Intro to Section 3
Section 3
9/4/2014 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 neighborhood.
When is the regulation applicable?
Is the funded assistance for
Housing rehabilitation
(including lead-based paint abatement)
Housing construction or
Other public construction?
When is the regulation applicable?
Are you a recipient of an award of
$200,000+?
Are you a contractor/subcontractor for covered work with a contract of
$100,000+?
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 construction.
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 contracts
What must recipients and contractors do?
Ensure that contracts/subcontracts of
$100,000+ make same good faith effort
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 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 businesses
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 laws
Will normally mean, “all things being equal”, the Section 3 resident or business will receive preference
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 limits.
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
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
Full time
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
Reporting
Refusing to award to violators
Using the DCA solicitation package
Documenting actions taken to comply
Subrecipient Responsibilities
Do at least one of the following
Opportunity fair for contractors and residents
Post 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
Preference
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 compliance
For contracts effective January 1, 2014
New contract language regarding compliance for those that claim a Preference
Preference must be maintained or subject to penalties
Contractors may be banned from future participation
Solicitation Package
Instructions
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 or
Allows a contactor to decline preference
Previous Section 3 Compliance Certification
Allows a contractor to certify compliance on previous work
Solicitation Package (Forms)
Assurance of Compliance Certification/Action
Plan
List subcontractors (if known)
List of workforce
Changes will constitute NEW hires
Provides “Before and After” picture for compliance documentation
Provides record keeping requirements
Solicitation Package (Forms)
Self Certifications
Complaints
Filed directly with HUD
(see DCA Section 3 Policy)
Summary
Applies broadly
Notice
Preference
Complaints
Reporting
Documentation
Contact Information
Pam Truitt, Grants Consultant
Phone: (404) 679-5240
E-Mail: pam.truitt@dca.ga.gov
Michael Casper, Compliance Manager
Phone: (404) 679-0594
E-Mail: michael.casper@dca.ga.gov
