Section 3 Plan Requirements

  • Purpose
    • to ensure that employment and other economic opportunities generated by HUD financial assistance shall, to the greatest extent feasible, and consistent with existing Federal, State and local laws and regulations, be directed to low and very low-income persons.
    • particular focus is on those who are recipients of government assistance for housing and to business concerns which provide economic opportunities to low and very low-income persons.
  • HHA’s Policy
    • To comply with Section 3 of the Housing and Urban Development Act of 1968, as amended (12 U.S.C., 1701u)
    • To provide a program that assures the opportunity for job training, employment and recruitment of low-income persons within Harrisburg.
    • To assure that contract work in connection with projects be awarded to business concerns that are located in the Harrisburg and the surrounding area or owned in substantial part by area residents.
    • To require a written “Section 3” Action Plan from all prospective bidders, along with the submission of all bid proposals.
    • prospective bidders shall be required to submit their utilization goals which shall be reviewed for its compliance with the Housing Authority “Section 3” Plan as part of their contract.
    • To encourage firms outside the project area to joint venture proposals with local area  firms in the bidding process.
  • Who this applies to:
    • Contractors
      • individuals, companies, corporations, partnerships, or other entities which contract to perform work generated by the expenditure of Section 3 covered assistance in connection with a Section 3 covered project.
  • What type of projects are covered by Section 3?
    • Business Concerns Located Within the Area
      • Individuals or firms located in Harrisburg, Pennsylvania and the surrounding area, employing primarily residents of Harrisburg and the surrounding area, or owned principally by residents of Harrisburg and the surrounding area which qualify as a small business under the small business size standards of the Small Business Administration. U.S. Department of Commerce.
  • Where is the area covered by Section 3?
    • project area
    • entire area encompassed within Harrisburg, Pennsylvania and the surrounding areas.
    • Determined by the Regional Administrator or Field Office Manager at the HUD Regional Office.
  • What is a Section 3 Business Concern?
    • A business owned by 51% or more Section 3 residents or
    • A business whose permanent, full-time employees include persons, at least 30% of whom are currently Section 3 residents or within 3 years of the date of first employment with the business concern were Section 3 residents or
    • A business that provides evidence of a commitment to subcontract in excess of 25 % of the dollar award of all subcontracts to be awarded to business concerns that meet the above two qualifications.
  • Who qualifies as a low-income resident?
    • Any individual who resides in Harrisburg and whose family income does not exceed 80% of the median income for the Standard Metropolitan Statistical Area, where the project is located.
    • Click here to see who qualifies based on income levels: Section 3 FY 2011 Income Limits
  • Where can I find the “Section 3” language?
    • 24 CFR 135.38 and “Section 3” of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u)(Section 3).
  • What does Section 3 apply to?
    • direct financial assistance awarded, provided or otherwise  made available under any program administered by HUD, in the form of loans, grants (including community development block grants), cooperative agreements, subsidies, contributions, or  other types of financial assistance provided in aid of housing, urban planning development, redevelopment, or general, public or community facilities, and new community development.
  • Is there a certain dollar threshold that has to be met for Section 3 to apply?
    • No
      • HUD maintains that a dollar threshold in Section 3 covered programs is inconsistent with the statute.
  • Bidding Requirements:
    • Prospective bidders must provide with the bid a written “section 3” Action Plan, showing their intent to comply with the Plan. They must also give a preliminary statement of work force needs which HHA will supply a list of potential candidates for the program, if known.
    • The “Invitation for Bid” shall advise prospective contractors of the requirements of  “Section 3” regulations as part of the contract specification. Eligible business concerns shall be recruited for covered projects by; personal contacts, local media, community organizations and public and private institutions which serve the project area.
  • Contractual Requirements
    • There must be a “Section 3” clause in the bid package for all contracts for work in connection with a project under Section 3.

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