Section 87.32 - Project construction

87.32 Project construction.

(a) All payments made by a hospital after mortgage closing for construction and development costs require the written approval of the State Department of Health. Payments may only be made for expenditures authorized in the development cost and capital requirement budget approved by the State Department of Health. Payments may be permitted monthly from either mortgage loans or capital contribution funds in accordance with procedures approved by the State Department of Health. Any capital or development costs determined by the State Department of Health to be ineligible under the 28-B program will not be approved for payment as a project cost. All payment approvals shall be subject to and conditioned upon audit by the State Department of Health.

(b) From mortgage closing until completion of the development period, the hospital may only enter into construction contracts contemplated by the approved contract and/or only with the prior approval of the department.

(c) Acceptable surveys and title reports, or satisfactory updates of such acceptable to the State Department of Health and the State Housing Finance Agency or the State Medical Care Facilities Finance Agency, free and clear of all exceptions not approved by the State Department of Health, shall be submitted prior to approval of payments after mortgage closing.

(d) Satisfactory evidence of identification of materials and insurance coverage in a form and amount acceptable to the State Department of Health shall be furnished for any project materials stored off the site of the project.

(e) All construction contract changes shall have prior written State Department of Health approval, except changes that must be started immediately to correct emergency field conditions. Requests for change orders from contingency funds may only be approved if required to meet emergency and life safety requirements, unforeseen field conditions or errors and omissions in contract documents. Requested changes of scope or of quality or type of functions, materials or equipment may be approved if the cost and the proposal are reasonable, if funds are available and if the change will not result in an increase in operating cost unless such change is approved by the article 28 process and the State Housing Finance Agency, or the State Medical Care Facilities Finance Agency. All change orders proposed shall contain a statement specifying if the contract completion time is to be changed. The State Department of Health shall limit all change order approvals from contingency funds to those necessary for completion of the project in order to protect the adequacy of the contingency budget.

(f) Acceptance of a restricted donation or a donation in kind which may result in an increase in operational costs shall have the prior approval of the State Department of Health.

(g) The equity funds of a hospital not currently required shall be invested. Such investments shall have the prior approval of the State Department of Health.

(h) Equipment may only be purchased by projects after approval of an equipment list by the State Department of Health. Such list shall be in accordance with the requirements set forth in the State Department of Health "Manual for the Preparation of Equipment Lists". Unit and total cost approval for all items shall be approved by the State Department of Health.

(i) Final payment for the completion of any contract shall require satisfactory evidence of payment of all sub-contractors and materialmen, the submission of all releases required by the State Department of Health, and such affidavits, certifications and consents of the hospital, the architect, the contractor and the surety as the State Department of Health may require.
 

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