Subgrantees may be reimbursed on the basis of actual cost, cost per unit, specific rates, fixed costs, or a combination of these. Explanations of these methods of payment follow.

Actual Cost -

Actual cost agreements authorize TxDOT to reimburse the subgrantee for all costs incurred under the project, subject to cost principles included in 2 C.F.R. Part 225 (formerly OMB Circular A-87,

Cost Principles for State and Local Governments

). Traffic safety grants are limited to amounts and items authorized in the project budget. Adjustments between cost categories within the budget of up to five percent of the total reimbursable budget are allowed without requiring an amendment.

Cost Per Unit of Work -

Some agreements are reimbursed on the basis of units of work performed. This method of payment uses a negotiated per-unit cost, with each component documented and approved in a detailed cost proposal. This method of payment eliminates the need to document each element included in the Request for Reimbursement (RFR), requiring instead that the performance of work be documented. However, the negotiated rate must be based on documented actual costs and experience in performing the prescribed task.

EXAMPLE:

Specific Rates -

Grants may authorize payment on the basis of specific rates. This method uses a composite of all or selected costs.

EXAMPLES:

Fixed Cost -

The grant may authorize payment of an agreed upon fixed amount not subject to modification. Payments are made periodically at agreed upon intervals or once upon completion of the project. If this method is used, there must be a detailed and thorough cost analysis made during the negotiating process.