DVBE GOOD FAITH EFFORT ABOLISHED

On July 28, 2009 AB4X-21 abolished the "Five Steps of the Good Faith Effort" as a DVBE program compliance element. Consequently, bidders responding to Department solicitations that include DVBE program participation requirements must meet the minimum DVBE commitment level identified in the solicitation. Failure to meet stated DVBE requirements will result in a rejected bid.

State departments and agencies may elect to waive DVBE program requirements for specified contracts when it is appropriate, but must still meet overall annual DVBE program goals. DWR solicitations expressly state when the DVBE program is exempt or included within that solicitation.

DVBE CERTIFICATION BENEFITS

The Disabled Veteran Business Enterprise Program (DVBE) was established in 1989 to acknowledge California disabled veterans for their sacrifice and service to the State. The program mandates DVBE participation in state contracting to promote competition and encourage greater economic opportunity for DVBE contractors. Agencies and departments are legislatively mandated to meet annual goals of 3% DVBE participation statewide and ensure a portion of the state's overall annual contract dollars are awarded to certified DVBE businesses.

As a certified DVBE firm, you are eligible to partner with a bidder seeking DVBE sub-contractors for services or commodities related to the performance of work awarded to the prime firm. The Office of Small and DVBE Services (OSDS) is the office responsible for the DVBE certification process and will assist you with any questions or concerns about the process.

Because most DVBE businesses are also small businesses, the DWR strongly encourages DVBE firms to become small business certified when they also meet the Small business certification and eligibility requirements. Small Business certification offers its own advantages during the bidding process as well as providing additional small business prompt payment benefits.

DVBE BID OPTION

In January 1, 2002 Government Code 14838.5 was amended to include certified DVBE businesses under the SB Option process. The DVBE Option allows Departments to solicit a minimum of two certified DVBE businesses to obtain price quotes for goods, IT goods and services, and personal services between $5,001 and up to $249,999.00, and up to $147,000 for public works. Because the Option is considered an "informal" bid process no provisions for protest are included, nor are there advertising requirements. The benefit to using the DVBE Option bid process is an immediate award to the DVBE business community for the full value of the contract rather than a subcontracted commitment level and full credit to the Department in its annual DVBE participation goals.

DVBE INCENTIVE (SB 115)

Under SB 115, the opportunity for a DVBE incentive is offered to qualified bidders committing to the use of a certified DVBE subcontractor when responding to a State solicitation. The level of incentive applied is equal to the level of DVBE participation to which the bidder commits. The allowable range of incentive application is between 1 and 5 percent. For instance, if a bidder identifies four percent DVBE commitment, the Incentive offered will be equal to four percent and is calculated against the low bidder's bid and that total is subtracted from the bid amount to get the adjusted bid total. The adjusted bid total will be used to rank the firm against other bidders and may place them in line for bid award.

DWR Bids that Require DVBE Participation

For DWR bids that require bidders to meet DVBE program requirements, the incentive offered shall be from 3 percent to 5 percent. As bidders must comply with program requirements in order to be considered for bid award, the DVBE incentive will be consistent with the level of DVBE commitment. Those firms that do not comply with DVBE program requirements as specified in the bid document cannot be considered and will have their bid rejected.

DWR Bids Exempt from DVBE Participation

The department may opt to exempt a solicitation from DVBE program requirements and still offer the DVBE incentive. The level of incentive offered shall be from 1 percent to 5 percent. Qualified bidders electing to commit to DVBE firms will have their bids adjusted based on the level of participation. Again, the highest level of incentive permitted will be 5 percent.

The incentive is for evaluation purposes only and awards resulting from the application of the incentive will be awarded at the bidder's bid price.

Additional DVBE Resources
Search for Certified DVBE Firms
DVBE Firm Substitution
Commercially Useful Function Requirements for SB/MB and DVBE
DVBE Incentive Program
DVBE and Small Business Program Violations and Sanctions