1. Tips for Evaluating Good Faith Efforts Tim Bullivant
Contract Evaluation Branch Manager
Caltrans Office of Business and Economic Opportunity

2. Contract Award Responsive bidder
Award contract to lowest responsive bidder
Responsive bidder or
Meet Disadvantaged Business (DBE) goal
Demonstrate adequate good faith efforts (GFE)
§26.53 What are the good faith efforts procedures recipients follow in situations where there are contract goals?
(a) When you have established a DBE contract goal, you must award the contract only to a bidder/offeror who makes
good faith efforts to meet it. You must determine that a bidder/offeror has made good faith efforts if the bidder/offeror does the following things:
(1) Documents that it has obtained enough DBE participation to meet the goal; or
(2) Documents that it made adequate good faith efforts to meet the goal, even though it did not succeed in obtaining
enough DBE participation to do so. If the bidder/offeror does document adequate good faith efforts, you must not deny
award of the contract on the basis that the bidder/offeror failed to meet the goal. See Appendix A of this part for guidance
in determining the adequacy of a bidder/offeror's good faith efforts.

3. 49 CFR § 26.53
(a) When you have established a DBE contract goal, you must award the contract only to a bidder/offeror who makes good faith efforts to meet it. You must determine that a bidder/offeror has made good faith efforts if the bidder/offeror does either of the following things: (1) Documents that it has obtained enough DBE participation to meet the goal; or (2) Documents that it made adequate good faith efforts to meet the goal, even though it did not succeed in obtaining enough DBE participation to do so. If the bidder does document adequate good faith efforts, you must not deny award of the contract on the basis of that bidder failed to meet the goal. See Appendix A of this part for guidance in determining the adequacy of a bidder’s good faith efforts.
Trainer Notes:
49 CFR part 26.53(a)

4. Appendix A to Part 26
Guidance Concerning Good Faith Efforts is in 49 CFR part 26, Appendix A. To view the regulation go to:
Appendix A is guidance developed by the US DOT for use in the agencies that receive Federal funds for transportation projects.

5. DBE Commitment Documents
This form is filled out by the Prime Contractor to list the DBEs claimed for credit towards the goal.

6. DBE - Good Faith Effort Documentation
SAMPLE
Trainer Notes:
This form is filled out by the Prime Contractor and contains information specific to their Good Faith Effort to meet the DBE Goal.

7. 49 CFR Appendix A: The efforts employed by the bidder should be those that one could reasonably expect a bidder to take if the bidder were actively and aggressively trying to obtain DBE participation sufficient to meet the DBE contract goal. Mere pro forma efforts are not good faith efforts to meet the DBE contract requirements.
Overall DBE Commitment
Amount of Work Made Available
Solicitations
Rejected DBEs
Bonding, Insurance, Materials, and Supplies Assistance
Trainer Notes:
“As a recipient, you have the responsibility to make a fair and reasonable judgment whether a bidder that did not meet the goal made adequate good faith efforts. It is important for you to consider the quality, quantity, and intensity of the different kinds of efforts that the bidder has made, based on the regulations and the guidance…” Appendix A to 49 CFR, Part 26 (II)
“It is not intended to be a mandatory checklist, nor is it intended to be exclusive or exhaustive. Other factors or types of efforts may be relevant in appropriate cases.” - Appendix A to 49 CFR, Part 26 (IV)
Plans, Specs., and Requirements Available
Other Bidders DBE
Other Bidders GFE
(if applicable)

8. Elements of a GFE Evaluation
DBE commitment
Work made available to DBE firms
Solicitation effort documentation
Advertisements for DBE participation
Initial search efforts
Follow-up solicitation efforts
Interest from DBEs to meet the goal
Offers of Assistance (bonding, plans, specs)
Rejected DBEs
Other Bidders
DBE Commitments
Good Faith Efforts
Trainer Notes:
“As a recipient, you have the responsibility to make a fair and reasonable judgment whether a bidder that did not meet the goal made adequate good faith efforts. It is important for you to consider the quality, quantity, and intensity of the different kinds of efforts that the bidder has made, based on the regulations and the guidance…” Appendix A to 49 CFR, Part 26 (II)
“It is not intended to be a mandatory checklist, nor is it intended to be exclusive or exhaustive. Other factors or types of efforts may be relevant in appropriate cases.” - Appendix A to 49 CFR, Part 26 (IV)

9. 1. DBE Commitment
The Closer the Bidder is to meeting the Goal, the less scrutiny is applied to their good faith efforts.
If the bidder is within 1% of meeting the goal, a brief review of good faith efforts may be sufficient.
When the DBE commitment is significantly below the goal, a fuller review is expected.
Trainer Notes:
For the regulation regarding how to count DBE Participation towards the goal, go online to:

10. 2. Work Made Available to DBEs
A minimum of 30 percent of the contract must be performed by the Prime Contractor.
Check work made available on advertisements and solicitations to calculate the dollar amount made available to DBEs.
Are there interested DBE contractors, located in the Caltrans District of the project, certified to perform the work made available by bidder? Check California Unified Certification Program DBE Database (CUCP).
Trainer Notes:
Federal Law requires prime contractors to perform at least 30 percent of the contract with their own forces.

11. 2. Work Made Available Is this a Good Faith Effort?
Items of Work
Bidder performs work
Bid Amount
% of Total Bid
Consultant Non-Engineering
C8700 No
$2,750.00
0.4%
Traffic Engineer
C8703
$7,300.00
1.0%
Engineering
C8710
$25,474.00
3.5%
Consultant, Environmental
C8713
$47,612.00
7.0%
Total DBE commitment: 0.00%
Contract DBE: 7.0%
Total work made available: 11.9% > 7.0%
Like to see more work made available by bidder!
Trainer Notes:
Appendix A to Part 26—Guidance Concerning Good Faith Efforts
“It is the bidder's responsibility to make a portion of the work available to DBE subcontractors and suppliers and to select those portions of the work or material needs consistent with the available DBE subcontractors and suppliers, so as to facilitate DBE participation.” Appendix A to 49 CFR, Part 26(IV)(D)

12. 3. Solicitations Did bidder contact those interested in the work?
Did the bidder use the CUCP website?
If the bidder is not receiving enough DBE responses, are they continuing to solicit DBEs? Did they solicit all DBE subcontractors in the area of the work?
Did the bidder allow sufficient time for the DBE to respond?
Prior to the bid opening, did the bidder have enough interest from DBEs to meet the contract goal?
Did the bidder adequately document the aforementioned?
Trainer Notes:
Appendix A to Part 26—Guidance Concerning Good Faith Efforts
(1) Conducing market research to identify small business contractors and suppliers and soliciting through all reasonable and available means the interest of all certified DBEs that have the capability to perform the work of the contract. This may include attendance at pre-bid and business matchmaking meetings and events, advertising and/or written notices, posting of Notices of Sources Sought and/or Requests for Proposals, written notices or s to all DBEs listed in the State's directory of transportation firms that specialize in the areas of work desired (as noted in the DBE directory) and which are located in the area or surrounding areas of the project.
(2) The bidder should solicit this interest as early in the acquisition process as practicable to allow the DBEs to respond to the solicitation and submit a timely offer for the subcontract. The bidder should determine with certainty if the DBEs are interested by taking appropriate steps to follow up initial solicitations.

13. 3. Solicitations Is this a good faith effort?
Type of Work
Number of DBEs
In Area?
Number of DBEs Solicited
Consultant, Non-Engineering 55
Did not check
None
Traffic Engineer 5 2
Engineering 3 1
Consultant, Environmental 4
Total bid = $659,000
Trainer Notes:
Appendix A to Part 26—Guidance Concerning Good Faith Efforts
“(The Bidder is) Conducing market research to identify small business contractors and suppliers and soliciting through all reasonable and available means the interest of all certified DBEs that have the capability to perform the work of the contract., This may include... written notices or s to all DBEs listed in the State's directory of transportation firms that specialize in the areas of work desired (as noted in the DBE directory) and which are located in the area or surrounding areas of the project. “ Appendix A to 49 CFR, Part 26(IV)

14. 4. Rejected DBE documentation
Did bidder provide name of DBEs who provided quotes on job? Was it documented?
Did bidder provide reason for rejecting a DBE’s quote?
If rejected for price, was the price difference excessive or unreasonable?
Did the bidder reject a DBE as unqualified without giving reasons?
Trainer Notes:
Appendix A to Part 26—Guidance Concerning Good Faith Efforts
“(1) Not rejecting DBEs as being unqualified without sound reasons based on a thorough investigation of their capabilities. The contractor's standing within its industry, membership in specific groups, organizations, or associations and political or social affiliations (for example union vs. non-union status) are not legitimate causes for the rejection or non-solicitation of bids in the contractor's efforts to meet the project goal. Another practice considered an insufficient good faith effort is the rejection of the DBE because its quotation for the work was not the lowest received. However, nothing in this paragraph shall be construed to require the bidder or prime contractor to accept unreasonable quotes in order to satisfy contract goals.
(2) A prime contractor's inability to find a replacement DBE at the original price is not alone sufficient to support a finding that good faith efforts have been made to replace the original DBE. The fact that the contractor has the ability and/or desire to perform the contract work with its own forces does not relieve the contractor of the obligation to make good faith efforts to find a replacement DBE, and it is not a sound basis for rejecting a prospective replacement DBE's reasonable quote. “

15. 5. Other Bidders’ Commitments
The reviewer must take into account the performance of all other bidders. See 49 CFR part 26, Appendix A, V.
When the apparent low bidder fails to meet the contract goal, but the others meet it, you may reasonably raise the question of whether, with additional efforts, the apparent low bidder could have met the goal.
Verify the commitments (certified as a DBE to perform the listed work, proper DBE credit given, DBE verifies commitment, DBE has sufficient forces to perform the work).
Consider the commitment of another bidder even if they are non-responsive.
Appendix A to Part 26—Guidance Concerning Good Faith Efforts
“At a minimum, you must review the performance of other bidders in meeting the contract goal. For example, when the apparent successful bidder fails to meet the contract goal, but others meet it, you may reasonably raise the question of whether, with additional efforts, the apparent successful bidder could have met the goal. If the apparent successful bidder fails to meet the goal, but meets or exceeds the average DBE participation obtained by other bidders, you may view this, in conjunction with other factors, as evidence of the apparent successful bidder having made good faith efforts.”
Note, the Regulation does not state that the bidders must be responsive.

16. 5. Other Bidders’ Commitments Which Bidder has a problem?
Contract 1
Goal: 10%
Low bidder: 2% commitment
2nd low: 10%; 3rd low: 8%
Example 1: If two other bidders came so close to meeting and/or met the goal, why was the lower bidder so far from meeting the goal?
Example 2: In this instance, it’s less likely that you might question the low bidders GFE efforts because they were so close to the other bidders, even though they didn’t meet it.
Contract 2
Goal: 10%
Low bidder: 9% commitment
2nd low: 10%; 3rd low: 8%

17. Determination
Your Final Determination should consider the following factors:
“All necessary and reasonable steps” to meet the DBE contract goal. 49 CFR 26 Appendix A(I)
“Quality, quantity, and intensity” of efforts to meet the DBE contract goal. 49 CFR 26 Appendix A(II)
“Actively and aggressively” trying to meet the DBE contract goal. 49 CFR 26 Appendix A(II)

18. Determination Do not use a checklist Do not use a point system
GFE reviews are based upon qualitative analysis of the documentation provided by the Prime Contractor.
Appendix A to Part 26(IV) - Guidance Concerning Good Faith Efforts

19. Determination How to Not Get Sued
Be able to explain how you evaluate GFE Process
Document your Processes and Procedures
Can you explain your determination if it went to court?

20. Determination
SAMPLE

21. Administrative Reconsideration
If a GFE has been found to be inadequate and the award to the bidder has been rejected, the “bidder/offeror must have an opportunity to meet in person with your reconsideration official to discuss the issue of whether it met the goal or made adequate good faith efforts to do so.” CFR 26.53(d)(3)
Trainer Notes:
INSERT REGULATION REGARDING RECONSIDERATION RIGHTS

22. Resources
(FTA Regulations)
(49 CFR How is DBE participation counted toward goals?)
(CUCP – DBE Database)
(North American Industry Classification System [NAICS] code lookup)

24. Thank You