Section 3 of the Housing and Urban Development Act of 1968 requires recipients of HUD funding to create job training, employment, and contract opportunities for low- and very low-income individuals. When you think of HUD funding, it's probably subsidized housing that comes to mind. However, HUD also provides financial assistance to community centers, libraries, parks, and local road improvement, among other things.
The intent of Section 3 is to provide these opportunities to the "greatest extent feasible," as outlined in 24 CFR 135.30. This means that other procurement considerations are subordinate to Section 3 goals, and that cost considerations are insufficient grounds for awarding contracts to firms that are not Section 3-compliant.
- Part I: Why does it matter?
- Part II: Is my PHA subject to Section 3?
- Part III: What are my PHA's responsibilities?
- Part IV: Can you recommend some Section 3 best practices?
What are my PHA's responsibilities?
Each PHA (and its contractors, subcontractors, and/or subrecipients) is required to:
- Comply with procedures to notify Section 3 residents and business concerns of their priority status and opportunities under Section 3
- Notify potential contractors working on Section 3-covered projects of their responsibilities
- Incorporate the Section 3 clause into all covered solicitations and contracts, which should describe how the bidder plans to recruit, train, and hire low-income residents and how successful trainees are selected for hire
- Facilitate training and hiring of Section 3 residents and award of contracts to Section 3 business concerns
- Assist in making contractors and subcontractors comply
- Ensure that no contracts are in violation of Section 3 requirements
- Document actions taken to comply with Section 3 requirements
- Submit Section 3 annual reports (form HUD-60002)
Form HUD-60002? What's that?
Last December, FHEO recorded a training webcast and slide presentation on the department’s new Section 3 reporting system, also known as the 60002 system. Available on the YouTube HUD channel, the 37-minute training webcast includes:
- An overview of the new system, which represents the first of several steps that HUD intends to take to improve its oversight and monitoring of Section 3 reporting
- A comparison of the old and new systems
- Examples of submissions in the new system
- Information about the transition to the new system
- An e-mail address to which questions about the new system can be sent: firstname.lastname@example.org
However, as you may be aware, the 60002 system has been temporarily disabled since January. In an email sent July 29 to the Section 3 mailing list, HUD updated PHAs on the ongoing technical problems:
“At this time, the Section 3 Summary Reporting System remains unavailable for the submission of Form HUD 60002 by covered agencies. The Department is aware of the challenges that this inconvenience presents. Please be assured that no recipients will be held in noncompliance for failing to submit 2013 or 2014 Section 3 reports on time, and the unavailability of the system should not result in negative findings during annual audits such as those conducted pursuant to the Single Audit Act (i.e., OMB Circular: A-133).”
The letter also states that new due dates will be communicated once the system has been relaunched. To sign up for the Section 3 mailing list, go here and enter your email address in the "Stay Connected" box on the right, then click "OK."
We'll conclude our discussion later this week by outlining some Section 3 best practices for your PHA.
NMA senior associate Cara Gillette trains, consults, and provides technical assistance nationwide in fair housing, public housing management, hearings, economic self-sufficiency, and governing boards. Prior to joining NMA, she administered public housing and Section 8 waiting lists, served as hearing officer, managed public housing, and oversaw resident economic development programs at the San Diego Housing Commission. She has previously written for the NMA blog on how to work with sequestration in the public housing program.