Skip to Main Content
menu
 Auburn, LaFayette & Roanoke Housing Authority Mobile Logos
menu
Like us on Facebook

Section 3

What is the Section 3 Business Registry?

The Section 3 Business Registry is a listing of firms that have self-certified that they meet one of the regulatory definitions of a Section 3 business and are included in a searchable online database that can be used by agencies that receive HUD funds, developers, contractors, and others to facilitate the award of certain HUD-funded contracts. The database can also be used by Section 3 residents to identify businesses that may have HUD-funded employment opportunities.

This registry is a helpful tool to assistant recipients of HUD funding (e.g., Public Housing Agencies, local units of government, property owners, etc), developers, and others locate Section 3 businesses within their community. It also enables HUD grantees to meet their Section 3 obligations by reducing some of the burden associated with locating eligible businesses.

It is important to note that Section 3 businesses are not entitled to receive contracts simply by being listed in HUD's Section 3 Business Registry database. Eligible businesses may need to demonstrate that they are responsible and have the ability to perform successfully under the terms and conditions of proposed contracts. Section 3 requirements at 24 CFR 135, then provides preference for contracts and subcontracts to these firms-but not a guarantee.

While the Department maintains the Business Registry database, it has not verified the information submitted by the businesses and does not endorse the services they provide. Accordingly, it is recommended that users perform due diligence before awarding contracts to firms that have self-certified on this registry by ensuring that they meet the definition of a Section3 business concern as defined by the Department's regulations at 24 CFR 135.5.

The general public can notify the Department through the Business Registry website if they believe a firm has potentially misrepresented themselves as a Section 3 business. In such situations, HUD will request documentation and additional information from the business to verify that they qualify for inclusion in the database. Businesses found to have misrepresented themselves will be removed from the database and penalized (see registry webpage for more information).

To search the database for self-certified Section 3 businesses, register your business for inclusion, or for more information on the Business Registry, please visit http://www.hud.gov/Sec3Biz

Additional information on the requirements of Section 3, can be found at http://www.hud.gov/section3.

Register For Section 3 Self Certification  

https://portalapps.hud.gov/Sec3BusReg/BRegistry/RegisterBusiness.action 

 

Section 3 Plan        

1. Overview of Section 3 Requirements

A. WHAT IS SECTION 3?
Section 3 is a provision of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) that is regulated by the provisions of 24 CFR 75. Section 3 regulations ensure that employment and other economic opportunities generated by certain 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, particularly those who are recipients of government assistance for housing, and to business concerns which provide economic opportunities to low- and very low-income persons.

B. PURPOSE OF THIS DOCUMENT
This plan outlines how the Auburn Housing Authority (AHA) and its subrecipients, contractors and subcontractors will comply with HUD's Section 3 requirements. AHA will, to the greatest extent feasible, ensure that employment and other economic opportunities are directed to low- and very low-income persons (Section 3 workers and Targeted Section 3 workers) and to eligible businesses (Section 3 Businesses) and require the same of its contractors.

AHA may amend its Section 3 Policies and Procedures documents as necessary to ensure continued compliance with HUD's requirements and/or to reflect updated Section 3 guidance and outreach strategies.

C. APPLICABILITY
For public housing financial assistance, all funding is covered, regardless of the amount of expenditure or size of a contract. This plan applies to development assistance, operating funds, capital funds, and all mixed-finance development.

For housing and community development financial assistance, this plan applies to housing rehabilitation, housing construction, and other public construction projects that exceed $200,000 or more of housing and community development financial assistance from one or more HUD programs. Applicability is determined at the project level.

For projects funded with Lead and Hazard Control and Healthy Homes Programs, this plan applies to projects that exceed $100,000.

This plan also applies to projects that include multiple funding sources. Multiple funding source projects include projects that include public housing financial assistance, housing and community development financial assistance for single or multiple recipients, and the Lead Hazard Control and Healthy Homes Program.

Section 3 requirements do not apply to:

1) Material Supply Contracts - § 75.3(b), 2) Indian and Tribal Preferences - § 75.3(c), and 3) Other HUD assistance and other Federal assistance not subject to Section 3 §75.3 (d). However, for financial assistance that is not subject to Section 3, recipients are encouraged to consider ways to support the purpose of Section 3. Additionally, Professional service jobs are defined in §75.5 as "non-construction services that require an advanced degree or professional licensing, including, but not limited to, contracts for legal services, financial consulting, accounting services, environmental assessment, architectural services, and civil engineering services." These jobs are excluded from the reporting requirement for Section 3 and Targeted Section 3 workers because it is very difficult for grantees and contractors to recruit and hire eligible persons for these roles due to the higher wages/salaries earned for these types of jobs. See HUD Notice CPD-21-09 for additional guidance.

2. Section 3 Coordinator
AHA's Section 3 Coordinator or assigned designee of the CEO serves as the central point of contact for Section 3 compliance for AHA and its subrecipients, contractors and subcontractors supporting the program. Subrecipients, contractors, subcontractors and others are encouraged to reach out to AHA's Section 3 Coordinator or assigned designee of the CEO with questions regarding Section 3 compliance. AHA's current designee for Section 3 Coordinator is as follows:

Richetta Stephens
Housing Accountant
rstephens@auburnhousingauth.org 

3. Employment, Training, and Contracting Goals

A. SAFE HARBOR COMPLIANCE
AHA will be considered to have complied with the Section 3 requirements and met safe harbor, if they certify that they followed the required prioritization of effort and met or exceeded the Section 3 benchmarks, absent evidence of the contrary.

Prior to the beginning of work, contractors and subcontractors will be required to certify that they will follow the required prioritization of effort for Section 3 workers, Targeted Section 3 workers, and Section 3 business concerns as outlined below in section C. After completion of the project, on the Section 3 Cumulative Report, contractors and subcontractors will be required to certify that they followed the prioritization of effort requirements.

If the contractor and subcontractor does not meet the safe harbor requirements, they must provide evidence that they have made qualitative efforts to assist low and very low-income persons with employment and training opportunities.

B. SAFE HARBOR BENCHMARKS
AHA has established employment and training goals that subrecipients, contractors, and subcontractors should meet in order to comply with Section 3 requirements outlined in 24 CFR §75.9 for public housing financial assistance and/or 24 CFR §75.19 for housing and community development financial assistance.

The safe harbor benchmark goals are as follows:

(For public housing financial assistance)

1) Twenty-five (25) percent or more of the total number of labor hours worked by all workers employed with public housing financial assistance in the PHA's fiscal year are Section 3 workers; Section 3 Labor Hours/Total Labor Hours = 25%

And

2) Five (5) percent or more of the total number of labor hours worked by all workers employed with public housing financial assistance in the PHA's fiscal year are Targeted Section 3 workers, as defined at 24 CFR Part 75.11. Targeted Section 3 Labor Hours/Total Labor Hours = 5%

(For housing and community development financial assistance)

1) Twenty-five (25) percent or more of the total number of labor hours worked by all workers on a Section 3 project are Section 3      workers; Section 3 Labor Hours/Total Labor Hours = 25%

And  

2) Five (5) percent or more of the total number of labor hours worked by all workers on a Section 3 project are Targeted Section 3 workers, as defined at 24 CFR Part 75.21. Targeted Section 3 Labor Hours/Total Labor Hours = 5%

HUD establishes and updates Section 3 benchmarks for Section 3 workers and/or Targeted Section 3 workers through a document published in the Federal Register, not less frequently than once every 3 years. Given that the Section 3 benchmarks are subject to change every three years or sooner, AHA will review and update the Section 3 Plan annually, as needed.

It is the responsibility of contractors to implement efforts to achieve Section 3 compliance. Any contractor that does not meet the Section 3 benchmarks must demonstrate why meeting the benchmarks were not feasible. All contractors submitting bids or proposals to the AHA are required to certify that they will comply with the requirements of Section 3.

C. CERTIFICATION OF PRIORITIZATION OF EFFORT FOR EMPLOYMENT, TRAINING, AND CONTRACTING 

EMPLOYMENT AND TRAINING
Under the AHA's Section 3 Program, contractors and subcontractors should make best efforts to provide employment and training opportunities to Section 3 workers in the priority order listed below:

(For public housing financial assistance)

1) To residents of the public housing projects or RAD converted PBV Developments for which the federal financial assistance is expended;

2) To residents of other public housing projects managed by the PHA that is providing the assistance or for residents of Section 8-assisted housing managed by the PHA;

3) To participants in YouthBuild programs; and

(For housing and community development financial assistance)

Provide employment and training opportunities to Section 3 workers within the metropolitan area (or nonmetropolitan county) in which the project is located in the priority order listed below:

1) Section 3 workers residing within the service area or the neighborhood of the project, and

2) Participants in YouthBuild programs.

Contractors and subcontractors will be required to certify that they will and have made best efforts to follow the prioritization of effort requirements prior to the beginning work and after work is completed.

CONTRACTING
Under the AHA's Section 3 Program, contractors and subcontractors must make their best efforts to award contracts and subcontracts to business concerns that provide economic opportunities to Section 3 workers in the following order or priority:

(For public housing financial assistance)

1) Section 3 business concerns that provide economic opportunities for residents of public housing projects or RAD converted PBV Developments for which the assistance is provided;

2) Section 3 business concerns that provide economic opportunities for residents of other public housing projects or Section-8 assisted housing managed by the PHA that is providing assistance;

3) YouthBuild programs; and

4) Section 3 business concerns that provide economic opportunities to Section 3 workers residing within the metropolitan area (or nonmetropolitan county) in which the assistance is provided.

(For housing and community development financial assistance)

1) Business concerns that provide economic opportunities to Section 3 workers residing within the metropolitan area (or nonmetropolitan county) in which assistance is located in the following order
of priority (where feasible):

a) Section 3 business concerns that provide economic opportunities to Section 3 workers residing within the service area or the neighborhood of the project; and

b) YouthBuild programs.

Contractors and subcontractors will be required to certify that they will and have made best efforts to follow the prioritization of effort requirements prior to the beginning work and after work is completed.

4. Section 3 Eligibility and Certifications
Individuals and businesses that meet Section 3 criteria may seek Section 3 preference from AHA or its contractors/subcontractors for training, employment, or contracting opportunities generated by public housing financial assistance and/or housing and community development financial assistance. To qualify as a Section 3 worker, Targeted Section 3 worker or a Section 3 business concern, each must self-certify that they meet the applicable criteria.

Businesses who misrepresent themselves as Section 3 business concerns and report false information to AHA may have their contracts terminated as default and be barred from ongoing and future considerations for contracting opportunities.

A. SECTION 3 WORKER AND TARGETED SECTION 3 WORKER
CERTIFICATION

A Section 3 worker seeking certification shall submit self-certification documentation to the recipient contractor or subcontractor, that the person is a Section 3 worker or Targeted Section 3 worker as defined
in 24 CFR Part 75. For the purposes of Section 3 worker eligibility, AHA will use individual income rather than family/household income to determine eligibility. The income limits will be determined annually using the guidelines published at https://www.huduser.org/portal/datasets/il.html.

Persons seeking the Section 3 worker preference shall demonstrate that it meets one or more of the following criteria currently or when hired within the past five years, as documented:

1) A low or very low-income resident (the worker's income for the previous or annualized calendar year is below the income limit established by HUD); or

2) Employed by a Section 3 business concern; or

3) A YouthBuild participant.

Persons seeking the Targeted Section 3 worker preference shall demonstrate that it meets one or more of the following criteria:

(For public housing financial assistance)

1) Employed by a Section 3 business concern or

2) Currently meets or when hired met at least one of the following categories as documented within the past five years:

a) A resident of public housing; or
b) A resident of other public housing projects or Section 8-assisted housing; or
c) A YouthBuild participant.

(For housing and community development assistance)

1) Employed by a Section 3 business concern or

2) Currently meets or when hired met at least one of the following categories as documented within the past five years:

a) Living within the service area or the neighborhood of the project, as defined in 24 CFR Part 75.5; or
b) A YouthBuild participant.

Section 3 workers and Targeted Section 3 workers who are seeking preference in training and employment must submit the Section 3 Worker and Targeted Section 3 Worker Certification Form included in the Appendix. Nothing in this part shall be construed to require the employment of someone who meets this definition of a Targeted Section 3 worker. Targeted Section 3 workers are not exempt from meeting the qualifications of the position to be filled. The certification procedure will consist of the following:

PROJECTS INVOLVING MULTIPLE SOURCES OF FUNDING
In cases where Section 3 covered projects include multiple sources of funds, including public housing financial assistance and housing and community development assistance, the AHA must follow the definition of Targeted Section 3 worker and priorities as outlined in subpart B of Part 75. For housing and community development financial assistance, AHA may follow either subpart B or subpart C of Part 75.

In cases where Section 3 covered projects include multiple housing and development funding sources (financial assistance) from single or multiple recipients, AHA will follow subpart C of Part 75. Refer to
chart in Appendix B.

B. SECTION 3 BUSINESS CONCERN CERTIFICATION
The AHA should encourage contractors and subcontractors to make best efforts to award contracts and subcontracts to Section 3 business concerns.

Businesses that believe they meet the Section 3 Business requirements may self-register in the HUD Business registry, here: http://www.hud.gov/Sec3Biz. Businesses may seek Section 3 Business Concern preference by demonstrating that it meets one or more of the following criteria:

1) At least 51 percent of the business is owned and controlled by low- or very low-income persons;
or

2) At least 51 percent of the business is owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing; or

3) Over 75 percent of the labor hours performed for the business over the prior three-month period are performed by Section 3 workers.

Businesses that seek Section 3 preference shall certify, or demonstrate to AHA, contractors or subcontractors, that they meet the definitions provided in the above. Businesses may demonstrate
eligibility by submitting the Section 3 Business Concern Certification Form included in the Appendix.

Section 3 Business Concern Certification Forms must be submitted at the time of bid/proposal. If the AHA previously approved the business concern to be Section 3 certified, then the certification can be submitted along with the bid or proposal, as long as the form is submitted within the prescribed expiration date. The Section 3 Business Concern Certification Form will expire after 3 months. Establishing a 3 month certification of eligibility period allows the AHA the ability to assess contractor performance to ensure the business is striving to meet the required goals.

5. Assisting Contractors with Achieving Section 3 Goals
In an effort to assist contractors with meeting or exceeding the Section 3 goals, AHA will do the following:

1) Share Section 3 Plan with contractors and subcontractors and explain policies and procedures

2) Require contractors wishing to submit a bid/offer/proposal to attend pre-bid meeting

3) Require contractor to sign the Section 3 Plan at pre-construction conference

4) Review Section 3 benchmarks and prioritization of effort with contractors and subcontractors to ensure that the goals are understood. It is not intended for contractors and subcontractors to
terminate existing employees, but to make every effort feasible to meet Section 3 benchmark goals by utilizing existing qualified workforce and by considering qualified eligible Section 3 workers and Targeted Section 3 workers (per the prioritization of effort outlined in Section #3) before any other person, when hiring additional employees is needed to complete proposed work to be performed.

5) At the time of bid where state and local laws allow, require the contractor to present a list, of the number of total labor hours, Section 3 worker labor hours, and Targeted Section 3 worker labor
hours expected to be generated from the initial contract and a list of projected number of available positions, to include job descriptions and wage rates. 

6) Maintain a local Section 3 worker/Targeted Section 3 worker database and provide the contractor with a list of interested and qualified Section 3 workers and Targeted Section 3 workers and
contact information.

7) Inform contractors about the HUD Section 3 Opportunity Portal
https://hudapps.hud.gov/OpportunityPortal/ 

8) Require contractors to notify Section 3 Coordinator of their interests regarding employment of Section 3 workers prior to hiring.

9) Encourage local business to register on the HUD Business Registry and direct contractors to the HUD Section 3 Business Registry https://www.hud.gov/section3businessregistry 

10) Leverage AHA 's communication outlets (social media, website, etc.) to effectively communicate employment and contracting opportunities that arise.

11) Where state and local laws allow, require contractors to submit a list of core employees (including administrative, clerical, planning and other positions pertinent to the construction trades) at the time of contact award.


6. Section 3 Outreach

A. OUTREACH EFFORTS FOR EMPLOYMENT AND TRAINING
In order to educate and inform workers and contractors, AHA's Section 3 Coordinator will be prepared to provide training and technical assistance on a regular basis per program guidelines. When training opportunities are available, contractors and subcontractors should, to the greatest extent feasible:

1) Notify the Section 3 Coordinator when training opportunities are available

2) Provide information/handouts about Section 3 training opportunities to potential Section 3 workers and Targeted Section 3 workers

3) Conduct an annual training for Section 3 workers and Section 3 businesses 

Contractors and subcontractors should employ several active strategies to notify Section 3 workers and Targeted Section 3 workers of Section 3 job opportunities, including:

1) Clearly indicating Section 3 eligibility on all job postings with the following statement: "This job is a Section 3 eligible job opportunity. We encourage applications from individuals that are low income and/or live in Public Housing and/or receive a Section 8 voucher";

2) Including the Section 3 Worker and Targeted Section 3 Worker Self-Certification Form in all job postings

3) Working with the Section 3 Coordinator to connect Section 3 worker and Targeted Section 3 workers in the AHA database with opportunities and/or utilize the Section 3 Opportunity Portal to find qualified candidates

4) Establishing a current list of Section 3 eligible applicants

5) Contacting local community organizations and provide them with job postings for Section 3 eligible applicants; and

6) Coordinating a programmatic ad campaign, which results in widespread job posting across diverse ad networks including:

  1. Advertising job opportunities via social media, including LinkedIn and Facebook;
  2. Advertising job opportunities via flyer distributions and mass mailings and posting ad in common areas of housing developments and all public housing management offices;
  3. Contacting resident councils, resident management corporations, and neighborhood community organizations to request their assistance in notifying residents of available training and employment opportunities.

B. OUTREACH EFFORTS FOR CONTRACTING
When contracting opportunities arise, AHA will employ the following strategies to notify Section 3 Business Concerns of Section 3 contracting opportunities, including but not limited to:

1) Adding Section 3 language to all RFPs, procurement documents, bid offerings and contracts.

2) Coordinating mandatory pre-bid meetings to inform Section 3 Business Concerns of upcoming contracting opportunities. The Section 3 Coordinator will participate in these meetings to explain
and answer questions related to Section 3 policy.

3) Advertising contracting opportunities in local community papers and notices that provide general information about the work to be contracted and where to obtain additional information.

4) Providing written notice of contracting opportunities to all known Section 3 Business Concerns. The written notice will be provided in sufficient time to enable business concerns the opportunity
to respond to bid invitations.

5) Coordinating with the prime contractor to publicize contracting opportunities for small businesses.

6) Coordinating with the AHA's Business/Economic Development Department and all other business assistance agencies and contractor associations to inform them of contracting opportunities and request their assistance in identifying Section 3 business concerns. Could include local community development organizations, business development agencies (Chamber of Commerce), and minority contracting associations.

7) Connecting Section 3 business concerns with resources to support business development to assist in obtaining contracting opportunities (e.g., bonding and insurance assistance, etc.). Contractors will also be encouraged to collaborate with the AHA as subcontract opportunities arise in an effort to notify eligible Section 3 business concerns about the contracting opportunities.

7. Section 3 Contracting Policy and Procedure
AHA will incorporate Section 3 in its existing Procurement Policy and adopt a Section 3 Contracting Policy and Procedure to be included in all procurements generated for use with HUD funding. This policy and
procedure contain requirements for making efforts to award contracts to Section 3 Business Concerns.

All contractors/businesses seeking Section 3 preference must, before submitting bids/proposals to the AHA complete certifications, as appropriate. Such certifications shall be adequately supported with
appropriate documentation as referenced in the Section 3 Business Concern Certification Form.

8. Section 3 Provisions/Contract Language
AHA will include standard Section 3 language in all of its contracts to ensure compliance with regulations in 24 CFR Part 75. AHA will take appropriate actions upon finding that a contractor is in violation of 24
CFR Part 75 and does not knowingly contract with any contractor that has been found in violation of Section 3 regulations. On a periodic basis the Section 3 Coordinator will audit AHA contractors for
compliance with the minimum Section 3 requirements outlined in the Section 3 Plan.

In addition, contractors and subrecipients are required to include language in all Section 3 covered contracts or agreements for subcontractors to meet the requirements of 24 CFR Part 75.9 (for public housing financial assistance) or 24 CFR Part 75.19 (for housing and community development financial assistance).

For businesses, noncompliance with HUD's regulations in 24 CFR part 75 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts.

9. Reporting Requirements
For Section 3 covered contracts, contractors must submit the Section 3 Performance and Summary Report to AHA's Section 3 Coordinator on a monthly basis, and the annual reporting requirement set forth
in that form's instructions.

A. MONTHLY REPORTING
1) Contractors are required to submit monthly activity reports to AHA's Section 3 Coordinator by the 15th day of each month.

B. ANNUAL REPORTING
1) Once a project is completed, contractors must submit a final Section 3 cumulative report for the program year.

2) Upon the completion of a project, AHA's Section 3 Coordinator will conduct a final review of the project's overall performance and compliance.

3) AHA's Section 3 Coordinator will submit the Section 3 data to HUD annually. AHA will be compliant with Section 3 Safe Harbor by certifying compliance with Prioritization of Efforts in §75.9 and by meeting the Benchmark Goals for Section 3 and Target Section 3 Workers.

C. REPORTING ON PROJECTS WITH MULTIPLE FUNDING
SOURCES
1) For Section 3 projects that include public housing financial assistance and housing and community development financial assistance, AHA will report on the project as a whole and will
identify the multiple associated recipients.

2) For projects assisted with funding from multiple sources of housing and community development assistance that exceed the thresholds of $200,000 and $100,000 for Lead Hazard Control and Healthy Homes Programs (LHCHH), the AHA will follow subpart C of Part 75 and will report to the applicable HUD program office, as prescribed by HUD. Note: LHCHH assistance is not included in calculating whether the assistance exceeds the $200,000 threshold. HUD public housing
financial assistance and HUD housing and community development financial assistance is no included in calculating whether the assistance exceeds the LHCHH $100,000 threshold. Refer to
chart in Appendix B.

10. Internal Section 3 Complaint Procedure
In an effort to resolve complaints generated due to non-compliance through an internal process, AHA encourages submittal of such complaints to its Section 3 Coordinator as follows:

1) Complaints of non-compliance should be filed in writing and must contain the name of the complainant and brief description of the alleged violation of 24 CFR Part 75.

2) Complaints must be filed in a timely manner after the complainant becomes aware of the alleged violation.

3) An investigation will be conducted if the complaint is found to be valid. AHA will conduct an informal, but thorough investigation affording all interested parties, if any, an opportunity to submit
testimony and/or evidence pertinent to the complaint.

4) The AHA will provide written documentation detailing the findings of the investigation. The AHA will review the findings for accuracy and completeness before it is released to complainants. The findings will be made available in a reasonable time after the filing of complaint. If complainants wish to have their concerns considered outside of the AHA a complaint may be filed with the HUD program office responsible for the public housing financial assistance or the Section 3 project, or to the local HUD field office. These offices can be found through the HUD website, www.hud.gov/.

Complainants may be eligible to bring complaints under other federal laws. The U.S. Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information (medical history or predisposition to disease). For more information about complainant rights, please contact EEOC at: www.EEOC.gov. 

The Department of Labor Office of Federal Contract Compliance Programs (OFCCP) enforces, for the benefit of job seekers and wage earners, the contractual promise of affirmative action and equal employment opportunity required of those who do business with the Federal government. More information about the services they provide can be obtained at: http://www.dol.gov/ofccp/.