Tips for Evaluating Good Faith Efforts

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

2. Contract Award Award contract to lowest responsive bidder Responsive bidder or Meet Disadvantaged Business (DBE) goal Demonstrate adequate good faith efforts (GFE)

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.

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: https://www.transit.dot.gov/regulations-and-guidance/civil-rights-ada/dbe-regulations

5. DBE Commitment Documents

6. DBE - Good Faith Effort Documentation SAMPLE

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 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

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.

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).

11. 2. Work Made Available Is this a Good Faith Effort?

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?

13. 3. Solicitations Is this a good faith effort?

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?

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.

16. 5. Other Bidders’ Commitments Which Bidder has a problem? Contract 1 Goal: 10% Low bidder: 2% commitment 2nd low: 10%; 3rd low: 8% 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.

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.” 49 CFR 26.53(d)(3)

22. Resources https://www.transportation.gov/osdbu/disadvantaged-business-enterprise/official-faqs-dbe-program-49-cfr-23 (FTA Regulations) https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=1&SID=8d49c535a1608c98d3e13fe938e0200f&ty=HTML&h=L&r=PART&n=pt49.1.26#se49.1.26_155 (49 CFR 26.55 How is DBE participation counted toward goals?) http://www.dot.ca.gov/hq/bep/find_certified.htm (CUCP – DBE Database) https://www.census.gov/cgi-bin/sssd/naics/naicsrch (North American Industry Classification System [NAICS] code lookup)

24. Thank You