Rates

Consultants/subconsultants must submit their overhead rates on an annual basis and must follow the Federal Acquisition Regulations (FAR) Part 31.

Grantees and subrecipients who receive state or federal grants must submit their indirect cost rates and follow federal regulations 2 CFR Part 200 and FAR Part 31.

The Uniform Audit and Accounting Guide 2016 Edition (more recent 2024 version is available for purchase at AASHTO Store: Browse Transportation Publications and Online Training) is the most current edition and can be bought from the American Association of State Highway and Transportation Officials (AASHTO). This guide is beneficial when calculating your overhead rate. It is the most recent version and can be easier to read than FAR.

A Sample Overhead Rate Calculation (Excel) is available. Please note that this is a sample, and your accounting system may differ.

Overhead Rate Cap/Limit

Contracts with a start date of April 15, 2019, or later, have an overhead rate cap of 170.00%. Contracts with a start date of October 1, 2024, or later, have an overhead rate cap of 175.00%.

Annual Overhead Rate Analysis

If a consultant charges an overhead rate, they must submit it for an annual review within six months of their fiscal year end.

Consultants who are new to working with MnDOT will still go through the annual overhead rate analysis program to confirm their rate. If a consultant or subconsultant is not charging an overhead rate, they will be subject to a pre-award analysis and should still submit the required documents requested in the Annual Overhead Rate Analysis checklist below.

Review the checklist below for the minimum required documents to submit based on how the overhead rate was prepared.

Office of Audit Checklist: Annual Overhead Rate Analysis (PDF)

Additional documents depending on overhead rate type:

If MnDOT is your Cognizant Agency and you are requesting a Cognizant Review from MnDOT Audit, please contact MnDOT Audit before signing an Engagement Letter with a CPA.

After the MnDOT Office of Audit has approved your overhead rate, we will issue a letter to the MnDOT requesting office or program manager and our local Federal Highway Administration office.

Indirect Cost Rate Submissions

For Indirect Cost Rate Submissions refer to the Grants tab.

Safe Harbor Overhead Rate Program

The purpose of the Safe Harbor Overhead Rate Program is to allow time for engineering consulting firms who are new to working with MnDOT satisfy the requirements of Part 31 of the Federal Acquisition Regulation for Overhead Calculations. The federal regulations allow a consulting firm to use a Safe Harbor overhead rate if it has not had an overhead rate previously accepted by MnDOT. Consulting firms with an audited or otherwise accepted overhead rate developed following the federal cost principles are not eligible to participate in the Safe Harbor Overhead Rate Program.

The Federal Highway Administration approved using the Safe Harbor Overhead Rate Program for the consultant overhead rate calculation with a cap of 110% in 2019.

Premium Portion of Overtime

The Premium Portion of Overtime can either be included in the Indirect Labor Costs, the Direct Labor Costs, or Excluded from the Overhead Rate Costs by being part of direct expenses.

Facilities Capital Cost of Money

MnDOT does not accept Facility Capital Cost of Money rates, per the Audit Oversight of Consultant Contract Indirect Cost Rates Policy.

Contact

To comply with federal audit requirements, the MnDOT Office of Audit will request any additional information needed from the MnDOT office or project manager. Any questions from the consulting firm, grantee, subrecipient, railroad, utility, or transit system regarding these audits should be made directly to the MnDOT requesting office or project manager. The MnDOT Office of Audit will assist the MnDOT requesting office in addressing any questions/issues that may arise. All questions/inquiries auditors receive will be re-directed to the MnDOT requesting office for assistance.