9-HUD Construction Package 2022 9-27-2022.pdf

Northampton County Department of Community and Economic Development V/ September/2022

USING HUD FUNDS FOR CONSTRUCTION-RELATED ACTIVITIES

Guidance for Subrecipients Beginning Federally Funded Construction

Projects

Pre-Award Subgrant Notice to Pre- Construction Project Executed Proceed Construction Close-out

Issued

If you are a local government or organization that has received U.S. Department of Housing and Urban Development (HUD) grant funds for any type of construction activity, you must follow a number of federal and state requirements in bidding and executing your project. As the subgrantee, you must be sure these requirements are met and documented appropriately. Failure to follow the rules will result in one or more of the following (in order of severity):

• Delay of construction

• Re-bidding for contractors

• Denial of payment

• Order to return funds

• Criminal investigation

Fortunately, most subgrantees use HUD funds each year successfully for construction, renovation and repair. Very few experience issue that require a HUD finding, but it has happened. The guidance provided is intended to outline steps that need to be followed in order to comply with many of the HUD regulations and requirements.

Before you begin, a few words of caution about this guidance:

• This is a “how-to” guide and does not replace careful review and understanding of the laws and regulations referenced in 2CFR Part 200. Be sure to read your sub-grant agreement, paying special attention to the, "HUD Form 4010" incorporated into your sub-grant (typically Exhibit B ). There are laws and regulations referenced in the agreement that you must adhere to, not all of which are discussed here. (For example, non-discrimination in hiring practices must be addressed in your agency or municipal personnel policies.)

• This document is most useful for HUD’s CDBG, ESG, & HOME entitlement program funds. Other federal grant programs may have different or additional requirements.

Northampton County’s Department of Community and Economic Development (NC DCED) is available to help you throughout the preconstruction and bidding process. Please contact CDBG Administrator Frank Brooks at 610-829-6311 or fbrooks@northamptoncounty.org with any questions.

HUD SUBGRANTEE COMPLIANCE CHECKLIST:

This is a good Guide on how to Proceed before Construction begins

ACTION DATE COMPLETED

Receive “Notice to Proceed”

Review subgrant agreement and prepare bid package

Send “Code of Conduct” to NC DCED

Include MBE/WBE requirements in bid package

Include Section 3 requirements in bid package

Include Davis Bacon wage determination HUD Form 4010 in bid pack

Send over to NC DCED Sample Copy of Public Bid Notice.

Send completed bid package to NC DCED for

Send out bid announcement to MBE/WBE firms

Send proof of publication for two (2) separate ads to

NC DCED

Check 10 days prior to bid opening to see whether wage determinations have changed; notify potential bidders if change

Check suspension and disbarment status for potential awardee and send to NC DCED

Provide award information for successful bidder to NC DCED (minutes, bid tabulation, M/WBE/Section 3 bidder response form including list of current employees, insurance declarations)

Provide copy of executed contract to NC DCED

Invite NC DCED rep to pre-construction conference

Notify NC DCED of start date

Ensure required postings are at job site

Ensure weekly certified payrolls are sent to NC

Request payment

Submit project reports as required

Notify NC DCED when job is complete

Subgrantee Responsibilities: Notice to Proceed through Construction

A. BEFORE PROCEEDING

1. Do not proceed until you have been issued a “Notice to Proceed” from NC DCED.

The Notice to Proceed will be issued once the sub-grant has been executed and the review of compliance with environmental laws and regulations has been completed by NC DCED. No "choice limiting" costs may be obligated or incurred toward this project until the environmental review has been completed by NC DCED and you have received the Notice to Proceed.

• Entering into a construction contract before knowing if any mitigating measures must be incorporated into the project design is considered choice limiting.

• Contracting with an engineer and/or project manager and soliciting bids are not considered choice limiting and may begin before a Notice to Proceed is issued. However, be advised that the environmental review may require a change to your project design, so proceed cautiously.

2. Read your CDBG sub-grant agreement, including the HUD from 4010 in Exhibit

B. Many of the conditions will affect the cost of the project and can impact your timeline. The entirety of HUD from 4010 must be included in the construction contract and in any subcontracts.

3. Submit a “Code of Conduct” usually in the municipalities Administrative Code governing employees, officers, or agents in award of contracts, to NC DCED.

B. COMPETITIVE BID REQUIREMENTS

Any good or service purchased under the CDBG grant must be done in accordance with your entity's purchasing requirements or the County's, whichever is most restrictive.

Northampton County's thresholds are as follows:

A. Quoting requirements when the total expenditure in any one sale transaction, regardless of the number of individual items purchased and including any shipping costs during this transaction is as follows:

• $1 to $5,000 -- One quote, verbal or written

• $5,001 to $24,999 – Minimum three (3) written quotes. Written documentation must be attached to the transaction, and shall indicate which qualified vendor(s) were contacted, their responses, the date, and other pertinent information besides price, such as delivery, etc.

• Expenditures over $25K need to procured utilizing a formally advertised public bid.

Competitive sealed bids must be used to procure goods or services in excess of $25,000 for construction, reconstruction, demolition, alteration and/or repair, for acquisition of machinery and equipment, or for engagement of services of a professional consultant, other than architectural or engineering services. Documented costs may include quotes or advertisements (ie: online cost comparisons). Remember to keep copies of all quotes/costs in your project record, as this verifies you followed the appropriate procurement method.

Selecting a good or service through the Commonwealth of Pennsylvania's cooperative purchasing program administered by the Department of General Services (DGS) Bureau of Procurement, the COSTARS Program, is an acceptable alternative to the methods listed above.

C. PREPARING THE BID PACKAGE

The first step in most construction projects is to document the specific work to be done in order to competitively solicit bids from construction contractors. On a small project where total construction costs are not expected to exceed $25,000.00, you may only wish to use an existing estimate or specifications to solicit written estimates from contractors (note:

Davis Bacon Wage Rates apply to all non-residential construction jobs over $2,000.00).

However, most work funded through CDBG is over this threshold. In that cases, most grantees work with an architectural, engineering or other project management firm to develop a bid package that ensures the selection of the most qualified contractor while complying with local, state, and federal laws and regulations. Grantees not accustomed to overseeing construction projects are highly encouraged to utilize the services of a project manager.

1. ACQUISITION OF ARCHITECTURAL/ENGINEERING SERVICES

If you plan to hire and pay for architectural/engineering (A/E) services under with CDBG funds, there are a few federal rules of which you need to be aware before you start incurring costs:

A. When acquiring A/E services to design your site/project, a Request for Proposals (RFP) or a Request for Qualifications (RFQ) may be used. Under an RFQ, you may use competitive proposal procedures whereby the competitors’ qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. In these instances, price is not used as a selection factor; once the most-qualified firm is identified, only that firm is asked for a price proposal that is subject to negotiation of a fair and reasonable price. If negotiations with the selected firm are unsuccessful, this process is repeated with the next highest-ranked firm, until a fair and reasonably priced contract can be awarded. You must document the basis for your determination of the most qualified competitor and the reasonableness of the contract price.

B. An RFQ may not be used to purchase other services performed by architects and engineers (24 CFR 85.36(d)(3)(v)). Additional services offered by A/E firms, such as preparation of bid packets, project management or grant writing, must be selected based on lowest cost (using an RFP or other appropriate small purchasing method).

C. You cannot award a contract to any person or firm that develops or drafts specifications, requirements, statements of work, invitations for bids, and/or requests for proposals (24 CFR 84.43).

Can I use our Municipal Engineer to Oversee our Project?

Architects or engineers selected by municipalities may be reimbursed through your grant if documentation can be supplied that the firm had been selected using an appropriate procurement methodology within the previous three (3) years of the Start Date of the sub-grant agreement and the contract specifically includes project management activities in the scope of services.

Otherwise, these costs cannot be paid under the grant.

2. HUD REQUIRED ATTACHMENTS FOR BIDS

There are a number of items your bidders must submit to you to help in your selection. One question often posed to NC DCED is whether or not a bid is considered complete if a bidder omitted a particular document. In many cases, this decision lies with your municipality's solicitor or organization's attorney. However, the following section details three (3) regulatory requirements that must be adhered to during the bidding process; if the documents substantiating compliance with these regulations are not submitted, the bid cannot be considered by you as a "responsive bid." These are MBE/WBE Business Preference, Section 3 Preference, and Bonding Documentation.

Note that activities may be bid separately to encourage participation by small, diverse businesses; however, contracts cannot be separately bid to avoid reaching the dollar threshold for compliance with the following.

A. MBE/WBE BUSINESS PREFERENCES

As a federal program, HUD requires contracting and subcontracting opportunities be afforded to businesses and organizations which are eligible for preferential treatment under a variety of Federal laws, Executive Orders, etc. (e.g., the Small Business Act). Eligible organizations include: small, small disadvantaged, women-owned.

What are MBE/WBE Requirements?

In order to ensure equal opportunity in government business, all contracts require bidders to solicit Small, Minority-Owned & Women-Owned Business Enterprises for any supplies and services they expect to procure for the project over $25,000.

You and any prime contractors are required to advise and provide the maximum practicable opportunity for participation to MBE's & WBE's. The target participation levels are 5% for minority owned business enterprises and 3% for women owned business enterprises.

Your bid package should define any preference provided to MBE's and WBE's. You must ensure that the following MBE/WBE documents are included in the bid documents.

• Bidder Response Form (Exhibit B)

• MBE/WBE Guidelines and Bidder Instructions

• MBE/WBE Utilization Report

• MBE/WBE Business Certification

Send bid announcement to all certified MBE/WBEs in the five-county area.

The current listing of state-certified Small and Diverse Firms can be accessed at the following website: https://www.dgs.internet.state.pa.us/suppliersearch

On the search page, select the "Code Look Up" button to search for the appropriate type of vendor you will be using. Once the appropriate classification code is selected, choose, “Northampton” from the dropdown list of counties, and then hit search. You will receive names of local MBE & WBE vendors and Small Diverse (SD) vendors for the type(s) of businesses you are soliciting.

Repeat for the following counties:

• Bucks

• Carbon

• Lehigh

• Monroe You must send the bid announcement to any certified MBE/WBE that provides the service or good you need and is located in the five counties listed above. You can choose to solicit other classifications (ie: Veteran-Owned Businesses) or non- certified businesses; however, non-certified vendors must agree to register with the Commonwealth in order to receive preference in bidding.

• Keep evidence, such as a fax cover sheet or a copy of the stamped, addressed envelope, showing you successfully sent the bid announcement to each registered business.

• If there are no relevant vendors, print the page showing there were no matches and keep this in your records.

At present, HUD only requires reporting of utilization of MBE/WBE and Section 3 business interests.

https://www.dgs.internet.state.pa.us/suppliersearch

B. SECTION 3 PREFERENCE

When Do Section 3 Requirements Apply?

Projects that are financed with state, local or private matching or leveraged funds used in conjunction with HUD funds are covered by Section 3 if the amount of HUD funding for the project exceeds the $200,000 project threshold. For example, Section 3 applies to training or employment arising in connection with HUD-funded housing rehabilitation, housing construction, or other public construction projects, and related contracting opportunities if the amount of HUD funding exceeds the $200,000 project threshold.

To meet the requirements, grantees must include Section 3 language in any agreements or contracts for qualifying projects. However, contractors and subcontractors must meet the regulation’s requirements, regardless of whether their agreements or contracts include Section 3 language. CDBG-DR grantees are encouraged to offer training to any contractors or subcontractors who may be new to Section 3 requirements. Grantees should also be regularly monitoring for contractor compliance; assisting contractors to obtain compliance; penalizing non-compliance; providing incentives for good performance; and refraining from entering into contracts with any contractor that previously failed to comply with the requirements of Section 3.

Include Section 3 documents in the bid package.

Section 3 information and documents are included in Exhibit B and included as part of the Agreement.

• The “Section 3 Clause” (Included in the municipality’s CDBG contract, as part of the

Special Assurances and Conditions)

• Section 3 Guidelines and Instructions”

• Section 3 Certification for Business Concerns Seeking Section 3 Status

You should also provide potential bidders with notice that you will consider Section 3 as a factor in your selection of a contractor.

Northampton County can assist in the bid announcement to Section 3 businesses.

C. BONDING REQUIREMENTS

1. Bid Bonds

A bid bond is a guarantee from each bidder equivalent to five percent (5%) of the bid price. The “bid guarantee” shall consist of a firm commitment such as a bid bond or certified check as assurance that the bidder will, if accepted, enter into the contract.

2. Performance Bonds

A performance bond guarantees the work to be done on all public works projects greater than $100,000. This bond must be equal to 100% of the contract price and must be held for up to one year after date of final completion

3. Payment Bonds

A payment bond is similar to a performance bond in that it also must be provided for all public works projects over $100,000 and guarantee 100% of the contract price. However, the payment bond guarantees payments to subcontractors and material suppliers.

4. DAVIS BACON ACT AND ADDITIONAL FEDERAL LABOR STANDARDS

What is Davis Bacon? What are additional labor provisions that apply?

The Davis-Bacon Wage Act (DBWA) requires that workers be paid not less than the prevailing wage rate for the area. Davis-Bacon is triggered when construction work over $2,000 is financed in whole or in part with covered federal funds. Davis-Bacon applies to all projects except the rehabilitation of residential structures containing less than eight units, or when force account (subgrantee employee labor) is used.

If a project uses both federal funds and state funds, the entire project is subject to DBWA, not PA Prevailing Wage.

Note that you MAY NOT break a project apart to avoid paying Davis-Bacon wages on a portion of a project.

Other labor provisions that apply to federal projects include:

• The Copeland Anti-Kickback Act, which requires that workers be paid weekly, that deductions from workers’ pay be permissible, and that contractors maintain and submit weekly payrolls.

• The Contract Work Hours and Safety Standards Act, which applies to contracts over $100,000 and requires that workers receive overtime compensation (time and one-half pay) for hours they have worked in excess of 40 hours in one week.

Include the Davis Bacon wage determination in the bid package. Davis-Bacon wage rates by county are available at the following website:

http://www.sam.gov

To select the appropriate wage determination, first select “Pennsylvania” and then “Northampton County.” You will then have to choose a category: building, residential, heavy, or highway.

• Building construction generally includes construction of sheltered enclosures with walk- in access for housing persons, machinery, equipment or supplies. This includes all construction within and including the exterior walls, both above and below grade.

• Residential projects involve the construction, alteration or repair of single-family houses or apartment buildings no more than four stories tall.

• Heavy construction is generally considered for all construction not properly classified as highway, residential, or building. Water and sewer line construction will typically be categorized as heavy construction.

• Highway projects include construction, alteration or repair of roads.

Once you choose a construction category, you will generally be limited to one wage determination (WD) number (ex: PA2022). Select this number, and then hit search. The body of each wage determination lists the classifications and wage rates that have been found prevailing for the cited type(s) of construction in the area covered by the wage determination.

If there is any doubt about choosing the correct category or classification, contact NC DCED for guidance. Additional guidance on selecting wage classifications is also available at:

http://sam.gov http://www.sam.gov/ http://sam.gov/

The applicable wage rate decision (and any additional classifications) must be a physical part of the bid package.

• Ten (10) days prior to bid opening, you must check to see whether the wage decision has been modified. If so, this modification applies to the job. You must contact all potential bidders appropriately in conformance with local procurement procedures.

• Wage determination modifications issued after bid opening do not apply to the job --except when a contract has been awarded, but construction has not begun within ninety (90) days after the award. In this case, the contractor must adhere to any wage modifications.

Include in the bid package, in its entirety, “HUD form 4010” (typically in Exhibit B), from the municipality’s sub-grant agreement with the County. This document lists all additional federal requirements to which the contractor and any subs are bound.

All conditions of your executed sub-grant agreement with Northampton County, including the HUD form #4010, flow down to and must be incorporated into all construction contracts and subcontracts. These documents must be included, either in their entirety or by reference, in the final contract with the contractor and any subcontractors.

C. ADVERTISING FOR BIDS

The steps below apply to projects/contracts expected to exceed $25,000.

1. Submit your bid documents to NC DCED at least two (2) weeks before advertising.

a. NC DCED will check to make sure all relevant federal requirements are included in the specs.

b. NC DCED will also check to see how you are providing preferences for Section 3 and MBE/WBE businesses, in order to meet the contracting goals.

2. The invitation to bid must be published in a "newspaper of general circulation" at least two (2) times at intervals of not less than three (3) days. This would be The Express Times and/or The Morning Call, depending on your location.

3. The first advertisement must be published not more than forty-five (45) days and the second advertisement not less than ten (10) days prior to the date fixed for the opening of bids.

4. Forward a copy of the Invitation to Bid to each applicable Minority/Women

Business. Submit proof of compliance to NC DCED.

5. Submit “Proof of Publication” to NC DCED.

A Word about Penn Bid

When you use the services provided by Penn Bid for your project this is an acceptable practice to reach a larger audience for your project.

Using the Penn Bid service will not relinquish your responsibilities regarding the HUD public notice requirements.

Some Words about Contractor Selection

When you bid your project, you will receive bids from a Prime Contractor or General Contractor.

This company often subcontracts parts of the job to other contractors. It is important that you make bidders aware that as a federally-funded project, all rules and regulations "flow down" from the County, to you, to the Prime Contractor, and to sub-contractors. This should be stated in the bid announcement and discussed at any pre-bid and/or pre-construction meetings you will conduct.

Bid Advertisement Scenarios

You plan to open bids on July 1,in order to recommend a contractor to your board/Council by

July 10.

OK

You send the bid packet to NC DCED May 15. We look at it May 21, and there is enough time in case a change is needed. The final version is approved May 28 and you advertise for the 1st time on May 30. The 2nd ad runs on June 15.

Not OK You send the bid packet to us on June 10th and tell us it will be in the paper on

June 12 for the 1st time and the 19th for the 2nd time (NC DCED needs time to review).

You send the bid packet to us March 1. We respond with approval March 10.

You advertise for the 1st time on April 15 and the 2nd time on June 15 (1st ad was too early, wage rates have expired.).

You send the bid packet to NC DCED May 15. We respond with approval on

May 28. You advertise for the 1st time on June 20 and the 2nd time on June 25 (2nd ad too close to due date).

D. AFTER BID OPENING AND BEFORE CONTRACT AWARD

1. Check every bidder’s “Exhibit B” to see whether any of the bidders identify as MBE, WBE, or Section 3 firms.

• If so, is a preference warranted?

• Ensure that the apparent low bidder submitted in “Exhibit B.” the necessary documentation.

2. Check suspension and disbarment status

Check the Federal site to ensure than the potential awardee has not been disbarred or suspended. Contractors must register at www.sam.gov. The website address is:

https://www.sam.gov

• Be sure to search with both by Name of the Company and by Owner.

• Print out results and provide NC DCED with a copy.

3. Send to NC DCED:

a) List of all bidders and bid amounts;

b) In Exhibit B” showing MBE/WBE/Section 3 status for each bidder; and

c) Confirmation that the selected bidder is not on the federal disbarment list.

http://www.sam.gov/ https://www.sam.gov/

E. AFTER CONTRACT AWARD AND BEFORE START OF CONSTRUCTION

1. Provide NC DCED with each of the following:

a) A copy of the minutes from the meeting at which the contract(s) was/were awarded. Be sure the minutes describe the method used to award the contract (small purchase, sealed bid, advertising, or formal proposal), including evaluation factors and scoring methodology.

b) A copy of the certified bid tabulation.

c) A copy of the completed, Bidder Response Form, for the successful bidder. This must include a list of all current employees of the contractor (including trade, office and professional employees). This list will be used to gauge compliance with Section 3 employment requirements.

d) Proof of bid bonds.

e) Proof of insurance coverage that lists the County as an additional insured and that shows levels of coverage as specified in your contract with the County.

f) A copy of the executed contract between the municipality and the contractor.

2. Remember that if a contract has been awarded, but construction has not begun within 90 days of the award, the grantee must determine whether any modifications have been issued to the wage decision. If so, the contractor must adhere to the modified wage decision.

3. Preconstruction Conference

A representative from the NC DCED must attend your pre-construction conference.

NC DCED staff will cover the federal labor and other requirements for the project and describe the payroll certification and payment process.

F. DURING CONSTRUCTION

1. Notify NC DCED of start date at least one week in advance.

This will allow NC DCED to anticipate receipt of payroll certifications and invoices. Note also that NC DCED may conduct random employee interviews and a review of the work site at least once during the project.

2. If a modification to the scope of work is determined to be needed at any point during construction, you must submit a project change order to NC DCED before work is done.

Do not proceed with activities that in any way modify the agreed-to scope or cost of activities before receiving NC DCED approval.

3. Ensure that a copy of the wage decision and all required posters/signage are visible at the construction site and take a digital photo: Davis Bacon, OSHA, and EEO.

Posters, in both English and Spanish, are available from NC DCED.

4. Ensure that the contractor submits original, certified payrolls and fringe benefit explanation form to NC DCED on a weekly basis. A payroll form and instructions are included in Exhibit B.

A fringe benefit form will be provided to you by NC DCED.

The County's Role in Payroll Oversight

As a CDBG recipient, the County assumes responsibility for ensuring that the Davis Bacon Wage Act (DBWA) is followed. We are required to receive the payroll certs weekly during the project. We do not use these to issue payment; this review is for enforcement purposes.

While the Federal Department of Labor states that only certified payroll certs on the WH-347 form are required to be completed by contractors, HUD requires we verify that any fringe benefits provided comply with the DBWA. In order to do this, contractors and subcontractors must agree to provide us with the information requested on the Fringe Benefit Explanation form.

Any questions regarding DBWA compliance will be directed by the County to the prime contractor. In the event that a dispute arises, we will notify you as the subgrantee. Payments on the project may need to be suspended during dispute resolution.

5. Submit invoices to NC DCED for payment.

NC DCED will review the certified payrolls and invoices. Pending any problems (non-compliance with wage rates, unapproved expenses, etc.), NC DCED will provide payment to the municipality.

6. Submit to NC DCED semi-annual project reports, as required.

7. Notify NC DCED when the job is completed. Following this notification, NC DCED will contact you with any final reports that need to be completed.

Exhibit B TO BE SUBMITTED WITH BID

BIDDER RESPONSE FORM:

MBE/WBE/SECTION 3 COMPLIANCE

A. Bidder Information Bidder Name:

EIN#:

Contact Person:

Address: Project Name:

Telephone: Bid Amount: $

As principal owner of the above-named firm, I certify that our firm is a bona fide:

Minority Owned Business Enterprise Signature

Women Owned Business Enterprise

Section 3 Business Enterprise Title (Must also submit Att. H)

None of the Above Date

B. Subcontractor Projection MBE Goal: 5.0% WBE Goal: 3.0% Section 3 Contracting Goal: 10.0%

Potential MBE/WBE/Sec3 Subcontractor or Supplier

Choose one:

MBE/WBE/Sec3

Address

Subcontract Amount/ Type of Work

C. Outreach Efforts If any of the above goals were not met, please describe your efforts to enlist MBE/WBE/Section 3 subcontractors or suppliers.

D. Current Employees Please attach a list of all employees (including for trade, office, and professional staff) and their titles as of the date of your bid. This list will be used as the basis for determining new hires for Section 3 compliance.

(Section 3 definitions included in Attachment E)

Exhibit B

GUIDELINES AND BIDDER INSTRUCTIONS:

MINORITY/WOMEN BUSINESS ENTERPRISES

This project is funded in part with federal Community Development Block Grant (CDBG) funds, as awarded by the U.S. Department of Housing and Urban Development. In accordance with federal and state rules and regulations, municipalities must uphold the conditions of Minority/Women Business Enterprises (MBE/WBE).

The objective of the plans is to facilitate the strengthening and expansion of MBE/WBE businesses.

The MBE goal for this project is 5.0% and the WBE goal is 3.0%. The successful bidder will be required to submit evidence that these goals have been met either through its own employment practices or through the use of MBE/WBE subcontractors and vendors. Failure to provide information related to these requirements may result in the bidder being determined not responsible.

As part of your bid:

In preparation of your bid, you must contact certified MBE/WBE in order to solicit subcontractor and supplier proposals. The current listing of state-certified MBE/WBE firms can be accessed at: http://www.dgsweb.state.pa.us/mbewbe/VendorSearch.aspx. You may also contact other MBE/WBE firms of which you are aware.

As part of your bid, you must submit the Bidder Response Form (Attachment A), which will be used to ascertain your level of MBE/WBE utilization. Your efforts and success in utilizing these firms will be one of the tests of bidder responsibility.

Failure to meet this project’s MBE/WBE goals does not automatically disqualify your bid. At the municipality’s discretion, elements of the MBE/WBE requirements may be waived, provided the bidder can submit adequate evidence of an effort to enlist MBE/WBE subcontractors and suppliers for the project.

If you are the successful bidder:

If you are the successful bidder, you will be expected to document your efforts to solicit MBE/WBE business participation, and to confirm the percentage of participation you will achieve.

At the completion of the project and before final payment, you will be required to furnish a completed Minority/Women Business Utilization Report (Attachment C), along with a Minority/Women Business Certification form (Attachment D) for each MBE/WBE business.

http://www.dgsweb.state.pa.us/mbewbe/VendorSearch.aspx

MBE/WBE BUSINESS CERTIFICATION

TO BE COMPLETED BY MBE/WBE SUBCONTRACTORS

PRIOR TO FINAL PAYMENT

PRIME CONTRACTOR WILL SUBMIT TO NORTHAMPTON COUNTY DCED

As principal owner of the company named herein, I certify that _

Name of Company is a bona fide:

Minority Business Enterprise

Women Business Enterprise

I further certify that this firm was subcontracted by _

Prime Contractor for work on the _

Name of Project in the amount of $_ .

Signature Date

Name Title

SECTION 3 GUIDELINES AND INSTRUCTIONS

Section 3 is a provision of the Housing and Urban Development (HUD) Act of 1968 that helps foster local economic development, neighborhood economic improvement, and individual self-sufficiency.

Section 3 requires that when contracting or employment/training opportunities are generated because an applicable federally funded project necessitates the awarding of contracts or the employment of additional personnel through individual hiring, the recipient must give preference to low- and very low-income persons and/or businesses owned by these persons or that substantially employ these persons.

Section 3 regulations are available as part of 24 CFR Part 135, which can be accessed at: http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&rgn=div5&view=text&node=24:1.2.1.2.10&idno=24

SUBRECIPIENT RESPONSIBILITIES

Subrecipients of Section 3-covered funding have a responsibility to “ensure compliance” of their contractors and subcontractors. This means that a subrecipient must:

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

2. Ensure Section 3 contracting and employment/training goals are met “to the greatest extent possible.”

3. Refrain from entering into contracts with contractors that are in violation of 24 CFR Part 135.

4. Respond to complaints made to the recipient by Section 3 residents or business concerns that the subrecipient, a contractor or subcontractor, is not in compliance with 24 CFR Part 135.

5. Cooperate with HUD in obtaining the compliance of contractors and subcontractors when allegations are made that the subrecipient’s contractors and subcontractors are not in compliance with 24 CFR Part 135.

SECTION 3 GOALS

All contractors undertaking Section 3-covered projects are expected to meet the Section 3 requirements.

To demonstrate compliance with the “greatest extent feasible” requirement of Section 3, contractors must meet the goals set forth below for providing contracting and employment/training opportunities to Section 3 businesses and Section 3 residents.

Contracting Goals. Ten percent (10%) of the total dollar amount of all covered construction contracts and subcontracts should be awarded to Section 3 businesses. Progress toward Section 3 contracting goals should be reported on Attachment F.

For all contracts and subcontracts on Section 3-covered projects, a preference for Section 3 businesses may be included in your selection scoring process in order to meet the contracting requirements.

Preference may be awarded to Section 3 businesses according to the following system:

A. Where the contract is to be awarded based upon the lowest price, the contract may be awarded to the qualified Section 3 Business with the lowest responsive quotation, if it is reasonable and no more than 10% higher than the quotation of the lowest responsive quotation from any qualified source.

http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&rgn=div5&view=text&node=24%3A1.2.1.2.10&idno=24 http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&rgn=div5&view=text&node=24%3A1.2.1.2.10&idno=24 http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&rgn=div5&view=text&node=24%3A1.2.1.2.10&idno=24

B. Where the contract is to be awarded based on factors other than price, a request for quotations may be issued by developing a rating system for the assignment of points to evaluate the merits of each quotation. The rating system may provide for a range 15% to 25% of the total number of available rating points to be set aside for the provision of preference for Section 3 businesses.

The purchase order may be awarded to the responsible firm whose quotation is the most advantageous, considering price and all other factors specified in the rating system.

Employment Goals. Thirty percent (30%) of new employment opportunities should be awarded to Section 3 residents. Progress toward Section 3 employment goals should be reported on Attachment G.

If a contractor or subcontractor will hire new employees as a result of receiving HUD assistance, these jobs must be provided, to the greatest extent feasible, to low- and very-low income persons, especially those living in the project area.

All contractors will seek low- or very low-income persons residing in the metropolitan area for no less than 30% of all new hires. When a person is newly hired by the contractor for the project, the contractor must show evidence of seeking Section 3 Residents.

Any employment resulting from these expenditures, including administration, management, clerical support, and construction, is subject to compliance with Section 3. Recipients are required, to the greatest extent feasible, to provide all types of employment opportunities to low and very low-income persons, including permanent employment and long-term jobs.

• Recipients and contractors are encouraged to have Section 3 residents make up at least 30% of their permanent, full-time staff.

• A Section 3 resident who has been employed for 3 years may no longer be counted towards meeting the 30% requirement. This encourages recipients to continue hiring Section 3 residents when employment opportunities are available.

There is no requirement to employ or contract with a Section 3 resident or business who does not meet the qualifications of the position to be filled or who cannot perform the contract.

SECTION 3 DEFINITIONS

Section 3 Business - means a business:

1. That is 51% or more owned by Section 3 residents; or

2. Whose permanent, full-time employees include persons, at least 30% of whom are currently Section

3 residents, or within three years of the date of first employment were Section 3 residents; or

3. That provides evidence of a commitment to subcontract in excess of 25% of the dollar award of all subcontracts to be awarded to business concerns that meet the qualifications set forth in (1) or (2) above.

Section 3 Resident – means:

1. A resident of the Northampton County Housing Authority; or

2. A low-income or very-low income person who resides in Northampton County. Low-income and very-low income means families (including single persons) whose incomes do not exceed 80 percent or 50 percent, respectively, of the area median income for families of that size.

2022-NORTHAMPTON COUNTY

INCOME LIMITS BY HOUSEHOLD SIZE

# IN

HOUSEHOLD

80% OF THE

MEDIAN

LOW-INCOME

50% OF THE

MEDIAN

VERY LOW

INCOME

30% OF THE

$90,600

1 PERSON

$50,750

$31,750

$ 19,050

2 PERSON

$ 58,000

$ 36,250

$ 21,800

3 PERSON

$65,250

$40,800

$ 24,500

4 PERSON

$ 72,500

$ 45,300

$ 27,750

5 PERSON

$78,300

$ 48,950

$ 32,470

6 PERSON

$ 84,100

$ 52,550

$ 37,190

7 PERSON

$ 89,900

$ 56,200

$ 41,910

8 + PERSON

$ 95,700

$ 59,800

$ 46,630

SECTION 3 FAQs How does Section 3 differ from the Minority/Women Business Enterprise programs?

Section 3 is both race and gender neutral. The preferences provided under this regulation are based on income level and location. The Section 3 regulations were designed to encourage recipients of HUD funding to direct new employment and contracting opportunities to low-income residents, and the businesses that employ these persons, within their community regardless of race and/or gender.

Contact HUD’s Office of Small and Disadvantaged Business Utilization at (202) 708-1428 to learn more about these programs.

How can a business become certified as a Section 3 business?

Northampton County’s Department of Community and Economic Development has a form that a business can fill out to certify as a Section 3 business (Attachment H).

How can businesses find Section 3 residents to work for them?

Businesses can recruit Section 3 residents in public housing developments and in the neighborhoods where the HUD assistance is being spent. Effective ways of informing residents about available training and job opportunities are: contacting resident organizations, local community development and employment agencies; distributing flyers; posting signs; and placing ads in local newspapers.

Will HUD require Section 3 compliance?

Yes. HUD monitors the performance of contractors, reviews annual reports from recipients, and investigates complaints. HUD also examines employment and contract records for evidence that recipients are training and employing Section 3 residents and awarding contracts to Section 3 businesses.

Contact Northampton County’s Department of Community and Economic Development, at (610) 829- 6311, with Section 3 questions.

When Do Section 3 Requirements Apply?