process that will be used for awards for applications submitted under this section are specified in paragraphs (c) and (d), respectively, of this section.

(a)

Criteria for submitting applications for projects with total project costs of less than $200,000, but more than $80,000. In order to submit an application under this section, each of the conditions specified in paragraphs (a)(1) through (7) of this section must be met.

(1)

The applicant must be eligible in accordance with § 4280.112.

(2)

The project must be eligible in accordance with § 4280.113.

(3)

Total project costs must be less than $200,000, but more than $80,000.

(4)

Construction planning and performing development must be performed in compliance with paragraph (c) of this section. The applicant or the applicant's prime contractor assumes all risks and responsibilities of project development.

(5)

The applicant or the applicant's prime contractor is responsible for all interim financing, including during construction.

(6)

The applicant agrees not to request reimbursement from funds obligated under this program until after project completion and is operating in accordance with the information provided in the application for the project.

(7)

The applicant must maintain insurance as required under § 4280.123(b), except business interruption insurance is not required.

(b)

Application content. Applications submitted under this section must contain the information specified in paragraphs (b)(1) through (4) of this section. Each applicant is encouraged, but is not required, to self-score the project using the evaluation criteria in § 4280.121.

(1)

Forms and certifications. The application must contain the items identified in § 4280.118(a), except that Form RD 4280-3B, “Application for Renewable Energy Systems and Energy Efficiency Improvement Projects Total Project Costs of Less than $200,000, But More Than $80,000” may be used instead of the form noted in § 4280.118 (a)(1). In addition, the applicant must submit a certification that the applicant meets each of the criteria for submitting an application under this section as specified in paragraph (a) of this section.

(2)

Applicant information. The application must contain the items identified in § 4280.118(b), except that the information specified in § 4280.118(b)(3) is not required. The Agency reserves the right to request supporting documentation to verify applicant eligibility.

(3)

Project information. The application must contain the items identified in § 4280.118(c).

(4)

Technical report. Each application must contain a technical report in accordance with § 4280.110(g) and Appendix A or B, as applicable, of this subpart.

(c)

Construction planning and performing development. Applicants submitting applications under this section must comply with the requirements specified in paragraphs (c)(1) through (3) of this section for construction planning and performing development.

(1)

General. Paragraphs (a)(1), (2), and (4) of § 4280.125 apply.

(2)

Small acquisition and construction procedures. Small acquisition and construction procedures are those relatively simple and informal procurement methods that are sound and appropriate for a procurement of services, equipment, and construction of a RES or EEI project with a total project cost of not more than $200,000. The applicant is solely responsible for the execution of all contracts under this procedure, and Agency review and approval is not required.

(3)

Contractor forms. Applicants must have each contractor sign, as applicable:

(i)

Form RD 400-6, “Compliance Statement,” for contracts exceeding $10,000; and

(ii)

Form AD-1048, “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion— Lower Tier Covered Transactions,” for contracts exceeding $25,000.

(d)

Payment process for applications for RES and EEI projects with total project costs of less than $200,000, but more than $80,000.

(1)

Upon completion of the project, the grantee must submit to the Agency a copy of the contractor's certification of final completion for the project and a statement that the grantee accepts the work completed. At its discretion, the Agency may require the applicant to have an inspector certify that the project is constructed and installed correctly.

(2)

The RES or EEI project must be constructed, installed, and operating as described in the technical report prior to disbursement of funds. For RES, the system must be operating at the steady state operating level described in the technical report for a period of not less than 30 days, unless this requirement is modified by the Agency, prior to disbursement of funds. Any modification to the 30-day steady state operating level requirement will be based on the Agency's review of the technical report and will be incorporated into the Letter of Conditions.

(3)

Prior to making payment, the Agency will be provided with Form RD 1924-9, “Certificate of Contractor's Release,” and Form RD 1924-10, “Release by Claimants,” or similar forms, executed by all persons who furnished materials or labor in connection with the contract.

Notes, amendments, and revision history

Source

Source: 86 FR 22309, Apr. 27, 2021, unless otherwise noted.

Authority

Authority: 7 U.S.C. 1989(a), 7 U.S.C. 2008s.

Source

Source: 70 FR 41303, July 18, 2005, unless otherwise noted.

§4280.120. Grant applications for RES and EEI projects with total project costs of $80,000 or less.

7 C.F.R. § 4280.120

Grant applications for RES and EEI projects with total project costs of $80,000 or less must provide the information specified in this section or, if the applicant elects to do so, the information specified in either §§ 4280.118 or 4280.119. In order to submit an application under this section, the criteria specified in paragraph (a) of this section must be met. The content for applications submitted under this section is specified in paragraph (b) of this section. Unless otherwise specified in this subpart, the construction planning and performing development procedures and the payment process that will be used for awards for applications submitted under this section are specified in paragraphs (c) and (d), respectively, of this section.

(a)

Criteria for submitting applications for RES and EEI projects with total project costs of $80,000 or less. In order to submit an application under this section, each of the conditions specified in paragraphs (a)(1) through (7) of this section must be met.

(1)

The applicant must be eligible in accordance with § 4280.112.

(2)

The project must be eligible in accordance with § 4280.113.

(3)

Total project costs must be $80,000 or less.

(4)

Construction planning and performing development must be performed in compliance with paragraph (c) of this section. The applicant or the applicant's prime contractor assumes all risks and responsibilities of project development.

(5)

The applicant or the applicant's prime contractor is responsible for all interim financing, including during construction.

(6)

The applicant agrees not to request reimbursement from funds obligated under this program until after the project has been completed and is operating in accordance with the information provided in the application for the project.

(7)

The applicant must maintain insurance as required under § 4280.123(b), except business interruption insurance is not required.

(b)

Application content. Applications submitted under this section must contain the information specified in paragraphs (b)(1) through (4), as applicable. Each applicant is encouraged, but is not required, to self-score the project using the evaluation criteria in § 4280.121.

(1)

Forms and certifications. Each application must contain the forms and certifications specified in paragraphs (b)(1)(i) through (x), as applicable, of this section except that paragraph (b)(1)(v) is optional.

(i)

Form RD 4280-3A, “Application for Renewable Energy Systems and Energy Efficiency Improvement Projects Total Project Costs of $80,000 or Less”.

(ii)

Form SF-424, “Application for Federal Assistance”.

(iii)

Form SF-424C, “Budget Information for Construction Programs”.

(iv)

Form SF-424D, “Assurances for Construction Programs”.

(v)

Identify the ethnicity, race, and gender of the applicant. Identify if the borrower is a veteran. This information is optional and is not required for a complete application but may be used by the Agency to award priority points.

(vi)

Environmental documentation in accordance with 7 CFR part 1970. The applicant should contact the Agency to determine what documentation is required to be provided.

(vii)

Certification by the applicant that—

(A)

The applicant meets each of the applicant eligibility criteria found in § 4280.112. The Agency reserves the right to request supporting documentation to verify applicant eligibility;

(B)

The proposed project meets each of the project eligibility requirements found in § 4280.113;

(C)

The design, engineering, testing, and monitoring will be sufficient to demonstrate that the proposed project will meet its intended purpose;

(D)

The equipment required for the project is available, can be procured and delivered within the proposed project development schedule, and will be installed in conformance with manufacturer's specifications and design requirements. This would not be applicable when equipment is not part of the project;

(E)

The project will be constructed in accordance with applicable laws, regulations, agreements, permits, codes, and standards;

(F)

The applicant meets the criteria for submitting an application for projects with total project costs of $80,000 or less;

(G)

The applicant will abide by the open and free competition requirements in compliance with § 4280.125(a)(1); and

(H)

For bioenergy projects, any and all woody biomass feedstock from National Forest System land or public lands cannot be otherwise used as a higher value wood-based product.

(viii)

State whether the applicant has received any grants and/or guaranteed loans under this subpart, or any guaranteed loans under 7 CFR part 5001. If the applicant has, identify each such grant and/or loan and describe the progress the applicant has made on each project for which the grant and/or loan was received, including projected schedules and actual completion dates.

(ix)

The applicant must identify whether or not the applicant has a known relationship or association with an Agency employee. If there is a known relationship, the applicant must identify each Agency employee with whom the applicant has a known relationship.

(x)

The applicant is a legal entity in good standing (as applicable) and operating in accordance with the laws of the State(s) or Tribe where the applicant has a place of business.

(2)

General. For both RES and EEI project applications:

(i)

Identify whether the project is for a RES or an EEI project;

(ii)

Identify the primary NAICS code applicable to the applicant's operation if known or a description of the operation in enough detail for the Agency to determine the primary NAICS code;

(iii)

Indicate if the proposed project will have a positive effect on resource conservation (e.g., water, soil, forest), public health (e.g., potable water, air quality), and the environment (e.g., compliance with the EPA's renewable fuel standard(s), greenhouse gases, emissions, particulate matter); and

(iv)

Identify the amount of matching funds and other funds and the source(s) the applicant is proposing to use for the project. In order to receive points under this scoring criterion, written commitments for funds (e.g., a Letter of commitment, bank statement) must be submitted when the application is submitted.

(A)

If financial resources come from the applicant, documentation may include a bank statement that demonstrates availability of funds.

(B)

If a third party is providing financial assistance, the applicant must submit a commitment letter signed by an authorized official of the third party. The letter must be specific to the project, identify the dollar amount and any applicable rates and terms. If the third-party commitment is a loan, the commitment must be firm, a letter-of-intent or pre-qualification letter, subject to underwriting requirements or contingencies are not acceptable. An acceptable condition may be based on the receipt of the REAP grant or an appraisal.

(3)

Technical report for EEI. Each EEI application submitted under this section must include a technical report in accordance with § 4280.110(g) and paragraphs (b)(3)(i) through (iv) of this section.

(i)

Project description. Provide a description of the proposed EEI, including its intended purpose and a vendor/installer certification that the EEI project meets the requirements for being commercially available.

(ii)

Qualifications of EEI provider(s). Provide a certification by the vendor/installer that:

(A)

They are qualified to complete the project as intended, including the number of years of experience with the proposed EEI technology. Any contractor or installer with less than 2 years of experience may be required to provide additional information in order for the Agency to determine if they are a qualified installer/contractor.

(B)

The EEI system will operate and perform over the project's useful life in a reliable and cost-effective manner; and

(iii)

Energy assessment. Provide a copy of the energy assessment (or energy audit) performed for the project as required under Section C of Appendix A to this subpart and the qualifications of the person which completed the energy assessment.

(iv)

Simple payback. Provide an estimate of simple payback, including all calculations, documentation, and any assumptions.

(4)

Technical report for RES. Each RES application submitted under this section must include a technical report in accordance with § 4280.110(g) and paragraphs (b)(4)(i) through (iv) of this section.

(i)

Project description. Provide a description of the project, including its intended purpose and a vendor/installer certification that the RES project meets the requirements for being commercially available. Appendix B contains instructions for how a project is to be constructed and installed. Identify the project's location and describe the project site.

(ii)

Resource assessment. Provide vendor/installer certified projections on energy to be replaced and/or generated once the proposed system is operating at its steady state operating level, including the quality and availability of the renewable resource to the project. If there is a residence closely associated with the RES project, include the historical amount of energy used by the residence and the historical amount of energy used by the agricultural operation or rural small business, as applicable, to satisfactorily demonstrate 50% or more of proposed generation will benefit the agricultural operation or rural small business;

(iii)

Project economic assessment. Describe the projected financial performance of the proposed project. The description must address total project costs, revenues accrued from the sale or crediting of energy, quantity and value of energy offset, and revenue from byproducts. Include applicable investment and other production incentives and indicate if they are a one time or reoccurring incentive. Provide an estimate of simple payback, including all calculations, documentation, and any assumptions; and

(iv)

Qualifications of key service providers. Provide a certification by the vendor/installer that:

(A)

They are qualified to complete the project as intended, including the number of similar systems installed previously and any professional credentials, licenses, and relevant experience. If specific numbers are not available for similar systems, you may submit an estimation of the number of similar systems; and

(B)

The RES system will operate and perform over the project's useful life in a reliable and cost-effective manner.

(c)

Construction planning and performing development for applications submitted under this section. All applicants submitting applications under this section must comply with the requirements specified in paragraphs (c)(1) through (3) of this section for construction planning and performing development.

(1)

General. Paragraphs (a)(1), (2), and (4) of § 4280.125 apply.

(2)

Small acquisition and construction procedures. Small acquisition and construction procedures are those relatively simple and informal procurement methods that are sound and appropriate for a procurement of services, equipment and construction of a RES or EEI project with a total project cost of not more than $80,000. The applicant is solely responsible for the execution of all contracts under this procedure, and Agency review and approval is not required.

(3)

Contractor forms. Applicants must have each contractor sign, as applicable:

(i)

Form RD 400-6, “Compliance Statement” for contracts exceeding $10,000; and

(ii)

Form AD-1048, “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion lower Tier Covered Transactions” for contracts exceeding $25,000.

(d)

Payment process for applications for RES and EEI projects with total project costs of $80,000 or less.

(1)

Upon completion of the project, the grantee must submit to the Agency a copy of the contractor's certification of final completion for the project and a statement that the grantee accepts the work completed. At its discretion, the Agency may require the applicant to have an inspector certify that the project is constructed and installed correctly.

(2)

The RES or EEI project must be constructed, installed, and currently be operating as described in the technical report prior to disbursement of funds. For RES, the system must be operating at the steady state operating level described in the technical report for a period of not less than 30 days, unless this requirement is modified by the Agency, prior to disbursement of funds. Any modification to the 30-day steady state operating level requirement will be based on the Agency's review of the technical report and will be incorporated into the Letter of Conditions.

(3)

Prior to making payment, the grantee must provide the Agency with Form RD 1924-9 and Form RD 1924-10, or similar forms, executed by all persons who furnished materials or labor in connection with the contract.

Notes, amendments, and revision history

Source

Source: 86 FR 22309, Apr. 27, 2021, unless otherwise noted.

Authority

Authority: 7 U.S.C. 1989(a), 7 U.S.C. 2008s.

Source

Source: 70 FR 41303, July 18, 2005, unless otherwise noted.

§4280.121. Scoring RES and EEI grant applications.

7 C.F.R. § 4280.121

Agency personnel will score each complete and eligible RES and EEI application based on the scoring criteria specified in this section, unless otherwise specified in a Federal Register notice, with a maximum score of 100 points possible.

(a)

Environmental benefits. A maximum of 5 points will be awarded for this criterion based on whether the applicant has indicated in the application that the proposed project will have a positive effect on resource conservation (e.g., water, soil, forest), public health (e.g., potable water, air quality), and the environment (e.g., compliance with EPA's renewable fuel standard(s), greenhouse gases, emissions, particulate matter). If the project will have a positive impact on:

(1)

Any one of the three impact areas, 1 point will be awarded.

(2)

Any two of the three impact areas, 3 points will be awarded.

(3)

All three impact areas, 5 points will be awarded.

(b)

Energy generated, replaced, or saved. A maximum of 25 points will be awarded for this criterion. Applications for RES and EEI projects are eligible for points under both paragraphs (b)(1) and (2) of this section.

(1)

Quantity of energy generated or saved per REAP grant dollar requested. A maximum of 10 points will be awarded for this sub-criterion. For RES and EEI projects, points will be awarded for either the amount of renewable energy generation per grant dollar requested, which includes those projects that are replacing energy usage with a renewable source; or the actual annual average energy savings over the most recent 12, 24, 36, 48, or 60 consecutive months of operation per grant dollar requested. Points will not be awarded for more than one category.

(i)

RES. The quantity of energy generated or replaced per grant dollar requested will be determined by dividing the projected total annual energy generated or replaced by the RES or RES retrofit (minus energy for residential use), which will be converted to BTUs, by the grant dollars requested. Points will be awarded based on the annual amount of energy generated or replaced (minus energy for residential use) per grant dollar requested for the proposed RES project. In cases where there are ineligible pre-application costs, the entire quantity of energy produced by the system is utilized for this scoring criteria as long as the use of energy produced is eligible. The Agency will award up to 10 points as determined using paragraphs (b)(1)(i)(A) and (B) of this section. If the annual amount of energy generated or replaced per grant dollar requested is:

(A)

50,000 BTUs average annual energy generated or replaced per grant dollar requested or higher, 10 points will be awarded; or

(B)

Less than 50,000 BTUs annual energy generated or replaced per grant dollar requested, points will be awarded according to the results of taking the energy generated or replaced per grant dollar requested/50,000 × 10 points. The points awarded are rounded to the nearest hundredth of a point.

(ii)

EEI. The Agency will award up to 10 points under this sub-criterion based on the average annual energy saved per grant dollar requested for the EEI project. The Agency will award up to 10 points as determined under paragraph (b)(1)(ii)(A) and (B) of this section. If the average annual energy saved per grant dollar requested is:

(A)

50,000 BTUs average annual energy saved per grant dollar requested or higher, 10 points will be awarded; or

(B)

Less than 50,000 BTUs average annual energy saved per grant dollar requested, points will be awarded according to the result of taking the energy saved per grant dollar requested/50,000 × 10 points. The points awarded are rounded to the nearest hundredth of a point.

(2)

Quantity of energy replaced, generated, or saved. A maximum of 15 points will be awarded for this sub-criterion. Points will be awarded on the basis of whether the project is for energy replacement, energy savings, or energy generation; points will not be awarded for more than one category.

(i)

Energy replacement. The Agency will award points under this sub-criterion for a RES project based on the amount of energy replaced by the project compared to the amount of energy used by the applicable process(es) over a 12-month period. If the estimated energy produced is more than 150 percent of the energy used by the applicable process(es), the project will be scored as an energy generation project under paragraph (b)(2)(ii) of this section.

(A)

Documentation for energy replacement. For a RES project to qualify as energy replacement, the applicant must provide documentation in its application on prior energy use incurred by the applicant. Proposed energy use, such as that attributed to an expansion, is not considered in the replacement calculation. For a RES project involving new construction and being installed to serve the new facility, the project can be classified as energy replacement only if the applicant can document prior energy use from a facility that is within plus or minus 10 percent of the size of the facility it is replacing. The estimated quantities of energy must be converted to either BTUs, watts, or similar energy equivalents to facilitate scoring.

(B)

Calculation. Energy replacement is determined by dividing the quantity of renewable energy that the RES project is estimated would have been generated if it were in place over the most recent 12-month period by the quantity of energy actually consumed over the same period by the applicable energy process(es) that is(are) consuming energy.

(C)

Awarding of points. Using the results from paragraph (b)(2)(i)(B) of this section, if the percentage of energy replacement is:

(1) Greater than 50 percent, 15 points will be awarded;

(2) Greater than 25 percent, but equal to or less than 50 percent, 10 points will be awarded; or

(3) Equal to or less than 25 percent, 5 points will be awarded.

(ii)

Energy generation. If the proposed RES is intended for production of energy or is a proposed retrofitting of an existing RES which increases the amount of energy generated, the Agency will award 10 points.

(iii)

Energy saved. The Agency will award up to 15 points under this sub-criterion for an EEI project based on the percentage of estimated energy saved by the installation of the project as determined by the projections in the applicable energy assessment or energy audit. If the estimated energy expected to be saved over the same period used in the energy assessment or energy audit, as applicable, will be:

(A)

50 percent or greater, 15 points will be awarded;

(B)

35 percent up to, but not including 50 percent, 10 points will be awarded;

(C)

20 percent up to, but not including 35 percent, 5 points will be awarded; or

(D)

Less than 20 percent, no points will be awarded.

(c)

Commitment of funds. A maximum of 15 points will be awarded for this criterion based on the percentage of written commitment an applicant has from its fund sources that are documented with a complete application.

(1)

Calculation. The percentage of written commitment is calculated as follows: Percentage of written commitment = total amount of funds for which written commitments have been submitted with the application/total amount of matching funds and other funds required.

(2)

Awarding of points. Using the result from paragraph (c)(1) of this section, the Agency will award points as shown in paragraphs (c)(2)(i) through (iii) of this section.

(i)

If the percentage of written commitments is 100 percent of the matching funds, 15 points will be awarded.

(ii)

If the percentage of written commitments is less than 100 percent, but more than 50 percent, points will be awarded as follows: ((Percentage of written commitments −50 percent)/(50 percent)) × 15 points, where points awarded are rounded to the nearest hundredth of a point.

(iii)

If the percentage of written commitments is 50 percent or less, no points will be awarded.

(d)

Previous grantees and borrowers. A maximum of 15 points will be awarded for this criterion based on whether the applicant has received and accepted a REAP grant award or guaranteed loan commitment under 7 CFR part 4280 of this title or a guaranteed loan commitment under either this part or 7 CFR part 5001 of this title.

(1)

If the applicant has never received and accepted a grant award or a guaranteed loan commitment under either this part or 7 CFR part 5001 of this title, 15 points will be awarded.

(2)

If the applicant has not received and accepted a grant award or guaranteed loan commitment under this subpart, or a guaranteed loan commitment under 7 CFR part 5001 of this title within the 2 previous Federal fiscal years, 5 points will be awarded.

(3)

If the applicant has received a grant award or guaranteed loan commitment under this subpart, or a guaranteed loan commitment under 7 CFR part 5001 of this title within the 2 previous Federal fiscal years, no points will be awarded.

(e)

Existing business. A maximum of 5 points will be awarded for an existing agricultural producer business or rural small business that meets the definition of existing business in § 4280.103 of this part.

(f)

Simple payback. A maximum of 15 points will be awarded for this criterion based on the simple payback of the project as defined in § 4280.103. Points will be awarded for either RES or EEI; points will not be awarded for more than one category.

(1)

RES. If the simple payback of the proposed project is:

(i)

Less than 10 years, 15 points will be awarded;

(ii)

10 years up to but not including 15 years, 10 points will be awarded;

(iii)

15 years up to and including 25 years, 5 points will be awarded; or

(iv)

Longer than 25 years, no points will be awarded.

(2)

EEI. If the simple payback of the proposed project is:

(i)

Less than 4 years, 15 points will be awarded;

(ii)

4 years up to but not including 8 years, 10 points will be awarded;

(iii)

8 years up to and including 12 years, 5 points will be awarded; or

(iv)

Longer than 12 years, no points will be awarded.

(g)

Size of request. For grant applications requesting $250,000 or less for RES, or $125,000 or less for EEI, an additional 10 points may be awarded such that a maximum score of 100 points is possible. All other applications will have a maximum possible score of 90 points.

(h)

State Director and Administrator priority points. A maximum of 10 points are available for this criterion. A State Director, for its State allocation under this subpart, or the Administrator, for making awards from the National Office reserve, may award up to 10 points to an application based on the conditions specified in paragraphs (h)(1) through (5) of this section. In no case shall an application receive more than 10 points under this criterion.

(1)

The application is for an under-represented technology.

(2)

Selecting the application helps achieve geographic diversity, which may include points based upon the size of the funding request.

(3)

The applicant is a member of an unserved or under-served population described as follows—

(i)

Owned by a veteran, including but not limited to individuals as sole proprietors, members, partners, stockholders, etc., of not less than 20 percent. In order to receive points, applicants must provide a statement in their applications to indicate that owners of the project have Veteran status.

(ii)

[Reserved]

(4)

Selecting the application helps further a Presidential initiative or a Secretary of Agriculture priority.

(5)

The proposed project is located in a Federally declared disaster area. Declarations must be within the last 2 calendar years.

(6)

The proposed project is located in an area where 20 percent or more of its population is living in poverty, as defined by the United States Census Bureau, underserved community(ies) or has experienced long-term population decline, or loss of employment.

Notes, amendments, and revision history

Amendments

[86 FR 22309, Apr. 27, 2021, as amended at 90 FR 30560, July 10, 2025]

Source

Source: 86 FR 22309, Apr. 27, 2021, unless otherwise noted.

Authority

Authority: 7 U.S.C. 1989(a), 7 U.S.C. 2008s.

Source

Source: 70 FR 41303, July 18, 2005, unless otherwise noted.

Amendments

[86 FR 22309, Apr. 27, 2021, as amended at 90 FR 30560, July 10, 2025]

§4280.122. Selecting RES and EEI grant applications for award.

7 C.F.R. § 4280.122

Unless otherwise provided for in a Federal Register notice, RES and EEI grant applications will be processed in accordance with this section. Complete applications will be evaluated, processed, and subsequently ranked, and will compete for funding, subject to the availability of grant funding. Each State will receive two grant allocations, an allocation of grant funds restricted to funding requests of $20,000 or less, and an allocation of grant funds which are unrestricted and can fund any size funding request.

(a)

RES and EEI grant applications. Complete RES and EEI grant applications, including combination grant and guaranteed loan requests, regardless of the amount of funding requested, are eligible to compete in two competitions within a Federal fiscal year—a State competition and a National competition.

(1)

To be competed in the State and National competitions, complete applications must be received by the applicable State Office by 4:30 p.m. local time no later than March 31. If March 31 falls on a non-business day or a federally-observed holiday, the next Federal business day will be considered the last day for receipt of a complete application. Complete applications received after this date and time will be processed in the subsequent fiscal year.

(2)

All eligible RES and EEI grant applications that remain unfunded after completion of the State competition will be competed in a National competition.

(b)

RES and EEI grant applications requesting $20,000 or less. Complete RES and EEI grant applications, including combination grant and guaranteed loan requests, requesting $20,000 or less are eligible to compete in up to five competitions—two State competitions and a National set-aside competition for grants of $20,000 or less, as well as the two competitions referenced in paragraph (a) of this section.

(1)

For complete RES and EEI grant applications for grants requesting $20,000 or less, there will be two State competitions each Federal fiscal year. Complete applications for $20,000 or less that are received by the Agency by 4:30 p.m. local time on October 31 of the Federal fiscal year will be competed against each other. Complete applications for $20,000 or less that are received by the Agency by 4:30 p.m. local time on March 31 of the Federal fiscal year and any applications for $20,000 or less that were not ready to compete or were not funded from the prior competition, will be competed against each other. If either October 31 or March 31 falls on a weekend or a federally observed holiday, the next Federal business day will be considered the last day for receipt of a complete application. Complete applications received after 4:30 p.m. local time on March 31, regardless of the postmark on the application, will be processed in the subsequent fiscal year.

(2)

All eligible RES and EEI grant applications requesting $20,000 or less that remain unfunded after completion of the State competition for applications received by March 31 will be competed in the National competition.

(c)

Ranking of applications. The Agency will rank complete eligible applications using the scoring criteria specific in § 4280.121. Higher scoring applications will receive first consideration.

(d)

Funding selected applications. As applications are funded, if insufficient funds remain to fund the next highest scoring application, the Agency may elect to fund a lower scoring application. Before this occurs, the Agency will provide the applicant of the higher scoring application the opportunity to reduce the amount of the applicant's grant request to the amount of funds available. If the applicant agrees to lower its grant request, the applicant must certify that the purposes of the project will be met and provide the remaining total funds needed to complete the project. If two or more applications score the same and if remaining funds are insufficient to fund each such application, the Agency will notify the applicants that they may either accept a proportional amount of funds or submit their total request for the next available competition. At its discretion, the Agency may also elect to allow any remaining multi-year funds to be carried over to the next fiscal year rather than selecting a lower scoring application.

(e)

Handling of ranked applications not funded. Based on the availability of funding, a ranked application might not be funded. Handling of unfunded applications depends on whether the request is more or less than $20,000.

(1)

All complete and eligible applications requesting $20,000 or less may be competed in up to five competitions within a Federal fiscal year and if not selected for funding, the Agency will discontinue consideration of the applications.

(2)

The Agency will discontinue consideration for funding all complete and eligible applications requesting more than $20,000 that are not selected for funding after the State and National competitions for the Federal fiscal year.

(f)

Commencement of the project. Not all grant applications that compete for funding will receive an award. Thus, the applicant assumes all risks if the applicant chooses to purchase the proposed equipment or start construction of the proposed project after the complete application has been received by the Agency, but before the applicant is notified as to whether or not they have been selected for an award.

Notes, amendments, and revision history

Source

Source: 86 FR 22309, Apr. 27, 2021, unless otherwise noted.

Authority

Authority: 7 U.S.C. 1989(a), 7 U.S.C. 2008s.

Source

Source: 70 FR 41303, July 18, 2005, unless otherwise noted.

§4280.123. Awarding and administering RES and EEI grants.

7 C.F.R. § 4280.123

The Agency will award and administer RES and EEI grants in accordance with Departmental Regulations and with paragraphs (a) through (h) of this section.

(a)

Letter of Conditions. A Letter of Conditions will be prepared by the Agency, establishing conditions that must be agreed to by the applicant before any obligation of funds can occur. Upon reviewing the conditions and requirements in the Letter of Conditions, the applicant must complete, sign, and return the Form RD 1942-46, “Letter of Intent to Meet Conditions,” and Form RD 1940-1, “Request for Obligation of Funds,” to the Agency if they accept the conditions of the grant; or if certain conditions cannot be met, the applicant may propose alternate conditions to the Agency. The Agency must concur with any changes proposed to the Letter of Conditions by the applicant before the application will be further processed.

(b)

Insurance requirements. Agency approved insurance coverage must be maintained for 3 years after the Agency has approved the final performance report unless this requirement is waived or modified by the Agency in writing. Insurance coverage shall include, but is not limited to:

(1)

Property insurance, such as fire and extended coverage, will normally be maintained on all structures and equipment.

(2)

Liability.

(3)

National flood insurance is required in accordance with 7 CFR part 1806, subpart B, if applicable.

(4)

Business interruption insurance for projects with total project costs of more than $200,000.

(c)

Forms and certifications. The forms specified in paragraphs (c)(1) through (5) of this section will be attached to the Letter of Conditions referenced in paragraph (a) of this section. The forms specified in paragraphs (c)(1) through (4) of this section and all of the certifications must be submitted prior to grant approval. The form specified in paragraph (c)(5) of this section, which is to be completed by contractors, does not need to be returned to the Agency, but must be kept on file by the grantee.

(1)

Form RD 1942-46, “Letter of Intent to Meet Conditions.”

(2)

Form RD 1940-1.

(3)

Form SF-LLL, “Disclosure of Lobbying Activities,” if the grant exceeds $100,000 and/or if the grantee has made or agreed to make payment using funds other than Federal appropriated funds to influence or attempt to influence a decision in connection with the application.

(4)

Form RD 400-4, “Assurance Agreement,” or successor form.

(5)

Form AD-1048, as signed by the contractor or other lower tier party.

(d)

Evidence of matching funds and other funds. If an applicant submitted written evidence of matching funds and other funds with the application, the applicant is responsible for ensuring that such written evidence is still in effect (i.e., not expired) when the grant is executed. If the applicant did not submit written evidence of matching funds and other funds with the application, the applicant must submit such written evidence that is in effect before the Agency will execute the Financial Assistance Agreement. In either case, written evidence of matching funds and other funds needed to complete the project must be provided to the Agency before execution of the Financial Assistance Agreement and must be in effect (i.e., must not have expired) at the time Financial Assistance Agreement is executed.

(e)

System for Award Management (SAM) registration. Before the Financial Assistance Agreement can be executed, the applicant's UEI number must be registered in the SAM and a valid (e.g. non-expired) Commercial and Government Entity (CAGE) code must be submitted to the Agency.

(f)

Financial Assistance Agreement. Once the requirements specified in paragraphs (a) through (e) of this section have been met, the Financial Assistance Agreement can be executed by the grantee and the Agency. The Agreement should be signed as soon as possible, but no later than within 6 months of obligation of funds or grant funds may be de-obligated by the Agency. The grantee must abide by all requirements contained in the Financial Assistance Agreement, this subpart, and any other applicable Federal statutes or regulations. Failure to follow these requirements might result in termination of the grant and adoption of other available remedies.

(g)

Grant approval. The grantee will be sent a copy of the executed Form RD 1940-1 and the Financial Assistance Agreement.

(h)

Power purchase agreement. Where applicable, the grantee shall provide to the Agency a copy of the executed power purchase agreement within 12 months from the date that the Financial Assistance Agreement is executed, unless otherwise approved by the Agency.

Notes, amendments, and revision history

Source

Source: 86 FR 22309, Apr. 27, 2021, unless otherwise noted.

Authority

Authority: 7 U.S.C. 1989(a), 7 U.S.C. 2008s.

Source

Source: 70 FR 41303, July 18, 2005, unless otherwise noted.

§4280.124. Servicing RES and EEI grants.

7 C.F.R. § 4280.124

The Agency will service RES and EEI grants in accordance with the requirements specified in Departmental Regulations; 7 CFR part 3; 7 CFR 1951 Subparts E and O; the Financial Assistance Agreement; and paragraphs (a) through (k) of this section.

(a)

Inspections. Grantees must permit periodic inspection of the project records and operations by a representative of the Agency.

(b)

Programmatic changes. Grantees may make changes to an approved project's costs, scope, contractor, or vendor subject to the provisions specified in paragraphs (b)(1) through (3) of this section. If the changes result in lowering the project's score to below what would have qualified the application for award, the Agency will not approve the changes.

(1)

Prior approval. The grantee must obtain prior Agency approval for any change to the scope, contractor, or vendor of the approved project. Changes in project cost will require Agency approval as outlined in paragraph (b)(1)(iii) of this section.

(i)

Grantees must submit requests for programmatic changes in writing to the Agency for Agency approval.

(ii)

Failure to obtain prior Agency approval of any such change could result in such remedies as suspension, termination, and recovery of grant funds.

(iii)

Prior Agency approval is required for all increases in project costs. Prior Agency approval is required for a decrease in project cost only if the decrease would have a negative effect on the long-term viability of the project. A decrease in project cost that does not have a negative impact on long-term viability requires Agency review and approval prior to disbursement of funds.

(2)

Changes in project cost or scope. If there is a significant change in project cost or any change in project scope, then the grantee's funding needs, eligibility, and scoring, as applicable, will be reassessed. Decreases in Agency funds will be based on revised project costs and other factors, including Agency regulations used at the time of grant approval.

(3)

Change of contractor or vendor. When seeking a change, the grantee must submit to the Agency a written request for approval. The proposed contractor or vendor must have qualifications and experience acceptable to the Agency. The written request must contain sufficient information, which may include a revised technical report as required under § 4280.118(e), 4280.119(b)(4), 4280.120(b)(3), or 4280.120(b)(4), as applicable, to demonstrate to the Agency's satisfaction that such change maintains project integrity. If the Agency determines that project integrity continues to be demonstrated, the grantee may make the change. If the Agency determines that project integrity is no longer demonstrated, the change will not be approved and the grantee has the following options: Continue with the original contractor or vendor; find another contractor or vendor that has qualifications and experience acceptable to the Agency to complete the project; or terminate the grant by providing a written request to the Agency. No additional funding will be available from the Agency if costs for the project have increased. The Agency decision will be provided in writing.

(c)

Transfer of ownership. After the Financial Assistance Agreement for the project has been executed, the grantee may request, in writing, a transfer of the Financial Assistance Agreement to another entity. Subject to Agency approval provided in writing, the Financial Assistance Agreement may be transferred to another entity provided:

(1)

The entity is determined by the Agency to be an eligible entity under this subpart; and

(2)

The type of RES or EEI technology and the scope of the project for which the Agency funds will be used remain unchanged.

(d)

Disposition of acquired property. Grantees must abide by the disposition requirements outlined in Departmental Regulations.

(e)

Financial management system and records. The grantee must provide for financial management systems and maintain records as specified in paragraphs (f)(1) and (2) of this section.

(1)

Financial management system. The grantee will provide for a financial system that will include:

(i)

Accurate, current, and complete disclosure of the financial results of each grant;

(ii)

Records that identify adequately the source and application of funds for grant-supporting activities, together with documentation to support the records. Those records must contain information pertaining to grant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays, and income; and

(iii)

Effective control over and accountability for all funds. The grantee must adequately safeguard all such assets and must ensure that funds are used solely for authorized purposes.

(2)

Records. The grantee will retain financial records, supporting documents, statistical records, and all other records pertinent to the grant for a period of at least 3 years after completion of grant activities except that the records must be retained beyond the 3-year period if audit findings have not been resolved or if directed by the United States. The Agency and the Comptroller General of the United States, or any of their duly authorized representatives, must have access to any books, documents, papers, and records of the grantee that are pertinent to the specific grant for the purpose of making audit, examination, excerpts, and transcripts.

(f)

Audit requirements. If applicable, grantees must provide an annual audit in accordance with 7 CFR part 3052. The Agency may exercise its right to do a program audit after the end of the project to ensure that all funding supported eligible project costs.

(g)

Grant disbursement. As applicable, grantees must disburse grant funds as scheduled in accordance with the appropriate construction and inspection requirements in §§ 4280.119, 4280.120 or 4280.125 as applicable. Unless required by third parties providing cost sharing payments to be provided on a pro-rata basis with other funds, grant funds will be disbursed after all other funds have been expended.

(1)

Unless authorized by the Agency to do so, grantees may submit requests for reimbursement no more frequently than monthly. Ordinarily, payment will be made within 30 days after receipt of a proper request for reimbursement.

(2)

Grantees must not request reimbursement for the Federal share of amounts withheld from contractors to ensure satisfactory completion of work until after it makes those payments.

(3)

Payments will be made by electronic funds transfer.

(4)

Grantees must use SF-271, “Outlay Report and Request for Reimbursement for Construction Programs,” or other format prescribed by the Agency to request grant reimbursements. Fund requests must at a minimum include documentation of costs and evidence of payment(s), including payment date(s). Failure to provide sufficient documentation of costs and evidence of payment, including payment date, may result in denied reimbursement.

(5)

For a grant awarded to a project with total project costs of $200,000 and greater, grant funds will be disbursed in full after the project is completed, is operational, and has met or exceeded the steady state operating level as set out in the grant award requirements. Grant funds may also be disbursed through 90 percent of grant disbursement. The final 10 percent of grant funds will be held by the Agency until construction of the project is completed, the project is operational, and the project has met or exceeded the steady state operating level as set out in the grant award requirements. In addition, the Agency reserves the right to request additional information or testing if upon a final site visit or review of documentation, the 30-day steady state operating level is not found acceptable to the Agency.

(h)

Monitoring of project. Grantees are responsible for ensuring that all activities are performed within the approved scope of work and that funds are only used for approved purposes.

(1)

Grantees shall constantly monitor performance to ensure that:

(i)

Time schedules are being met;

(ii)

Projected work is being accomplished by projected time periods;

(iii)

Financial resources are being appropriately expended by contractors (if applicable); and

(iv)

Any other performance objectives identified in the scope of work are being achieved.

(2)

To the extent that resources are available, the Agency will monitor grantees to ensure that activities are performed in accordance with the Agency-approved scope of work and to ensure that funds are expended for approved purposes. The Agency's monitoring of grantees neither:

(i)

Relieves the grantee of its responsibilities to ensure that activities are performed within the scope of work approved by the Agency and that funds are expended for approved purposes only; nor

(ii)

Provides recourse or a defense to the grantee should the grantee conduct unapproved activities, engage in unethical conduct, engage in activities that are or that give the appearance of a conflict of interest, or expend funds for unapproved purposes.

(i)

Reporting requirements. Financial and project performance reports must be provided by grantees and contain the information specified in paragraphs (i)(1) through (3) of this section.

(1)

Federal financial reports. Between grant approval and completion of project (i.e., construction), SF-425, “Federal Financial Report” will be required of all grantees as applicable on a semiannual basis. The grantee will complete the project within the total sums available to it, including the grant, in accordance with the scope of work and any necessary modifications thereof prepared by grantee and approved by the Agency.

(2)

Project performance reports. Between grant approval and completion of project (i.e., construction), grantees must provide semiannual project performance reports and a final project development report containing the information specified in paragraphs (i)(2)(i) and (ii) of this section. These reports are due 30 working days after June 30 and December 31 of each year.

(i)

Semiannual project performance reports. Each semiannual project performance report must include the following:

(A)

A comparison of actual accomplishments to the objectives for that period;

(B)

Reasons why established objectives were not met, if applicable;

(C)

Reasons for any problems, delays, or adverse conditions which will affect attainment of overall program objectives, prevent meeting time schedules or objectives, or preclude the attainment of particular objectives during established time periods. This disclosure must be accompanied by a statement of the action taken or planned to resolve the situation; and

(D)

Objectives and timetables established for the next reporting period.

(ii)

Final project development report. The final project development report must be submitted 90 days after project completion and include:

(A)

A detailed project funding and expense summary; and

(B)

A summary of the project's installation/construction process, including recommendations for development of similar projects by future Applicants to the program.

(3)

Project completion requirements. Once the project has been constructed, the grantee must provide the Agency as applicable via form RD 4280-3D “Annual Outcome Project Performance Certification”, a certification that their system has for the past year performed at the steady operating level as described in the technical report of their application, and whether projected jobs created or saved have occurred, or certify that it has not performed as described. If it has not performed, a description of the circumstances which have occurred and affected system performance must be reported, along with the actual performance of the subject REAP project, and the actual number of jobs created or saved as a direct result of the REAP project.

(i)

RES. Three total annual outcome project performance certifications or reports are required for RES projects. The first is due at the completion of the first full calendar year following the year in which the project was completed. The remaining are required for subsequent calendar years.

(ii)

EEI. Two total annual outcome performance certifications or reports are required for EEI projects. The first is due at completion of the first full calendar year following the year in which the project was completed. The second is required for the subsequent calendar year.

(j)

Grant close-out. Grant close-out must be performed in accordance with the requirements specified in 2 CFR part 200.

Notes, amendments, and revision history

Source

Source: 86 FR 22309, Apr. 27, 2021, unless otherwise noted.

Authority

Authority: 7 U.S.C. 1989(a), 7 U.S.C. 2008s.

Source

Source: 70 FR 41303, July 18, 2005, unless otherwise noted.

§4280.125. Construction planning and performing development.

7 C.F.R. § 4280.125

(a)

General. The following requirements are applicable to all procurement methods specified in paragraph (f) of this section.

(1)

Maximum open and free competition. All procurement transactions, regardless of procurement method and dollar value, must be conducted in a manner that provides maximum open and free competition. Procurement procedures must not restrict or eliminate competition. Competitive restriction examples include, but are not limited to, the following: Placing unreasonable requirements on firms in order for them to qualify to do business; noncompetitive practices between firms; organizational conflicts of interest; and unnecessary experience or excessive bonding requirements. In specifying material(s), the grantee and its consultant will consider all materials normally suitable for the project commensurate with sound engineering practices and project requirements. The Agency will consider any recommendation made by the grantee's consultant concerning the technical design and choice of materials to be used for such a project. If the Agency determines that a design or material, other than those that were recommended, should be considered by including them in the procurement process as an acceptable design or material in the project, the Agency will provide such applicant or grantee with a comprehensive justification for such a determination. The justification will be documented in writing.

(2)

Equal employment opportunity. For all construction contracts and grants in excess of $10,000, the contractor must comply with Executive Order 11246, as amended by Executive Order 11375 and Executive Order 13672, and as supplemented by applicable Department of Labor regulations (41 CFR part 60). The applicant, or the lender and borrower, as applicable, is responsible for ensuring that the contractor complies with these requirements.

(3)

Surety. The Agency will require surety on any contract for procurement exceeding $100,000, except as provided for in paragraph (a)(3)(iv) of this section. For contracts of lesser amounts, the grantee may require surety.

(i)

Surety covering both performance and payment will be required. The United States, acting through the Agency, will be named as co-obligee on all surety unless prohibited by State or Tribal law. Surety may be provided as specified in paragraphs (a)(3)(i)(A) or (B) of this section.

(A)

Surety in the amount of 100 percent of the contract cost may be provided using either:

(1) A bank letter of credit; or

(2) Performance bonds and payment bonds. Companies providing performance bonds and payment bonds must hold a certificate of authority as an acceptable surety on Federal bonds as listed in Treasury Circular 570 as amended and be legally doing business in the State where the project is located.

(B)

Cash deposit in escrow of at least 50 percent of the contract amount. The cash deposit cannot be from funds awarded under this subpart.

(ii)

The surety will normally be in the form of performance bonds and payment bonds; however, when other methods of surety are necessary, bid documents must contain provisions for such alternative types of surety. The use of surety other than performance bonds and payment bonds requires concurrence by the Agency after submission of a justification to the Agency together with the proposed form of escrow agreement or letter of credit.

(iii)

When surety is not provided, contractors must furnish evidence of payment in full for all materials, labor, and any other items procured under the contract in an Agency-approved form.

(iv)

The Agency may make exceptions to surety for any of the situations identified in paragraphs (a)(3)(iv)(A) through (E) of this section.

(A)

Small acquisition and construction procedures as specified in § 4280.119(c) and (d) or § 4280.120(c) and (d) as applicable are used.

(B)

The proposed project is for equipment purchase and installation only and the contract costs for the equipment purchase and installation are $200,000 or less.

(C)

The proposed project is for equipment purchase and installation only and the contract costs for the equipment purchase and installation are more than $200,000 and the following requirements can be met:

(1) The project involves two or fewer subcontractors; and

(2) The equipment manufacturer or provider must act as the general contractor.

(D)

Other construction projects that have only one contractor performing work.

(E)

The grantee agrees to request reimbursement of grant funds only after the contractors have furnished evidence of payment in full and evidence there are no outstanding liens regarding any materials, labor, and any other items procured under the contract, and the systems are deemed operational.

(4)

Grantees accomplishing work. In some instances, grantees may wish to perform a part of the work themselves. Grantees may accomplish construction by using their own personnel and equipment, provided the grantees possess the necessary skills, abilities, and resources to perform the work and there is not a negative impact to their business operation. For a grantee to provide a portion of the work, with the remainder to be completed by a contractor:

(i)

A clear understanding of the division of work must be established and delineated in the contract;

(ii)

Grantees are not eligible for payment for their own work as it is not an eligible project cost;

(iii)

Warranty requirements applicable to the technology must cover the grantee's work; and

(iv)

Inspection and acceptance of the grantee's work must be completed by either:

(A)

An inspector that will— (1) Inspect, as applicable, and accept construction; and

(2) Furnish inspection reports; or

(B)

A licensed engineer that will— (1) Prepare design drawings and specifications;

(2) Inspect, as applicable, and accept construction; and

(3) Furnish inspection reports.

(b)

Forms used. Technical service and procurement documents must be approved by the Agency and may be used only if they are customarily used in the area and protect the interest of the applicant and the Government with respect to compliance with items such as the drawings, specifications, payments for work, inspections, completion, nondiscrimination in construction work and acceptance of the work. The Agency will not become a party to a construction contract or incur any liability under it. No contract will become effective until concurred in writing by the Agency. Such concurrence statement must be attached to and made a part of the contract.

(c)

Technical services. Unless the requirements of paragraph (c)(4) of this section can be met, all RES and EEI projects with total project costs greater than $1,000,000 require:

(1)

The design, installation monitoring, testing prior to commercial operation, and project completion certification be completed by a licensed professional engineer (PE) or team of licensed PEs. Licensed PEs may be “in-house” PEs or contracted PEs.

(2)

Any contract for design services must be subject to Agency concurrence.

(3)

Engineers must be licensed in the State where the project is to be constructed.

(4)

The Agency may grant an exception to the requirements of paragraphs (c)(1) through (3) of this section if the following requirements are met:

(i)

State or Tribal law does not require the use of a licensed PE; and

(ii)

The project is not complex, as determined by the Agency, and can be completed to meet the requirements of this program without the services of a licensed PE.

(d)

Design policies. Unless the applicant plans to request a lump sum reimbursement of grant funds at the end of construction and 30 days of successful operation, regardless of total project costs, final plans and specifications must be reviewed by the Agency and approved prior to the start of construction. Facilities funded by the Agency must meet the following design requirements, as applicable:

(1)

Environmental requirements. Actions taken under this subpart must comply with the environmental review requirements in accordance with 7 CFR part 1970. Project planning and design must not only be responsive to the grantee's needs but must consider the environmental consequences of the proposed project. Project design must incorporate and integrate, where practicable, mitigation measures that avoid or minimize adverse environmental impacts. Environmental reviews serve as a means of assessing environmental impacts of project proposals, rather than justifying decisions already made. Applicants may not take any action on a project proposal that will have an adverse environmental impact or limit the choice of reasonable project alternatives being reviewed prior to the completion of the Agency's environmental review. If such actions are taken, the Agency has the right to withdraw and discontinue processing the application.

(2)

Architectural barriers. All facilities intended for or accessible to the public or in which physically handicapped persons may be employed must be developed in compliance with the Architectural Barriers Act of 1968 (42 U.S.C. 4151 et seq.) as implemented by 41 CFR 101-196, section 504 of the Rehabilitation Act of 1973 (42 U.S.C. 1474 et seq.) as implemented by 7 CFR parts 15 and 15b, and Titles II and III of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.).

(3)

Energy/environment. Project design shall consider cost effective energy-efficient and environmentally-sound products and services.

(4)

Seismic safety. All new structures, fully or partially enclosed, used or intended for sheltering persons or property will be designed with appropriate seismic safety provisions in compliance with the Earthquake Hazards Reduction Act of 1977 (42 U.S.C. 7701 et seq.), and E.O. 12699, Seismic Safety of Federal and Federally Assisted or Regulated New Building Construction. Designs of components essential for system operation and substantial rehabilitation of structures that are used for sheltering persons or property shall incorporate seismic safety provisions to the extent practicable as specified in 7 CFR part 1792, subpart C.

(e)

Contract methods. This paragraph identifies the three types of contract methods that can be used for projects funded under this subpart. The procurement methods, which are applicable to each of these contract methods, are specified in paragraph (f) of this section.

(1)

Traditional method or design-bid-build. The services of the consulting engineer or architect and the general construction contractor must be procured in accordance with the following paragraphs.

(i)

Solicitation of offers. Solicitation of offers must:

(A)

Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. The description must not, in competitive procurements, contain features that unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured, and when necessary will set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a “brand name or equal” description may be used to define the performance or other salient requirements of a procurement. The specific features of the named brands which must be met by offerors must be clearly stated.

(B)

Clearly specify all requirements which offerors must fulfill and all other factors to be used in evaluating bids or proposals.

(ii)

Contract pricing. Cost plus a percentage of cost method of contracting must not be used.

(iii)

Unacceptable bidders. The following will not be allowed to bid on, or negotiate for, a contract or subcontract related to the construction of the project:

(A)

An engineer or architect as a person who has prepared plans and specifications or who will be responsible for monitoring the construction;

(B)

Any entity in which the grantee's architect or engineer is an officer, employee, or holds or controls a substantial interest in the grantee;

(C)

The grantee's governing body officers, employees, or agents;

(D)

Any member of the grantee's immediate family or partners in paragraphs (e)(1)(iii)(A), (B), or (C) of this section; or

(E)

An entity which employs, or is about to employ, any person in paragraph (e)(1)(iii)(A), (B), (C), or (D) of this section.

(iv)

Contract award. Contracts must be made only with responsible parties possessing the potential ability to perform successfully under the terms and conditions of a proposed procurement. Consideration must include, but not be limited to, matters such as integrity, record of past performance, financial and technical resources, and accessibility to other necessary resources. Contracts must not be made with parties who are suspended or debarred.

(2)

Design/build method. The design/build method, where the same person or entity provides design and engineering work, as well as construction or installation, may be used with Agency written approval.

(i)

Concurrence information. The applicant will request Agency concurrence by providing the Agency at least the information specified in paragraphs (e)(2)(i)(A) through (H) of this section.

(A)

The grantee's written request to use the design/build method with a description of the proposed method.

(B)

A proposed scope of work describing in clear, concise terms the technical requirements for the contract. It shall include a nontechnical statement summarizing the work to be performed by the contractor, the results expected, and a proposed construction schedule showing the sequence in which the work is to be performed.

(C)

A proposed firm-fixed-price contract for the entire project which provides that the contractor will be responsible for any extra cost which result from errors or omissions in the services provided under the contract, as well as compliance with all Federal, State, local, and Tribal requirements effective on the contract execution date.

(D)

Where noncompetitive negotiation is proposed and found, by the Agency, to be an acceptable procurement method, then the Agency will evaluate documents indicating the contractor's performance on previous similar projects in which the contractor acted in a similar capacity.

(E)

A detailed listing and cost estimate of equipment and supplies not included in the construction contract but which are necessary to properly operate the project.

(F)

Evidence that a qualified construction inspector who is independent of the contractor has or will be hired.

(G)

Preliminary plans and outline specifications. However, final plans and specifications must be completed and reviewed by the Agency prior to the start of construction.

(H)

The grantee's attorney's opinion and comments regarding the legal adequacy of the proposed contract documents and evidence that the grantee has the legal authority to enter into and fulfill the contract.

(ii)

Agency concurrence of design/build method. The Agency will review the material submitted by the applicant. When all items are acceptable, the Agency approval official will concur in the use of the design/build method for the proposal.

(iii)

Forms used. Agency approved contract documents must be used provided they are customarily used in the area and protect the interest of the applicant and the Agency with respect to compliance with items such as the drawings, specifications, payments for work, inspections, completion, nondiscrimination in construction work, and acceptance of the work. The Agency will not become a party to a construction contract or incur any liability under it. No contract shall become effective until concurred, in writing, by the Agency. Such concurrence statement must be attached to and made a part of the contract.

(iv)

Contract provisions. Contracts will have a listing of attachments and must contain the following:

(A)

The contract sum;

(B)

The dates for starting and completing the work;

(C)

The amount of liquidated damages, if any, to be charged;

(D)

The amount, method, and frequency of payment;

(E)

Surety provisions that meet the requirements of paragraph (a)(3) of this section;

(F)

The requirement that changes or additions must have prior written approval of the Agency as identified in the letter of conditions;

(G)

Contract review and concurrence. The grantee's attorney will review the executed contract documents, including performance and payment bonds, and will certify that they are in compliance with Federal, State, or Tribal law, and that the persons executing these documents have been properly authorized to do so. The contract documents, engineer's recommendation for award, and bid tabulation sheets will be forwarded to the Agency for concurrence prior to awarding the contract. All contracts will contain a provision that they are not effective until they have been concurred, in writing, by the Agency;

(H)

This part does not relieve the grantee of any responsibilities under its contract. The grantee is responsible for the settlement of all contractual and administrative issues arising out of procurement entered into in support of Agency funding. These include, but are not limited to, source evaluation, protests, disputes, and claims. Matters concerning violation of laws are to be referred to the applicable local, State, Tribal, or Federal authority; and

(3)

Construction management. Construction managers as a constructor (CMc) acts in the capacity of a general contractor and is financially and professionally responsible for the construction. This type of construction management is also referred to as construction manager “At Risk.” The construction contract is between the grantee and the CMc. The CMc in turn subcontracts for some or all of the work. The CMc will need to carry the Agency required 100 percent surety and insurance, as required under paragraph (a)(3) of this section. Projects using construction management must follow the requirements of (e)(2)(i) through (iv) of this section.

(f)

Procurement methods. Procurement must be made by one of the following methods: Competitive sealed bids (formal advertising); competitive negotiation; or noncompetitive negotiation. Competitive sealed bids (formal advertising) are the preferred procurement method for construction contracts.

(1)

Competitive sealed bids. In competitive sealed bids (formal advertising), sealed bids are publicly solicited and a firm-fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is lowest, price and other factors considered. When using this method, the following will apply:

(i)

At a sufficient time prior to the date set for opening of bids, bids must be solicited from an adequate number of qualified sources. In addition, the invitation must be publicly advertised.

(ii)

The invitation for bids, including specifications and pertinent attachments, must clearly define the items or services needed in order for the bidders to properly respond to the invitation under paragraph (f)(1) of this section.

(iii)

All bids must be opened publicly at the time and place stated in the invitation for bids.

(iv)

A firm-fixed-price contract award must be made by written notice to that responsible bidder whose bid, conforming to the invitation for bids, is lowest. When specified in the bidding documents, factors such as discounts and transportation costs will be considered in determining which bid is lowest.

(v)

The applicant, with the concurrence of the Agency, will consider the amount of the bids or proposals, and all conditions listed in the invitation. On the basis of these considerations, the applicant will select and notify the lowest responsible bidder. The contract will be awarded using an Agency-approved form.

(vi)

Any or all bids may be rejected by the grantee when it is in their best interest.

(2)

Competitive negotiation. In competitive negotiations, proposals are requested from a number of sources. Negotiations are normally conducted with more than one of the sources submitting offers (offerors). Competitive negotiation may be used if conditions are not appropriate for the use of formal advertising and where discussions and bargaining with a view to reaching agreement on the technical quality, price, other terms of the proposed contract and specifications are necessary. If competitive negotiation is used for procurement, the following requirements will apply:

(i)

Proposals must be solicited from two qualified sources, unless otherwise approved by the Agency, to permit reasonable competition consistent with the nature and requirements of the procurement.

(ii)

The request for proposal must identify all significant evaluation factors, including price or cost where required, and their relative importance.

(iii)

The grantee must provide mechanisms for technical evaluation of the proposals received, determination of responsible offerors for the purpose of written or oral discussions, and selection for contract award.

(iv)

Award may be made to the responsible offeror whose proposal will be most advantageous to the grantee, price and other factors considered. Unsuccessful offerors must be promptly notified.

(v)

Owners may utilize competitive negotiation procedures for procurement of architectural/engineering and other professional services, whereby the offerors' qualifications are evaluated, and the most qualified offeror is selected, subject to negotiations of fair and reasonable compensation.

(3)

Noncompetitive negotiation. Noncompetitive negotiation is procurement through solicitation of a proposal from only one source. Noncompetitive negotiation may be used when the award of a contract is not feasible under small acquisition and construction procedures, competitive sealed bids (formal advertising) or competitive negotiation procedures. Circumstances under which a contract may be awarded by noncompetitive negotiations are limited to the following:

(i)

After solicitation of a number of sources, competition is determined inadequate; or

(ii)

No acceptable bids have been received after formal advertising.

(4)

Additional procurement methods. The grantee may use additional innovative procurement methods provided the grantee receives prior written approval from the Agency. Contracts will have a listing of attachments and the minimum provisions of the contract will include:

(i)

The contract sum;

(ii)

The dates for starting and completing the work;

(iii)

The amount of liquidated damages to be charged;

(iv)

The amount, method, and frequency of payment;

(v)

Whether or not surety bonds will be provided; and

(vi)

The requirement that changes or additions must have prior written approval of the Agency.

(g)

Contracts awarded prior to applications. Owners awarding construction or other procurement contracts prior to filing an application, must provide evidence that is satisfactory to the Agency that the contract was entered into without intent to circumvent the requirements of Agency regulations.

(1)

Modifications. The contract shall be modified to conform to the provisions of this subpart. Where this is not possible, modifications will be made to the extent practicable and, as a minimum, the contract must comply with all State and local laws and regulations as well as statutory requirements and executive orders related to the Agency financing.

(2)

Consultant's certification. Provide a certification by an engineer, licensed in the State where the facility is constructed, that any construction performed complies fully with the plans and specifications.

(3)

Owner's certification. Provide a certification by the owner that the contractor has complied with applicable statutory and executive requirements related to Agency financing.

(h)

Contract administration. Contract administration must comply with 7 CFR 1780.76. If another authority, such as a Federal, State, or Tribal agency, is providing funding and requires oversight of inspections, change orders, and pay requests, the Agency will accept copies of their reports or forms as meeting oversight requirements of the Agency.

Notes, amendments, and revision history

Source

Source: 86 FR 22309, Apr. 27, 2021, unless otherwise noted.

Authority

Authority: 7 U.S.C. 1989(a), 7 U.S.C. 2008s.

Source

Source: 70 FR 41303, July 18, 2005, unless otherwise noted.