Section 3 Steed Robinson – Office of Community Development  9/4/2014

 Provision of the Housing and Urban Development Act of 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. What is Section 3?

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 applicable?

 When hiring, contracting or job training opportunities arise in connection with housing rehabilitation, housing construction or other public construction. September 11-13, 2013 When is the regulation triggered?

 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 a recipient 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 What must recipients and contractors do?

 Outreach to Section 3 residents and businesses  Documentation of Outreach  Giving a Preference in hiring and contracting to Section 3 residences and businesses How are these “safe harbor” goals achieved?

 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 What does Preference mean?

 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. Eligibility for Employment and Contracting

 Resident of HUD assisted housing  Residents of the non-metro county where the HUD- assisted project is located and who have a household income that falls below HUD’s income limits.  See DCA specific policies for “service area”. Who are Section 3 Residents?

 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 What is a Section 3 business?

 Updated and Adopted November 1, 2013  Solicitation Package Available as of January 2, 2014 DCA Policy – See Appendix II

 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 DCA Policy – Some specifics

“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 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. Subrecipient & Contractor Responsibilities

 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 Operating Procedures

 Instructions  Section 3 Clause  Cure and Termination Clause  Selection of Preference  Previous Compliance Certification  Action Plan Solicitation Package

 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 Solicitation Package (Forms)

Filed directly with HUD (see DCA Section 3 Policy) Complaints

 Applies broadly  Notice  Preference  Complaints  Reporting  Documentation Summary

Pam Truitt, Grants Consultant Phone: (404) Michael Casper, Compliance Manager Phone: (404) Contact Information