The Federal Process applies to an engineering or design related service contract directly related to a highway construction project and reimbursed with federal-aid highway program (FAHP) funding.
A firm providing engineering or design related services must be administratively qualified with an effective rate by the closing date of the solicitation to compete for contracts using the Federal Process, unless they are eligible to utilize the federal “safe harbor” indirect cost rate. Eligibility must be approved by the PEPS Administrative Qualifications Group prior to the closing date of the solicitation in order to compete. No engineering or design related services are exempt.
In addition, the firm must complete and submit the AASHTO Internal Control Questionnaire and demonstrate that they have, and are utilizing, an acceptable cost accounting system capable of segregating direct and indirect costs.
If a firm is eligible and the safe harbor rate is used, the safe harbor rate will be applicable for the duration of the contract.
The safe harbor rate is not intended for and will not be used as a field rate for a field-based contract. Should an eligible firm opting for the safe harbor rate be selected to provide services requiring a field rate, TxDOT will establish a field rate for the firm.
Revised: April 9, 2020
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