Section 3The 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.
30% of all of new hires must be Section 3 employees. This includes CHA and low-income Chicago area residents. The Prime will be required to complete the Schedule B and outline all of the employees who are needed to complete this 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. A Section 3 Job Order Form will be submitted with the Schedule B and it will be routed to Resident Services, who will work with the Prime Contractor, and their Subcontractors, to place qualified Section 3 employees in the positions identified on the Schedule B.
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 that would be a good guide 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 self-certify your company, if you meet the requirements outlined below. If you are looking to contract with a Section 3 Business Concern, you can search those self-certified businesses through the same website.
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”.
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.