Summary of Allowable Costs and Procurement Procedures
Allowable Costs
State, local, and Indian tribal governments must use the cost principles in 2 CFR Part 225-Cost Principles for State, Local, and Indian Tribal Governments (OMB Circular A-87).
Private nonprofit organizations (other than educational institutions) must use the cost principles in 2 CFR Part 230-Cost Principles for Non-Profit Organizations (OMB Circular A-122).
Educational institutions must use the cost principles in 2 CFR Part 220-Cost Principles for Educational Institutions (OMB Circular A-21).
Procurement: Highway Construction Projects
For contracts for highway construction, direct recipients or subrecipients must use bidding methods that are effective in securing competition. Detailed construction contracting procedures are contained in 23 CFR Part 635, subpart A.
Contracts for engineering and design services related to highway construction must be let in accordance with procurement requirements under 23 CFR Part 172.
Procurement: Projects that are not highway construction
For projects that are not highway construction, procedures for procurement of goods and services are included in 49 CFR Parts 18 and 19.
A State must follow the same policies and procedures it uses for procurements from its non-Federal funds in accordance with 49 CFR 18.36(a). All clauses required by Federal law and regulation must be included in the contract (see 49 CFR 18.36(i)).
Local and Indian tribal governments receiving funds directly from FHWA or through other than a State agency must use procurement procedures that comply with the requirements in 49 CFR 18.36(b) through (i).
Local and Indian tribal governments receiving funds through a State must use procurement procedures specified by the State in accordance with 49 USC 18.37(a). All clauses required by Federal law and regulation must be included in the contract (see 49 CFR 18.36(i)).
Nonprofit organizations and institutions of higher education receiving funds directly from FHWA or through another agency must use procurement procedures that comply with the requirements in 49 CFR 19.40 through 19.48.
