To update ovirt 3.1 you can follow next procedure:
1. If possible, in oVirt console make all VM backup to export domain.
2. In oVirt node update execute engine-upgrade
3. If engine-upgrade find new version of ovirt-engine-setup you will be prompted to update this package, do it, then run engine-upgrade again:
yum update ovirt-engine-setup engine-upgrade
4. engine-upgrade will stop oVirt engine, then back up database, then update packages and then start oVirt engine again.