CHA outstanding work in Section 3 program prompts HUD to waive final year of compliance agreement

CHICAGO (Feb. 5, 2018) –The U.S. Department of Housing and Urban Development (HUD) has waived the final year of a five-year agreement with the Chicago Housing Authority because of the agency’s outstanding performance and commitment to enhancing the Section 3 program that provides job and contracting opportunities to public housing residents.

HUD noted that CHA not only met the benchmarks of the Voluntary Compliance Agreement (VCA), but exceeded them in many areas, including contractor hiring and sub-contracting. In the last four years, CHA has become a leader in Section 3 activity, building the nation’s first office specifically tailored to Section 3 business concerns, offering direct assistance, training and support to Section 3 business owners. CHA also created an in-house portal system for Section 3 residents and businesses to search and apply for jobs and contracts.

The HUD Section 3 program is aimed at helping resident-owned businesses gain access to contracting opportunities and to support Section 3 residents and businesses in the areas of training and resources, business development and compliance. HUD Secretary Ben Carson met with CHA officials Jan. 8 at the Section 3 office and later toured a CHA property where Section 3 contractors are doing work to rehabilitate the building.

 “The CHA is recognized as a model and leader in Section 3 initiatives and projects, thanks to the leadership of HUD and the hard work of my staff,” CHA CEO Eugene Jones, Jr., said. “I want to thank HUD for its partnership and support. HUD’s oversight and guidance regarding CHA’s Section 3 program has been an invaluable resource, and CHA looks forward to working with HUD on future Section 3 activities.

“I’d also like to thank everyone who contributed to this very important project, especially CHA’s Department of Procurement and Contracts and the staff at the Section 3 Field Office. Their hard work has allowed CHA residents to get contracting opportunities and work experience that will lead them on the road to self-sufficiency.”

Anna Maria Farias, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said: “HUD is extremely pleased that the Chicago Housing Authority has stepped up and met the requirements of the important VCA it entered into several years ago. We look forward to seeing the results of the many employment and contracting opportunities their efforts will create for CHA residents in the years to come.”

Through the Section 3 program, CHA achieved a subcontracting total amount of 16.5 percent for construction contracts, exceeding the 10 percent VCA and regulatory goal by more than six percent. CHA also achieved a subcontracting total of 23.8 percent for professional service contracts, exceeding the three percent subcontracting goal for professional service contracts by more than 20 percent.

In all, $179,678,935.87 (19.65 percent) of the total awarded contract amount of $914,298,502.93 during the period was awarded to Section 3 businesses.

In each reporting period, the CHA’s contractors also exceeded the 30 percent Section 3 hiring goal for all new hires on construction and professional service-related projects.  Of the total 1,970 hires during the period, 1,031 were Section 3 residents. This represents over 52 percent of total hires.

CHA began tracking Section 3 internal hires in January 2014 after HUD approval of the CHA’s Section 3 Hiring Policy. Since January 2014, 40 percent of CHA’s internal hires have been Section 3 residents.

To date, CHA has issued more than $1 million in need-based grants of up to $5,000 and competitive grants up to $20,000 which have enabled several Section 3 residents to start their own businesses including retail, food services and others.

As part of its commitment to Section 3, CHA began using the Job Order Contracting (JOC) Program in 2016 which has helped more than 100 Section 3 business owners perform as prime contractors and gain experience through smaller-scale maintenance projects in eight categories (general construction, mechanical, electrical, plumbing, interior improvement, fire suppression/life safety, environmental remediation and landscaping). To date, over 900 contracts valued at over $50 million have been approved and many contractors have been able to build capacity and move up to higher-valued contracting tiers, enabling them to increase their experience and grow their businesses.

In 2015, Omari Stamps, owner of Marsolino’s Carpentry, applied for the JOC program that encourages established businesses to mentor start-up businesses owned by low-income residents and help them on their road to self-sustainability.

Since then, Stamps, a native of the South Shore neighborhood, has been working with Gordian Group at CHA’s Dearborn Homes, doing whatever needs to be done: rebuilding and rehabilitating units, cleaning painting and polishing.

“I couldn’t have asked for a better opportunity at this point in my life,” Stamps said.

The Section 3 JOC Program has six tiers for contractors with projects valued at between $2,500 to $250,000. The program is supported by two lines of credit that enable Section 3 businesses to meet their payroll, purchase equipment and supplies, and cover other business expenses, an essential part of supporting small businesses and helping them build capacity.