IMPORTANT NOTICE

CHANGES TO SECTION 3 REGULATIONS

Section 3 rules have been modified to concentrate solely on total worker hours worked with 25% of those hours being worked by Section 3 and Targeted Section 3 Workers to achieve compliance (see definitions within this section);

HOWEVER,

It is understood that not all contracted vendors will be able to meet this benchmark. With that understanding, HUD has provided for “Qualitative Efforts” to meet the spirit of the regulations and to provide meaningful assistance to those persons for which Section 3 is intended. It is important that all vendors make every effort to maximize the hiring of Section 3 workers, but if those documented efforts cannot achieve compliance, Qualitative Efforts may be factored into the overall Section 3 proposed plan and will be strongly considered in the resultant scoring when recommending proposals for award.

If you determine that your organization might not achieve the 25% compliance benchmark, please include Qualitative Efforts in your submission to clarify your intent and qualify your plan.

PHILADELPHIA HOUSING AUTHORITY

SECTION K

SECTION 3 COMPLIANCE

TABLE OF CONTENTS

Page

I. INTRODUCTION TO SECTION 3 4

A. SECTION 3 OVERVIEW

B. APPLICABILITY

II. BIDDER/PROPOSER INSTRUCTIONS ON COMPLETING 4

SECTION 3 FORMS

III. PHA SECTION 3 POLICY (FROM PHA CONTROL POLICY AND 4

PROCEDURE #10, XVII, AS APPROVED BY THE BOARD OF COMMISSIONERS

ON SEPTEMBER 18, 2021)

IV. APPENDICES 17

A. SECTION 3 COMPLIANCE FORMS 1 - 7

B. SECTION 3 ONLINE COMPLIANCE REPORTING REQUIREMENTS

EXAMPLES OF EFFORTS TO DEMONSTRATE SECTION 3

COMPLIANCE

SECTION 3 PROGRAM

I. INTRODUCTION TO SECTION 3

A. SECTION 3 OVERVIEW

Section 3 of the Housing and Urban Development Act of 1968, as amended (12 U.S.C.

1701u) (“Section 3”) and 24 CFR Part 75 requires that, to the greatest extent feasible, employment and other economic opportunities generated by certain financial assistance from the U.S. Department of Housing and Urban Development (HUD) be directed to low-and very low-income residents, particularly those who are recipients of government assistance for housing, and to business concerns that provide economic opportunities to low- and very low income persons, as defined in 24 CFR 75.

B. APPLICABILITY

This Policy shall cover all contracts, including memoranda of understanding, for the provision of services to PHA funded through Section 3 Public Housing financial Assistance (defined at 24 CFR § 75.3(a)(1)), which includes cooperative purchasing agreements and contracts for professional services (such as audit and accounting, brokerage, architecture, and legal), maintenance, repairs, labor, landscaping, modernization projects, employee training, PHA resident education and services, or construction. This Policy does not apply to contractors who only furnish materials or supplies.

II. BIDDER/PROPOSER INSTRUCTIONS ON COMPLETING SECTION 3 FORMS

All Bidders/Proposers should review the Section 3 Policy, contained herein, and complete Form 1, located in Appendix A of this section. Depending on the answers given on Form 1, the Bidder/Proposer may be directed to complete additional forms for the bid/proposal, which should be included in the bid response/proposal.

III. SECTION 3 POLICY

Section 3 of the Housing and Urban Development Act of 1968, as amended (12 U.S.C. 1701u) (“Section 3”) and 24 CFR Part 75 requires that, to the greatest extent feasible, employment and other economic opportunities generated by certain financial assistance from the U.S. Department of Housing and Urban Development (HUD) be directed to low-and very low-income residents, particularly those who are recipients of government assistance for housing, and to business concerns that provide economic opportunities to low- and very low income persons, as defined in

24 CFR 75.

A. Statement Of Purpose

1. This Section 3 portion of the Procurement Policy shall provide direction to the Philadelphia Housing Authority (PHA) for maximizing employment and other economic opportunities for low- and very low-income individuals and business concerns through certain HUD-funded contracts, pursuant to 24 CFR Part 75. PHA will establish appropriate procedures and processes to implement this Section 3 portion of the Policy.

This Policy does not require employing a Section 3 Worker that does not meet the qualifications of the position to be filled or cannot fulfill the contract requirements.

B. Applicability

1. This Policy shall cover all contracts, including memoranda of understanding, for the provision of services to PHA funded through Section 3 Public Housing financial assistance (defined at 24 CFR § 75.3(a)(1)), which includes cooperative purchasing agreements and contracts for professional services (such as audit and accounting, brokerage, architecture, and legal), maintenance, repairs, labor, landscaping, modernization projects, employee training, PHA resident education and services, construction. This Policy does not apply to contractors who only furnish materials or supplies.

C. Definitions

1. PHA incorporates into this Policy all of the definitions contained in 24 CFR 75;

definitions most applicable to PHA’s Policy are listed below.

a. Contractor: Any entity that enters into a contract or agreement to perform work generated by the expenditure of Section 3 Covered Assistance, or for work in connection with a Section 3 Covered Project.

b. HUD Youthbuild Programs: Programs that receive assistance under subtitle D of Title IV of the National Affordable Housing Act, as amended by the Housing and Community Development Act of 1992 (42 U.S.C. 12899), and provide disadvantaged youth with opportunities for employment, education, leadership development, and training in the construction or rehabilitation of housing for homeless individuals and members of low- and very low-income families.

c. Qualitative Efforts: Where an entity fails to meet the quantitative numerical benchmark(s) set forth by HUD, certain qualitative efforts may be accepted to demonstrate compliance with the Section 3 requirements. Qualitative Efforts can include, but are not limited to: contributing to PHA’s Section 3 Fund; outreach efforts to generate job applicants who are Targeted Section 3 workers; direct on-the-job training (including apprenticeships); indirect training such as arranging for, contracting for, or paying tuition for, off-site training technical assistance to help Section 3 workers; and outreach efforts to identify and secure bids from Section 3 business concerns.

d. Section 3 Business Concern: A business concern is defined as a business entity formed in accordance with State law, and which is licensed to the extent required under any State, county or municipal law to engage in the type of business activity for which it was formed, and which meets at least one of the following criteria, documented within the last six-month period:

i. It is at least 51 percent owned and controlled by low- or very low-income persons;

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

iii. It is a business at least 51 percent owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing.

e. Section 3 Clause: The contract provisions set forth in 24 CFR 75. The Section 3 Clause is set forth in Section III of this Policy.

f. Section 3 Covered Assistance:

i. Public and Indian housing development assistance provided pursuant to section 5 of the U.S. Housing Act of 1937 (1937 Act);

ii. Public and Indian housing operating assistance provided pursuant to section 9 of the 1937 Act;

iii. Public and Indian housing modernization assistance provided pursuant to section14 of the 1937 Act; or

iv. Assistance provided under any HUD housing or community development program that is expended for work arising in connection with:

A. Housing rehabilitation (including reduction and abatement of lead-based paint hazards, but excluding routine maintenance, repair and replacement);

B. Housing construction; or

C. Other public construction project (which includes other buildings or improvements, regardless of ownership).

g. Section 3 Covered Contract: A contract or subcontract (including a professional service contract) awarded by a recipient or contractor for work generated by the expenditure of Section 3 Covered Assistance, or for work arising in connection with a Section 3 Covered Project. Section 3 Covered Contracts do not include contracts awarded under HUD’s procurement program that are governed by the Federal Acquisition Regulation System (see 48 CFR, Chapter1). Section 3 Covered Contracts also do not include contracts for the purchase of supplies and materials. However, whenever a contract for materials includes the installation of the materials, the contract constitutes a Section 3 Covered Contract.

h. Section 3 Covered Project: The construction, reconstruction, conversion or rehabilitation of housing (including reduction and abatement of lead-based paint hazards); other public construction that includes buildings or improvements (regardless of ownership) assisted with housing or community development assistance.

i. Section 3 Fund: A fund held and administered by or under the direction of PHA to be expended for the purpose of supporting training programs for Section 3 Residents to develop skills necessary or useful to: 1) fulfill all or a portion of the requirements of any of PHA’s Section 3 Covered Contracts; 2) support or create Section 3 Business Concerns; or 3) sell to PHA, directly or through Section 3 Business Concerns, supplies and materials commonly procured by public housing authorities. Such training programs shall include, without limitation, apprentice or pre-apprenticeship programs developing skills involved in building trades, maintenance, landscaping and security and scholarships, including to pay the cost of participation of Section 3 Residents in any available apprenticeship programs for the building trades, such as plumbing, carpentry, electrical, etc., or continuing education. The financial assistance may be used for the payment of tuition, union initiation fees, dues, tools, equipment and work clothing, or any other related expense.

h. A Section 3 worker: is any worker who currently fits, or when hired within the past five years fit1, at least one of the following categories, as documented:

1 Per HUD’s new Section 3 rule, the five year period began on 11/30/2020 and is the earliest date that can be used for a new hire.

1. The worker’s income for the previous or annualized calendar year is below the income limit established by HUD (see Question 6 of this part I of these FAQs, below);

2. The worker is employed by a Section 3 business concern (see Question 5 of part I, below); or

3. The worker is a YouthBuild participant.

j. A Section 3 targeted worker: for Public Housing Financial Assistance projects is a Section 3 worker who:

1. Is employed by a Section 3 business concern; or

2. Currently fits, or when hired fit2, at least one of the following categories, as documented within the past five years:

(i) A resident of public housing or Section 8-assisted housing;

(ii) A resident of other public housing projects or Section 8-assisted housing managed by the PHA that is providing the assistance; or

(iii) A YouthBuild participant.

k. Subcontractor: Any entity (other than a person who is an employee of the contractor) which has a contract with a contractor to undertake a portion of the contractor’s obligation for the performance of work generated by the expenditure of Section 3 Covered Assistance, or arising in connection with a Section 3 Covered Project.

l. Safe Harbor: A safe harbor is a provision of a statute or a regulation that specifies that certain conduct will be deemed not to violate a given rule.

m. Labor Hour: Hours worked by all workers employed with public housing financial assistance in a PHA fiscal year.

D. PHA Responsibilities

1. PHA will comply with Section 3 in its operations. This responsibility includes:

a. Notifying Section 3 Residents and Section 3 Business Concerns about jobs and contracts generated by Section 3 Covered Assistance so that residents may seek jobs and businesses may submit bids/proposals for available contracts;

2 Id.

b. Notifying potential contractors of the objectives of Section 3 and ways in which each contractor can assist PHA in meeting its goal;

c. Facilitating the training and employment of Section 3 Residents and the award of contracts to Section 3 Business Concerns; and

d. Documenting the action that the PHA takes to comply with the Section 3 requirements, the results of the actions, and impediments, if any.

2. PHA also has a responsibility to ensure compliance of contractors and subcontractors.

PHA will:

a. Notify contractors of their responsibilities under Section 3 including, but not limited to, incorporating the Section 3 Clause in contract documents;

b. Refrain from entering into contracts with contractors that are in violation of the regulations at 24 CFR Part 75;

c. Respond to complaints made to PHA by Section 3 worker or targeted worker or Section 3 Business Concerns that PHA, a contractor or subcontractor, is not in compliance with 24 CFR Part 75; and

d. Cooperate with HUD in obtaining the compliance of contractors and subcontractors when allegations are made that PHA’s contractors and subcontractors are not in compliance with the regulations at 24 CFR Part 75.

E. Goals

1. Goals for Employment for all contractors under Section 3 covered contracts:

i. The Section 3 goals require that Section 3 workers comprise no less than 25% of the total number of labor hours worked by all workers employed with public housing financial assistance in the PHA’s or other recipient’s fiscal year. Of that 25%, no less than 5% of the total number of labor hours worked must be worked by Targeted Section 3 WorkersThe above benchmark notice will be updated by the Secretary every three (3) years.

2. Preferences Regarding Small Purchases: For contracts that do not exceed $20,600, procured in accordance with the Small Purchase Procedures found in this Procurement Policy, and where the Section 3 Covered Contract is to be awarded based on price, the contract will be awarded to the responsible source with the lowest responsive quotation.

a. Where the Section 3 Covered Contract in an amount not to exceed $20,600 is to be awarded based on factors other than price, a request for quotations will be prepared in accordance with PHA’s Procurement Policy, including a rating system for the assignment of points to evaluate the merits of each quotation. The solicitation will identify all factors to be considered, including price or cost. The rating system will provide for a range of 10 to 15 percent of the total number of available rating points to be set aside for the provision of preference for Section 3 Business Concerns. The percent of the preference points shall be determined by the head of PHA’s Supply Chain Management Department or his or her designee upon due consideration of the effect of any preference upon the ability to obtain responsive quotations. The contract or purchase order will be awarded to the responsible firm whose quotation is the most advantageous, considering price and all other factors specified in the rating system.

3. Preferences Regarding Procurement By Request For Proposals (RFP): For Section 3 Covered Contracts awarded through an RFP process, the RFP shall identify all evaluation factors (and their relative importance) to be used to rate proposals. One of the evaluation factors shall address both the preference for Section 3 Business Concerns and the acceptability of the proposing contractor’s strategy for meeting the Section 3 greatest extent feasible requirement. This factor shall provide for a range of 10 to 15 percent of the total number of available points to be set aside for the evaluation of these two components. The percent of the preference points shall be determined by the head of PHA’s Supply Chain Management Department or his designee upon due consideration of the effect of any preference upon the ability to obtain responsive proposals.

a. The component of this evaluation factor designed to address the preference for Section 3 Business Concerns must establish a preference for these business concerns in the order of priority ranking as set forth in this policy.

b. With respect to the second component (the acceptability of the strategy for meeting the greatest extent feasible requirement), the RFP shall require disclosure of the contractor’s strategy for meeting the greatest extent feasible requirement to comply with the Section 3 employment. A determination of the contractor’s responsibility will include the submission of an acceptable strategy for meeting the greatest extent feasible requirement. The contract award shall be made to the responsible firm whose proposal is determined most advantageous considering price and all other factors specified in the RFP.

4. Preferences Regarding Contracts to be Awarded Under a Sealed Bid Process: Where the Section 3 Covered Contract is to be awarded under a sealed bid process, PHA will utilize the procedure and the method for providing preference for Section 3 Business Concerns described in 24 CFR Part 75.

5. Safe Harbor Benchmarks: The Section 3 Covered Contract is in compliance with safe harbor if the vendor “met or exceeded the Section 3 benchmarks AND followed the required prioritization of effort. If the vendor can’t meet, or hasn’t met, the quantitative benchmarks prioritization of effort, they must provide acceptable evidence that they have made qualitative efforts to assist low and very low income persons with employment and training opportunities. The evidence must be approved by PHA representative prior to execution.

F. Safe Harbor Compliance

Contractor will be considered to have complied with the Section 3 requirements and met the safe harbor benchmarks, 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 G. 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 acceptable evidence that they have made qualitative efforts to assist low and very low-income persons with employment and training opportunities.

1. HUD holds PHA accountable for compliance with Section 3 requirements: Therefore, contractor reporting requirements will be incorporated into all Section 3 Covered Contracts and contractors shall be contractually required to respond to requests for information from PHA for compliance verification throughout the life of the contract. PHA’s Section 3 Program and/or PHA’s Office of Audit and Compliance may also conduct random compliance inspections at the site of a Section 3 Covered Project.

2. Achievement of Numerical Goals: In the absence of evidence to the contrary, if a contractor meets the minimum numerical goals listed in Section III.E of this Policy, above, the contractor is considered to have complied with its Section 3 requirements under this Policy.

3. Burden of Proof: Section 3 requires compliance with its minimum numerical requirements unless PHA and its contractors demonstrate that such compliance was not feasible following reasonable efforts. Contractors must demonstrate, through compliance reports and forms established by PHA, that they have met the numerical goals stated in Section III.

E of this Policy. When a contractor is unable to meet the objectives stated in Section III.E of this Policy, the contractor has the burden of satisfactorily demonstrating why it was not feasible to meet the numerical goals. Such justification may include impediments encountered despite actions taken. In the event a contractor does not meet the numerical goals for Section 3 worker hours, PHA requires that a contractor demonstrate that it has provided other sufficient qualitative efforts as further evidence of its attempt to provide Section 3 related qualitative benefits. See Section III F.4 Policy.

4. Qualitative PHA Options: Except in the case of Section 3 Covered Contracts under $20,600, PHA requires each contractor pursuant to any Section 3 Covered Contract to perform qualitative efforts in each of the following circumstances:

a. The Section 3 worker labor hours, including Targeted Section 3 Workers, on the project failed to achieve 25 percent of the total labor hours performed on the project;

b. The Targeted Section 3 worker labor hours on the project failed to achieve 5 percent of the total labor hours performed on the project.

5. Cooperation: Vendor will cooperate fully with Section 3 compliance reviews by PHA.

Vendor will promptly correct or work with subcontractors to correct any deficiencies identified by PHA during such reviews.

6. Safe Harbor Benchmarks:

i. 25% or more of all labor hours worked by all workers employed with public housing financial assistance in the PHA’s or other recipient’s fiscal year must be Section 3 workers (including Targeted Section 3 Workers).

ii. 5 % or more of all labor hours worked by all workers employed in PH financial assistance in the PHA’s or other recipient’s fiscal year must be Targeted Section 3 workers.

Section 3 labor Hours / Total labor hours = 25% AND Targeted Section 3 labor hours / Total labor hours = 5%

G. Qualitative Efforts

Under the PHA’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. 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.

1) To residents of the public housing projects for which the public housing 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 Youth Build programs; and

4) To low and very low-income persons residing within the metropolitan area (or nonmetropolitan county) in which the assistance is expended

1. The following qualify as qualitative efforts to fulfill the requirements of Section III F.4 of this policy:

a. Contribute to a Section 3 Fund created by PHA in the amount of three percent (3%) of the Section 3 Contract amount (see Definitions, Section III, C.i ).

b. Provide training or apprenticeship opportunities to the greatest extent feasible per the prioritization of efforts above.

c. Provide services to Section 3 workers supporting work readiness and retention (e.g., work readiness activities, interview clothing, test fees, transportation, childcare).

d. Provide assistance to apply for/or attend community college, a four-year educational institution, or vocational/technical training.

e. Provide technical training (workshops or one-on-one support) to help Section 3 business concerns understand and bid on contracts.

f. Divide subcontracts into smaller jobs to facilitate participation by Section 3 business concerns.

g. Provide bonding assistance, guaranties, or other efforts to support viable bids from Section 3 business concerns.

h. Provide Contracting Opportunities, to the greatest extent feasible, to Section 3 business concerns that provide economic opportunities to Section 3 workers residing within the service area or the neighborhood of the project and participants in Youth Build programs.

All proposed potential qualitative efforts must be reviewed and approved by PHA prior to execution of any agreement. Each contractor shall fill out the Section 3 forms that are part of the solicitation which shall be reviewed by PHA to ensure the proposed plan is substantive and meaningful for the Section 3 workers and targeted workers. The Section 3 forms shall provide a framework for contractors to provide proposed plans for qualitative efforts in a manner that may be evaluated and graded by PHA’s review committee. If the contractor cannot meet the labor hour requirements and does not provide a Qualitative Efforts plan that is acceptable to PHA, or if the vendor's plan fails to achieve its proposed results (to be determined at PHA’s sole discretion), the contractor shall at a minimum contribute to a Section 3 Fund created by PHA in the amount of three percent (3%) of the expended contract amount.

2. Data Collection and Reporting

a. Monthly Reporting

i. Contractors are required to submit monthly activity reports to PHA’s Section 3 Vendor Portal, or by any other tracking software system utilized by PHA, by the 1st 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 in PHA’s Section 3 Vendor Portal.

2. Upon the completion of a project, PHA’s Office of Audit and Compliance will conduct a final review of the project’s overall performance and compliance.

3. PHA will submit an annual report to HUD documenting the compliance with Section 3 in such form and with such information as HUD may request. The report will be submitted in compliance with HUD required deadlines. HUD will be provided access to all records, reports and other documents or items PHA maintains to demonstrate compliance with Section 3 requirements.

H. Section 3 Complaint Process

1. Complaint Right

a. Any Section 3 Resident and any representative who is not a Section 3 Resident, but who represents one or more Section 3 Residents, and any Section 3 Business Concern or any individual representative of one or more Section 3 Business Concerns, may bring concerns of noncompliance with Section 3 to HUD in conformity with complaint procedures detailed in 24 CFR 75. Complaints are to be filed with the Assistant Secretary for Fair Housing and Equal Opportunity.

2. Resolution of Complaints

a. If the Assistant Secretary sends a complaint to PHA for resolution, PHA will review the complaint promptly. If PHA believes that the complaint lacks merit, PHA will notify the Assistant Secretary, in writing, of this recommendation with supporting reasons, within thirty (30) days of the date of receipt of the complaint. The determination that a complaint lacks merit is reserved to the Assistant Secretary.

b. If PHA determines that there is merit to the complaint, PHA will have sixty (60) days from the date of receipt of the complaint to resolve the matter with the complainant.

At the expiration of the sixty (60) day period, PHA must notify the Assistant Secretary in writing whether a resolution of the complaint has been reached. If resolution has been reached, the notification must be signed by both PHA and the complainant and must summarize the terms of the resolution reached between the two parties

c. Any request for an extension of the sixty (60) day period by PHA must be submitted in writing to the Assistant Secretary, and must include a statement explaining the need for the extension.

d. If PHA is unable to resolve the complaint within the sixty (60) day period (or more if extended by the Assistant Secretary), the complaint shall be referred to the Assistant Secretary for handling in accordance with 24 CFR 75.

3. Intimidatory or Retaliatory Acts Prohibited

a. PHA will not intimidate, threaten, coerce, or discriminate against any person or business because the person or business has made a complaint, testified, assisted or participated in any manner with an investigation, proceeding, or hearing regarding a complaint.

4. Judicial Relief

a. Nothing in this policy precludes a Section 3 Resident or Section 3 Business Concern from exercising the right to seek redress directly through judicial procedures.

I. Section 3 Clause

All Section 3 Covered Contracts shall include the following clauses (A-G, below), referred to as the Section 3 clause:

A. The work to be performed under this contract is subject to the requirements of section 3 of the Housing and Urban Development Act of 1968, as amended, 12U.S.C. 1701u (Section 3). The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD Assistance or HUD- assisted projects covered by Section 3, shall, to the greatest extent feasible, be directed to low and very low-income persons, particularly persons who are recipients of HUD Assistance for housing.

B. The parties to this contract agree to comply with HUD's regulations in 24 CFR part 75, which implement Section 3. As evidenced by their execution of this contract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the Part 75 regulations.

C. The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 CFR part 75, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 CFR part 75. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 CFR part 75.

D. The contractor will certify that any vacant employment positions, including training positions, that are filled (1) after the contractor is selected but before the contract is executed, and (2) with persons other than those to whom the regulations of 24 CFR part

75 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 CFR Part 75.

E. 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.

F. With respect to work performed in connection with Section 3 covered Indian Housing Assistance, section 7(b) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450e) also applies to the work performed under this contract. Section 7(b) requires that the greatest extent feasible (i) preference and opportunities for training and employment shall be given to Indians, and (ii) preference in the award of contracts and subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises. Parties to this contract that are subject to the provisions of section 3 and section 7 (b) agree to comply with section 3 to the maximum extent feasible, but not in derogation of compliance with section 7(b).

APPENDIX A:

SECTION 3 COMPLIANCE FORMS 1 – 7

Page 1 of 4 Effective 10/03/24

INSTRUCTIONS: All vendors MUST complete this Section 3 commitment form as part of their bid/proposal, or to amend a commitment after a contract has been successfully awarded. Please answer the questions, AS PROMPTED. This form must be signed when completed. If additional forms are required, it will be noted in the appropriate section of this Form 1.

1. IS YOUR BUSINESS A QUALIFIED SECTION 3 BUSINESS CONCERN?

□ YES □ NO

If the answer is “Yes,” check at least one reason below, review and initial the acknowledgement section in Question 2, sign this Form, and complete Form 2 and provide appropriate documentation.

It is at least 51 percent owned and controlled by low- or very low-income persons;

Over 75 percent of the labor hours performed for the business over the prior three-month period are performed by Section 3 workers; or, It is a business at least 51 percent owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing.

If the answer is “No”, review and initial the acknowledgement section in Question 2, proceed to Question 3 and sign this Form.

2. YOUR BUSINESS IS EXPECTED TO MEET PHA’S SAFE HARBOR BENCHMARKS

BELOW.

1) The Section 3 worker labor hours on the project must equal at least 25 percent of the total labor hours performed on the project, and shall consist of the following:;

Section 3 Labor Hours / Total Labor Hours = 20% Targeted Section 3 Labor Hours / Total Labor Hours = 5%

I ACKNOWLEDGE AND UNDERSTAND THE ABOVE SAFE HARBOR

BENCHMARKS AND THAT MONTHLY FILING OF LABOR HOURS TO PHA

WILL BE REQUIRED

IN THE EVENT THAT YOUR ORGANIZATION FAILS TO MEET THE ABOVE SAFE

HARBOR BENCHMARKS, YOU WILL RECEIVE CREDIT FOR THE PERCENTAGE OF

HOURS THAT QUALIFIED AS SECTION 3 WORKED HOURS; HOWEVER YOU WILL BE

REQUIRED TO MAKE UP THE SAFE HARBOR DEFICIT BY PROVIDING QUALITATIVE

EFFORTS THAT MAY, WITH APPLIED CREDIT, EQUAL TO UP TO 3% OF THE

CONTRACT VALUE.

PHILADELPHIA HOUSING AUTHORITY

SECTION 3 VENDOR COMMITMENT

(FORM 1)

Page 2 of 4 Effective 10/03/2024

3. PHA QUALITATIVE EFFORTS AND OTHER ECONOMIC OPPORTUNITIES – THIS

SECTION MUST BE COMPLETED BY ALL BIDDERS/PROPOSERS WHO ARE NOT A

SECTION 3 BUSINESS CONCERN

Vendors who are successfully awarded a contract with PHA are expected to provide proof of best efforts to achieve the Safe Harbor Benchmarks for worked hours. In addition, vendors are required to plan for and conduct Qualitative Efforts to provide Other Economic Opportunities to Section 3 and Targeted Section 3 workers in the priority order listed below if they are unable to meet the Section 3 Safe Harbor Benchmarks.

1) Residents of the public housing projects for which the public housing financial assistance is expended;

2) 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) Participants in YouthBuild programs; and

4) Low- and very low-income persons residing within the metropolitan area in which the assistance is expended.

The following qualify as qualitative efforts to fulfill the requirements of not meeting PHA’s Safe Harbor Benchmarks, subject to PHA pre-approval. At least one option must be selected.

A. Contributions to the Section 3 Fund that PHA will use for job training and development, continuing education, and Section 3 business development.

□ YES □ NO

If your answer is “Yes,” your business must contribute up to 3% of the total contract invoice value minus that proportional amount of credit applied for Section 3 hours worked.

B. Your business will provide training or apprenticeship opportunities to those who qualify as low and very low income workers?

□ YES □ NO

If “Yes”, please complete the TRAINING/APPRENTICESHIP QUESTIONNAIRE section of the

DESCRIPTION OF QUALITATIVE EFFORTS & OTHE ECONOMIC OPPORTUNITIES

document attached below.

C. Your business will connect Section 3 workers to services supporting work readiness and retention (e.g., work readiness activities, interview clothing, test fees, transportation, childcare)

□ YES □ NO

If “Yes”, please complete the WORK READINESS QUESTIONNAIRE section of the

D. Your business will provide assistance to apply for/or attend community college, a four-year educational institution, or vocational/technical training.

□ YES □ NO

If “Yes”, please complete the POST SECONDARY ASSISTANCE QUESTIONNAIRE section of the

Page 3 of 4 Effective 10/03/2024

E. Provide technical training (workshops or one on one support) to help Section 3 business concerns understand and bid on contracts.

□ YES □ NO

If “Yes”, please complete the TECHNICAL TRAINING FOR SECTION 3 BUSINESSES QUESTIONNAIRE section of the DESCRIPTION OF QUALITATIVE EFFORTS & OTHE ECONOMIC OPPORTUNITIES document attached below.

F. Divide subcontracts into smaller jobs that result in participation by Section 3 businesses.

If “Yes”, please provide details:

G. Provide bonding assistance, guaranties, or other efforts to support viable bids from Section 3 business concerns.

If “Yes”, please provide details:

H. Develop, stabilize or expand a Section 3 Business(es)?

If your answer is “Yes,” please provide a detailed plan for review and approval by the PHA Section 3 Program for one of the following prior to execution of any agreement:

Assist with the formation of Section 3 Joint Business Venture Hire or subcontract with a Section 3 Businesses for work unrelated to this contract, if successfully awarded Provide mentorship, continuing education, and training opportunities that benefit Section 3 Businesses

By signing below, the vendor acknowledges and understands that it has reviewed PHA’s Section 3 compliance requirements and agrees to comply with the selected commitments indicated above. Vendor attests that the proof supplied and representations made for Section 3 status are accurate, to the best of its knowledge and belief and understands that any intentional submission of false information shall be a material breach of the contract.

To the extent that the completion of this form is contingent upon future information, for example price negotiations, request for specific services, etc., the undersigned hereby affirms and agrees to fully adhere in good faith to the PHA Section 3 compliance goals. The undersigned acknowledges and affirms responsibility for completion and submission of this form PRIOR TO AWARD of a contract and acknowledges that failure to submit this form will render this submission non-responsive.

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Attested to by:

Authorized Officer Signature Date

Print Name and Title Company/Business Name

Address Phone Number

Email:

Proposal or Contract Number

EMPLOYERS MUST RETAIN THIS FORM IN THEIR SECTION 3 COMPLIANCE FILE

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SECTION 3 VENDOR COMMITMENT

DESCRIPTION OF QUALITATIVE EFFORTS & OTHER ECONOMIC OPPORTUNITIES

INSTRUCTIONS: All bidders/proposers who are NOT a Section 3 business concern (defined on Section 3 Vendor Commitment Form 1) MUST complete a Section 3 commitment form as part of their bid/proposal, or to amend a commitment after a contract has been successfully awarded.

Vendors must meet the safe harbor benchmarks for Section 3 Labor Hours and Targeted Section 3 Labor Hours listed on Vendor Commitment Form 1. In the event that your organization fails to meet these safe harbor benchmarks, you will receive credit for the percentage of hours that qualified as Section 3 worked hours; however, you will be required to make up the safe harbor deficit by providing “qualitative efforts” that may, with applied credit, equal to up to 3% of the contract value.

“Qualitative efforts” are activities by PHA contractors the help public and assisted housing residents obtain jobs or benefit from other economic opportunities, now or in the future. Vendors commit to certain types of qualified efforts when completing Vendor Commitment Form 1, and PHA Resident Programs & Partnership (RPP) reviews all proposed qualitative efforts. RPP’s review looks for proposed activities that are likely to have a significant, positive impact on our resident or other low- and very low-income workers.

If your bid includes a commitment to any of the following qualitative efforts, you MUST complete this form

Training/Apprenticeship: Provide training or apprenticeship opportunities to those who qualify as low- and very low-income workers – answer questions on pages 2-4.

o “Training or apprenticeship opportunities” should qualify graduates/completers for jobs. If a program or service does not lead directly to employment, it is a “work readiness activity.”

Work Readiness: Connect Section 3 workers to services supporting work readiness and retention (e.g., work readiness activities, interview clothing, test fees, transportation, childcare) – answer questions on page 5.

Post-Secondary Assistance: Provide assistance to apply for/or attend community college, a four-year educational institution, or vocational/technical training – answer questions on page 6.

Technical Training for Section 3 Businesses: Provide technical training (workshops or one on one support) to help Section 3 business concerns understand and bid on contracts – answer questions on pages 7-8.

The most important part of your proposal is how valuable your proposed qualitative efforts will be to PHA residents and other Section 3 workers. RPP is looking for proposals that can have an estimated value equal to 3% of the contract value, to help ensure that PHA’s vendors, and PHA, are meeting HUD’s Section 3 requirements. RPP will use the information you provide here to help determine if the value of the proposed qualitative efforts to PHA resident and other Section 3 workers will meet these requirements. Checking more boxes and proposing more efforts will not necessarily help or harm your proposal scoring –the value of your proposed activities is what matters.

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Section 3 Vendor Commitment, Description of Qualitative Efforts & Other Economic Opportunities

TRAINING/APPRENTICESHIP QUESTIONNAIRE:

Answer the following questions if you have committed to provide training or apprenticeship opportunities to those who qualify as low- and very low-income workers. Add more page(s) if necessary.

a. Name of proposed training:

b. Brief description of proposed training:

c. Who will provide the training?

If the training will be provided internally by the vendor (your organization), what are the positions and/or qualifications of the instructors? Example: “Training is led by a shift supervisor with over 10 years’ experience.”

If the training will be provided externally by another organization, identify the provider. Example: “Community College of Philadelphia Welding Technology Program.”

d. What industry-recognized credentials do graduates/completers of the proposed training earn?

An “industry-recognized credential” is defined* as being exam-based, administered by third parties, supplemental to traditional postsecondary credentials, and sought or accepted by employers in an industry. Examples of industry-recognized credentials include Certified Information Systems Security Professional, Certified Medical Laboratory Assistant, and Certified Foodservice Management Professional.

e. ☐ Check this box if the proposed training is an Apprenticeship Program.

e.1. If the training is an Apprenticeship: What is the name of the program or program sponsor?

Example: IBEW Local 98 Apprentice Training for the Electrical Industry (ATEI)

* Definition from Mathematica/Bill & Melinda Gates Foundation “Education-to-Workforce Indicator Framework” (2022).

Page 3 of 8 Effective 10/01/2024 e.2. If the training is an Apprenticeship: To your knowledge, is this Apprenticeship registered?

Yes, registered with the

PA Dept. of Labor & Industry Yes, registered with the

US Dept. of Labor No, it is not registered

I don’t know

☐ Other (please explain):

f. Training results/outcomes:

Examples: “Successful graduates/completers of this training have been hired by Employers X, Y and Z at starting wages of $25/hour, with health insurance and other benefits.” Hiring opportunities can be with your own organization, or with partner employers – but MUST be realistic and actually available to graduates of the program.

g. Length of proposed training:

Examples: “152 hours,” or “8 weeks.”

h. Number of participant seats and proposed frequency of training:

Example: “Up to 10 students twice a year, starting in February and July.” If schedule, frequency or other dates are TBD or unknown, explain how you will decide or find out when/how often training should be offered, such as “5 seats reserved in first class after work begins, if we do not meet safe harbor hiring benchmarks for Section 3 workers.”

i. Criteria for admission to proposed training:

Examples: High school diploma or GED®, 8th grade reading level, pass an entrance exam (please identify exam), complete an application and an in-person interview. Most training programs or apprenticeships have some kind of admission criteria; a work readiness program may be open to anyone.

j. Location of proposed training:

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k. Is any specialized equipment required for training? Who is responsible for providing it?

Example: “Vendor will provide materials and supplies. Participants must purchase uniforms and equipment.”

l. What is the estimated cost or value of the proposed training?

Example: “Cost per participant is $1,425.”

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WORK READINESS QUESTIONNAIRE:

Answer the following questions if you have committed to services supporting work readiness and retention (e.g., interview clothing, test fees, transportation, childcare, etc.). Add more pages if necessary.

a. Brief description of proposed work-readiness services:

b. Who will provide the work-readiness services described above?

If the service(s) will be provided internally by the vendor (your organization), what are the positions and/or qualifications of the instructors? Example: “Resume support is led by a hiring manager from our HR department.”

If the service(s) will be provided externally, identify the source. Example: “We provide vouchers to obtain job interview attire through the Career Wardrobe.”

c. Results/outcomes:

Examples: “Program completers will have a fully-refreshed resume and cover letter applicable to jobs in our sector.”

d. Availability:

Example: “Up to 10 seats twice a year, starting in February and July.” If schedule, frequency or other dates are TBD or unknown, explain how you will decide or find out when/how often services should be offered, such as “5 seats reserved in first class after work begins, if we do not meet safe harbor hiring benchmarks for Section 3 workers.”

e. Location of proposed work-readiness program or service:

f. What is the estimated cost or value of the proposed work-readiness program or service?

Example: “Cost of staff time per participant is $125,” or “Cost of clothing voucher is $20.”

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POST-SECONDARY ASSISTANCE QUESTIONNAIRE:

Answer the following questions if you have committed to provide assistance to apply for/or attend community college, a four-year educational institution, or vocational/technical training.

a. Brief description of proposed post-secondary assistance:

Please identify all of the institutions you propose to assist students in accessing. Examples: “Community College of Philadelphia,” or “Sheet Metal Workers' Local 19 Training Center.” Describe how you are proposing to assist prospective students.

b. Who will provide the work-readiness services described above?

If the service(s) will be provided internally by the vendor (your organization), what are the positions and/or qualifications of the instructors? Example: “FAFSA completion support is provided by our HR manager.”

If the service(s) will be provided externally, identify the source. Example: “We provide vouchers for tutoring.”

c. Results/outcomes:

Examples: “Participants will receive 100 hours of free tutoring in core academic subjects at the Community College of Philadelphia.”

d. Availability:

Example: “Up to 5 students supported per semester.” If schedule, frequency or other dates are TBD or unknown, explain how you will decide or find out when/how often assistance should be offered, such as “We will work with the PHA Youth & Family Center to identify students who need additional support, if we do not meet safe harbor hiring benchmarks for Section 3 workers.”

e. What is the estimated cost or value of the proposed post-secondary assistance?

Example: “Cost of staff time per participant is $125,” or “Value of each tutoring voucher is $750.”

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TECHNICAL TRAINING FOR SECTION 3 BUSINESSES QUESTIONNAIRE:

Answer the following questions if you have committed to provide technical training (workshops or one on one support) to help Section 3 business concerns understand and bid on contracts.

a. Name of proposed training:

b. Brief description of proposed training:

c. Who will provide the training?

If the training will be provided internally by the vendor (your organization), what are the positions and/or qualifications of the instructors? Example: “Training is led by an accountant with over 15 years’ experience.”

If the training will be provided externally by another organization, identify the provider. Example: “The Enterprise Center’s Procurement Assistance Program,” or “Contractor X, an expert in public sector proposal development.”

d. Training results/outcomes:

Examples: “Successful graduates/completers of this training will register an EIN and develop a business plan.”

e. Length of proposed training:

Examples: “152 hours,” or “8 weeks.”

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f. Number of participant seats and proposed frequency of training:

Example: “One round of training for up to four resident business owners.” If schedule, frequency or other dates are TBD or unknown, explain how you will decide or find out when/how often training should be offered, such as “We will provide speaking services to PHA’s Section 3 Entrepreneurship Program after work begins and quarterly for the duration of this contract, if we do not meet safe harbor hiring benchmarks for Section 3 workers.”

g. Location of proposed training:

h. What is the estimated cost or value of the proposed training?

Example: “Cost of staff time per resident business supported is $3,000.”

SECTION 3 BUSINESS APPLICATION

Your business may qualify as a Section 3 business if it meets the criteria listed on Form 2 and you provide the required documentation. The benefits to qualifying as a Section 3 business are:

1. Automatic Section 3 Compliance for your PHA Contract: All of your employees’ labor hours qualify as Section 3 Worker labor hours regardless of whether or not they meet Section 3 Worker income requirements. Please note that you will still be required to report all labor hours on a monthly basis.

2. Potential Business Opportunities: Section 3 businesses are listed on a PHA directory that is shared with…