Intro to Section 3

Section 3
Steed Robinson – Office of Community Development
What is Section 3?
Provision of the Housing and Urban Development Act of
1968 - 24 CFR Part 135
Helps foster local economic development, neighborhood
economic improvement, and individual self-sufficiency
Requires recipients of certain HUD financial assistance to
provide job training, employment and contracting
opportunities for low or very low income residents in
connection with projects and activities in their
When is the regulation applicable?
Is the funded assistance for
(including lead-based paint
Housing construction or
Other public construction?
When is the regulation applicable?
Are you a recipient of an award of
Are you a contractor/subcontractor for
covered work with a contract of
Does not apply to purchase of supplies
and materials except when installation
is involved
September 11-13, 2013
When is the regulation triggered?
When hiring, contracting or job
training opportunities arise in
connection with housing rehabilitation,
housing construction or other public
September 11-13, 2013
What must a recipient do?
 Demonstrate
good faith effort to meet
numerical goals established in
regulation— “safe harbor”
 30
percent of the number of new hires
 10 percent of the total dollar amount of
contracts for building trades
 3 percent of the total dollar amount of other
What must recipients and contractors do?
that contracts/subcontracts of
$100,000+ make same good faith
percent of the number of new hires
percent of the total dollar amount
of contracts for building trades
3 percent of the total dollar amount of
other contracts
What must recipients and contractors do?
All CDBG contracts (Administration,
Engineering, Construction) $100,000+
must include a Section 3 Clause
How are these “safe harbor” goals achieved?
Outreach to Section 3 residents and
Documentation of Outreach
Giving a Preference in hiring and contracting
to Section 3 residences and businesses
What does Preference mean?
Not defined by regulation
Must be consistent with Federal, State and local
Will normally mean, “all things being equal”,
the Section 3 resident or business will receive
Eligibility for Employment and Contracting
Section 3 resident must meet the qualifications
of the position to be filled.
Section 3 business must have the ability and
capacity to perform successfully under the terms
and conditions of the proposed contract.
Who are Section 3 Residents?
Resident of HUD assisted housing
Residents of the non-metro county where the HUDassisted project is located and who have a
household income that falls below HUD’s income
See DCA specific policies for “service area”.
What is a Section 3 business?
51% or more owned by Section 3 residents
Section 3 residents make up 30% of its full-time
permanent staff
Provide evidence of a commitment to subcontract more
than 25% of the dollar award of all subcontracts to
businesses that qualify as a Section 3 business
DCA Policy – See Appendix II
Updated and Adopted November 1, 2013
Solicitation Package Available as of January
2, 2014
DCA Policy – Some specifics
In whole or in part statement
Full time
Requirements apply to projects and activities funded in
whole or in part with covered funds and the entire project
budget is subject to Section 3
Regularly works a minimum of 40 hrs. per week
New hires
full-time employees for permanent, temporary or seasonal
employment opportunities
DCA Policy – Some specifics
“Make Every Effort in Your Disposal”
Order of Preference in Hiring (30% goal)
 Section 3 Residents of HUD assisted housing
 At the site
 In the City
 In the County
Order of Preference for Contracting (10%/3% Goal)
 ROB (Owned or controlled by LMI persons in the city/county)
 30% hires
 25% contracting
DCA Policy – Some specifics
“Make Every Effort in Your Disposal”
Providing Other Economic Opportunities
If a greater need is identified, training may be substituted
for hiring and contracting goals.
 Must equal or exceed 3% of total contract award
 If a preference is claimed and if the contractor cannot
comply with goals, this can substitute
 See polices for standards for training
Subrecipient Responsibilities
“Accepts responsibility for enforcing
Section 3 requirements and pro-actively
providing notice”
Subrecipient Responsibilities
Post job opportunities in sources generally available
to LMI people
Place this language in all contract solicitations— “This
project is covered under the requirements of Section
3 of the HUD Act of 1968.”
Pre-bid meetings
Preconstruction conferences
Section 3 Clause
Subrecipient Responsibilities
Providing Resident Certification and Affidavit Forms
Encouraging the training of Section 3 residents
Refusing to award to violators
Using the DCA solicitation package
Documenting actions taken to comply
Subrecipient Responsibilities
at least one of the following
fair for contractors and
job sites with 24”x24” placard with
specific wording
Subrecipient & Contractor Responsibilities
Use the DCA Solicitation Package. It must be
returned or bid is not acceptable.
If numerical goals are not met, must provide
explanation and documentation for DCA review
and approval.
Operating Procedures
Post positions in at least three community
sources (see Policy)
 Use of temporary agencies
 Placements
must self certify and be offered
For contracting, at least one pre-bid meeting must
be held as form of Notice
Post contracting opportunities in at least three
community sources (see Policy)
Operating Procedures
Contractor must convey past history of
 For
contracts effective January 1, 2014
New contract language regarding
compliance for those that claim a Preference
 Preference
must be maintained or subject to
 Contractors may be banned from future
Solicitation Package
Section 3 Clause
Cure and Termination Clause
Selection of Preference
Previous Compliance Certification
Action Plan
Solicitation Package (Forms)
Section 3 Self-Certification and Action Plan
 Allows
a contractor to claim preference
 Allows a contactor to decline preference
Previous Section 3 Compliance Certification
 Allows
a contractor to certify compliance on previous
Solicitation Package (Forms)
Assurance of Compliance Certification/Action
 List
subcontractors (if known)
 List of workforce
Changes will constitute NEW hires
 Provides
“Before and After” picture for compliance
 Provides
record keeping requirements
Solicitation Package (Forms)
Self Certifications
Filed directly with HUD
(see DCA Section 3 Policy)
Applies broadly
 Notice
 Preference
 Complaints
 Reporting
 Documentation
Contact Information
Pam Truitt, Grants Consultant
Phone: (404) 679-5240
E-Mail: [email protected]
Michael Casper, Compliance Manager
Phone: (404) 679-0594
E-Mail: [email protected]

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