All construction by a public entity using board funds shall be done by advertisement, competitive bid and contract, except:

(1) Utility and railroad relocations and adjustments; and

(2) Installation of traffic control devices.

If federal funds are included in the project, the negotiated contract shall include the applicable provisions of federal highway administration policies and procedures prescribed in 23 C.F.R. 140, 23 C.F.R. 645 and 23 C.F.R. 646, Federal Aid Policy Guide.