Making A Good Faith Effort-Small Underutilized Business Program

Like many government agencies, the City of Minneapolis has small business subcontracting goals. The requirement is that prime contractors and developers must either meet the goals, or make a good-faith effort (GFE) to meet the goals. The aim of the program is for primes to form relationships with woman- and minority-owned small firms, and primes should usually be able to leverage those relationships to meet the goals. However, if the goals are not met on a given project, City staff will evaluate whether the prime contractor made a good faith effort to meet the goals. But, what does it mean to make a good faith effort?

When City contract compliance staff evaluate whether a contractor made a good faith effort, they will ask for evidence that the contractor took certain actions. Those actions might be organized into three basic categories: initial outreach, follow-up/negotiation, and breaking out subcontracting opportunities.

Regarding the contractor’s initial outreach, primes should note that the City only counts MnUCP-certified, local, minority- and women- owned firms (MBEs and WBEs) toward its goals. Evidence of a firm’s Minnesota MBE or WBE certification is found at Community and professional organizations may also be helpful in finding MBEs and WBEs, but must be the primary resource.

Primes should solicit through all reasonable and available means the interest of all MBEs and WBEs certified in the scopes of work of the project. City staff will ask for evidence like copies of bid invitations sent, fax confirmation sheets, email correspondence, and phone logs of MBEs/WBEs called. Also, primes should do this outreach early enough that MBEs/WBEs have plenty of time to respond. This may sometimes mean starting outreach before the City holds its pre-bid meeting. Note that while there are many types of actions a contractor should be able to document in order to show a good faith effort, documentation of thorough initial outreach is usually weighed the most heavily by City staff.

Regarding the prime’s follow-up and negotiation, primes should follow up with potential subcontractors intelligently, negotiate fairly, and freely share appropriate project information. If, for example, a prime has emailed fifty MBEs/WBEs during initial outreach, and some of those firms responded that they were not interested, the prime need not contact those firms again about that project. Follow-up communications should be reserved for firms that did not initially respond, that responded favorably, or that responded ambiguously. And of course, MBEs/WBEs should be given the project details that they need to respond effectively to the solicitation.

Regarding breaking out subcontracting opportunities, a prime should select portions of the work to be performed by MBEs/WBEs in order to increase the likelihood that the project goals will be achieved. Depending on the nature and size of the project, this may require some creativity, including breaking certain scopes of work into smaller units. Even if a prime would prefer to self-perform certain scopes of work, breaking out those scopes to increase MBE or WBE inclusion remains a weighty consideration in any good faith effort evaluation.

Depending on the project, making and documenting a good faith effort can be time-consuming, to put it mildly. Again, the hope is that prime contractors are forming relationships within the community of small minority- and woman-owned firms. This would increase the chances that a prime can make two phone calls, and meet the goals, instead of having to make 50 phone calls, and not meet the goals.

The above is only a brief summary. For more detailed information about meeting the goals or making good faith efforts, refer to the City’s bid documents for any formally bid project, or call the Contract Compliance Division of the Civil Rights Department at 612-673-3012.

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