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residents of the project area and contracts for work in connection with the project be <br />awarded to business concerns that are located in, or owned in substantial part by persons <br />residing in the area of the project. <br />b. The parties to this contract will comply with the provisions of said Section 3 and the <br />regulations issued pursuant thereto by the Secretary of Housing and Urban Development <br />set forth in 24 C.F.R. 235, and all applicable rules and orders of the Office issued <br />thereunder prior to the execution of this Contract. The parties to this Contract certify and <br />agree that they are under no contractual or other disability that would prevent them from <br />complying with these requirements. <br />c. The contractor will send to each labor organization or representative of workers with <br />which he/she has a collective bargaining agreement or other contract or understanding, if <br />any, a notice advising the said labor organization or workers' representative of his/her <br />commitments under this Section 3 clause and shall post copies of the notice in <br />conspicuous places available to employees and applicants for employrnent or training. <br />d. The contractor will include this Section 3 clause in every subcontract for work in <br />connection with the project and will, at the direction of the applicant for ar recipient of <br />Federal financial assistance, take appropriate action pursuant to the subcontract upon a <br />finding that the subcontractor is in violation of regulations issued by the Secretary of <br />Housing and Urban Development, 24 C.F.R. Part 135. The contractor wi11 not <br />subcontract with any subcontractor where it has notice or knowledge that the latter has <br />been found in violation of regulations under 24 C.F.R. Part 135 and will not let any <br />subcontract unless the subcontractor has first provided it with a preliminary statement of <br />ability to comply with the requirements of these regulations. <br />Compliance with the provisions of Section 3, the regulations set forth in 24 C.F.R. Part <br />135, and all applicable rules and orders of the Office issued hereunder prior to the <br />execution of the contract, shall be a condition of the federal financial assistance provided <br />to the project, binding upon the applicant or recipient for such assistance, its successors <br />and assigns. Failure to fulfill these requirements shall subject the applicant or recipient, <br />its contractors and subcontractors, its successors and assigns to those sanctions specified <br />by the grant or loan agreement or contract through which federal assistance is provided, <br />and to such sanctions as are specified by 24 C.F.R. Part 135. <br />15. Section 503 Handicapped (if $2 500 or Over) Affirmative Action for Handicapped Workers. <br />a. The contractor will not discriminate against any employee or applicant for employment <br />because of physical or mental handicap in regard to any position for which the employee <br />or applicant for employment is qualified. The contractor agrees to take affirmative action <br />to employ, advance in employment and otherwise treat qualified handicapped individuals <br />without discrimination based upon their physical or mental handicap in all employment <br />15 <br />