The Federal Highway Administration (FHWA) has extended the use and application of the Safe Harbor Overhead cost rate through December 31, 2016, for those consultants that meet the eligibility requirements.  The extension is being issued to allow additional time for evaluation and possible permanent implementation.  The  Safe Harbor overhead rate will remain at 110%. 

This safe harbor rate was approved for use by eligible consultants on a test evaluation basis for ten selected state DOT’s, which Michigan DOT (MDOT) was one of them.

Consulting firms who satisfied certain criteria were able to utilize this safe harbor rate to create a contract cost history during the test period to use as a base for development of an overhead cost rate in the future.  The safe harbor rate was effective July 1, 2013, through June 30, 2016.  MDOT issued Consultant Advisory 2016-10 on July 12, 2016, to notify Michigan consultants utilizing this “safe harbor” rate that FHWA has extended the program through December 31, 2016. 

If your firm has questions regarding the Safe Harbor Overhead Cost Rate or the MDOT prequalification program, please contact me or one of the other FAR experts here at Somerset.