The development team tasked with retooling the Iberville public housing development has come under fire after a subcontractor certified as a disadvantaged business enterprise funneled the bulk of its work to non-DBEs — a move that could violate the Housing Authority of New Orleans’ contracting policy.

Making the potential misstep all the more intriguing is general contractor Woodward Design + Build’s separate involvement in the $364 million World Trade Center redevelopment project. Woodward and partner Carpenter and Co. were selected by the city, in part, because of their commitment to using DBEs.

It was not immediately clear Tuesday whether NolMar, the subcontractor in question, is involved in the World Trade Center project.

For the Iberville project, Woodward partnered with NolMar in order to meet HANO’s 20 percent requirement for disadvantaged business enterprise subcontracting. But Nolmar then subcontracted more than 90 percent of its total contract values, in three phases of the Iberville project, to firms not owned either by women or by racial minorities and not certified as DBEs, according to a Sept. 9 letter from HANO to HRI, the lead developer on the $600 million Iberville work.

It was up to Woodward, per HANO’s policy, to enforce DBE participation “in any and all tier subcontracts,” the letter says.

As a result, “we have made the determination that (Woodward) is not in compliance with HANO’s Employment, Training and Contracting Policy as it relates to the DBE subcontracting requirement of 20 percent,” HANO official Jennifer Adams wrote.

Adams instructed HRI to send HANO proof that, in the third phase of the Iberville revamp, all involved would adhere to the rules. As for the first two phases, which are substantially complete, the firms could contribute to a HANO training fund as a compliance alternative, the letter stated.

HRI’s vice president of government relations, former Mayor Sidney Barthelemy, said HRI and HANO are working to rectify the issue. When HANO was under federal management, he said, its administration approved Woodward’s methods for gaining DBE participation.

“We are in the process of working with HANO to clarify concerns raised with such a plan and are proud of the positive impact the project has had on the lives of former Iberville residents and the community as a whole,” Barthelemy said.

And HANO Executive Director Gregg Fortner and spokeswoman Lesley Thomas, in an apparent backtrack from the agency’s initial stance, said Tuesday that the matter is still under review.

“Our board and staff continue to work with the master developer HRI on documentation and the specific circumstances of its contract approval by the former HUD receiver,” they said in a statement.

Asked about the conflicting messages, Fortner said the Sept. 9 letter gave HRI the chance to respond and that HANO will consider HRI’s stance before it makes a final determination.

All that aside, the dispute provides insight into how DBEs — and the larger developers and contractors who partner with them — obtain and execute public contracts at a time when the city is still ironing out rules around DBE goals.

A five-member city selection committee, for example, awarded potential developers for the World Trade Center project up to 50 points, out of a potential 500 total, simply for their DBE participation.

The Woodward-Carpenter proposal scored the highest of five applicants, with 467 points. The decision has proven contentious, however, as one of the firms passed over has sued the city, claiming it stacked the deck in Woodward’s favor.

Clarified rules for how DBE subcontractors count toward overall DBE goals are being crafted, and the city expects to unveil them in early 2016, city spokeswoman Sarah McLaughlin said.

In the meantime, the city has increased the staff in the office responsible for tracking and monitoring DBE participation on city contracts, she said. That office requests copies of executed subcontract agreements, documentation of payments and construction schedules.

It also conducts random onsite visits to “ensure the DBEs submitted are the DBEs actually performing the work,” McLaughlin said.

The office now has six people, including three compliance officers directly responsible for keeping up with DBE participation.

“We are confident that we have established a new normal in that DBE compliance is mandated. The Four Seasons development at the World Trade Center will be a prime example of the new way — with clear DBE goals and strong local hiring requirements,” McLaughlin said.

Follow Jessica Williams on Twitter, @jwilliamsNOLA.