USDA Federal Financing 1

[twich]

This may be the wrong forum for this question, but I could not find another suitable forum. Besides, structural folks have as well rounded project experience as any displine.

Does anyone have experience with USDA financing as it relates to the project and construction management of a project? Any comments would be appreciated.

Case: Local government construction of a $20 million courthouse. Possible USDA financing is being suggested due to limited, or no up front financing costs, and the ability to stretch repayment of loan over 40 years vs. 20 years for a conventional bond financing.

I am familiar with the environmental and historical property aspects involved with the USDA process.

Questions: Will our existing A/E contract have to be reworked to accomdate the Feds?

Is the contractor paid by USDA rather than the owner? If so what kind delay could be expected between the contractor's draw request and his payment?

I understand change orders have to be approved by USDA. What kind of time delay could be expected between the CO request and the authorization to proceed? What about CO work that has to be done immediately, will the owner be stuck without possible reimbursment?

What are the heartaches involved with working with USDA during the construction process due to paperwork and hoops to jump through?

Thanks for any thoughts or comments you may have.
Twich

 

[dpa]

I have never worked with USDA but I did work for the Navy as a civilian for about 18 years until they offered early outs. A few things to beware of. You may be required to provide office space for full time on-site government inspectors. This would come out of your budget so make sure you find out and plan for the costs, if required. The Navy did it that way. Of course we were overhauling military ships that absolutely could not afford to have a failure at the critical moment, maybe USDA doesn't fret over details that much. On-site inspectors can be a good thing in that change orders were often handled in a matter of hours, sometimes minutes, unless government engineers had to be called in. Even then we tried to respond as quickly as possible. How smoothly it goes depends on the personalities involved. Some of our ship surveyors were jerks but most were not.

The other expense you might have to plan for is lots of reports and progress meetings. But here again these were military assets on a tight time table because other ships were scheduled for work as soon as the ones undergoing overhaul were available to replace them on station. Your building is not scheduled for deployment so you probably won't have quite as much administrative overload if any. It would just be a good idea to make sure in advance.

It's entirely possible that none of the above will happen on this type of project.

Hope this helps.

DPA

 

[twich]

Thanks dpa. I've done considerable NAVFAC work and am somewhat familiar with "guvment" work. Although no direct USDA (Rural Development) work. They may be more convoluted than military work. Guess I need to start collecting the USDA manuels. Thanks again.
Twich