HomeMy WebLinkAboutStaff Report 432-08TO:
9
City of Palo Alto
CRy Manager’s Report
................HONOP, a~o~E CtTYCOUNC~!E
FROM:
DATE:
REPORT TYPE:
CITY MANAGER
NOVEMBER 10, 2008
CONSENT
DEPARTMENT: PUBLIC WORKS
CMR:432:08
SUBJECT:Approval of Amendment No. 1 to Purchase Order C08124799 With
Western States Oil for an Additional Amount of $250,000 Per Year
for a Three Year Term in a Total Not to Exceed $3,582,000 for
Provision of Automotive Fuel
RECOMMENDATION
Staff recommends that Council:
Approve and authorize the City Manager or his designee to execute Amendment No. 1 to
Purchase Order C08124799 with Western States Oil in the amount of $250,000 for the
provision of automotive fuel for a one- year period from December 17, 2007 to December
16, 2008; and
Authorize the City Manager or his designee to exercise the option to renew the purchase
order in the amount of $1,194,000 for the second year and $1,194,000 for the third year, for a
total not to exceed contract amount of $3,582,000 provided the contractor is responsive to the
City’s needs, and the quality of the contractor’s products and services is acceptable during the
first year of the contract.
DISCUSSION
On December 10, 2007, Council approved Purchase Order C08124799 with Western States Oil
(CMR 442:07) to provide unleaded gasoline, diesel, and biodiesel fuel, in accordance with City
specifications, and at the Oil Price Information Service (OPIS) San Jose "rack average" price in
effect on the date of delivery. Fuel is delivered into tanks located at the Municipal Services
Center, Landfill, Golf Course, Fire Stations One, Two, and Four, the Water Quality Control
Plant, Foothills Park, Civic Center, and several standby generator sites. A Request for Quotation
(RFQ) was sent to six vendors on October 31, 2007 with four vendors responding. Staff
reviewed all bids submitted and recommended that the bid submitted by Western States Oil be
accepted and Western States Oil was declared the lowest responsible bidder.
The purchase order amount is based on transportation costs including overhead plus estimated
fuel costs determined by the OPIS index, which changes on a daily basis. The actual cost may be
higher or lower than the estimate as it is subject to fuel market trends. The original contract
CMR:432:08 Page 1 of 2
value of $944,000 was determined by multiplying the delivered cost of the fuel (based on the
November 7, 2007 OPIS index) by the estimated quantity required at each site. Due to the
flucuation in fuel prices over the past 12 months and based on the OPIS, the purchase order
amount of $944,000 is insufficient to provide fuel for the 12-month term ending December 16,
2008. The request of an additional $250,000 will ensure uninterrupted delivery to City fueling
sites. Although fuel prices are currently trending downward, the market remains very volatile.
Because of this volatility, it is requested that the purchase order amount for the optional second
and third years be increased by $250,000 each year as well.
RESOURCE IMPACT
Funding in the amount of $900,000 has been budgeted for fuel costs in the FY 2008-09 Public
Works Department Equipment Management Operations and Maintenance budget. In order to
insure that adequate funding is available for this contract, the budget will be amended at midyear
for an additional $250,000. This additional amount will be recovered from departments via a
corresponding increase in allocated charges. Due to the current fluctuation in fuel pricing the
fuel budget and corresponding allocations will also be re-evaluated during the FY 2009-10
budget process.
POLICY IMPLICATIONS
Authorization of the contract does not represent any change to the existing policy.
ENVIRONMENTAL REVIEW
Contractor is required to comply with all federal, state and local environmental laws and
regulations applicable to the transportation and delivery of automotive fuels.
ATTACHMENTS
Attachment A: CMR:442:07
PREPARED BY:
DEPARTMENT HEAD:
KE1Ti-I LAHAIE
Fleet Manager
GLENN S. ROBERTS
Director of Public Works
CITY MANAGER APPROVAL:
city
CMR:432:08 Page 2 of 2
TO:
FROM:
ATTACHMENT A
City of IPMo AIlto
C ty iV a ager s Repert
HONORABLE CITY COUNCIL
CITY MANAGER
5
DEPARTMENT: PUBLIC WORKS
DATE:DECEMBER 10, 2007 CMR:442:07
SUBJECT:APPROVAL OF A PURCHASE ORDER WITH WESTERN STATES OIL
FOR A PERIOD OF UP TO 3 YEARS IN THE AMOUNT OF $944,000 PER
YEAR FOR A TOTAL AMOUNT NOT TO EXCEED $2,832,000 FOR
PROVISION OF AUTOMOTIVE FUEL
RECOMMENDATION
Staff recommends that Council:
Approve and authorize the Mayor to execute a purchase order with Western States Oil in the
amount of $944,000 for the provision of automotive fuel for a one year period from
December 17, 2007 to December 16, 2008; and
Authorize the City Manager or his designee to exercise the option to renew the purchase
order in the amount of $944,000 for the second and $944,000 third year, provided the
contractor is responsive to the City’s needs, and the quality of the contractor’s products and
service is acceptable during the first year of the contract.
DISCUSSION
Western States Oil will furnish unleaded gasoline, diesel, and biodiesel fuel, in accordance with
City specifications, and at the Oil Price Information Service (OPIS) San Jose "rack average"
price in effect on the date of delivery. Fuel will be delivered into tanks located at the Municipal
Services Center, Landfill, Golf Course, Fire Stations One, Two, and Four, Water Quality Control
Plant, Foothills Park, Civic Center, and several standby generator sites.
Summary of Bid Process
Bid Name/Number
Proposed Length of Purchase Order
Number of Bids Mailed to
Contractors
Total Days to Respond to Bid
Pre-Bid Meeting?
Number of Bids Received:
Bid Price Range
*
Automotive Fuel Services - RFQ #124799
12 months with option to renew
6
20
No
4*
$944,048 - $1,010,964"*
Bid summary provided in Attachment A. The Certification of Nondiscrimination is
Attachment B.
First year cost only, based on OPIS November 7, 2007 San Jose Rack Average fuel pricing.
CMR:442:07 Page 1 of 2
¯ Staff has reviewed all bids submitted and recommends that the bid submitted by Western States
Oil be accepted and that Western States Oil be declared the lowest responsible bidder. The
change order amount of $94,400, which equals 10 percent of the .total contract, is requested to
insure against the volatility of fuel prices, which are expected to increase during the term of the
purchase order.
Contractors bid delivery pricing and margin only. Fuel pricing is determined by the OPIS index,
which changes on a daily basis. The contract value of $944,000 was determined by multiplying
the delivered cost of the fuel (based on the November 7, 2007 OPIS index) by the estimated
quantity required at each site. The actual cost may be higher or lower than the estimate of
$944,000, subject to fuel market trends.
RESOURCE ~ACT
Funding in the amount of $500,000 has been budgeted for fuel costs in the FY 2007-08 Public
Works Department Equipment Management Operations and Maintenance budget. In order to
insure that adequate funding is available for this contract, the budget Will be amended at mid-
year for an additional $444,000. This additional amount will be recovered from departments via
a corresponding increase in allocated charges.
POLICY II~PLI[CATIIONS
Authorization of the contract does not represent any change to the existing policy.
ENVIRONMENTAL REVIEW
Contractor is required to comply with all federal, state and local environmental laws and
regulations applicable to the transportation and delivery of automotive fuels.
ATTACE~ENT$
Attachment A: Bid Summary
Attachment B: Certification of Nondiscrimination
PREPARED BY:
DEPARTMENT HEAD:
CITY MANAGER A~DPROVAL:
KEITH LAHAIE
Fleet Manager
Director of Public Works
Assistant City Manager
CMR:442:07 Page 2 of 2
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CERTIFICATION OF NONDISCRIMINATION SECTION II
Project:Automotive Fuel Delivery Services
Certification of Nondiscrimination: As suppliers of goods and/or services to the City of Palo Alto in excess
of $5,000, the firm, contractor or individual(s) listed below certify that: they do not and in the performance of
this contract they will not discriminate in employment of any person because of race, skin color, gender, age,
religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status,
weight or height of such person; and further certify that theyare in compliance with all Federal, State and local
directives and executive orders regarding nondiscrimination in employment.
Signature:
CITY OF PALO ALTO -RFQ 124799 PAGE 1 OF t