Construction

Construction 1. Allowable Construction Costs include the costs for: A. The following types of projects, and as further described or limited in the Grant Agreement under which the project is funded: (i) projects that will facilitate compliance with national primary drinking water regulations; (ii) projects that will facilitate consolidation of public water systems or the use of an alternative water supply. Consolidation between rural water associations and municipalities is eligible if one party is an eligible grant applicant. (iii) projects that will upgrade a drinking water system; or (iv) development of a public water system to replace private drinking water supplies if the water poses a significant threat to human health. B. Subagreements for construction work on drinking water systems improvements. These subagreements are the prime contracts (including any subcontracts) for such construction work and any necessary contracts for purchase of equipment, materials and supplies by the Grant recipient. Should any costs for such contracts be incurred prior to Grant offer, said costs will be allowable provided that the Grant recipient has requested and obtained Department approval of said costs and provided that the Grant agreement budget period includes the time period these costs are incurred. C. Drinking water distribution lines on drinking water distribution projects which provide drinking water to previously unserved areas, and the service lines between the public water main and the water meter. D. Drinking water distribution system rehabilitation and replacement (including rehabilitation and replacement of eligible service lines) necessary to eliminate water loss or to preserve/restore the safety or integrity of the system, as determined in an approved facilities plan. E. Water system capacity equal to all water distribution system leaks that will remain in the system, as determined in an approved facilities plan. F. Drinking water systems which include service to industrial or commercial users when such works are owned by an eligible applicant. G. Buildings that house or protect water production, treatment or distribution facilities. H. Replacement of existing service lines from a water main up to a building (which includes any privately owned portion) if an identified public health threat exists (such as lead in the drinking water) that can be reduced by the replacement of the existing service line. 2. Unallowable costs include: A. Costs for the following types of projects: (i) Projects primarily for growth, development, or fire protection; (ii) Projects that can be consolidated (except for projects to implement such consolidation); (iii) Projects for systems without adequate financial or managerial support necessary to comply with ARPA requirements and all requirements of the Grant agreement; and (iv) Projects for drinking water systems which serve federal users exclusively, or almost exclusively. B. Construction and construction related costs which are incurred after the Department approved eligible contract completion date (including approved time extension change orders), unless approved by the Department pursuant to Rule 3.7.5.4 of these regulations. C. Bonus payments that are part of the construction contract for completion of building before a contractual completion date, unless required by state law. D. Administration buildings.