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RUS 773 Increase a Big Win for PCCA Contractors773 Ebensm

During the Construction Industry Roundtable at PCCA's 2020 Convention in the Bahamas, Eben Wyman discussed language in the construction procedures for the Rural Utilities Service's new ReConnect Program for rural broadband that permits the use of RUS Form 773 on "small-scale" projects. RUS defines "small-scale" as $1 million or less, whereas the previous limit on the use of Form 773 was $250,000. When PCCA expanded its government affairs efforts in 2015, a top goal was raising the 773 limit so that RUS could realize the full benefit of its resources and more efficiently construct broadband infrastructure in rural America. PCCA will continue working to ensure that the ReConnect Program contract policy will become permanent RUS policy.

"This regulatory action is a significant victory for PCCA and would not have been possible without the steadfast determination of the Government & Industry Affairs Committee and the active grassroots members who made it happen," said Eben Wyman, Wyman Associates, who leads PCCA's government affairs efforts.

Eben Wyman, in the Q3 PCCA Journal:

RUS Raises Contract Limits in the RUS Telecommunications and Electric Programs

When PCCA expanded its government relations platform to include active lobbying before Congress and regulatory agencies, the positions on PCCA’s initial regulatory agenda included strong support for the Department of Agriculture’s Rural Utilities Service (RUS) and support for “raising the negotiated contract limits in the RUS telecommunications program.” PCCA members regularly work on projects funded by RUS dollars, which provide real-life benefits that come with RUS programs.

The RUS 773 contract has been used for “minor construction” projects over the years, but it came with a limit of $250,000. PCCA has long held that this amount is outdated and impedes the full potential of RUS resources. Therefore, the Government Affairs Committee set out to convince RUS to raise the limit from $250,000 to $1 million to provide rural communities the opportunity to more efficiently construct broadband infrastructure.

While this commonsense regulatory fix consisted of only a minor change in RUS contract policy, RUS has been in the process of rewriting several contracts and told PCCA that they lacked the resources needed to make specific changes to one contract over another. Undeterred, PCCA took its story to Congress and successfully secured language in a House appropriations bill that encouraged RUS to review construction contract procedures and, specific to the 773 contract, consider “benefits or detriments towards increasing the limit of the contracts to $1,000,000....”

Last year, RUS was awarded $600 million to establish what is now known at the “ReConnect Program” to provide loans and grants to fund construction, improvement, or acquisition of facilities and equipment needed to provide broadband service in eligible rural areas. As described in the ReConnect Program Construction Procedures, RUS Form 773, Miscellaneous Construction Work and Maintenance Services Contract, can now be used on “Small-Scale Construction” projects (costing $1 million or less). Form 773 would have to be prepared along with diagrams, sketches, and tabulations necessary to specify clearly the work to be performed and who shall provide which materials. The selected contractor must meet all federal and state licensing requirements, as well as bonding and insurance requirements. Further, “if the contract amount exceeds $250,000, a contractor’s bond for the contract amount must be provided by the contractor.”

The program construction procedures also provide that RUS Form 515, Telecommunications System Construction Contract, or a non-RUS contract “must be used to finance outside plant construction projects estimated to cost over $1 million, including all labor and materials.”

To sum up, for all projects estimated to cost $1 million or less, including all labor and materials, use of Form 515, a non-RUS contract, the 773 contract, or other work orders provided under Small-Scale Construction will be allowed. It is important to recognize that the increase in the 773 contract loan amount is currently limited to the ReConnect Program. However, PCCA was recently informed by RUS staff that, depending on the success of the ReConnect Program, contract policy used in ReConnect will likely become RUS policy on a permanent basis. Rest assured, PCCA will remind RUS of this as the new program is implemented and throughout its duration.

This regulatory action is a significant victory for PCCA and would not have been possible without the steadfast determination of the Government Affairs Committee and the active grassroots members who made it happen.