We constrain cosmological parameters and galaxy-bias parameters using the combination of galaxy clustering and galaxy-galaxy lensing measurements from the Dark Energy Survey (DES) year-3 data. We describe our modeling framework and choice of scales analyzed, validating their robustness to theoretical uncertainties in small-scale clustering by analyzing simulated data. Using a linear galaxy-bias model and redMaGiC galaxy sample, we obtain 10% constraints on the matter density of the Universe. We also implement a nonlinear galaxy-bias model to probe smaller scales that includes parametrization based on hybrid perturbation theory and find that it leads to a 17% gain in cosmological constraining power. We perform robustness tests of our methodology pipeline and demonstrate stability of the constraints to changes in the theory model. Using the redMaGiC galaxy sample as foreground lens galaxies and adopting the best-fitting cosmological parameters from DES year-1 data, we find the galaxy clustering and galaxy-galaxy lensing measurements to exhibit significant signals akin to decorrelation between galaxies and mass on large scales, which is not expected in any current models. This likely systematic measurement error biases our constraints on galaxy bias and the S8 parameter. We find that a scale-, redshift- and sky-area-independent phenomenological decorrelation parameter can effectively capture this inconsistency between the galaxy clustering and galaxy-galaxy lensing. We trace the source of this correlation to a color-dependent photometric issue and minimize its impact on our result by changing the selection criteria of redMaGiC galaxies. Using this new sample, our constraints on the S8 parameter are consistent with previous studies and we find a small shift in the Ωm constraints compared to the fiducial redMaGiC sample. We infer the constraints on the mean host-halo mass of the redMaGiC galaxies in this new sample from the large-scale bias constraints, finding the galaxies occupy halos of mass approximately 1.6 × 1013 M⊙/h.