2014 cdbg applicants' workshop section 3 overview (see also dca policy– appendix r)

2014 CDBG Applicants' Workshop

Section 3

Overview (see also DCA Policy–

Appendix R)


Community Finance Division

• 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.

September 11-13, 2013

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

When is the regulation applicable?




▪ When hiring, contracting or job training opportunities arise in connection with housing rehabilitation, housing construction or other public construction.

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.

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 October 31, 2013

• Solicitation Package being developed

DCA Policy – See Appendix R




• 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

county)▪ 30% hires▪ 25% contracting





“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





“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





▪ Providing Resident Certification and Affidavit Forms

▪ Encouraging the training of Section 3 residents

▪ Reporting

▪ Refusing to award to violators

▪ Use the DCA solicitation package

▪ Documenting actions taken to comply





▪ Do at least one of the following

• Opportunity fair for contractors and residents

• Post job sites with 24”x24” placard with specific wording





▪ 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 for future

participation

Operating Procedures




• Instructions• Section 3 Clause• Cure and Termination Clause• Selection of Preference• Previous Compliance Certification• Action Plan

Solicitation Package




Pam Truitt, Grants Consultant

Phone: (404) 679-5240

E-Mail: [email protected]

Michael Casper, Compliance Manager

Phone: (404) 679-0594

E-Mail: [email protected]

Contact Information

mailto:[email protected]

2014 cdbg applicants' workshop section 3 overview (see also dca policy– appendix r)

Documents

cdbg contracts administration

total dollar

housing rehabilitation

public construction

regulation applicable

regulation safe harbor

dca policy appendix

contracting opportunities