Federal regulations address participation in equipment owned or rented by the contractor and used in force account work. Specified cost accounting principles must be used to develop the rates. Ineligible costs include use of contingencies, replacement cost escalator factors and premium rental rates for rental periods less than one month.

Federal policy requires the actual costs to be used to determine extra work payments; however, actual equipment costs are usually not readily available. Therefore, FHWA permits a LG to specify the acceptable rate guides in construction contracts. The LG may also include any equipment rate schedules developed in conformance with the federal cost principles and FHWA policy.

The LG is responsible for adopting TxDOT specifications for equipment rental rates or for obtaining TxDOT approval for its own rental rates. Details regarding specific requirements related to equipment rental rates that must be followed and properly documented are found in of this Manual and the .