Date Published: October 2012
Yes, an NSP developer may hire such a contractor as long as the developer is not a governmental entity, a grantee, or a subgrantee, and the developer ensures that all costs are reasonable. However, if a developer has an "identity of interest" (developer also acting as general contractor or subcontractor), then this must be disclosed and the NSP grantee should adopt policies regarding the extent of the fee or profit that will inure to the related company is not considered an "undue enrichment" - rather that the developer is only receiving a developer fee but also a full profit acting as a contractor.
NOTE: When Dealing with Conflict of Interest questions, it is recommended that you contact your local field office to ensure compliance with all applicable regulations. Specific facts vary greatly such that general advice has limited applicability.