Good Faith Effort
A Good Faith Effort (GFE) is a series of documented, proactive actions taken by a bidder to provide meaningful subcontracting and supplier opportunities to certified small and disadvantaged businesses.
GFE requirements are used when a project includes participation goals and a bidder does not meet the established subcontracting goal through actual commitments at the time of bid submission. In these situations, the bidder must demonstrate that it took all reasonable and necessary steps to identify, solicit, and engage qualified firms before the bid due date.
A GFE is more than simply sending notices or making a few phone calls. It is a documented process that demonstrates genuine outreach, communication, and consideration of certified firms for available work.
On this page:
Why GFEs Matter
GFE requirements help:
- Expand opportunities for certified small and disadvantaged businesses.
- Promote fair and open competition.
- Encourage inclusive participation in public contracting.
- Support economic development within local communities.
- Ensure compliance with federal, state, and local contracting requirements.
GFEs are designed to ensure that bidders actively seek participation from qualified firms and provide those firms with a meaningful opportunity to compete for subcontracting work.
When Is a GFE Required?
A GFE may be required when:
- A solicitation includes mandatory subcontracting participation goals.
- The bidder does not achieve the required participation percentage.
- Contract documents specify that GFE documentation may be submitted as an alternative to meeting the goal.
The specific requirements vary depending on the funding source and program governing the project.
What Does a Successful GFE Include?
Although requirements differ by program, successful GFE documentation generally demonstrates that the bidder:
Identified Qualified Firms
The bidder reviewed available directories and identified certified firms capable of performing the work.
Solicited Firms Early
Outreach was conducted sufficiently in advance of bid opening to allow firms adequate time to prepare and submit quotations.
Provided Meaningful Opportunities
Work was divided into reasonable portions when feasible, allowing smaller firms to participate.
Shared Project Information
Interested firms were provided access to plans, specifications, bid documents, and other information necessary to prepare a quote.
Followed Up
The bidder actively contacted firms after initial outreach to determine their level of interest and answer questions.
Evaluated Quotes Fairly
Responses from certified firms were considered in good faith and not rejected without legitimate business reasons.
Maintained Documentation
The bidder retained records demonstrating all outreach efforts, communications, responses, and award decisions.
City of San Diego SLBE Program GFEs
For projects subject to the City of San Diego Small Local Business Enterprise (SLBE) Program, contractors are required to take affirmative steps to attract and utilize certified SLBE and ELBE firms. If the mandatory subcontracting goal is not achieved, bidders must submit GFE documentation demonstrating compliance with the City's requirements. The City evaluates GFEs using a point-based system and requires a minimum score for compliance. Refer to the instructions for bidders completing GFE submittals for projects subject to the SLBE Program for additional information.
Key areas reviewed include:
1. Participation Achieved
Credit is awarded based on the percentage of the subcontracting goal that was achieved through commitments to certified firms.
2. Written Solicitations
Bidders must provide project-specific solicitations to certified firms, identifying the available scopes of work and providing sufficient notice before bid opening. Solicitations should include information on plans and specifications and indicate available assistance for equipment, materials, bonding, financing, and insurance.
3. Follow-Up Communications
Bidders must conduct follow-up outreach to determine whether firms intend to submit quotes and document those communications. Telephone logs and written responses are commonly required.
4. Subcontract Award Analysis
Bidders must document the evaluation of received quotes and explain why firms were selected or not selected. Rejections should be based on legitimate business considerations and supported by documentation.
5. Outreach Assistance
Bidders must engage community organizations, business associations, and other outreach resources to help recruit certified firms for participation opportunities.
Documentation Matters
One of the most common reasons GFE submissions are found deficient is inadequate documentation.
Examples of documentation that may be required include:
- Copies of solicitation notices.
- Email delivery confirmations.
- Certified mail receipts.
- Telephone logs.
- Written responses from subcontractors.
- Bid comparison summaries.
- Subcontract award analyses.
- Records of outreach to organizations and business groups.
Maintaining organized records throughout the bidding process is essential.
GFE for Caltrans and DBE Projects
What Is the DBE Program?
The Disadvantaged Business Enterprise (DBE) Program is a federally mandated program designed to ensure nondiscrimination in the award and administration of transportation contracts and to create a level playing field for DBE firms.
Projects funded by the Federal Highway Administration (FHWA), Federal Transit Administration (FTA), and other U.S. Department of Transportation agencies may include DBE participation goals.
When Is GFE Required?
For federally funded transportation projects, a bidder typically has two ways to satisfy DBE requirements:
- Meet the established DBE participation goal; or
- Demonstrate that it made adequate GFEs to meet the goal.
If the DBE goal is not met, the bidder must show that it actively and aggressively sought DBE participation and exhausted all reasonable opportunities before bid submission.
Common Elements of DBE GFEs
GFEs for DBE projects often include:
- Soliciting certified DBE firms in a timely manner.
- Identifying specific scopes of work suitable for DBE participation.
- Providing plans, specifications, and requirements to interested firms.
- Negotiating in good faith with interested DBEs.
- Assisting DBEs with bonding, financing, insurance, equipment, and materials when appropriate.
- Documenting all outreach efforts and responses.
- Maintaining records showing why quotes were accepted or rejected.
Caltrans Expectations
For projects administered by the California Department of Transportation (Caltrans), GFEs are evaluated based on whether the bidder took all necessary and reasonable steps to obtain DBE participation. Caltrans and local agencies review the quality, timing, and extent of outreach activities, not simply the number of contacts made.
A bidder may be found non-compliant if it fails to provide adequate documentation or cannot demonstrate meaningful efforts to engage DBE firms.
City of San Diego Federally Funded Transportation Projects
When the City of San Diego administers federally funded transportation projects that include DBE requirements, contractors must comply with applicable federal DBE regulations and project-specific contract requirements.
Depending on the solicitation, contractors may be required to:
- Meet the established DBE goal;
- Submit DBE commitment documentation; or
- Demonstrate sufficient GFEs if the goal is not achieved.
Because federal requirements differ from the City's SLBE Program, contractors should carefully review each solicitation and follow the specific GFE instructions provided in the contract documents.
Best Practices for Contractors
To strengthen a GFE submission:
- Start outreach early.
- Contact firms more than once.
- Break work into smaller subcontracting opportunities when practical.
- Keep detailed records of every communication.
- Respond promptly to questions from interested firms.
- Evaluate quotes consistently and fairly.
- Maintain organized files for all outreach and bid documents.
GFEs should be viewed as an ongoing process rather than a last-minute compliance exercise.
Need Additional Assistance?
Contractors should review the solicitation requirements for each project carefully, as GFE requirements can vary between City-funded, state-funded, and federally funded contracts. Early coordination with a Contract Compliance Officer in the Purchasing & Contracting Department and certified firms can help improve participation outcomes and reduce the risk of bid responsiveness issues.
Refer to the instructions for bidders completing GFE submittals for projects subject to the SLBE Program for additional information.
What is a Good Faith Effort?
There are certain immutable requirements to making "Good Faith Efforts." Though they may be similar in most aspects, there are some differences between the requirements for Federally Funded Projects and State Funded Projects.
What is a Third-Party Challenge?
Any individual, business enterprise, state, federal, local entity, or employee may challenge a firm that they believe to be ineligible for the Disadvantaged Business Enterprise (DBE) program.
The California Department of Transportation (Caltrans) Civil Rights Program must receive a written communique from the challenging party and must identify both parties (challenged and challenger) and include the challenger's name, address and a summary of the issues (lack of ownership, and/or control, inextricable ties, etc.). This summary must contain relevant information supporting the challenger's contention that the challenged firm does not meet the eligibility standards set forth in Code of Federal Regulations under 49 CFR 23.53.
For more detailed information, please contact janice.salais@dot.ca.gov.
What is Reciprocity?
Reciprocity means that one participating certifying agency or department accepts another participating certifying agency's certification for its DBE contracting opportunities. Participating certifying agencies share a common interest: to reduce the paperwork and certification burden to applicants by standardizing the application process between the participating certifying agencies. The process of reciprocity requires that each participating certifying agency have an approved letter of agreement to participate as a certifying agency on file with the Caltrans Civil Rights Program. This letter is assurance that the participating certifying agency follows the certification guidelines detailed in Code of Federal Regulations under 49 CFR 23 and Chapter 2.5 of the California Public Contract Code. The Caltrans Civil Rights Program also performs a review of the agency's certification program to ensure that it meets those same guidelines.
For more detailed information, please contact David DeLuz at smallbusinessadvocate@dot.ca.gov.