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HomeMy WebLinkAboutDI Good Faith Efforts Guidelines Updated_1 CITY OF SOUTH BEND’S GUIDELINES FOR GOOD FAITH EFFORTS BY CONTRACTORS IN MEETING MBE/WBE CONTRACT GOALS Under the City of South Bend’s Minority and Women’s Business Enterprise (MWBE) Inclusion Program Plan (COSB Inclusion Plan), the City of South Bend (the City) is authorized to set “contract specific” goals to increase MWBE participation in City contracts and procurements. MBE/WBE participation goals are set based on availability of MWBE contractors within the City’s geographic market area identified in the City’s Disparity Study. For contractors bidding on a construction, services, supplies or equipment contract where goals have been set for all or parts of the project, below is information relevant to “good faith efforts” to meet the contract goal. When the City sets a contract goal, that means MWBE’s are in fact available to perform work on the contract. Project bidders must try diligently to meet the goal. Failure to make a good faith effort may result in rejection of your bid as non-responsive to the contract. ______________________________________________________________________________ Good faith efforts means actions undertaken by a contractor to achieve a contract goal which, by their scope, intensity, and appropriateness to the objective, can be reasonably expected to fulfill the Program’s goals (City’s Inclusion Plan, Section 4.B., No. 21). ___________________________________________________________________ A good faith effort is fully reviewable by the City. Where a contract goal is not met, contractors must provide as much information as possible to help the City assess the contractor’s good faith efforts to achieve the goal. Inadequate proof of good faith efforts may result in a finding that the contractor was non-responsive, causing its bid to be rejected even if it is the lowest. Good faith efforts require active, aggressive efforts by the prime contractor to obtain the contract MBE/WBE participation goal. Mere pro forma efforts are not good faith efforts. To satisfy the good faith efforts test: • A prime contractor may not reject a MWBE’s bid solely because it is not the lowest bid received from subcontractors. If the MWBE’s costs are reasonable and not excessive, the MWBE’s quote or bid presumptively should be accepted on a contract requiring goals even if the MWBE’s bid is not the lowest one received. However, if an MWBE’s bid or quote is unreasonable or excessive, the prime contractor may 2 reject the bid on that basis. The contractor has the burden of demonstrating the excessiveness or unreasonableness of the MWBE’s bid or quote. Because the City must determine whether a MWBE quote was unreasonable or excessive, Contractors must provide the City with copies of each MWBE and non MWBE quote submitted to the bidder when a non-MWBE was selected over an MWBE. • A contractor may not reject a MWBE as being unqualified without sound reasons based on a thorough investigation of the MWBE’s capabilities. If a prime contractor rejects a MWBE as unqualified, the Contractor must provide the City with good reasons for this. The MWBE’s industry standing or membership in a specific group, organization, political or social affiliation (example: union v. non -union) is not a basis to reject the MWBE for lack of qualification. • The ability or desire of a prime contractor to perform the work of the contract with its own organization team does not relieve the prime contractor of the need to make good faith efforts to use MWBE sub contractors to meet the contract goal. EXAMPLE: Total Project Estimate is $500,000. An MBE goal of 5% is set for a specific portion of the project, i.e., $25,000. Only one MBE submits a quote to the prime contractor for that portion of the project, and it is $25,000. A non MWBE submits a quote of $22,000 for the same portion of the project. Rejecting the MBE quote may not meet the requirement of making a good faith effort to meet the contract goal because: 1) the MBE quote is within the goal percentage and dollar amount set for MBE participation on the project; 2) selection of the MBE quote guarantees that the contractor meets the set goal and that its bid will be deemed responsive; and 3) the difference between the MBE and non MWBE quotes is not significant in terms of the overall contract amount. If the MBE’s quote is $25,000 and the non-MWBE bid is $22,000, it may not be demonstrative of a good faith effort to reject the MBE solely because the MBE’s quote is not the lowest. The excess is not greatly significant to the total contract cost, and it could reasonably be expected to be made up elsewhere in the contract while guaranteeing full goal compliance. The above example is illustrative only. The City will make a fair and reasonable judgment as to good faith efforts based on all information and documentation provided by bidders and taking into account the Quality Quantity, and Intensity Formatted: Underline Formatted: Underline Formatted: Underline 3 of the efforts made by a contractor to meet the contract goal. GOOD FAITH EFFORTS MATERIALS TO BE INCLUDED WITH BID If a contractor’s bid does not meet the goal set for the contract, the contractor must submit evidence of good faith efforts with its bid so the City can determine whether the contractor is a responsive bidder. If the contractor’s bid meets the MBE/WBE goal, evidence of good faith effort is not required, but it would be prudent to include some evidence in case an error was made. The information required of a contractor who has not achieved the contract goal to show good faith efforts can be found in the South Bend Inclusion Program Plan at Section 8.B.3.d. as follows: (b) Where the bidder cannot achieve the contract goal, the bidder must provide proof of having made good faith efforts to meet the goal. In making this determination of whether to issue a goal waiver, the City will consider, at a minimum, the bidder’s efforts to: (1) Solicit through all reasonable and available means (e.g., attendance at pre-bid meetings, advertising and written notices) the interest of all MWBEs in the scopes of work of the contract. The contractor shall provide interested MWBEs with timely, adequate information about the plans, specifications, and requirements of the contract to allow such firms to respond to the solicitation. The bidder must follow up initial solicitations with interested MWBEs. (2) Select portions of the work to be performed by MWBEs in order to increase the likelihood that the contract goal will be achieved. This includes, where appropriate, breaking out contract work items into economically feasible units to facilitate participation, even when the bidder would otherwise prefer to perform these work items with its own forces. It is the bidder’s responsibility to make a portion of the work available to MWBEs and to select those portions of the work or material needs consistent with the availability of such firms to facilitate their participation. (3) Negotiate in good faith with interested MWBEs. Evidence of such negotiation includes the names, addresses, and telephone numbers of firms that were contacted; a description of the information provided regarding the plans and specifications for the work selected for subcontracting; and why agreements could not be reached. The bidder may not reject MWBEs as being unqualified without sound reasons based on a thorough investigation of their capabilities. That there may be some additional costs involved in finding and using MWBEs is not in itself sufficient reason for a bidder’s failure to meet the contract goal, as long as such costs are reasonable. The ability or desire of a bidder to perform the work of a Contract with its own organization does not relieve it of the responsibility to make good faith efforts on all scopes of work within which subcontracting opportunities are available. (4) Make efforts to assist interested MWBEs in obtaining bonding, lines of credit, or insurance as required by the City or the bidder, where appropriate. 4 (5) Make efforts to assist interested MWBEs in obtaining necessary equipment, supplies, materials, or related assistance or services, where appropriate. Materials that should be submitted to support a contractor’s good faith efforts include: • Copies of advertisements, notices, or solicitations from contractor to MWBE’s-- to include date and time of issuance; • A list of all locations where advertisements or notices to MWBE’s were placed or solicitations sent; • Copies of communication between contractor and MWBE’s in response to contractor’s advertisements, notices, or solicitations; • Proof of contractor’s break-out of contract items into units feasible for performance by WMBE’s; • Proof of communications between the contractor and MWBE regarding negotiations for agreements, and why agreement could not be reached, as stated more specifically in above Subsection (b) (3); • Proof of bids or quotes from MWBE’s and those from non MWBE’s when non MWBE’s bid or quote is used; • Proof of efforts made by contractor to assist MWBE to participate in contract, where appropriate; and • Any other information tending to show that Contractor made active, aggressive efforts to meet the MBE/WBE participation goal but despite good faith efforts was unable to do so.