The purpose of Section 3 is to make HUD-financed employment and economic opportunities available to low-income residents. Under CHA’s Section 3 program, there are multiple requirements for every contract. Hiring and Contracting are both required under Section 3, and vendors cannot choose between the two. Section 3 does not apply to Supply & Delivery contracts. CHA’s Section 3 requirements are outlined in HUD’s 24 CFR 135.
Section 3 Field Office
The purpose of CHA’s Section 3 Field Office is to serve Section 3 Residents and Section 3 Business Concerns by providing the resources and tools needed for economic development, neighborhood economic improvement, and individual self-sufficiency.
Under Section 3 of the HUD Act of 1968, wherever HUD financial assistance is expended for housing or community development, to the greatest extent feasible, economic opportunities will be given to Section 3 residents and businesses in that area.
What is a Section 3 Business Concern?
A Section 3 Business concern is a business concern under HUD Regulations:
(1) 51 percent or more owned by section 3 residents; or
(2) Whose permanent, full-time employees include persons, at least 30 percent of whom are currently section 3 residents, or within three years of the date of first employment with the business concern were section 3 residents; or
(3) That provides evidence of a commitment to subcontract in excess of 25 percent of the dollar award of all subcontracts to be awarded to business concerns that meet the qualifications set forth in paragraphs (1) or (2) in this definition of “section 3 business concern”.
What We Do
30% of all of new hires must be Section 3 employees. This includes CHA and low-income Chicago area residents. The Prime Contractor is required to complete a Schedule B and outline all of the employees who are needed to complete the scope of work. Through the hiring chart on Schedule B, Compliance is able to determine how many Section 3 employees are needed for the contract. The 30% of all new hires covers new hires for the Prime Contractor and the Subcontractors. Contractors will be required to utilize CHA’s hiring system, which allows Section 3 individuals to apply for open positions on CHA contracts.
Minimum Wage Requirements
Contractors must pay the specified minimum wage in this Requirement to those employees who are considered to be providing work to the CHA under the Contract. The specified minimum wage will apply primarily to contracts for services to the CHA, though some employees (or contractors) on supply contracts may be covered.
Prime Contractors are required to subcontract 10% of the total contract value for construction contracts and 3% of the total contract value for all other contracts to Section 3 Business Concerns. CHA does not certify Section 3 Business Concerns and it is the responsibility of the Prime Contractor to verify the information presented by the self-certified Section 3 Businesses. A checklist as to what documents you should request is available through HUD’s Section 3 Website.
CHA’s Self-Certified Section 3 Business Concern Registry is available for your business to company, if your business meets the outlined below. If you are interested in contracting looking to contract with a Section 3 Business Concern, please visit https://section3jobs.thecha.org/FindSec3BusinessConcern.aspx.
Other Economic Opportunities
If for any reason, a business is unable to subcontract the full percentage requirement to a Section 3 Business Concern, CHA requires the vendor to propose other economic opportunities that would benefit the residents and future businesses. Examples include, but are not limited to teaming agreements, mentorship programs, internship programs, or anything creative that the Prime Contractor can propose.
Section 3 Opportunities
You can register as an Employer or Applicant at https://section3jobs.thecha.org/.
For instructions on how to register and use the system, please use these helpful guides:
Section 3 FAQs
For additional resources, please refer to the local Government Agencies below.
City of Chicago Department of Business and Consumer Affairs: http://www.cityofchicago.org/city/en/depts/bacp.html/
City of Chicago Department of Procurement: http://www.cityofchicago.org/city/en/depts/dps.html/
City of Chicago Department of Buildings: www.cityofchicago.org/buildings
U.S. Department of Housing and Urban Development:
Section 3 Forms:
Subcontractor Information Submittal Form
Section 3 Vendor Check Submittal Form
Section 3 FAQ
HUD Income Limits
Schedule A Template
Schedule B Section 3 Utilization Plan
Section 3 Business Concern Module – Instruction Manual