...the state is the one involved and vetting potential kinship placements. So it wouldn't necessarily be up to him to do that research or even make those determinations. It's possible some relative may come forward (though unlikely as one didn't for the other kids).
I suspect that his only option is to say "yes, we'll do it." or "no, we can't."
Based on that conversation, there may be additional discussion of maintaining contact between siblings if the baby is placed elsewhere. But I don't think he gets to decide where elsewhere is - or if that's with a relative. That's on the state.