Valley Water Small Business Enterprise (SBE) Outreach Program – Bidder/Proposer FAQ
What is the SBE participation requirement for bidders/proposers?
All non-SBE bidders/proposers must either:
- Subcontract at least 30% of the work to Department of General Services (DGS) certified SBEs, or
- Submit complete Good Faith Effort (GFE) documentation showing they actively sought SBE participation.
If you are a certified SBE bidder/proposer, this requirement does not apply.
What happens if I do not meet the 30% SBE participation goal?
If you are not an SBE bidder/proposer and do not subcontract at least 30% to DGS-certified SBEs, you must submit complete Good Faith Effort (GFE) documentation, or your bid/proposal will not be considered responsive. This means showing that before the bid/proposal opening, you:
- Subdivided work into smaller, feasible portions suitable for SBEs.
- Conducted outreach to a reasonable number of DGS-certified SBEs (including advertisements at least 10 days before bids were due).
- Followed up with SBEs to confirm interest, negotiated in good faith, and documented any rejections with reasons.
Failure to provide timely and complete GFE documentation will render a bid/proposal non-responsive.
What sort of GFE documentation is Valley Water looking for?
GFE documentation must show specific, verifiable actions you took before bid opening to involve SBEs. All three categories of GFE (Subdivide Work, Outreach, and Follow-Up) must be addressed in your documentation.
Acceptable documentation may include:
- Subdivide Work: Subcontracting plans, memos, or market research showing how you broke work into smaller, feasible units for SBE participation.
- Outreach: Copies of advertisements published at least 10 days before bids were due, outreach logs, emails, or call records showing contact with DGS-certified SBEs.
- Follow-Up Communication: Emails, phone logs, or written notes showing you confirmed interest with SBEs, provided project information, negotiated in good faith, and documented reasons for rejecting any SBE bids.
What type of certification do SBEs need?
To count toward participation goals, SBEs must be certified by the California Department of General Services (DGS). The following certifications are acceptable:
- Small Business (SB) certification
- Small Business for the Purpose of Public Works (SB-PW) certification
Is there a preference for SBE or non-SBE bidders/proposers with SBE participation?
Yes. Bidders/Proposers may receive financial or evaluation preferences if they are certified SBEs or if they subcontract significant percentages of work (30%, 40%, or 50%+) to certified SBEs. These preferences are capped at 5% of the bid price or $150,000, depending on the contract size for construction projects. There is no dollar limit for professional services projects, but the maximum preference a proposer can receive is five percent.
Where can I find help or more information?
Contact Valley Water’s Labor Compliance Program at [email protected] / (408) 630-2311.