Good Faith Effort Documentation: What Prime Contractors Need to Keep (2026)

A good faith effort (GFE) is the record that proves you really tried to subcontract with small and diverse businesses. When you miss a participation goal, that record is what separates a responsive bid from a rejected one, and a clean compliance review from liquidated damages. Short answer: start outreach early, document every contact with a date, log every quote you receive, and write down why you picked or passed on each firm. What the file has to show depends on who is buying. In 2026 the rules for federal contracts, California state contracts, federal-aid transportation work and city contracts are all different. This guide shows you what to keep for each.

Where good faith efforts apply in 2026

If you only remember one thing: the solicitation controls. Read the small business, DVBE or DBE section before you price the job, not the night before bids are due.

What goes in a good faith effort file

Whatever the program, reviewers look for the same evidence. Keep it in one folder per bid:

• Work items you broke out for subcontracting. Split the scope into pieces small firms can realistically perform. Primes that offer only one large package rarely pass a GFE review.
• Where you searched. Screenshots or exports from the Cal eProcure Certified Firm Search, the SBA’s Small Business Search, the California UCP DBE directory and any city system such as BAVN, with the date and search terms.
• Dated notices. The emails or letters you sent, who received them, and the date. Send them early enough for firms to price the work.
• Follow-ups. A second contact with interested firms, with dates. One blast email is not an effort.
• Access to plans and specs. How and where subcontractors could get the bid documents.
• A quote log. Every quote you received, the amount, and the scope it covered, including the ones you did not use.
• Selection reasons. Why each firm was chosen or passed over. “Price was 4% higher” is a reason. “Not selected” is not.
• Assistance offers. Any help you offered with bonding, credit lines, insurance or breaking up payments.
• Meeting records. Pre-bid meeting sign-in sheets and matchmaking events you attended.

Mistakes that sink a good faith effort

• Outreach that starts too late. Notices sent two days before bid opening look like a box-checking exercise, and on City of LA bids they fail the 15-day rule outright.
• No quote log. If you cannot show what a small business quoted, you cannot show why you rejected it.
• Naming a firm, then self-performing. On federal contracts with a subcontracting plan, using the small businesses named in your proposal less than planned triggers a written explanation. Unexplained, it can count as a material breach.
• Pass-through subcontracts. A certified firm that adds no real work does not perform a commercially useful function, and its participation may not count at all.
• Expired certifications. Check every firm’s status on the bid due date. Our California certified small business lookup guide shows how.

After award: the file keeps growing

Good faith efforts do not end when you win the contract. Keep signed subcontracts, payment records and any substitution requests with the agency’s approval. On federal contracts with a subcontracting plan, keep your reporting on schedule: individual subcontract reports twice a year and summary reports once a year. If a small business drops out, document the replacement search the same way you documented the original outreach. Our small business subcontracting plan guide covers federal reporting in more detail.

What we would do in your position

1. Read the participation section first. Before you price, write down the goal, the program (federal plan, DVBE, DBE or city) and the documentation deadline.
2. Start outreach two to three weeks out. That clears the City of LA 15-day rule and gives small firms time to price real scope.
3. Use one quote log for every bid. A simple spreadsheet works: firm, certification, work item, date contacted, quote, decision, reason.
4. Bring a certified partner who performs real work. GERC is a woman-owned, California-certified SB (Micro) and SB-PW firm, #2045992. We carry real consulting scope on your team: economic analysis, grants and proposal support. See how primes meet SB and DVBE participation goals.
5. Hand off the paperwork if you are stretched. We build subcontracting plans, run outreach and keep the GFE file for primes. See how we team with prime contractors.

Good faith effort documentation: frequently asked questions

What is a good faith effort in government contracting?

It is the documented outreach a prime contractor does to subcontract with small, disadvantaged, disabled veteran or other targeted businesses. When a goal is missed, the agency reviews that record to decide whether the bid is still responsive or whether the contractor complied with its plan.

Does California allow a good faith effort instead of meeting the DVBE goal?

Not on state contracts. California eliminated the DVBE good faith effort option in 2009, so bidders must meet the DVBE participation the solicitation requires unless that solicitation exempts it. Local agencies set their own rules.

Are DBE good faith efforts required on Caltrans and transit projects in 2026?

Under USDOT’s DBE rule, agencies may not set new DBE contract goals or require good faith efforts to cure a shortfall until California finishes reevaluating its DBE firms. Check each solicitation, because requirements can change once the reevaluation is complete.

How early should a prime contractor start subcontractor outreach?

At least 15 calendar days before bids are due, and earlier for large or complex scopes. The City of Los Angeles requires notices at least 15 days before the bid date, and small firms need time to price the work.

What documentation do I need for a good faith effort?

Keep the work items you broke out, the databases you searched, dated notices and follow-ups, how firms could get plans and specs, a log of every quote, your selection reasons, and any offers of bonding, credit or insurance help.