CDBG-DR Contractor Readiness Guide

What CDBG-DR actually is

Community Development Block Grant, Disaster Recovery (CDBG-DR) is federal money flowing from HUD to the State of Florida, then down to counties and municipalities, and finally to contractors and homeowners. The $211M Hillsborough Rebuilding for Tomorrow program is one piece. Similar programs are active across Pinellas, Manatee, Sarasota, and others.

The money pays for home repair, replacement, elevation, and new construction for homeowners damaged by Helene and Milton who meet income and damage thresholds. Contractors performing the work get paid from federal funds, which means federal rules apply.

The five things that change when federal money is involved

1. Davis-Bacon prevailing wages

On CDBG-DR work, you don't pay market wages. You pay Davis-Bacon wage determinations published by the Department of Labor for your county and trade. Those rates are often higher than what you'd pay on a private job, and they have to be documented with certified payroll submitted weekly.

Missing or late certified payroll is the most common reason draws get held.

2. Environmental review

Every federally-funded project goes through a NEPA-style environmental review before work can start. For most rebuild work, that's a Tier-2 review. But it still has to be complete and approved, and any work started before approval is ineligible for reimbursement. Full stop.

3. Floodplain and elevation requirements

If the property is in a Special Flood Hazard Area (most Helene-impacted coastal parcels are), the rebuild must meet elevation requirements under the 50% substantial damage rule. Elevation certificates, base flood elevation calculations, and freeboard requirements all have to be documented and signed off before foundation work.

4. Procurement and competition

Sole-source contracts are the exception, not the rule. Most CDBG-DR work requires documented competitive procurement. Even on homeowner-selected contractors, the program administrator has to demonstrate price reasonableness. Keep your proposals, backup pricing, and any competitive bids on file.

5. Draw schedule and documentation

You don't get paid for pouring concrete. You get paid for submitting a draw package that documents what was done, who did it, at what wage, with which materials, inspected by whom, and approved against which line item of the approved scope. Miss a piece of documentation and the draw sits.

The three mistakes that stop payment

Mistake 1: Starting work before environmental clearance

The homeowner is frustrated, the sub is available, the weather is good. So you start. If environmental clearance isn't signed, that work is ineligible. The administrator can't pay you and the homeowner can't either (the program paid them). This happens more often than anyone wants to admit.

Mistake 2: Paying hourly wages instead of Davis-Bacon

Subs show up, clock in, clock out. You pay them your standard rate. Certified payroll goes in. Compliance officer notices the rate is below Davis-Bacon determination. Now you're liable for back wages on every hour worked on the project, plus potential penalties and debarment.

Mistake 3: No documentation for change orders

Homeowner asks you to "also do the back porch while you're here." You do it. You add it to the final draw. Administrator rejects it because it wasn't in the approved scope of work and there's no documented change-order approval in the file. You either eat the cost or chase the homeowner for it.

The readiness checklist

Before bidding CDBG-DR work, have this in place:

• Contractor compliance binder: W-9, insurance (GL, WC, auto), Florida license, DUNS/SAM.gov registration, SUNBIZ active status.
• Davis-Bacon workflow: A certified-payroll process your bookkeeper or payroll service actually knows how to produce. Several services (eBacon, LCPtracker) handle this specifically.
• Scope-of-work discipline: Written SOW before any work starts. Signed change-order process before scope changes.
• Documentation cadence: Daily photos, daily logs, weekly certified payroll, monthly draw package. Build the routine before you need it.
• Environmental checkpoint: Written confirmation of environmental clearance before mobilization. Put it in your project launch checklist.
• Floodplain awareness: Know whether the property is in a SFHA. Know the 50% rule. Have a relationship with a Florida licensed surveyor who does elevation certificates.
• Payment reality: Federally-funded draws take 45 to 90 days. Price in the carrying cost. Have the working capital lined up before bidding.

Should you bid at all?

Federally-funded rebuild work has higher margin potential because the administrative overhead scares off smaller competitors. But it's not free money. The compliance burden is real and the penalties for getting it wrong are severe. The firms that make money on CDBG-DR are the ones that invested in the compliance infrastructure before the first bid, not during the first job.

For most small GCs, the practical path is either (a) stay commercial or private and let someone else eat the compliance cost, or (b) commit to building the compliance capability properly and win the share that most competitors can't touch. The middle ground, bidding one CDBG-DR job to see how it goes, usually ends badly.

Tyler Alexander is the founder of Cranes Consulting. If you're weighing whether to bid CDBG-DR work, or you're already in and stuck on documentation, set up a 30-minute call.