Grant Administration: Section 8.9 Economic Opportunity Requirements During Construction

Economic Opportunity is different than the non-discrimination in hiring requirements described in Chapter 4: Grantee Requirements. Section 3 of the Housing and Urban Development Act of 1968 requires that contracting and employment opportunities be offered to businesses located in and lower-income people residing in the area of the project. (Additional information regarding provisions of Section 3 impacting a grantee’s contracting and contractor hiring is discussed in Chapter 7: Procurement.) This section briefly summarizes the duties of prime contractors related to subcontracting and employment efforts for both prime contractors and subcontractors.

For covered projects, Section 3 establishes goals for job training, employment and contracting that the grantee must track and report. For construction activities, the grantee should develop procedures to track the following:

  • Employment and Job Training: new hires of Section 3 Residents
  • Contracting for Construction: total dollar amount of construction contracts and subcontracts with Section 3 Businesses

Businesses seeking to confirm whether a resident meets the definition of Section 3 Resident or a firm meets the definition of Section 3 business should consult with the LSO or other project contact identified by the grantee or sub-recipient during the Pre-Construction Meeting.

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