[Code of Federal Regulations]
[Title 23, Volume 1]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 23CFR172.9]

[Page 24]
 
                           TITLE 23--HIGHWAYS
 
 CHAPTER I--FEDERAL HIGHWAY ADMINISTRATION, DEPARTMENT OF TRANSPORTATION
 
PART 172--ADMINISTRATION OF ENGINEERING AND DESIGN RELATED SERVICE CONTRACTS--Table of Contents
 
                    Subpart A--Procurement Procedures
 
Sec. 172.9  Compensation.

    (a) Contracting agencies may establish cost principles for 
determining the reasonableness and allowability of costs. Federal 
reimbursement shall be limited to the Federal share of the costs 
allowable under the cost principles in 48 CFR part 31 (Federal 
Acquisition Regulations). Any references included in 48 CFR part 31 to 
other parts of 48 CFR do not apply to these contracts.
    (b) Applicable cost principles shall be referenced in each 
contractual document.
    (c) Methods of payment. (1) The method of payment to compensate the 
consultant for all work required shall be set forth in the original 
contract and in any contract modifications thereto. It may be a single 
method for all work or may involve different methods for different 
elements of work. The methods of payment which shall be used are: lump 
sum, cost plus fixed fee, cost per unit of work or specific rates of 
compensation.
    (2) Compensation based on cost plus a percentage of cost or 
percentage of construction cost shall not be used.
    (3) When the method of payment is other than a lump sum, the 
contract shall specify a maximum amount payable which shall not be 
exceeded unless adjusted by a contract modification.
    (4) The lump sum method shall not be used to compensate a consultant 
for construction engineering and inspection services except when the 
agency has established the extent, scope, complexity, character and 
duration of the work to be required to a degree that fair and reasonable 
compensation including a fixed fee can be determined.
    (d) Fixed fees. (1) The determination of the amount of the fixed fee 
shall take into account the size, complexity, duration, and degree of 
risk involved in the work. The establishment of the fixed fee shall be 
project specific.
    (2) Fixed fees normally range from 6 to 15 percent of the total 
direct and indirect cost. Subject to the approval of the FHWA, a fixed 
fee over 15 percent may be justified when exceptional circumstances 
exist.