S.D. Codified Laws § 46A-9-55

If all or a portion of the cost of the proposed works is to be met by grant of labor or a grant-in-aid from a federal or state agency, does not require the use of any state or federal funds in the proposed works, or under other contract with a federal or state agency, and the rules of such agency provide that work may not be done by contract, the board of directors may proceed with the necessary construction or other work without first complying with any of the provisions of §§ 46A-9-52 to 46A-9-54, inclusive.