The following is a list of the types of actions that government entities will often consider as part of a bidder’s good faith effort to obtain DBE participation. Each effort is not mandatory and other steps beyond these may be utilized. Remember, the intent is to achieve DBE participation, not to create meaningless documents.

1. The bidder negotiated in good faith with interested DBEs. It is the bidder’s responsibility to consider the available pool of certified DBEs when determining subcontract or supply needs. It is the bidder’s responsibility to furnish DBEs with information about plans or specifications to facilitate the bid. Include names of DBEs considered, information given to the DBE, if any, and an explanation of why agreements could not be reached for DBEs to perform the work.

2. The bidder selected portions of work for which the government entity  has capable, certified DBEs to perform. This may include breaking out work items or subcontracting items the prime contractor normally performs.

3. The bidder used good business judgment in rejecting a DBE quote, considering both price and capabilities. If a DBE quote represents a reasonable price for performing the work, the  Contractor should use that quote even though the DBE quote is higher than a non-DBE quote. However, bidders do not have to use excessive or unreasonable quotes.

4. The bidder solicited capable, certified DBEs through pre-bid meetings, advertising, telephone, mail, facsimile, e-mail, or a combination of the foregoing. The solicitation must have occurred within sufficient time to all a DBE to respond. If a DBE expresses an interest in the contact or a desire to quote and fails to submit a quote, follow up the initial contact, whether the contact was solicited or unsolicited. Receiving substantial unsolicited quotes may not be considered actively and aggressively pursuing DBE participation.

5. The bidder assisted interested DBEs in obtaining equipment, supplies, or materials for the project being bid.

6. The combinations of DBEs the bidder considered in trying to meet the goal. It is acceptable to use a portion of several DBE bids.

7. The bidder assisted interested DBEs in obtaining bonding, credit, or insurance on the project being bid. The government entity will consider the performance of other bidders as one factor when determining good faith efforts. For example, if all other bidders met the goal, perhaps the bidder who did not meet the goal did not take sufficient reasonable efforts to do so. The government entity will look at the documentation submitted to verify timely contacts with DBEs by telephone, mail, fax or personal contact. the government entity  will analyze all subcontractor quotes received and whether or not rejected DBE quotes were unreasonable or excessive. the government entity  will examine documents and narratives in regard to efforts made to secure bonding, insurance or credit lines for DBE firms.

Each item on the above list is not mandatory nor is it exclusive or exhaustive. The strongest good faith efforts will be personal and individualized. A mass mailing/fax alone is not an acceptable good faith effort.

At Kleiner & Cazeau, we have seen the issue of showing good faith efforts come up in the context of the bid protest. Usually a bidders wins a contract but either does not meet the DBE goal or the percentage of participation by DBEs is lower than provided by other bidders. In that case other bidders may file a bid protest alleging that the winning bidder should not be allowed to perform the contract.

At Kleiner & Cazeau, we have represented both winning bidders who have failed to meet DBE goals and losing bidders who feel that the winning bidder failed to properly show good faith efforts. Call us at (305) 517-1392 ext 102 if you feel that you have an issue with a showing of good faith efforts.

Every government entity that participates in the Disadvantaged Business Enterprise (DBE) or Airport Concessions Disadvantaged Business Enterprise (ACDBE) programs must establish an annual contract goal.   This goal represents the portion of funds expended on an annual basis that will be spent with DBE firms. In other words, if an entity establishes a goal of 25%, then twenty-five percent of funds received from the U. S. Department of Transportation (USDOT) must be spent with DBEs.

When the government entity goes out to bid on a project, a DBE goal will be announced in the solicitation document (RFP, RFQ, ITB, etc.) In order to win a contract that contains DBE contract goals, the responsive low bidder must provide evidence that DBE participation meets or exceeds the assigned goal. If this is not the case, then the low bidder must show that it made “good faith efforts” to meet the goal.

Good faith efforts are those actions the bidder took to find DBEs and have them participate in the contract. They are a number of ways to show that a bidder made good faith efforts. It often requires that the bidder, solicit DBE companies at pre-bid meetings, advertising, telephone, mail, facsimile, e-mail, or a combination of the foregoing.

The government entity can either accept or reject the good faith effort. If rejected, the bidder often has the right to request administrative reconsideration of the decision. Normally, if the bidder requests administrative reconsideration, the bidder can choose to submit a written narrative supporting its good faith effort submittal or appear in person at an administrative hearing.

The reconsideration process is administratively final and has no further administrative appeal steps within the government entity or the USDOT.  If your company is facing the possibility of losing a contract for failure to meet the DBE goal it is important that you know how to show you made good faith efforts to meet the goal.

At Kleiner & Cazeau, we can help you establish procedures for meeting your DBE goals and assist you in showing good faith efforts if you are unable to meet your goals.