Labor Standards, Procurement and Section 3 CDBG ... · which DBRA labor standards apply. Therefore, YouthBuild participants must be paid prevailing wages on DBRA-covered construction

Labor Standards, Procurement and Section 3CDBG Requirements

November, 2017Colleen Simmons

L. Marcela Vargas

Division of Water Infrastructure, CDBG-I Unit

Purpose of this Overview

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Department of Environmental Quality

Overview:

• How to comply with the Labor Standards, Section 3, and Procurement

requirements.

• Provide more guidance, resources and tools.

• Best Practices.

• Non Compliance issues.

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Labor Standards

Section 3

Procurement

CDBG Funds

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General Compliance

• Document everything for monitoring and reporting purposes

• Attend workshops/trainings

• The Division is periodically reevaluating processes to avoid non compliance issues.


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General Compliance

Please ensure there is continuous communication among parties related to the CDBG project:

• Local Government Officials and Staff

• Grant Administrator

• Engineers

THE LOCAL GOVERNMENT IS THE RESPONSIBLE ENTITY NOT the CONSULTANT/GRANT ADMINISTRATOR

CONTRACTORS MUST COMPLY WITH LABOR STANDARDS AND SECTION 3 REQUIREMENTS


Labor Standards

Davis Bacon and Related Acts

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• Davis Bacon Act applies to contracts directly funded through federal agencies.

• Other Federal funding programs have had Labor Standards requirements added on to enabling legislation:

• For those programs, US Department of Labor has HUD and EPA pass through to the local funding agency (county, city, etc.) enforcement through the “Davis –Bacon and Related Acts”.


DAVIS-BACON ACT

• Enacted in 1931, amended in 1935 & 1964

• Federal construction contracts over $2,000

• Applies to all laborers & mechanics

• Includes alteration, repair, painting & decorating

• Requires payment of prevailing wage rates

• Requires weekly payment of wages

•The Act is “site-based”

• Usually applied through the “Related acts”


COPELAND ACT

• Enacted in 1934

• Prohibits “Kick-backs” of pay

• Requires certified weekly payrolls

• Regulates payroll deductions from wages:• FICA, federal and state income tax withholding• Bona fide prepayment of wages• Court ordered payments, fringe benefit plans, etc.


CONTRACT WORK HOURS & SAFETY STANDARDS ACT (CWHSSA)

• Enacted in 1962

• Overtime for all work > 40 hrs/week

• Applies to contracts over $100,000

• Liquidated damages for violations ($25 per day per violation) Updated


DOL REGULATIONS - 29 CFR

• Pt 1 Determination of wage decisions

• Pt 3 Copeland Act requirements

• Pt 5 Labor standards provisions for contracts

• Pt 6 Administrative proceedings (ALJs)

• Pt 7 Practice before the Admin. Review Board


Labor Regulations Summary

• Three sets of laws (Davis Bacon, Copeland, Contract Work Hours & Safety)

• These three sets of laws are enforced by USDOL, pursuant to CFR Title 29, Parts USDOL, pursuant to CFR Title 29, Parts 1,3, 5, 6 & 7)

• USDOL (and Statutes) require sub recipients to enforce labor regs on funded responsible entities.

• CDBG (EDI/BEDI/Section 108): Housing and Community DevelopmentAct of 1974, Sec. 110(a)

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RESPONSIBILITIES


State Responsibilities

• Provide technical Assistance

• Ensure compliance with requirements: Grantees and Contractors

• Monitor Labor Standards

• Maintain full documentation of actions

• Report contracts to HUD

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Grantee Responsibilities

• Designate appropriate enforcement staff

• Ensure that bid docs, contracts, & subcontracts contain

• Section 3 clause

• Federal labor standards clauses (HUD-4010)

• Applicable wage decision

• Verify contractor eligibility (www.sam.gov, print results page or make note to file)

• Conduct on-site employee interviews with laborers & mechanics; comply with posting requirements

• Review certified weekly payrolls

• Ensure compliance with requirements

• Maintain full documentation of actions

• Refer investigations to HUD

• Submit required reports


http://www.sam.gov/


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The grantee’s “labor standards officer” (LSO) performs more than payroll reviews. The LSO should be informed of all project planning and

contracting activity, should be consulted regularly regarding the applicability of prevailing

wage requirements, and should have the authority to withhold funds from contracts when

circumstances warrant

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Labor Standards Officer

• Responsible for:

• Obtaining wage determinations and contract provisions

• Verifying contractor and subcontractor eligibility

• Conducting pre-bid and pre-construction conference

• Obtaining all required documentation

• Reviewing weekly certify payroll reports

• Conducting site visits for employee interviews

• Monitoring project compliance

• Maintaining appropriate files


Prime Contractor Responsibilities

• Responsible for compliance of all contractors

• Subcontractors communicate through prime

• Include labor provisions & wage decision in all subcontracts

• Provide subcontractors with forms, guidance

• Ensure agency access to employees on site

• Submits certified payrolls for own employees

• Request additional classifications: Review wage decision to determine if there is a need for an additional classification to complete the project.

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Subcontractors Responsibilities

• Prepare & submit certified weekly payrolls

• Insure compliance by sub-tier sub-contractors, including incorporation of labor provisions & wage decision

• Review wage decision, request additional classifications

• Ensure agency access to employees on site

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Construction Contract Documents

Ensure incorporation into contract document

1. The current appropriate wage decision applicable to the work being done, and;

1. The applicable Federal labor standards clauses

• Labor Standard Provisions: HUD-4010


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APPLICABILITY


CDBG Applicability

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“All laborers and mechanics

employed . . on construction

work financed in whole or in

part . . . shall be paid

[prevailing wage rates].”

Section 110a of the HCDA of 1974

CDBG Applicability

• Construction work over $2,000

• Unit thresholds may also apply (8+ units) (Contiguous + same owner)

• Soft costs generally do not trigger DB (Soft costs include architectural, engineering, financing, and legal fees, and other pre- and post-construction expenses)


CDBG Applicability

• Force account work is exempt (except for PHA staff)

• Volunteers are exempt (must be documented)

• YouthBuild participants are not exempt from prevailing wage requirements determinations for any project to which DBRA labor standards apply. Therefore, YouthBuild participants must be paid prevailing wages on DBRA-covered construction.


EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY

SYSTEM U.S. DEPARTMENT OF LABOR Washington, D.C. 20210

CLASSIFICATION YouthBuild CORRESPONDENCE SYMBOL

OWI-DYS DATE December 20, 2016

Verify Contractor EligibilityDavis-Bacon covered projects only

www.sam.gov

Print results page or

make note to file

http://www.sam.gov/

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WAGE DECISION


DOL DB Rates

• Conduct survey of contractors: Encourage contractor’s participation!

• By geographic area: Counties

• Establishes the “prevailing” wage rate

• May be modified from time to time

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DOL WAGE DECISION

• Identifies work classifications, basic hourly wages, fringe benefits

• It may be modified periodically

• Published for 4 types of construction: Heavy, Building, Residential & Highway

• Must be posted in conspicuous place at the job site

• Review the scope (end use) of the project, if work is more than 20 % or one Million of the contract amount then there is a need for an additional WD.

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BUILDING

Sheltered enclosures for the purpose of housing persons, machinery, equipment, etc.

Apartment buildings greater than 4 stories

Commercial buildings

RESIDENTIAL

Single family houses, townhouses

Apartment buildings 4 stories or less

HIGHWAY

Roads

Highways

Sidewalks

Parking areas

Other paving work not incidental to other construction

HEAVY

Projects which cannot be classified as Building, Residential, or Highway

Dredging

Water & sewer lines

Parks and playgrounds

Flood control


CHARACTER OF CONSTRUCTION

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Obtaining Wage Decisions

On-line at www.wdol.gov

http://www.wdol.gov/

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WAGE DECISION “LOCK-IN”

Lock-in at bid opening provided contract is awarded within 90 days (Competitively Bid Contract)

Lock-in at contract award date or the construction start date, whichever occurs first (Negotiated Bid Contract)

Must update wage decision if contract is awarded more than 90 days after bid opening

Modifications published <10 days before bid opening are not applicable if there is insufficient time to notify bidders

Document attempts to notify bidders or the reason you were unable to notify bidders (it does not apply to SRF if <10 days )

Ensure your agency has a system in place to track wage decision modifications and pending contracts subject to Davis-Bacon prevailing wage requirements

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Wages & Fringe Benefits

The term “wages” or “prevailing wages” includes:

◦ The basic hourly rate (BHR)

◦ Contractor contributions irrevocably made to a trustee or third party pursuant to a bona fide fringe benefit (FB) fund, plan, or program

◦ The rate of costs the contractor reasonably anticipates in providing bona fide FB’s where certain conditions are met


Fringe Benefits

• Under DBA, FB’s are a component of “prevailing wage”

• The WD obligation may be satisfied by:

• Paying the BHR and FB in cash

• Contributing payments to a bona fide plan

• Any combination of the two

• Must be paid weekly for all hours worked

• Cash wages paid in excess of BHR may count to offset or satisfy the FB obligation


Examples of Fringe Benefits

•Life Insurance

•Health Insurance

•Pension

•Vacation

•Holiday

•Sick Leave


Fringe Benefits Calculation

Base Rate: $14.85

Fringe Benefit $: $1.38

Fringe Benefit %: 3%

3% of the base rate

0.03 X 14.85 = $0.44

$14.85

$ 1.38

$ 0.44

Total hourly wage: $16.67

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Examples

• If WD requires a prevailing wage of $16.67 ($14.85 BHR plus $1.82 in FB), the contractor can comply by paying:

• $16.67 in cash wages; or

• $14.85 plus $1.82 in bona fide FB; or

• $13.00 plus $3.67 in bona fide FBs

DBRA regulations do not list requirements of bona fide plan, but indicate that benefits funded a trust or insurance program would typically be bona fide, and that the “bona fide” requirements excludes fringe benefits that are “illusory or not genuine”.

Also refer to 29 C.F.R Part 5.20.


Overtime Pay(CWHSSA)

An employee worked 45 hours as carpenter, where WD BHR is $14.85 plus $1.82 in FB’s:

45 hours x $16.67 $ 750.15

5 hours x $14.85/2 $ 37.12

787.27


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Davis Bacon

Compliance Principles


Laborers and mechanics

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Laborers and Mechanics mean anyone who is performing construction work on the project

Supervisors are covered if they spend 20% or more of their time performing manual work ***

Every person who performs work is considered “employed” regardless of any contractual relationship

Classify and pay for work

Performed

Split Classifications

An employee performing work in more than one trade may be:

1. Paid the wage rate specified for each classification

2. Keep accurate time records

3. Otherwise, pay the employee the highest wage rate of the applicable trade

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• Covered if driving on the “site of the work”

• Covered if loading/unloading on the “site of the work” if the time so spent is not de minimus

• Not covered if driving between DB site and commercial facilities

• HUD follows DOL non-enforcement policy for Owner/Operators who own and drive their own trucks

• This policy does not extend to owner operators of heavy equipment

Truck Drivers - Owner/Operators



• DBRA does not cover a material supplier who manufactures materials to be used on a project site and/or delivers materials to the project site unless the supplier is hauling from a location that has been determined as site of work.

• Moving materials from one area of the project site to another area is covered as construction activity. Hauling material away from the project site to another site determined to be site of work is also covered as construction activity.

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• A material supplier that only delivers construction materials to the project, if such time is de minimis, is not covered by DBRA.

• De minimis will be determined on a case by case basis by grantee as the USDOL did not wish to establish “an artificial benchmark” for determining the definition. (29 C.F.R. § 785.47 - Where records show insubstantial or insignificant periods of time)

• Truck drivers who spend more than an incidental amount of time on the site of work are covered for the time spent. If a driver drives on the project site, then must sit and waits in a queue to unload, the time spent driving on site and the time waiting to unload would potentially be compensable under the contract DBRA rate.

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https://www.dol.gov/cgi-bin/leave-dol.asp?exiturl=http://s.dol.gov/8L&exitTitle=www.ecfr.gov&fedpage=yes

Helpers

• Not included on wage decisions

• Won’t be added to the decision absent comprehensive data submitted to demonstrate, to the DOL’s satisfaction, that the use of Helpers are prevailing in a locality

• Indicates possible misclassification, underpayment of semi-skilled or skilled workers

• Follow up: determine actual duties of “Helper”

• Do not merely permit contractor to change payroll to rename as “Laborers” without review

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Apprentices & Trainees

• Only apprentices & trainees registered in an approved program may be paid less than the wage rate specified for their work classification

• “Approved program” means a program registered with the DOL or DOL recognized State Apprenticeship Agency

• Ratio requirements apply: The maximum number of apprentices that may be on the job site

• Pre-apprentices not registered in a program must be paid the full journeyman rate for the classification of work they perform

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Apprentices & Trainees

• Employing contractor must submit documentation of registration and current participation in the program – typically this will come from the DOL or State apprenticeship program office

• Apprentices/trainees not registered or who are utilized out of ratio must be paid the full wage rate (base + fringes) listed on the wage decision for the classification of work performed

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Volunteers

• Performs services voluntarily

• Does not receive compensation for services

• May be paid expenses, reasonable benefits, nominal fee for services

• Not otherwise employed at any time on the construction work

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ADDING CLASSIFICATIONS


Additional Classification Criteria

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• The work to be performed by the proposed classification is not on the

Wage Decision (WD) as an existing classification.

• The proposed classification must reflect the similar and reasonable

relationship to the WD rates.

• The proposed classification is utilized in the project area by the

contractors

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Additional Classification Criteria

• “The proposed wage rate, including any bona fide fringes benefits, bears a reasonable relationship to the wage rates contained in the wage determination” to consider the entirety of the rates within the relevant category on the wage determination and to not generally use as a benchmark the lowest rate within that category.

• Four general categories: skilled crafts, laborers, power equipment operators, and truck drivers. To determine a “ reasonable relationship,” the requested additional classification is compared to the classifications on the applicable wage decision within the same category.

Memorandum No. 213

U.S. Department of Labor

Wage and Hour Division


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Additional Classification Process - Pre-Bid

Contracting Agency (Responsible entity) and Contractor:

• Review WD

• Compare the WD with the project work

• Anticipate needed classifications: Tell contractors about the possible need to request additional classifications and rates after award.

“Unlisted classifications needed for work not included within the scope of the classifications listed may be added after award only as provided in the labor standards contract clauses (29 CFR 5.5 (a) (1)

(ii)).”


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Additional Classification Process - After Contract Award

• Identify additional classifications that may be needed:• At the pre-construction conference or

• From certified payrolls

• Work with the contractors and other affected parties to help develop the conformance request

• Submit conformance request to CDBG-I Unit, Division of Water Infrastructure:

• HUD form 4230-A

• Agency: Local government/Responsible entity

• Signature: Labor Standard Representative (Same person that reviews certified payroll and submits semiannual labor reports)

• Submission to DOL: CDBG – I Unit will complete the submission on behalf of the Municipality/County. The submission includes a completed HUD form 4230-A, related documentation, agency recommendations and a copy of the contract WD (WHD policy requires the submission of the contract wage determination with the conformance request).


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• Submit by email only to [email protected]. Scan the completed form and all supporting documents into PDF file and attach to the email.

• CDBG-I Unit submit document via email to

[email protected]

• Grantees shall inform CDBG-I Unit Compliance Specialist via email once the response from the Department of Labor is received. (DOL representative responses go to the email on the HUD form 4230-A only)

• If DOL does not response within 30 days, it does not mean that the request has been approved (Contact them again by phone, mail or email). The project does not stop construction at any point, contractor will pay the proposed wage rate until final approval from DOL, if the approved amount is higher, the contractor shall go back and pay the difference for the time worked during the approval process.

The Compliance Specialist will provide TA and trainings to grantees and contractors to complete forms and determine the most accurate rates for

new classifications.


mailto:[email protected]

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U .S . D E P A R T M E N T O F H O U S IN G A N D U R B A N D E V E LO P M E N T

R E P O R T O F A D D IT IO N A L C L A S S IF IC A T IO N A N D R A T E

D A T E O F R E P O R T

T O : (A ppropria te R eg iona l O ffice , U .S . D epartm ent o f Labor )

U .S . D E P A R T M E N T O F L A B O R E M P L O Y M E N T S T A N D A R D S A D M IN IS T R A T IO N W A G E -H O U R / D IV IS IO N O F C O N S T R U C T IO N W A G E R A T E D E T E R M IN A T IO N - R O O M S -3012 W A S H IN G T O N , D C 20210

F R O M : (N am e and Location o f H U D O ffice )

N A M E O F P R O JE C T

P R O JE C T N U M B E R

L O C A T IO N O F P R O JE C T (C ity , C oun ty and S ta te )

D E S C R IP T IO N O F W O R K

W A G E D E C IS IO N N O . & M O D IF IC A T IO N N O . (A lso a ttach copy o f app licab le w age dec is ion)

W A G E D E C IS IO N E F F E C T IV E D A TE

In o rder to com ple te the p ro jec t, it is necessary to es tab lish w age ra tes fo r the fo llow ing c lass ifica tions no t inc luded in the above -re ferenced U .S . D epartm ent o f Labor W age D ec is ion :

C LA S S IF IC A T IO N S

B A S IC H O U R LY R A TE (S )

F R IN G E B E N E F IT P A Y M E N T S

N A M E , A D D R E S S & Z IP C O D E O F LA B O R O R G A N IZA T IO N

N A M E , A D D R E S S & Z IP C O D E O F P R IM E C O N TR A C TO R

T ITLE O F LA B O R O R G A N IZ A T IO N R E P R E S E N TA T IV E

T IT LE O F C O N T R A C T O R ’S R E P R E S E N T A T IV E

S upporting docum ents a ttached.

T he in te res ted parties , inc lud ing the em ployees or the ir au thorized representa tives , agree on the c lass ifica tion and w age ra te .

T he in te res ted parties , inc lud ing the em ploye es or the ir au thorized representa tives , cannot agree on the proper c lass ifica tion and w age ra te .

A de term ination o f the ques tion by the S ecre tary o f Labor is there fore reques ted. A va ilab le in fo rm ation and recom m endations are a ttached.

A P P R O V E D

(S igna tu re o f H U D A rea Insu ring O ffice R epresen ta tive )

_______________________________ D a te

(S igna tu re o f H U D R eg iona l Labor R e la tions O ffice r)

_______________________________ D a te

H U D -4230A (4 -73 ) P R E V IO U S E D IT IO N IS O B S O LE T E

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DOL Approval Letter must be posted in a conspicuous place


Davis-Bacon Certified Weekly Payroll Reports

Payroll Basics

• Optional WH347 form

• Compliance statement (original signature)

• Payrolls are due weekly

• Identify first and final payroll (

• “No Work” payrolls are highly encourage – all weeks must be accounted for

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Payroll Basics

• Payrolls must be complete & legible

• Prime contractor reviews payrolls for completeness, submits to Labor Standards Officer

• Payroll retention – three years

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• Contractor or sub-contractor name

• Business address

• Project name & number

• Week ending date

• Day & date for each day in the workweek

• Numbering payrolls

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Important Information

Employee name & identifying number – contractor must make address & SSN available on request only

Employee work classification (name of the classification, no numbers)

Rate of pay

Straight and overtime hours (if any) worked per day, per week on the project.

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Important Information

Must be on the Payroll

• Gross wages earned project specific

• Deductions from wages

• Net pay

• Statement of compliance:

• One for each weekly payroll

• Signed by company official or designee

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Payroll Review

• Ensure submission of certified weekly payrolls

• Conduct on-site interviews

• Check payrolls/related records

• Ensure correction of underpayments

• Prepare / submit required reports

• Maintain records for three years

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• Use to validate payroll data

• Use to develop complaints – by expanding the number of employees interviewed, following up on claims

• Target interviews to substantiate suspected violations

• Interviews are confidential – the information is not to be shared with contractors

• HUD-11 form – (Spanish version available)

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Employee Interviews

Employee Interviews

• There is no regulation that dictates the frequency of conducting employee interviews.

• Employee interviews are conducted based on the intensity and duration of the project, and must be sufficient to establish the degree of compliance and to indicate the nature and extent of violations, if any.

• A small project that takes a few days will have different frequency of interviews compared to a larger project than may run the course for several months.

• It is generally recommended to conduct interviews every two (2) to four (4) weeks, or at least once during the course of each phase of construction on each project.

• All job classifications represented on the job must be included during the interview process.

• At least 10 percent of the workers in all trades onsite, and a least one in each job classification working at the site, should be interviewed.

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Employee Interviews

• If the designated labor officer of the grantee notices discrepancies with payrolls and employee interviews, the frequency of employee interviews should increase.

• Payrolls should be used to verify data obtained during on-site interviews.

• Check to see that employees are being paid the amounts specified in the wage decision, the amount shown on the payrolls, and the hours shown on the payrolls.

• Include hours of the supervisor. If any discrepancies between onsite interviews, payrolls, and wage rates are identified, they need to be corrected.

• DEQ Benchmark: Conduct interviews every three weeks to determine if the contractor and subcontractors are in compliance with labor laws.

• Randomly select employees to be interviewed.

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Employee Interviews

Benchmark

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Frequency

3 weeks At least one in each job

classification working at the

site

Monthly Ensure every classification has

been interviewed

Quarterly Ensure there are no new

employees

Discrepancies: 2 weeks Same employees and new

employees


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•Review first payrolls in some detail

•Spot check subsequent payrolls if no problems are detected early on

•Review for trades; are all trades represented?

•Compare HUD-11s with payrolls & follow up on discrepancies

•Focus on falsification

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Payroll Review

•Allow contractor reasonable time to make corrections, pay restitution, but follow up promptly if needed

•Retain original certified payrolls; do not return original payrolls to contractor

•Schedule additional employee interviews if payrolls show signs of falsification or underpayment

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Payroll Review

• “Other” deductions not clearly identified or explained

• Classification errors or deliberate misclassification –e.g., employees listed as laborers performing skilled work

• Photocopied or faxed certified payroll

• Incomplete payroll information

• Single compliance statement for multiple weeks

• Unauthorized signatory to compliance statement

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Payroll Review - Issues

Falsification Indicators:

•Ratio of laborers to mechanics >1:1

•Too few or irregular hours

•Discrepancies in wage computations

•Extraordinary deductions

•Worker with a complaint

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Payroll Review -Issues

After Review

• Communicate routine review results by phone; document with “memo to file”

• Take corrective action promptly

• Notify contractor in writing of violations if not corrected promptly after informal request

• Always send written notification of serious violations or when sanctions, withholding are possible

• Provide appeal rights to contractor

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Corrective Actions

• Require appropriate documentation – require certifiedcorrection payroll report

• Obtain written assurance of future compliance for substantial violations

• Submit report to DWI and HUD OLR where restitution >$1,000

• Track all restitution for Semi-Annual Report

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Most common specific findings and their appropriate corrective actions

• Not posting Davis-Bacon materials where workers can easily see them:

• Instruct the contractor to move the postings to a prominent and accessible location.

• Not having certified payrolls for all workers including lower tier subs:

• Instruct the contractor to provide payrolls for ALL workers on site

• Time gap in certified payrolls:

• Instruct the contractor to provide zero certified payrolls or a letter on company letterhead stating that no work was completed during the time gap.

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• Workers classifications are not on wage determination:

• Complete a Conformance Request and send it to DEQ for review. The owner/contractor shall follow up on a regular basis until DOL issues a conformance. The contractor must then post this conformance with the Davis-Bacon signage on site.

• Not paying the Davis-Bacon wage rate. Perform a thorough review of all certified payrolls:

• Verify the wage rate paid each worker is at least equal to the wage rate PLUS fringe benefits on the wage determination for the project.

• instruct the contractor to correctly pay the wage rates in the determination.

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• To document compliance, the contractor shall provide an adjusting certified payroll from the beginning of work showing the adjusted wage rate and difference in pay to be made.

• To document the worker has been paid, the contractor shall provide a copy of payment, such as a check or direct deposit receipt.

• The owner must keep copies of the documentation with the certified payrolls in the project file. After wage rate findings have been resolved, conduct Davis-Bacon interviews of the workers on site and place them with the certified payrolls.

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• If inconsistencies are found, the grantee instruct the contractor to make corrections. The grantee stop payments, issue a stop work order, and any other means necessary to bring the contractor into compliance.

• If the findings are not resolved in a timely manner, contact the Division. The Division will take further action as necessary and may report the findings to the HUD Office.

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Occurs when a contractor is declared ineligible for future contracts due to:

◦ Violations of the DBA in disregard of its obligations to employees or subcontractors

◦ Aggravated or willful violations under the labor standards provisions of

related Acts

Period of ineligibility is up to 3 years for DBRA


Debarment

• Debarment is considered when a contractor has:• Submitted falsified certified payrolls

• Required “kickbacks” of wages or back wages

• Committed repeat violations

• Committed serious violations

• Prime contractors can be debarred for subcontractor violations


Debarment

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General Compliance

• Pre construction – Undertake the proper steps to make sure labor regulations and procedures are in place to ensure compliance during the construction process.

• Construction Period – Follow through on the procedures to ensure proper posting, payroll, monitoring and compliance procedures are followed.

• Construction Completion and Post Construction Completion Period –Gather payroll, certifications, and documentation and records retention requirements.

• The predevelopment and preconstruction phase are the most important phase of a successful project.


Compliance for Davis-Bacon Projects

Ensure submission of certified payrolls

Conduct on-site interviews (HUD-11)

Spot-check payrolls/related records

Ensure correction of underpayments: benchmarks

$10 or less: fix it

$100 or more: ask more questions

$1000 or more: stop the project

Maintain records 3 (5) years after completion

Submit enforcement reports as needed

Maintain a schedule of Contractors working on the site:


WEEK 1 WEEK 2 WEEK 3 WEEK 4

Prime

Sub A

Sub B

Labor Standards Do’s and Don’ts

Wage Determinations and Bid Documents

• DO’s

• WD must be in Bid Package

• WD covers all work, including subcontractors

• WD is the minimum wage to be paid

• Prime Contractor’s Responsibilities

• Posting of WD

• Determining Contractor Eligibility

• Use of Apprentices

• Labor Standards Officer shall be the same throughout the life of the project: he/she reviews payrolls and conducts interviews.

• Don’ts

• Failure to Include WD

• Use of wrong determination

• Multiple Labor Standards Officer coordinating the same project


Labor Standards Red Flags

Red flags

• Kickbacks: currently the most common issue.

• Fraud schemes by Vendors, Contractors and Grantee

• Contractors not being monitored with frequency

• Properly classify employees: Contractors must classify their employees correctly otherwise they are under the false claim act

• Worked hours to the decimals are red flags: employers divide employees in two different classifications to pay less

• Equipment Operator: It matters what they sit in, not the work they do.


Important!!

• IRS – Contractor or Employee?

• 1099 or W2?

Is not being enforce by HUD but it can be a red flag!!!

Misclassification


REPORTS

Semi-Annual (§5.7(b))

Submit report twice each year for periods:

Oct 1 - Mar 31

Apr 1 - Sep 30

Report covered contracts for construction awarded within reporting period

Report enforcement activity – regardless of award


REPORTS

Grantees with Davis-Bacon applicable projects must report to the State (Once the wage decision has been obtained and prior to construction starting ):

• The wage decision(s) used

• The pre-construction meeting minutes

• Start of Construction card: The information included on the card is the bid advertising date, bid opening date, date of contract award, bid contract amount(s), date of pre-construction meeting, wage decision(s) used, and estimated construction start date


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The posters and notices below are required to be posted conspicuously on the job site:

The Davis-Bacon poster (WH 1321) and other Labor Standards Posters shall at all times be posted by the contractor and its subcontractors at the worksite in a prominent and accessible place where it can be easily seen by workers.

• Equal Opportunity is the Law- English and Spanish

• Federal Minimum Wage Poster- English and Spanish

• HUD Federal Labor Standards Provisions

• NC DOL Wage and Hour Notice to Employees- English and Spanish

• NC DOL OSH Notice to Employees- English and Spanish

• US DOL Employee Rights Under the Davis-Bacon Act Poster (WH-1321)- English and Spanish

• HUD 4010 Federal Labor Standards Provisions

• Posters and brochures are also available at the North Carolina Department of Labor, the Occupational Safety &

Health Administration, and Department of Labor Wage and Hour Division websites.

Required Posters for Grantee Use


http://www.nclabor.com/posters/English/EEOC Poster - English.pdf

http://www.dol.gov/ofccp/regs/compliance/posters/pdf/eeosp.pdf

http://www.dol.gov/whd/regs/compliance/posters/minwage.pdf

http://www.dol.gov/whd/regs/compliance/posters/minwagesp.pdf

http://portal.hud.gov/hudportal/documents/huddoc?id=DOC_12586.pdf

http://www.nccommerce.com/Portals/2/Documents/Compliance/Labor/NCDOL_WageHourNotice_EngSpanPoster2009.pdf

http://www.nccommerce.com/Portals/2/Documents/Compliance/Labor/NCDOL_OSHNotice_EngSpanPoster2009.pdf

http://www.dol.gov/whd/regs/compliance/posters/fedprojc.pdf

http://www.dol.gov/whd/regs/compliance/posters/davispan.pdf

http://www.nccommerce.com/Portals/2/Documents/Compliance/Labor/HUDFederalLaborProvisionsHUD4010.pdf

http://www.nclabor.com/posters/posters.htm

http://www.osha.gov/dcsp/osp/states_posters.html

http://www.osha.gov/dcsp/osp/states_posters.html

http://www.dol.gov/whd/resources/posters.htm

Why are these regulations in place?

• Section 3: Promotes job creation for low and very low income residents. The program helps to increase employment under HUD programs. Improve communities’ well being, it does not support low incomes, but it does support job creation for those that are unemployed.

• Labor Standards: Promotes fair wages for HUD programs. Implement regulations to avoid lower wages for those with qualified skills to complete a project.

• Procurement: Promotes fair competition, taking in account performance and compliance of partners. To foster greater economy and efficiency, grantees and sub grantees are encouraged to enter into State and local intergovernmental agreements for procurement or use of common goods and services.


Examples

• One contractor submitted 9 payrolls and only 1 signature page covering the 9-payroll periods. Do they need to submit a separate signature page for each payroll period?

• For the “mason” and “laborer-mason” worker classifications in our wage determination, $0 fringe benefits are required. Therefore, which box do they check on the payroll signature page questions 4 a or b? It seems that neither are applicable, so should they leave blank or write “n/a” somewhere?

• Should the payrolls we receive have just the CDBG project site hours, or all cumulative hours including hours that are not related to the CDBG project? How do you determine who pays the overtime hours if there is only 27 hours CDBG project time and hours for another separate project brings the employee into OT pay?


Exercise!!!

Resources

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HUD/Office of Labor Relations

http://portal.hud.gov/hudportal/HUD?src=/program_offices/labor_relations

https://www.hud.gov/program_offices/administration/hudclips/handbooks/sech/13441

Handbook

Guidebooks

Labor Relations Letters

Forms


http://portal.hud.gov/hudportal/HUD?src=/program_offices/labor_relations

https://www.hud.gov/program_offices/administration/hudclips/handbooks/sech/13441

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DISCLAIMER

This presentation is intended as general information only and does not carry the force of legal opinion. The Division of Water Infrastructure (DWI) is providing this information as a public service. This information and related materials are presented to give the public access to information on CDBG Labor Standards requirements. You should be aware that, while we try to keep the information timely and accurate, there will often be delay between official publications of the materials and the modification of these pages. Therefore, we make no express or implied guarantees. The Federal Register and the Code of Federal Regulations remain the official source for regulatory information published by the Department of Housing and Urban Development. We will make every effort to keep this information current and to correct errors brought to our attention.

Economic Opportunities for Low-and Very Low-Income Persons

Section 3

Section 3 Purpose/ Intent

Section 3 of the Housing and Urban Development Act of 1968 [12 U.S.C. 1701u and 24 CFR Part 135] is HUD’s legislative directive for creating

economic opportunities for low and very low-income persons residing in the community in which the funds are spent (regardless of race and gender), and the businesses that substantially employ them, should receive priority

consideration.

Section 3 is both race and gender neutral. The preferences provided under this regulation are based on income-level and location. Section 3

regulations were designed to encourage recipients of HUD funding to direct new employment, training, and contracting opportunities to low-income residents, and the businesses that employ these persons, within their

community regardless of race and/or gender.


History of Section 3

• 1968 Housing and Urban Development Act (12USC 1701u- Section 3)

• 1992 Housing and Urban Development Act: Amendments- Strengthened and clarified Section 3

• 1994 Interim Rule issued at 24 CRF Part 135 (Implementing Regulations)

HUD funds are one of the largest sources of federal dollars….Typically result in new contracts, employment or training opportunities….

If economic opportunities are created…Section 3 residents and businesses receive preference

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Section 3 Covered Programs

• The requirements of Section 3 only apply to the portion(s) of covered funding that were used for projects/activities involving housing construction, rehabilitation, demolition, or other public constructions.

• Section 3 applies to the entire covered project or activity regardless of whether the activity was fully or partially funded with covered assistance

• The requirements of Section 3 apply to recipients of HUD Community Planning and Development funding exceeding an aggregate total of $200,000.


Section 3 Criteria

• Eligibility based on two things:

1. Proximity to where funds expended (project area, Town and County)

2. Income Level of potential Section 3 residents

Race and Gender neutral!!

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What about Contractors?

• Contractors or subcontractors that receive contracts in excess of $100,000 for Section 3 covered projects/activities are required to comply with the Section 3 regulations in the same manner as direct recipients.

• This means that both the recipient (town/city/county) and the contractor will implement Section 3 and all requirements associated with Section 3



• Not only enforcing the Section 3 requirements but pro-actively facilitating compliance with Section 3:

• Support grantees to implement procedures to notify Section 3 residents and business concerns about training, employment, and contracting opportunities generated by Section 3 covered assistance

• Notifying Section 3 businesses and other organizations that support small businesses of CDBG-I projects

• Provide examples of procurement procedures that provide preference for Section 3

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• Provide technical assistance to grantees about Section 3 best practices to meet goals

• Assisting and actively cooperating with the grantees in making contractors and sub-contractors comply

• Documenting actions taken to comply with Section 3

• Submitting Section 3 Annual Summary Reports (HUD-60002 form) to HUD

• Notify contractors in each pre-bid meeting of the Section 3 requirements

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Establish partnerships with other community agencies, Federal, State and local agencies, and educational institutions. Many have as their missions the fostering of job creation,

training, and business development

Note: The state made available an option for training to be paid with CDBG funds for

Section 3 residents. (4 years certificate for current or future projects)

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• Implementing procedures to notify Section 3 residents and business concerns about training, employment, and contracting opportunities generated by Section 3 covered assistance

• Notifying potential contractors working on Section 3 covered projects of their responsibilities

• Incorporating the Section 3 Clause into all covered solicitations and contracts

• Create a Section 3 list with Income surveys results (if applicable)



• Review procurement procedures that provide preference for Section 3

• Assisting and actively cooperating with the DWI in making contractors and sub-contractors comply

• Documenting actions taken to comply with Section 3:• Meet numerical goals including 3% non - construction jobs• Explain if numerical goals cannot be met

• Submitting Section 3 Annual Summary Reports (HUD-60002 form)


Contractor Responsibilities

• Incorporating the Section 3 Clause into all covered subcontracts

• Documenting actions taken to comply with Section 3

• Inform grantees of potential openings and subcontracting and/or training opportunities

• Inform Section 3 residents of opportunities

• Inform Section Businesses of opportunities

• Post Section 3 posters in a conspicuous place

• Submit a Section 3 Plan with a contract over $100,000

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Contractor Responsibilities

• The 30% hiring goal and 10% contracts awarded goal are the only safe harbors whereby a contractor will have to complied with Section 3.

• If the two goals above cannot be met , other training and employment opportunities can be provided to substitute for those goals, but documentation should be submitted explaining why those numerical goals could not be met.

• The acceptability of those efforts will be determined by HUD’s recommended activities 24 CFR part 135 Appendix, examples include :

• Distributing or posting flyers advertising positions to be filled

• Contacting grantee about open positions

• Holding job informational meeting for residents

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Important

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It is important for CDBG-I recipients to work closely with their contractors and subcontractors early in the contracting process to ensure understanding

and compliance with Section 3 requirements.

Triggering Compliance Requirements

• Section 3 is triggered when the normal completion of construction and rehabilitation projects creates the need for new employment, contracting, or training opportunities.

• The Section 3 regulations should not read that recipients are required to hire Section 3 residents or award contracts to Section 3 businesses other than what is needed to complete covered projects/activities.


Section 3 Business Concern

A Section 3 business concern is defined as a business where:

• 51% or more of the business is owned by Section 3 residents or

• 30 % of its full time employees include persons that are currently Section 3 residents, or were Section 3 residents within three years of the date of first hire*

• 25% of subcontracts are committed to Section 3 businesses.

* Example: Alysha was an unemployed Section 3 resident that was first hired by ABC Company on January 1, 2011. She received a raise of $2,500 in March 2012, thereby boosting her household income above the local low income level. ABC Company may continue to count Alysha as one of their Section 3 employees until December 31, 2013 (i.e. within three years of the date of first hire)


Section 3 Resident

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A ―section 3 resident is:

1) a public housing resident;

2) or a low- or very low-income person residing in the

metropolitan area or non-metropolitan county where

the Section 3 covered assistance is expended

Section 3 Goals

The Section 3 regulations established thresholds and goals at 24 CFR 135.30:

Goals

• 30 % of the aggregate number of new hires shall be Section 3 residents

• 10 % of the total dollar amount of all covered construction shall be awarded to Section 3 business concerns.

• 3 % of the total dollar amount of all covered non-construction contracts shall be awarded to Section 3 business concerns.


http://www.nccommerce.com/rd/community-assistance/investment-assistance/forms-resources/compliance-plans-and-templates/DOC_12047.pdf

http://www.gpo.gov/fdsys/pkg/CFR-2003-title24-vol1/xml/CFR-2003-title24-vol1-subtitleB-chapI-subchapB.xml

Section 3 Compliance

• Recipients should describe the efforts that were taken, barriers encountered, and other relevant information that will allow DWI to make a determination regarding compliance.

• Pre bid meetings shall take place at the local government level, points for attending to meeting can be added as part of the bid package (procurement process)


Section 3 Plan ImplementationBest Practices

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Good Faith Efforts

• Have a local coordinator

• Outreach to Public Housing Authorities

• Coordinate with DWI

• Use data from Income surveys to identify eligible, interested workers

• Document your efforts to comply with Section 3.

• Work with local non-profits to develop employment/training programs.

• Contact Community Colleges and other job training efforts

• Compare crew list from Section 3 Plan with Certified Payrolls


Good Faith Efforts

• Certify Section 3 Businesses based on 24 CFR Part 135 (State efforts)

• Develop a Section 3 Certification (State is working with other state agencies to develop a process):

• Establish certification procedures and once certified is good for 3 years.

• Include Section 3 businesses list in RFPs

• Exchange Section 3 businesses information with other agencies

• Educate Residents about the Section 3 program (Open house)

• Get involve with agencies that support Section 3 residents and Section 3 businesses

• Section 3 success begins at every phase of the procurement process

• Used progress meeting to remind contractors about requirements and potential needs of new hires or subcontracting.

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Good Faith Efforts

• Successful bidder must show good faith efforts:

• Invitation to send quotes for the bid: DEQ Sample

• Posters around the area

• Sending information to agencies that work with small businesses from the area

• Become a Section 3 Business: Hire new employees.

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New Hires Section 3 Hire Goal

30%

1 employee 1 employee 100%

2 employees 1 employee 50%

3 employees 1 employee 33%

Document!

Document!!

DOCUMENT!!!

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Documentation and Outreach

All bid documents shall be sent to the following offices prior to the pre bid date (15 days):

State will share information with other agencies, other interested parties and construction websites:

• Construction.com/Dodge

• constructconnect.com (Former iSq.FT.com) Update

• Historically Underutilized Businesses Office

• Hispanic Contractors Association of the Carolinas

• Section 3 businesses

• Other Construction companies

Grantees:

• Division of Water Infrastructure **

• Interactive Purchasing System (IPS) website**

• Section 3 businesses**

• Minority/Women owned businesses**


Documentation and Outreach

• Optional:

• North Carolina Chamber of Commerce

• North Carolina Hispanic Chamber of Commerce

• Associated Builders and Contractors (ABC) Carolinas Chapter

• Carolinas Associated General Contractors

• North Carolina Department of Administration: Office for Historically Underutilized Businesses

• American Indian Chamber of Commerce of North Carolina


Records Maintenance and Documentation

• All projects are required to maintain comprehensive documentation of their Section 3 outreach efforts and implementation activities. (Section 3 filing system checklist):

• Develop a Section 3 record keeping system, keep record of actions and results: DWI provides a recordkeeping checklist

• Prime contractor and sub-contractors Section 3 plans shall be filed and maintained available to be produced to and reviewed by DWI and/or HUD officials.


Good faith efforts and partnerships

• Four Phases of Enforcement (Section 3 applies to these phases)

• Bid Package Preparation and pre-bid meeting records:• Emphasize Section 3 at Pre-Bid Conferences

• Pre-Construction Activities• On-Site Inspections (certified payrolls review)• Records Review

• Grantees decide how to achieve compliance. “Front-End” and/or “Back-End” (Good Faith Efforts):

• Front-End: Recruitment efforts• Back-end: Preference and bid allowances are at the near

total discretion of the sub recipient.

• Sponsor a Section 3 Workshop for contractors and sub contractors from the area


Good faith efforts and partnerships

• Establish procedures to notify Section 3 residents and businesses about contracting opportunities and Section 3 covered projects: State, Grantee and Contractors

• Develop and maintain lists of Section 3 residents:• Public Housing Authorities

• Income Surveys

• Area Employment agencies: workforce, job link, etc.

• Public assistance programs: eligibility is often income

• Develop and maintain lists of Section 3 businesses: State and grantees

• Develop Section 3 Plan for Contractors ($100,000 contracts +). DWI has developed a template


Section 3 Plan for All Contractors

Section 3 Plan guidance:

• Identification of the Project Area

• Specific Information about the current workforce

• Specific plan for hiring Section 3 eligible residents

• Specific plan for engaging Section 3 designated business concerns


Section 3 Plan for All Contractors

• Firm commitment to include as part of all bids the Section 3 Plan which identifies activities to comply with the Section 3 program and the Section 3 Clause in all sub-contracts

• Firm commitment to conduct aggressive outreach and notifications to potential Section 3 residents and businesses of hiring opportunities using site signage, flyers, etc.

• Firm commitment to provide identified area employment agencies of jobs available


Best practices and partnerships

• Explaining contractors the hiring requirements and reporting expectations is the key to a successful program

• Help contractors advertise vacancies & subcontracting opportunities

• Ensure compliance from contractors and subcontractors

• Develop appropriate penalties/incentives for non-compliance or good performance



• If an individual was unemployed for the majority of the year, their income may be sufficiently depleted to qualify as a Section 3 resident. Section 3 is much more than laborers, landscaping and cleaning services.

•Re hires are still considered “New Hires”. If the businesses re call the same employee when they have work.



Network/collaborate with local agencies/ Outreach:

• Coordinate activities with local educational institutions: Community Colleges, Universities and High schools.

• Workforce Development

• NC Work (Employment Security)

• Goodwill Industries

• Department of Social Services

• Housing Authorities



• Community Newspaper

• Resident Newsletters

• Community Meetings

• Periodic Mailings

• Financial Institutions: Entrepreneurs programs

• Referrals from Employment and Training Programs

• Postings: Community Center and Govt. Offices and project area


Section 3 in Procurement

• Section 3 Procurement Standards

• Encourages a preference for Section 3 businesses

• Geographic preference is not allowed for scoring competitive bids, except where applicable Federal statues expressly mandate or encourage.

• Section 3 consideration may be included as an evaluation factor where price is not sole factor

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• Section 3 Procurement Standards

• Contractor/subcontractors are held to the same standards

• Include Section 3 information in all bid packages and contracts

• Grantees should discuss Section 3 requirements Pre-Bid and Pre-Construction conferences/meetings

• Contractors Reporting Requirements:

• Section 3 Plan – Prime Contractor

• Master Subcontractor list on the 20th day of each month after construction of Section 3 covered project has commenced

• Section 3 Summary Form (HUD Form 60002)

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• Consider re-sizing activities to increase Section 3 businesses participation

• Contractors can commit to hire Section 3 Residents in advance: points can be added to the bid package for that commitment

• Hold effective pre bids meetings: grantee and contractor responsibilities

• AFFIDAVITS: Include acknowledgement form in the bid for Minority/Women owned businesses and Section 3 businesses goals commitment

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Section 3 New Ruling (still under review)

135


New ruling Vs. Current “Main Changes”

Renewed emphasis on enforcement of Section 3.

Current Proposed

1. “To the greatest extent feasible” this means best efforts. 1. Establishes clearer guidelines for

achieving compliance “to the greatest

extent feasible”. Increases Compliance by

Covered Recipients.

2. The current regulation sets a goal for Section 3 residents to

comprise 30 percent of all new hires, regardless of the length of

employment.

2. Requires “new hires” to work a

minimum percentage of hours.

3. Section 3 Business must meet one of the following three

definitions: (a) 51 percent owned by Section 3 residents; (b) at

least 30 percent of permanent, full-time employees are Section

3 residents; (c) provides evidence of a commitment to

subcontract 25 percent or more of the dollar amount of all

subcontracts to businesses that meet definitions (a) or (b).

3. Revises the definition of a “Section 3

Business”. The proposed rule removes

category (c) of the current definition of a

Section 3 Business and adds two new

categories.

4. The definitions of Section 3 resident and Section 3 business

concern in the current Section 3 regulation do not limit eligibility to

beneficiaries that are actually located in the proximity of HUD-

funded projects or activities.

4. Introduction of New Term “Section 3 Local

Area” Keeps HUD-Funded Jobs and

Contracts Local.

5. The requirements of Section 3 apply to recipients of HUD

Community Planning and Development funding exceeding an

aggregate total of $200,000. Contractors or subcontractors that

receive contracts in excess of $100,000 for Section 3 covered

projects/activities are required to comply with the Section 3

regulations in the same manner as direct recipients.

5. Sets a new funding threshold for non-

PHA grantees. This proposed rule

establishes a new threshold for recipients

of covered housing and community

development assistance that is based on

the expenditure (not the receipt) of these

funds.

6. Currently, the interim regulations set forth a minimum

numerical goal that 3 percent of the total dollar amount of

non-construction contracts shall be awarded to Section 3

businesses.

6. Removes the 3% minimum numerical

goal for non-construction contracts.

Current Proposed

7. Requires PHAs and other grantees to monitor contractor

payroll data, only apply as a best practice.7. Requires PHAs and other grantees to

monitor contractor payroll data.

8. Recipients that are located in jurisdictions that are

governed by bargaining agreements with labor unions

typically have low rates of compliance with the minimum

numerical goals for contracting because unions often do

not recognize their contractor’s Section 3 obligations.

8. Amending Agreements with Labor

Unions Increases Jobs and

Apprenticeships for Section 3 Residents

9. The current regulation does not require recipients to

verify that Section 3 residents or businesses meet the

applicable definitions. Instead, residents and businesses

are merely required to comply with whatever procedures

recipients put in place.

9. Allows grantees to accept self-

certifications or presume eligibility.

10. There has been minimal imposition of penalties on

recipients that are delinquent with the current regulatory

reporting requirements.

10. Imposes penalties for failure to submit

Section 3 annual reports.

11. Existing Section 3 regulations are not sufficiently

explicit about specific actions that could be undertaken to

achieve compliance; that the existing regulations do not

clearly describe the extent to which recipients may require

sub recipients, contractors, and subcontractors to comply

with Section 3; and actions that recipients may take to

impose meaningful sanctions for noncompliance by their

sub recipients, contractors, and subcontractors.

11. Imposes program sanctions on PHAs

and grantees that fail to comply.

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New ruling Vs. Current “Main Changes”

Most successful recipients combine Section 3 obligations with Davis Bacon payroll requirements. In an effort to formalize a long-standing best practice:

**This proposed rule requires Section 3 covered recipients that are administering Davis Bacon-covered projects, to monitor contractor payroll data for changes in workforce (i.e., terminations, retirements, transfers, and other new job vacancies) to proactively identify instances when Section 3 obligations are triggered.

**This practice will increase monitoring and oversight by recipients and significantly impact contractor accountability.

Submission of Section 3 plan and HUD 60002 Report

• You can email Section 3 plan to [email protected] for review only before signatures.

• The original signed hardcopy needs to be submitted to DWI. Must be adopted

• Submit HUD 60002 report (Annual report).

• It is recommended to submit the plan by local government and not by grant number or program specific, for any open grants for the grantee.

• It is highly recommended to update the plan every 3 years.

NOTE:

- Contractors submit report to grantees

- Grantees submit report to DWI



Submission of Section 3 plan and HUD 60002 Report

• Use the Narrative Box!!

• HUD has provided a narrative at the end of the current reporting form. USE IT!!. This is the place to describe your Section 3 efforts beyond the numbers. Don’t just report “zeros” across the board with no explanation.

• Explain why if you failed to meet your goals.

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Section 3 Voluntary Compliance Agreement

• 3 years agreement and a public document upon its effective date.

• Section 3 Coordinator will ensure that the terms of the agreement are being met: 13 items on the agreement.

• Redevelop a Section 3 plan covering Section 3 contracting, employment, and training.

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Section 3 Voluntary Compliance Agreement

• Review existing contract and procurement policies, practices and procedures: Requires sub recipients and its contractors, where appropriate, to break out contract work items into economically feasible units to facilitate participation by Section 3 business concern.

• Section 3 Recordkeeping requirements: Section 3 file system checklist.

• Facilitating the education of the communities

• Facilitating the award of contracts to Section 3 Business concerns

• Semiannual Reporting

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Section 3 File System Checklist

• Copies of all contracts between grantees and its contractors or subcontractors;

• Total amount of each covered contract and the amount expended with Section 3 business concerns and Section 3 residents;

• Section 3 Program outreach activities, grantees and contractors;

• Grantee’s Section 3 Plan;

• Contractor’s Section 3 Plan;

• Listing of each Section 3 business concern benefiting from the Section 3 efforts, to include, but not limited to, project name, contractual award amounts, trade or service, joint ventures;

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Section 3 File System Checklist

• Grievances, appeals, and results of all such actions in regard to the Section 3 Program;

• Listing of Section 3 residents employed or trained to include, but not limited to, project name, compensation expended on each resident, permanent or temporary position, disposition of all residents participating in the training program, and number of new hires;

• A list of Section 3 businesses that specifies contact information and type of services rendered; and

• Information that identifies the number of certified Section 3 business concerns awarded contracts and the amount of contracts.

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CDBG-I Unit Contact Information

• Julie Cubeta: (919)707-9189, [email protected]

• John Tucker: (919) 707-9052, [email protected]

• Stephanie Morris: Office (919) 707-9196, [email protected]

• Colleen Simmons: Office (704) 235-2202, Cell (919) 441-9378, [email protected]

• Stacey Starkey: Office (919) 707-9193, [email protected]

• L. Marcela Vargas: Office (919) 707-9057, [email protected]

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Q&A

Thanks!!!