H.R. 3258: Parity in Engineering Act

When a state hires engineers, surveyors, or designers for a highway project paid for with federal-aid money, federal law sets the ground rules. Firms are selected the way federal agencies pick architects and engineers — on qualifications. The contracts are then audited using the government-wide cost principles in the Federal Acquisition Regulation.

Those rules also cover overhead. A firm's indirect cost rate — its non-project expenses spread across its billable labor — gets audited once a year by a lead federal or state agency. Every other agency paying with federal highway funds must then accept that rate, apply it without administrative or de facto ceilings, notify the firm before using its cost data, and keep that data confidential.

Minnesota and West Virginia are exempt from those overhead and audit rules. They still pick firms on qualifications, but they don't have to accept another agency's audited rate, and nothing bars them from capping what a firm can recover.

H.R. 3258 deletes Minnesota from that exemption, leaving West Virginia as the only state outside the federal overhead rules. The whole bill is one line: it swaps "the States of West Virginia or Minnesota" for "the State of West Virginia."

For firms, the change means a single audited rate that works in Minnesota the same way it works in Wisconsin or Iowa. For the Minnesota Department of Transportation and local agencies, it means giving up the option to set their own overhead limits on federally funded engineering contracts. Whether that raises what Minnesota pays for design work depends on how far any current limits sit below firms' audited rates.