Can CDBG funds be used to pay a third party to do all the rehab inspections for a grantee?
Date Published: May 2015
CDBG regulations allow grantees to utilize third parties to perform the functions of program implementation. 24 CFR 85.36 (b) through (i) define procurement requirements applicable to third party service providers such as inspectors, specification writers, architects, engineers, etc. Grantees should follow local procurement policies that conform to state and federal requirements, found in 24CFR Part 85, including procurement standards, free and open competition, methods of procurement, contracting with small and minority firms and women's business enterprises, conflict of interest, bonding, insurance, debarment, contracting cost and price. Beyond the procurement and contracting requirements, other considerations include technical qualifications of the individual/firm, experience with a similar scope of work, applicable licensing, and references.
It is recommended that you enter into a written contract agreement with the third party service provider. The written agreement should contain clear contract provisions such as a defined scope of work, legal remedies for non-performance or breach of contract, and agreed upon price for the provision of professional services. Having a contract in place serves as a means of ensuring clear communication between the parties involved, as a legal protection for the grantee and the professional service provider, and as a written record of the transaction that took place (scope of work, costs, etc.). It is also highly recommended that your legal counsel review the contract documents to ensure all local and state requirements are met.