Chad - Sategui-Deressa Irrigation Project : Credit 0489 - Credit Agreement - 1 - Conformed

CONFORMED COPY CREDIT NUMBER 489 CD Development Credit Agreement (Sat6gui-Dressia Irrigation Project) BETWEEN REPUBLIC OF CHAD AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 28, 1974 CONFORMED COPY CREDIT NUMBER 489 CD Development Credit Agreement (Sat6gui-D6ressia Irrigation Project) BETWEEN REPUBLIC OF CHAD AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 28, 1974 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 28, 1974, between REPUBLIC OF CHAD (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) The Borrower has requested the Association to assist in the financing of Parts A, B, C, D and E of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) The Borrower intends to contract from the African Development Fund (hereinafter called ADF) a loan (hereinafter called the ADF Loan) in the principal amount of 4,000,000 units of account (as defined in the Articles of Agreement of ADF), to assist in the financing of Parts F, G, H, I and J of the Project described in Schedule 2 to this Agreement, oin the terms and conditions set forth in an agreement (hereinafter called the ADF Loan Agreement) to be entered into between the Borrower and ADF; and WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower upon ternms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the deletion of Sections 5.01 and 6.02(h) thereof and to the renumbering of Section 6.02(i) into 6.02(h) thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: 4 (a) "OMVSD" means Office de Mise en Valeur de Satgui - Deressia, to be established by the Borrower in accordance with Section 8.01(a) of this Agreement; (b) "BDT" means the Banque de Developpement du Tchad, a bank established by Ordonnance No. 1 of the Borrower, dated January 13, 1962. (c) "ONDR" means Office National pour le D&veloppement Rural, an agency of the Borrower; (d) "Project Area" means an area of approximately 11,000 ha located on the East bank of the Logone River, in the Prefecture of Tandjile; (e) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and OMVSD: and (f) "CFAF" means the currency of the Borrower. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to seven million five hundred thousand dollars ($7,500,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule shall be amended from time to time, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed under the Development Credit Agreement; provided, however, that, except as the Association shall otherwise agree, no withdrawal shall be made on account of expenditures in the territories of any country which is not a member of the Bank (other than Switzerland) or for goods produced in, or services supplied from, such territories. Section 2.03. Except as the Association shall otherwise agree, the goods and services (other than services of consultants) required for the Project and to be financed out of the proceeds of the Credit, shall be procured on the basis of 5 international competition under procedures consistent with the Guidelines for Procurement under World Bank Loans and IDA Credits, published by the Bank in April 1972 as revised in October 1972, and in accordance with, and subject to, the provisions set forth in Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be December 3 1, 1979 or such other date as shall be agreed between the Borrower and the Association. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semi-annually on June I and December I in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each June I and December 1 commencing June 1, 1984, and ending December 1, 2023, each installment to and including the installment payable on December 1, 1993 to be one-half of one per cent (1/2 * of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.09. The Directeur G6nral and the Chief Accountant of OMVSD, acting jointly, are designated as representatives of the Borrower for the purpose of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. ARTICLE III Execution of the Project Section 3.01. The Borrower shall cause OMVSD to carry out the Project, with due diligence and efficiency and in conformity with appropriate financial, administrative, engineering and agricultural practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. (a) Unless the Association and ADF shall otherwise agree, the Borrower shall make available to OMVSD the proceeds of the Credit and of the ADF Loan under a subsidiary loan agreement to be entered into between the 6 Borrower and OMVSD, under terms and conditions acceptable to the Association and ADF. (b) The Borrower shall exercise its rights Linder the Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower, the Association and ADF and to accomplish the purposes of the Credit and the ADF Loan, and except as the Association and ADF shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.03. (a) In order to assist OMVSD in the preparation of final designs for civil works and of bidding documents for the rice mill included in Parts G and H of the Project, the evaluation of all bids and the supervision of construction of the Project, the Borrower shall cause OMVSD to employ engineering consultants acceptable to the Association upon terms and conditions satisfactory to the Association. (b) In order to assist OMVSD in carrying out the research and seed multiplication program referred to in Part C of the Project, the Borrower shall cause OMVSD to employ an agricultural consultant acceptable to the Association upon terms and conditions satisfactory to the Association. Section 3.04. In carrying out Parts A, B, C, F and G of the Project, the Borrower shall cause OMVSD to employ contractors acceptable to the Association upon terms and conditions satisfactory to the Association. Section 3.05. (a) The Borrower shall cause OMVSD to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by OMVSD to replace or repair such goods. (b) Except as the Association shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.06. (a) The Borrower shalH cause OMVSD to furnish to the Association, promptly upon their preparation, the plans, specifications, contract documents and construction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. 7 (b) The Borrower shall cause OMVSD to: (i) maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the procceds of the Credit, and to disclose the use thereof in the Project; (ii) enable the Association's accredited representatives to examine the Project, the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. Section 3.07. The Borrower shall take or cause to be taken all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for carrying out Parts A, B, C and G of the Project and shall furnish to the Association, promptly after such acquisition, evidence satisfactory to the Association that such land and rights in respect of land are available for purposes related to the Project. Section 3.08. (a) The Borrower shall cause OMVSD to enter into appropriate arrangements with BDT, including, inter alia, the opening of an imprest account * by OMVSD in BDT, to lend to OMVSD promptly as needed, LIp to a total of CFAF 160,000,000 for short and medium-term credits to farmers, paddy purchases and working capital. (b) The Borrower shall ensure that BDT shall not charge OMVSD an interest rate for the credits referred to in paragraph (a) of this Section higher than that charged by BDT on similar loans relating to other crops. (c) As OMVSD generates funds through its operations, the Borrower shall cause OMVSD to replace the funds lent by BDT in accordance with paragraph (a) of this Section with funds generated by OMVSD to provide short and medium-term credits to farmers, to procure paddy and to provide OMVSD with working capital. Section 3.09. Except as the Association shall otherwise agree, the Borrower shall cause OMVSD to levy and collect a charge of 10% of gross production from farmers in the polder areas. Section 3.10. Except as the Association shall otherwise agree, the Borrower shall cause OMVSD to make available to farmers in the Project Area short and medium-term credits under standard credit agreements, the terms and conditions of which shall be acceptable to the Association, and which shall include an interest rate not higher than that referred to in Section 3.08(b). 8 ARTICLE IV Other Covenants Section 4.01. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. Section 4.02. (a) The Borrower shall cause OMVSD to maintain records adequate to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of OMVSD. (b) The Borrower sFall cause OMVSD to: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements of OMVSD and the audit thereof as the Association shall from time to time reasonably request. Section 4.03. The Borrower shall cause OMVSD to take out and maintain with responsible insurers insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 4.04. The Borrower shall cause OMVSD to be managed at all times by a Directeur Gnral appointed on a full-time basis with qualifications and experience satisfactory to the Association. Section 4.05. In order to assist OMVSD in the management of OMVSD, the Borrower shall cause the Directeur Gendral of OMVSD to secure the services of management consultants acceptable to the Association, upon terms and conditions satisfactory to the Association, who shall provide the Technical Director of the Project, the Chief Accountant, Extension Officer and the Operation and Maintenance Engineer, all with qualifications and experience satisfactory to the Association, upon terms and conditions acceptable to the Association. 9 Section 4.06. At the request of the Directeur Gendral of OMVSD, the Borrower shall provide OMVSD with qualified Chadian counterpart personnel to the specialists referred to in Section 4.05 of this Agreement who shall take their posts not later than six months after such specialists will have taken their position. Section 4.07. The Borrower shall conduct a survey of health conditions in the Project Area, continue to monitor such conditions and take all appropriate measures to control sickness therein. Section 4.08. The Borrower shall raise the farmgate prices of paddy to a level sufficient to induce farmers to grow rice and market it through OMVSD, and shall raise the ex-mill prices of rice to levels sufficient to provide OMVSD with revenues adequate to cover its operating costs and repay OMVSD's capital investments, such levels of paddy and rice prices to be acceptable to the Association and to take into account, in so far as possible, the consumers' interests. Section 4.09. (a) The Borrower shall cause OMVSD to deposit all its cash funds in an account in BDT. (b) The Borrower shall not transfer to the Treasury the funds of OMVSD * deposited in BDT pursuant to the provisions of paragraph (a) of this Section. Section 4.10. The Borrower shall cause OMVSD to operate and maintain its equipment and property, including the roads financed under the Project, and from time to time to make the necessary renewals or repairs thereof, all in accordance with sound engineering practices. ARTICLE V Consultation, Information and Inspection Section 5.01. The Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Borrower and the Association shall from time to time, at the request of either party: (a) exchange views through their representatives with regard to the performance of their respective obligations under the Development Credit Agreement, the administration, operations and financial condition of OMVSD and, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out any part of the Project, and other matters relating to the purposes of the Credit; and 10 (b) furnish to the other all such information as it shall reasonably request with regard to the general status of the Credit. On the part of the Borrower, such information shall include information with respect to financial and economic conditions in the territories of the Borrower, including its balance of payments, and the external debt of the Borrower, of any of its political subdivisions and of any agency of the Borrower or of any such political subdivision. Section 5.02, (a) The Borrower shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the administration, operations and financial condition of OMVSD and, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out any part of the Project. (b) The Borrower and the Association shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit, the maintenance of the service thereof or the performance by either of them of its obligations under the Development Credit Agreement. Section 5.03. The Borrower shall afford all reasonable opportunity for accredited representatives of the Association to visit any part of the territories of the Borrower for purposes related to the Credit. ARTICLE VI Taxes and Restrictions Section 6.01. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories. Section 6.02. The Development Credit Agreement shall be free from any taxes on or in connection with the execution, delivery or registration thereof, imposed under the laws of the Borrower or laws in effect in its territories, Section 6,03. The payment of the principal of, and service charges on, the Credit shall be free from all restrictions, regulations, controls and moratoria of any nature imposed under the laws of the Borrower or laws in effect in its territories. S 11 ARTICLE VII Remedies of the Association Section 7.01. If any event specified in Section 7.01 of the General Conditions or in Section 7.03 of this Agreement shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continuance thereof, the Association, at its option, may by notice to the Borrower declare the principal of the Credit then outstanding to be due and payable immediately together with the service charges thereon, and upon any such declaration such principal and service charges shall become due and payable immediately, anything to the contrary in the Development Credit Agreement notwithstanding. Section 7.02. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) OMVSD shall have failed to perform any of its obligations under the Subsidiary Loan Agreement; (b) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of OMVSD or for the suspension of its operation; (c) The presidential Ordonnance establishing OMVSD and the interministerial decree setting forth the statutes of OMVSD shall have been amended, suspended, abrogated, repealed or waived in such a way as to adversely affect the performance by the Borrower of its obligations under this Agreement; (d) The Subsidiary Loan Agreement, or any material provision thereof shall have been amended, suspended, abrogated or waived wdhout the prior agreement of the Association; and (e) The right of the Borrower to utilize the funds provided by ADF under the ADF Loan Agreement shall have been suspended or terminated in whole or in part. Section 7.03. For the purposes of Sectior 7.01 of the General Conditions, the following additional events are specified: (a) the events specified in paragraphs (a) or (d) of Section 7.02 of this Agreement shall occur and shall continue for a period of 30 days after notice thereof shall have been given by the Association to the Borrower. 12 (b) any event specified iii paragraph (b) or (c) of Section 7.02 of this Agreement shall occur. (c) ADF shall have demanded repayment of any part of the ADF Loan prior to its agreed maturity pursuant to the terms of the ADF Loan Agreement. ARTICLE VIII Effective Date; Termination Section 8.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 10.01(b) of the General Conditions: (a) OMVSD has been established as an tablissement public under the laws of the Borrower, and with statutes acceptable to the Association. (b) The Borrower and OMVSD have entered into the Subsidiary Loan Agreement mentioned in Section 3.02(a) of this Agreement. (c) OMVSD has entered into a contract with the management consultants in accordance with the provisions of Section 4.05 of this Agreement and the Directeur Gnral of the Project mentioned in the said Section has taken up his post. (d) The Borrower has employed the Engineering Consultants referred to in Section 3.03(a) of this Agreement. (e) The Borrower has taken all steps necessary to exempt the goods and services to be imported, manufactured, procured or supplied for the project from any tax or duty. (f) The Borrower and ADF have entered into the ADF Loan Agreement under terms and conditions acceptable to the Association. (g) The conditions precedent to initial disbursements, if any, under the ADF Agreement (other than the effectiveness of this Agreement) have been fulfilled. Section 8.0?. The date January 28, 1975 is hereby specified for the purposes of Section 10.04 of the General Conditions. 13 ARTICLE IX Representative of the Borrower; Addresses Section 9.01. Subject to the provisions of Section 2.09 of this Agreement, the Ministre d'Etat chargd de l'Economie Moderne, du Plan, du Commerce et de la Coopration Internationale of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. Section 9.02. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: For the Borrower: Minist&re de l'Economie Moderne, du Plan, du Commerce et de la Coopdration Internationale P.O. Box 286 N'Djamena, Republic of Chad Cable address: Ministre Economie Plan N'Djamena For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed 14 in their respective names and to be delivered in the District of Columbia, United States of America as of the day and year first above written. REPUBLIC OF CHAD By /s/ H.E. Bawoyeu Alingu6 Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / Roger Chaufournier Regional Vice President Western Africa 15 SCHEDULE I Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of amounts of the Credit to each Category and the percentage of eligible expenditures so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed I. Civil works for 4,700,000 100% of total irrigation works, expenditures roads and the agricultural re- search station. II. Management con- 600,000 100% of total sultants' serv- expenditures ices. III. Second phase study 100,000 100% of total (agricultural part) expenditures IV. Unallocated 2,100,000 TOTAL 7,500,000 2. For the purposes of this Schedule the term "total expenditures" means the aggregate of: (i) expenditures for goods produced in, or services supplied from, the territories of any country other than the Borrower; and (ii) expenditures for goods produced in, or services supplied from, the territories of the Borrower. 3. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement; (b) payments for taxes imposed directly under the laws of the Borrower or laws in effect in its territories on goods or services, or on the importation, 16 manufacture, procurement or supply thereof, to the extent that any such taxes are levied on goods or services imported, manufactured, procured or supplied directly for the purposes of the Project. To the extent that the amount represented by the percentage set forth in the third column of the table in paragraph I above in respect of any Category would exceed the amount payable net of all such taxes, such percentage shall be reduced to ensure that no proceeds of the Credit will be withdrawn on account of payments for such taxes. 4. Notwithstanding the allocation of an amount of the Credit set forth in the second column of the table in paragraph I above: (a) if the estimate of the expenditures under any Category shall decrease, the amount of the Credit then allocated to such Category and no longer required therefor will be reallocated by the Association by increasing correspondingly the unallocated amount of the Credit; (b) if the estimate of the expenditures under any Category shall increase, the percentage set forth in the third column of the table in paragraph I above in respect of such expenditures shall be applied to the amount of such increase, and a corresponding amount will be allocated by the Association, at the request of the Borrower, to such Category from the unallocated amount of the Credit, subject, however, to the requirements for contingencies, as determined by the Association, in respect of any other expenditures; and (c) if the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. 0 17 SCHEDULE 2 Description of the Project The Project is designed to improve conditions of wet season rice cultivation on about 11,000 ha of the Sat6gui-D6ressia plain and consists of the following: Part A. The construction of two polders irrigated by gravity to serve a net cultivated area of rice of about 4,000 ha. Part B. The construction of about 102 km of feeder roads to serve the Project Area. Part C. The rehabilitation of the irrigation system of the Boumo Agricultural Station and the carrying out of a program of applied research and seed multiplication. Part D. Management consultants' services to assist OMVSD in the carrying out of the Project and in the development of the irrigated perimeter. Part E. The completion of a feasibility study for a second phase project (agricultural part). Part F. The renovation and repair of the Boumo Agricultural Station buildings. Part G. The construction of a rice mill of four tons an hour capacity, together with offices, workshop, staff housing, related facilities at Lai and eight field warehouses of about one thousand tons capacity each, to be located i,i the Project Area. Part H. The purchase of operation and maintenance equipment, farm machinery, vehicles, workshop and rice mill equipment. Part I. Salaries of local pcrsonnel until June 30, 1979 and operating costs until June 30, 1978. Part J. Engineering consultants' services to help prepare final designs, to supervise construction under Parts A, B, C, F and G of the Project and to assist in the preparation of the second stage feasibility study (engineering part). The Project is expected to be completed by June 30, 1979. 0 18 SCHEDULE 3 Procurement 1. With respect to any contract for civil works to be financed under Category 1, of the paragraph I of Schedule I to this Agreement estimated to cost $50,000 equivalent or more: (a) If bidders are required to prequalify, OMVSD shall, before qualification is invited, inform the Association in detail of the procedure to be followed and shall introduce such modifications in said procedure as the Association shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequalification, shall be furnished by OMVSD to the Association for its comments before the applicants are notified and OMVSD shall make such additions to or deletions from the said list as the Association shall reasonably request. (b) Before bids are invited, OMVSD shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications--and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedure as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (c) After bids have been received and evaluated, OMVSD shall, before a final decision on the award is made, inform the Association of the name of the bidder to whom it intends to award the contract and shall furnish to the Association, in sufficient time for its review, a detailed report, by the consultants referred to in Section 3.03(a) of this Agreement, on the evaluation and comparison of the bids received, together with the recommendations for award of the said consultants, and the reasons for the intended award. The Association shall, if it determines that the intended award would be inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement, promptly inform OMVSD and state the reasons for such determination. (d) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. (e) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the delivery to the Association of the first application for withdrawal of funds from the Credit Account in respect of any such contract. S 19 2. With respect to any other contract for civil works OMVSD shall furnish to the Association, promptly after its execution and prior to the delivery to the Association of the first application for withdrawal of funds from the Credit Account in respect of any such contract, two conformed copies of such contract, together with the analysis of bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract is not consistent with the procedures set forth or referred to in Section 2.03 of this Agreement, promptly inform OMVSD and state the reasons for such determination. 3. Items costing less than $5,000 equivalent shall be procured according to normal Government procedures, provided, however, that the aggregate of all items procured under such procedures shall not exceed $50,000 equivalent. 4. Farmers' agricultural inputs, except seeds, shall be procured through ONDR.