# How Local Agencies Must Pick Engineers on Federal-Aid Work > Counties and cities hiring engineers with federal-aid highway money must follow 23 CFR 172. What it requires, what to check in an RFQ, and how to raise it. _By Oswald B. · Published 2026-10-26_ When a county or city hires an engineering firm with federal-aid highway money, 23 CFR Part 172 sets the rules. The agency must select on qualifications, keep price out of the ranking, give no points for being local, rank at least three firms, and follow its state DOT's approved procedures. You can check any RFQ against them before you submit. County and city work is a large share of public pursuits for many civil firms. A state DOT has a consultant services office. A small county may have one engineer and a template from its last federal job. The rule is the same for both. This piece covers what it says, how to read a local RFQ against it, and how to raise a problem without souring the client. Every section number below comes from the eCFR text of Part 172, current as of October 16, 2026. ## What Is 23 CFR Part 172? 23 CFR Part 172 is the Federal Highway Administration (FHWA) rule for hiring engineering and design consultants on federal-aid highway projects. It applies to federally funded contracts for projects under 23 U.S.C. 112(a), and it exists to make sure "a qualified consultant is obtained through an equitable qualifications-based selection procurement process" ([§ 172.1](https://www.ecfr.gov/current/title-23/section-172.1)). Three points in the scope matter for local work: - **It reaches local agencies.** State transportation agencies must "ensure that subrecipients comply" with the part (§ 172.1). A county or city spending federal-aid money passed through the state DOT is a subrecipient. - **It covers more than design.** "Engineering and design related services" includes program management, construction management, feasibility studies, preliminary engineering, design, surveying, and mapping on a covered highway project ([§ 172.3](https://www.ecfr.gov/current/title-23/section-172.3)). - **It sits on top of 2 CFR 200.** The general federal grant rules still apply, except where they conflict with Part 172 (§ 172.1). Services not tied to a covered highway construction project fall back to 2 CFR 200 alone. The current text comes from FHWA's May 22, 2015 final rule. FHWA proposed amendments in January 2024; as of October 2026, none has been finalized. ## Which Local Projects Fall Under 23 CFR 172? The test is who holds the award. Federal-aid highway funds that reach a county through the state DOT bring Part 172 with them. A grant awarded directly to the county by USDOT may not. | Funding source | Who holds the award | Consultant selection rules | | -------------------------------------------------- | --------------------------------------- | ------------------------------------------------------- | | Federal-aid formula funds passed through the state | State DOT, local agency as subrecipient | 23 CFR 172, under the state's approved procedures | | Bridge Formula Program funds on a local bridge | State DOT, local agency as subrecipient | Administered under title 23, so federal-aid rules apply | | Safe Streets and Roads for All (SS4A) grant | The local agency, directly from USDOT | 2 CFR 200 plus local procurement rules, per USDOT | | Local or state money only | The local agency | State law, often a state QBS ("mini-Brooks") statute | **Bridge Formula Program.** FHWA's implementation guidance says BFP funds are "to be administered as if apportioned under chapter 1 of title 23" and that any BFP project "is to be treated as a project on a Federal-aid highway" ([FHWA memo, January 14, 2022](https://www.fhwa.dot.gov/bridge/20220114.cfm)). The same memo sets a 100 percent federal share for off-system bridges owned by a county, city, town, or other local agency. A county bridge design paid with BFP money is federal-aid work. **SS4A.** USDOT's SS4A costs and contracting fact sheet says the program "follows the grant governance and financial requirements set up in 2 CFR Part 200," and that Title 23 requirements "do not apply for SS4A when it comes to costs and contracting" ([USDOT, FY23 fact sheet](https://www.transportation.gov/sites/dot.gov/files/2023-03/SS4A-Cost-and-Contracting-FAQs-FY23.pdf)). FHWA's [January 2024 proposed rule](https://www.federalregister.gov/d/2024-01705) agrees: Part 172 reaches state DOT subrecipients "but not when these entities are recipients of an award directly from DOT." Under [2 CFR 200.320(b)(2)(iv)](https://www.ecfr.gov/current/title-2/section-200.320), QBS for A/E services is allowed but not required. Your state's QBS law may still require it. For where SS4A funding stands, see [the last SS4A round](/blog/last-safe-streets-round). If an RFQ doesn't say how the project is funded, ask. ## What Does 23 CFR 172 Require When a Local Agency Selects a Consultant? The default method is competitive negotiation, which Part 172 defines as qualifications-based selection under the Brooks Act ([§ 172.7(a)(1)](https://www.ecfr.gov/current/title-23/section-172.7)). Here is what that method requires, by section. | Requirement | Section | | ---------------------------------------------------------------------------------------------------------------- | ------------------------ | | Public solicitation that gives in-state and out-of-state firms a fair opportunity | § 172.7(a)(1)(i) | | A project-specific RFP, even when firms were first screened by an RFQ or a prequalification list | § 172.7(a)(1)(i) | | Evaluation factors and their relative weights published in the RFP | § 172.7(a)(1)(ii)(C) | | Any cost proposal submitted sealed and separate, because it can't be used to rank | § 172.7(a)(1)(ii)(F) | | At least 14 calendar days to respond to the RFP, except in unusual circumstances | § 172.7(a)(1)(ii)(G) | | No price in evaluation, ranking, or selection, including wage rates, indirect cost rates, and other direct costs | § 172.7(a)(1)(iii)(B) | | No in-state or local preference as a factor | § 172.7(a)(1)(iii)(C) | | Local presence and DBE participation allowed only as nominal factors, together capped at 10 percent | § 172.7(a)(1)(iii)(D) | | Discussions with at least three of the most highly qualified firms, when the RFP calls for them | § 172.7(a)(1)(iv)(C) | | At least three firms ranked, and every responding firm told the final ranking of the top three | § 172.7(a)(1)(iv)(D)–(E) | | An independent agency estimate prepared before the top firm's cost proposal is reviewed | § 172.7(a)(1)(v)(B) | | Only the top-ranked firm's cost proposal considered; the others may be disposed of under agency procedures | § 172.7(a)(1)(v)(D) | **State licensure is still allowed.** The local preference ban doesn't preempt state licensing laws. An agency can require a professional license in its state as a minimum qualification (§ 172.7(a)(1)(iii)(C)). **A local office can be promised.** Local presence can't be drawn on political or jurisdictional lines. If an out-of-area firm commits to something like a local project office, "that commitment shall be considered to have satisfied the local presence criteria" (§ 172.7(a)(1)(iii)(D)(1)). On-call contracts have their own limits. An on-call or IDIQ contract can't run longer than five years with extensions, and task orders under a QBS-procured on-call can't be competed on cost ([§ 172.9(a)(3)](https://www.ecfr.gov/current/title-23/section-172.9)). For how those vehicles work in general, see [how on-call and IDIQ contracts work for A/E firms](/blog/on-call-idiq-matoc-contracts). ## When Can a Local Agency Skip Full Qualifications-Based Selection? Part 172 allows two other methods, each with conditions you can check. | Method | When it's allowed | Conditions | | -------------- | -------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | | Small purchase | Total contract cost at or below the federal simplified acquisition threshold, or a lower state threshold | No splitting the scope to get under the threshold; at least three consultants reviewed; a change order over the threshold loses federal funding | | Noncompetitive | Single source, an emergency, or inadequate competition after soliciting several firms | The agency needs FHWA approval of its justification before using it | The federal simplified acquisition threshold is **$350,000**, as defined in [FAR 2.101](https://www.acquisition.gov/far/2.101) (FAC 2026-01, effective March 13, 2026). Part 172 points to that definition, and when state law or policy sets a lower threshold, the lower one controls (§ 172.7(a)(2)). States often set lower lines. MaineDOT's local project training, for example, allows a simplified process only under $25,000 and requires an advertised RFP above $250,000 ([MaineDOT, Hiring Consultants, November 2023](https://www.maine.gov/mdot/lpa/docs/certification/2023/HiringConsultants_Nov2023.pdf)). Check your state's local programs manual before you assume the federal number applies. The splitting rule is the one to watch. The scope, project phases, and contract requirements "shall not be broken down into smaller components merely to permit the use of small purchase procedures" (§ 172.7(a)(2)(i)). The full amount of any modification that pushes the contract over the threshold is ineligible for federal-aid funding, and FHWA may pull all federal funds from the contract (§ 172.7(a)(2)(iv)). ## How Do You Check a County or City RFQ for Compliance? Reading an RFQ against Part 172 takes the funding source and about ten minutes. Check these signals on any local pursuit that might carry federal money. | What you see in the RFQ | Why it matters | Rule | | ------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------ | ---------------------- | | A fee schedule, hourly rates, or "cost" listed as a scored criterion | Price, including wage and indirect rates, can't be an evaluation factor | § 172.7(a)(1)(iii)(B) | | Cost proposals requested in the same envelope or file as qualifications | Cost must be sealed and separate | § 172.7(a)(1)(ii)(F) | | Points for a firm headquartered in the county or state | In-state or local preference is banned | § 172.7(a)(1)(iii)(C) | | A local presence criterion worth 15 points out of 100, or combined with DBE above 10 | Local presence and DBE together are capped at 10 percent | § 172.7(a)(1)(iii)(D) | | A plan to rank or interview only two firms when more responded | At least three firms must be ranked | § 172.7(a)(1)(iv)(D) | | Design phases split into separate contracts, each just under the threshold | Splitting to use small purchase procedures is banned | § 172.7(a)(2)(i) | | An on-call term over five years, or task orders awarded on price | On-call contracts are capped at five years; QBS task orders can't be competed on cost | § 172.9(a)(3) | | An overhead cap, or a lower overhead rate as a condition of award | An accepted indirect cost rate can't be capped, and offering a lower one can't be required | § 172.11(b)(1)(iv)–(v) | | Fewer than 14 calendar days to respond to the RFP | The minimum is 14 days except in unusual circumstances | § 172.7(a)(1)(ii)(G) | One distinction prevents false alarms. An RFQ may ask every firm for a sealed cost proposal up front. That is allowed, as long as it's separate and only the top-ranked firm's proposal is considered (§ 172.7(a)(1)(v)(D)). The problem is a cost proposal that gets scored, or a price opened for every firm. [MaineDOT's local training](https://www.maine.gov/mdot/lpa/docs/certification/2023/HiringConsultants_Nov2023.pdf) lists both as "risks to funding": "considering price as a ranking factor" and "reviewing prices from all consultants, not just #1." That is the framing to use: a noncompliant procurement is first a risk to the agency's reimbursement. ## How Do You Raise a Compliance Problem Without Losing the Client? Frame it as protecting the client's money, because it is. When state or local procedures conflict with federal rules, the agency must follow the federal rules "to be eligible for Federal-aid reimbursement" ([§ 172.7(b)(1)(ii)](https://www.ecfr.gov/current/title-23/section-172.7)). A county that scores price on a federal-aid job puts the federal share of the contract at risk. Raising it before submittals are due helps whoever wrote the RFQ. In order: 1. **Use the written questions period.** Ask a neutral question that cites the rule. "Is this project federal-aid funded? If so, will the rate schedule in Section 4 be scored, given 23 CFR 172.7(a)(1)(iii)(B)?" Answers usually go out to every proposer as an addendum, so it reads as a clarification instead of a complaint. 2. **Ask, don't accuse.** Many of these issues come from reused templates. Last year's locally funded RFQ, which scored fees under state law, becomes this year's federal-aid RFQ. 3. **Go to the state DOT's local programs office if the answer doesn't fix it.** State DOTs must oversee subrecipient procurement of engineering services ([§ 172.5(a)(4)](https://www.ecfr.gov/current/title-23/section-172.5)). Local agencies must adopt the state's procedures, write their own for state approval, or send each procurement to the state for review (§ 172.5(b)). The state's LPA coordinator handles exactly this. 4. **Use a formal protest only as a last resort.** Agencies' written procedures must address how disputes are resolved (§ 172.5(c)(18)). A protest is public and slow, and it puts you across the table from a client you want to keep. 5. **Decide whether to pursue at all.** If the procurement stays noncompliant, you're competing in a process that may not hold. Put that into your [go/no-go decision](/blog/go-no-go-decision-framework) like any other risk. This is general information, not legal advice. Talk to counsel before any protest. ## How Is a Federal-Aid RFQ Different From a Locally Funded One? The same county can issue both in one month. A federal-aid RFQ runs under Part 172 and the state DOT's approved procedures. A locally funded RFQ runs under state law, usually a state QBS statute with its own thresholds and exceptions. Our guide to [qualifications-based selection](/blog/qualifications-based-selection) covers how those state laws work. | | Federal-aid RFQ (23 CFR 172) | Locally funded RFQ (state law) | Direct USDOT grant, such as SS4A (2 CFR 200) | | ----------------------- | ------------------------------------------------- | ------------------------------ | ---------------------------------------------------- | | Price at selection | Banned, including rates | Depends on the state statute | QBS allowed for A/E services, not required | | Local preference | Banned; nominal local presence plus DBE up to 10% | Depends on state and local law | Check the grant agreement and local rules | | Firms ranked | At least three | Depends on the state statute | Proposals solicited from multiple qualified firms | | Small purchase line | $350,000 or a lower state threshold | Set by state or local law | The agency's own threshold, no higher than the FAR's | | Who reviews the process | State DOT, with FHWA above it | The agency, under state law | The agency, under its grant agreement with USDOT | For your team, the practical difference is the paperwork around the selection. On a federal-aid job, expect federal contract provisions, costs held to the federal cost principles, and an indirect cost rate accepted from an audit or a state review (§ 172.11(b)(1)). Your state DOT prequalification can matter too. MaineDOT, for one, tells local agencies to solicit from its prequalified list in most cases. See [how state DOT prequalification works](/blog/state-dot-prequalification). The submittal itself is scored the same way under any QBS process. With price off the table, relevant projects, the named team, and your grasp of the scope decide the ranking. [What evaluators actually score in an SOQ](/blog/winning-soq) applies directly. ## Frequently Asked Questions ### Can a local agency ask for hourly rates in a federal-aid RFQ? It can ask for a sealed cost proposal, but it can't score one. Part 172 bans price as an evaluation factor, including wage rates and indirect cost rates (§ 172.7(a)(1)(iii)(B)). Cost proposals must be sealed and separate, and only the top-ranked firm's proposal can be considered in negotiation. ### Does 23 CFR 172 apply to SS4A grants? Not for consultant procurement. USDOT's SS4A fact sheet says the program follows 2 CFR 200 and that Title 23 requirements don't apply to its costs and contracting. FHWA's 2024 proposed rule says Part 172 doesn't reach direct USDOT grant recipients. Under 2 CFR 200, QBS for A/E services is allowed but optional. State QBS law may still require it. ### What is the small purchase threshold for federal-aid engineering contracts? It's the federal simplified acquisition threshold, $350,000 under FAR 2.101 as of FAC 2026-01, unless state law or policy sets a lower one. An agency can't split a scope or phase to fit under the line. If a modification pushes the contract over it, the full modification is ineligible for federal-aid funding. ### Can a county give points for having a local office? Only as a nominal factor. Local presence and DBE participation together can't exceed 10 percent of the evaluation (§ 172.7(a)(1)(iii)(D)). The criterion can't follow county or state lines, and a firm that commits to opening a local project office satisfies it. ### What happens if only two firms respond? The agency may proceed if it finds the solicitation didn't arbitrarily limit competition (§ 172.7(a)(1)(iv)(D)). Otherwise it can re-solicit, or, if that isn't practical, use the noncompetitive method, which needs FHWA approval. --- Canonical HTML: https://rfpm.ai/blog/local-agency-federal-aid-consultant-selection · Site overview: https://rfpm.ai/llms.txt · Sitemap: https://rfpm.ai/sitemap.xml