DVBE Good Faith Effort documentation.

Why GFE exists

California public works contracts (and most federal contracts using SDVOSB scope) carry a participation goal — typically 3% of the contract value to DVBE firms. Sometimes meeting that goal directly isn't feasible: maybe the trade is highly specialized, maybe the DVBE firms in that NAICS code are at capacity, maybe pricing from DVBE bidders is materially higher than the project budget can absorb.

GFE is the procedural escape valve. It says: the contractor demonstrably tried, documented the attempts, and the participation goal could not be met despite reasonable effort. When the documentation is real, the bid stays competitive. When the documentation is thin, the bid gets thrown out.

When GFE applies — and when it doesn't

GFE applicability has narrowed in California state DVBE contracts. Under current regulations, on competitive solicitations with a DVBE participation goal, the contract must generally be awarded to the lowest responsible bidder who meets the goal. That means a non-compliant bid with even a perfect GFE package may still lose to a compliant bidder.

However, GFE remains the operating standard for:

• Federal contracts with SDVOSB participation requirements
• Local agency DVBE/MBE/WBE programs (LA City RAMP, SF LBE, San Diego SLBE)
• Prime contractor subcontracting plans on large federal projects
• School district and special district public works (varies by district)
• Caltrans Disadvantaged Business Enterprise (DBE) contracts

The practical takeaway: always check the specific solicitation. The GFE rules are agency-by-agency. The state statewide DVBE rule is the strictest; most other regimes still allow GFE as a compliance path.

The 7-step GFE process

1. Identify the participation goal. Read the solicitation carefully. The DVBE goal is typically 3% statewide; some agencies set higher goals (5-10%) on specific contract types. Confirm the trade scope where DVBE participation is required and the documentation deadline.
2. Build a target list of DVBE firms. Search Cal eProcure for DVBE firms registered under the relevant NAICS codes. For federal SDVOSB scope, search VetCert. For LA-area work, search RAMP. Build a target list of at least 15-25 DVBE firms across the trades where participation is needed.
3. Send solicitation letters at least 10-14 business days before bid. Email or mail formal solicitation letters to every firm on the target list. Include the project description, scope of the package, drawings or specifications, response deadline, and your contact information. Track delivery with read receipts or certified mail.
4. Document outreach activities. Maintain a spreadsheet logging every solicitation: firm name, contact, NAICS code, scope, date sent, delivery confirmation, response date, response content. This is the core evidence file. Keep all email and correspondence in a dedicated folder.
5. Follow up with non-responding firms. Five to seven days after the initial solicitation, follow up with non-responding firms by phone or email. Document every contact attempt. Agencies look for follow-up activity as a signal of genuine effort.
6. Negotiate in good faith with responding firms. When DVBE firms respond with bids, evaluate them on the same criteria as non-DVBE bids. If a DVBE bid is higher, negotiate. Document any negotiation. If you ultimately do not select a DVBE bid, write down the specific reason — pricing differential alone is rarely sufficient justification.
7. Compile and submit the GFE package. Submit the GFE documentation with the bid package. Include the solicitation letters, the target list, the response log, follow-up records, negotiation notes, and a narrative explaining why the participation goal could not be met directly. Sign and date the GFE certification.

The five reasons GFEs get rejected

1. Insufficient outreach lead time. Soliciting DVBE firms three days before the bid is due is not a good faith effort. Plan for 10-14 business days minimum.
2. Too few firms solicited. Sending letters to four DVBE firms when fifty are registered under the relevant NAICS code reads as a checkbox exercise.
3. No follow-up with non-responders. If you send the letter and don't follow up, the reviewing agency assumes you didn't actually want a response.
4. Pricing rejection without negotiation. If a DVBE responded with a bid 8% higher than your non-DVBE quote and you simply rejected it without attempting to negotiate, that's not good faith — it's price filtering.
5. Missing or generic narrative. The GFE narrative must explain specifically why the participation goal couldn't be met — not boilerplate language about “market conditions.”