[Code of Federal Regulations]

[Title 24, Volume 1]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR135.36]



[Page 731-732]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

    CHAPTER I--OFFICE OF ASSISTANT SECRETARY FOR EQUAL OPPORTUNITY, 

               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 135_ECONOMIC OPPORTUNITIES FOR LOW- AND VERY LOW-INCOME PERSONS

--Table of Contents

 

 Subpart B_Economic Opportunities for Section 3 Residents and Section 3 

                            Business Concerns

 

Sec.  135.36  Preference for section 3 business concerns in contracting 

opportunities.



    (a) Order of providing preference. Recipients, contractors and 

subcontractors shall direct their efforts to award section 3 covered 

contracts, to the greatest extent feasible, to section 3 business 

concerns in the order of priority provided in paragraph (a) of this 

section.

    (1) Public and Indian housing programs. In public and Indian housing 

programs, efforts shall be directed to award contracts to section 3 

business concerns in the following order of priority:

    (i) Business concerns that are 51 percent or more owned by residents 

of the housing development or developments for which the section 3 

covered assistance is expended, or whose full-time, permanent workforce 

includes 30 percent of these persons as employees (category 1 

businesses);

    (ii) Business concerns that are 51 percent or more owned by 

residents of other housing developments or developments managed by the 

HA that is expending the section 3 covered assistance, or whose full-

time, permanent workforce includes 30 percent of these persons as 

employees (category 2 businesses); or

    (iii) HUD Youthbuild programs being carried out in the metropolitan 

area (or nonmetropolitan county) in which the section 3 covered 

assistance is expended (category 3 businesses).

    (iv) Business concerns that are 51 percent or more owned by section 

3 residents, or whose permanent, full-time workforce includes no less 

than 30 percent section 3 residents (category 4 businesses), or that 

subcontract in excess of 25 percent of the total amount of subcontracts 

to business concerns identified in paragraphs (a)(1)(i) and (a)(1)(ii) 

of this section.

    (2) Housing and community development programs. In housing and 

community development programs, priority consideration shall be given, 

where feasible, to:

    (i) Section 3 business concerns that provide economic opportunities 

for section 3 residents in the service area or neighborhood in which the 

section 3 covered project is located (category 1 businesses); and

    (ii) Applicants (as this term is defined in 42 U.S.C. 12899) 

selected to carry out HUD Youthbuild programs (category 2 businesses);

    (iii) Other section 3 business concerns.

    (b) Eligibility for preference. A business concern seeking to 

qualify for a section 3 contracting preference shall certify or submit 

evidence, if requested, that the business concern is a section 3 

business concern as defined in Sec.  135.5.

    (c) Ability to complete contract. A section 3 business concern 

seeking a contract or a subcontract shall submit evidence to the 

recipient, contractor, or subcontractor (as applicable), if requested, 

sufficient to demonstrate to the satisfaction of the party awarding the 

contract that the business concern is responsible and has the ability to



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perform successfully under the terms and conditions of the proposed 

contract. (The ability to perform successfully under the terms and 

conditions of the proposed contract is required of all contractors and 

subcontractors subject to the procurement standards of 24 CFR 85.36 (see 

24 CFR 85.36(b)(8)).) This regulation requires consideration of, among 

other factors, the potential contractor's record in complying with 

public policy requirements. Section 3 compliance is a matter properly 

considered as part of this determination.