A contractor can turn in the lowest number on a public works bid and still lose the job. The bid gets declared non-responsive because the subcontractor outreach ad ran in the wrong publication, ran too late, or never ran at all. It's one of the most common ways a low bid gets thrown out in California. It's also one of the easiest to prevent, provided you know the rules before bid day.
Nothing here replaces the bid package in front of you. Good faith effort rules vary by funding source, by agency and by individual contract. The special provisions, instructions to bidders and agency forms always control. Treat what follows as a map, and confirm the details every time.
What a good faith effort is, and why California handles it differently
A good faith effort is a prime contractor's documented attempt to meet a project's participation goal for certified firms. Depending on the contract, those firms may be Disadvantaged Business Enterprises, Disabled Veteran Business Enterprises, small businesses or local business enterprises. If your committed subcontractors meet the goal outright, you usually don't have to prove anything further. If you fall short, you have to show you genuinely tried, and advertising is typically the first thing a reviewer checks.
The advertising piece is specific. You publish a solicitation for subcontractors and suppliers in the publications the agency specifies, within the time window it specifies, before bid opening.
California adds a wrinkle. Proposition 209, now Article I, Section 31 of the state constitution, bars race- and gender-based preferences in state and local contracting. That's why goals here come in three main forms. Federally funded transportation work carries DBE goals under 49 CFR Part 26. State programs that aren't race- or gender-based include the DVBE program under Military and Veterans Code Section 999 and following, along with small business programs. Local agencies run their own small, local or emerging business programs, such as San Francisco's LBE program under Administrative Code Chapter 14B.
The contracts where outreach advertising shows up
Outreach requirements turn up across a wide range of public work. These are the places estimators most often run into them:
- Caltrans federal-aid highway projects with a DBE contract goal.
- Local Assistance projects, where cities and counties spend federal highway dollars under Chapters 9 and 15 of the Caltrans Local Assistance Procedures Manual.
- Transit projects with Federal Transit Administration funding, at agencies such as LA Metro, BART, VTA, SFMTA and San Diego MTS.
- Airport projects with FAA funding, including LAX, SFO and San Diego International.
- City of Los Angeles public works contracts, which carry the city's own subcontractor outreach requirements.
- San Francisco contracts with LBE subcontracting goals, monitored by the city's Contract Monitoring Division.
- California High-Speed Rail Authority contracts, which carry an overall 30 percent small business goal.
- State agency contracts with DVBE goals, depending on how the individual solicitation treats DVBE compliance.
The local programs deserve a closer look. Some agencies don't simply ask whether you made an effort. They spell out particular outreach steps and may score them. Los Angeles has revised its program over the years, so read the current requirements in the bid package rather than relying on what applied on the last city job you bid.
A workable rule of thumb applies everywhere. If the package contains a participation goal and also a good faith effort form or any reference to "good faith efforts," assume advertising is required and treat it as pass/fail.
What federal reviewers look for under 49 CFR Part 26
On DBE projects, Appendix A to 49 CFR Part 26 lists the kinds of efforts reviewers weigh, and Caltrans and local agencies use it as their baseline. Advertising is only one item. Reviewers also look for solicitation through all reasonable and available means, including outreach meetings and written notices. They want to see that the solicitation went out early enough for DBEs to respond.
The list goes further. It includes breaking work into economically feasible pieces, even work you could self-perform. It includes giving interested firms adequate information about plans, specifications and requirements, and negotiating in good faith rather than rejecting DBEs without sound reasons. Appendix A also counts help with bonding, credit, insurance or equipment, and use of community organizations, contractor groups and agency DBE offices.
Reviewers also compare you with the rest of the field. If the second-low bidder met the goal and you didn't, expect that comparison to weigh against you. It raises a fair question about how hard you tried.
Federal DBE rules have been the subject of recent changes, including to how firms are certified. Before you count on a particular firm or procedure, check current guidance from Caltrans or the awarding agency.
On Caltrans-administered and Local Assistance federal-aid projects, DBE commitments and good faith effort documentation go in on agency forms. Local Assistance projects use LAPM Exhibit 15-H, "DBE Information – Good Faith Efforts." Caltrans-advertised projects use whatever forms the contract's special provisions list.
The deadlines are short. Documentation is commonly due within a few days after bid opening, and the special provisions set the exact cutoff. Missing it by hours can disqualify you. Have the package assembled before you seal the bid, not after.
Exhibit 15-H asks for the names of the publications you used, the dates the ads ran and the work items you solicited. You attach copies or proofs of publication. The DBEs you list must be certified through the California Unified Certification Program as of the bid. A firm whose certification is still pending doesn't count toward the goal.
Here's how the math plays out. Say a county public works department advertises a $2.8 million federal-aid resurfacing job with a 14 percent DBE goal, which means $392,000 in DBE participation. Your best commitments come to 11 percent, or $308,000, leaving you $84,000 short. Your bid now rides on your good faith effort package, and the first page a reviewer turns to is the advertising: where it ran, when, and what work it listed.
Running the ad and building a file that survives review
Start with the bid documents' definition of an acceptable publication. Agencies often call for trade papers, focused publications serving certified firms, or both, and some require more than one. The Daily Reporter is among the publications certified by the Department of General Services as a trade and focused newspaper. Whichever outlet you use, confirm it meets the wording in your contract. Then count backward from bid opening so the ad runs inside the required window, with time left for subs to actually respond.
Once the ad has run, everything depends on whether you can prove what you did. Before submitting, check that your file contains these items:
- Proof of publication for every ad, showing the publication name and run dates.
- The ad text itself, listing specific work items, where plans can be viewed, a contact and any bonding or insurance assistance offered.
- Copies of written notices sent to certified firms, with dates.
- A log of follow-up calls and emails, including who responded and what they quoted.
- Your reasons for rejecting any certified firm's quote, stated in terms a reviewer would accept.
A reviewer reading that file should be able to reconstruct your outreach without calling you. If they can't, assume the effort didn't happen as far as the agency is concerned.
On your next bid with a participation goal, find the good faith effort section in the special provisions the day the package arrives. Note the advertising window and the post-bid deadline, and book the ad before you start pricing. Then build the file as you go, so the paperwork is ready when the bids are opened.
