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 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
MnDOT has an overhead rate of 160.00%. Contracts with a start date of April 15, 2019, or later, have an overhead rate cap of 170.00%.
Annual Overhead Rate Analysis
FY24 Pilot Program
Beginning on July 1, 2023, MnDOT will combine consultant pre-award and overhead audits into an annual overhead analysis. One annual overhead/pre-award analysis of a consultant or subconsultant is required if it has an agreement of greater than $50,000. For the purposes of this pilot, subconsultants need only to be referred if their cost will be over $50,000.
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 following checklist for what needs to be submitted depending on how you prepare your overhead rate:
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
Review the following checklist for what needs to be submitted depending on what type of indirect cost rate is being requested:
Additional documents depending on the indirect cost rate type:
- MnDOT Indirect Cost Rate Questionnaire
- De Minimis Certification
- Governmental Organization Certificate of Indirect Costs
- Non-Profit Organization Certificate of Indirect Costs
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 indirect cost rate if it has not had an indirect cost rate previously accepted by MnDOT. Consulting firms with an audited or otherwise accepted indirect cost 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.
- Safe Harbor Overhead Rate Policy
- Safe Harbor Overhead Rate Program Procedures
- Safe Harbor Program Questionnaire (PDF)
- Safe Harbor Program Consultant Certification Form (PDF)
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.
- NCM – Multiple Choices, depending on the year of Actual Cost Detail that is being evaluated:
- 2023 NCM (Excel) (to be used with 2022 Data)
- 2022 NCM (Excel) (to be used with 2021 Data)
- 2021 NCM (Excel) (to be used with 2020 Data)
- 2020 NCM (Excel) (to be used with 2019 Data)
- Audit Oversight of Consultant Contract Indirect Cost Rates Policy
- Sample Overhead Rate Calculation (Excel)
- Common Unallowable Costs (Word)
- Common Control (Related Party) Rent Adjustment Workpaper (Excel)
- FHWA Guidance on PPP Loan Forgiveness (PDF)
- Paycheck Protection Program Cost Recovery Considerations (PDF)
- Paycheck Protection Program FAQ (PDF)
- Paycheck Protection Program Exception Memo to Consultants with State Funded P/T Contracts (PDF)
- MnDOT Paycheck Protection Program Certification Form (PDF)
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.