CDBG funds will eventually be used to pay for the actual construction work to rehab a community center. However, the professional services for the design and engineering of the center will be paid with local, non-federal funds. Are these professional services subject to the same Section 3 reporting requirements as the construction work?
Date Published: May 2015
The professional service work for design/engineering that was completed prior to your involvement would not be included in any Section 3 reporting since no covered HUD grant funds were used. Construction, and construction-related, and any contracts are subject to Section 3 requirements if $1 of covered HUD funds is used. 24 CFR Part 135 - Section 3 Regulations states: Section 3 covered contract means a contract or subcontract (including a professional service contract) awarded by a recipient or contractor for work generated by the expenditure of Section 3 covered assistance, or for work arising in connection with a section 3 covered projects.