HomeMy WebLinkAbout12/15/2004 - STAFF REPORTS (9) I=�
DATE: December 15, 2004
TO: City Council
FROM: Procurement and Contracting Manager and Director of Public Works
APPROVE PURCHASE OF THE CITY'S BULK GASOLINE AND DIESEL FUEL COMMODITY
REQUIREMENTS.
RECOMMENDATION:
That City Council authorize the issuance of a Blanket Purchase Order, not to exceed the budgeted
amount approved each fiscal year, for the City's bulk gasoline and diesel fuel commodity
requirements to The SoCo Group Inc., participating in the County of Riverside Fuel Contract
RIVCO-40500-001-014-12/05 through December 2007.
SUMMARY:
Due to the relatively small volume of fuel purchased, the City has benefitted by participating in
the fuel contract of a larger agency. In 2003 the County of Riverside contract was awarded to
The SoCo Group Inc. of Perris, CA and the City Council approved participation in the County
contract. The County went back out to bid in September when the previous contract ended and
awarded a split contract between The SoCo Group Inc. of Perris, CA and Downs Commercial
Fueling of Corona, CA. that became effective December I" , for a period of three years. Based
on the County bid process and the price differential between the two vendors, the vendor for the
City of Palm Springs would be The SoCo Group. Given our fuel volume, staff believes it is in the
City's best interest to take advantage of cost savings available through the economies of scale
afforded by participating in a larger agency's fuel contract. Staff recommends participating in the
County of Riverside contract to procure our fuel requirements.
BACKGROUND:
Fuel pricing formulas are based on the Oil Price Information Service(OPTS)weekly newsletterthat
is an industry standard for reporting average fuel prices on a per gallon basis nationally. Each
supplier is allowed to charge a "differential" based upon volume, load size, and delivery location.
Applicable taxes are then added. The County of Riverside, with significantly greater fuel volume
than the City of Palm Springs, conducted a formal bid and split their award between two vendors,
the incumbent, The SoCo Group Inc. of Perris, CA, and Downs Commercial Fueling of Corona,
CA. Although fuel rack rates fluctuate weekly from the refineries, The SoCo Groups' differential
for the Palm Springs area ($.0291 per gallon) is less than that of Downs ($.0353 per gallon) and
therefore The SoCo Group received the award for the County operations in Palm Springs.
The City purchases approximately 150,000 gallons of unleaded gasoline and 30,000 gallons of
diesel fuel per year for the City's eight fuel tanks. Annual fuel costs for city vehicles are budgeted
at$245,000.00 for the current 2004/2005 Fiscal Year, and are anticipated to be about the same
for the 2005/2006 Fiscal Year. Our costs averaged about 40 cents per gallon less than prices at
retail service stations over the same time period.
J A
Bulk Gasoline and Diesel Fuel
December 15, 2004
Page 2 fo 2
Historically, when the City has conducted its own competitive process as it did in the 1980's, the
pricing was not as favorable as the County due to the comparatively low fuel volume consumed.
The Procurement and Contracting Manager, pursuant to the requirements of Section 7.09.010 of
the Municipal Code, finds that utilization of the competitive process by the County of Riverside,
CA and award to The SoCo Group Inc. to procure the gasoline and diesel fuel commodity
requirements is adequate to protect the public interest, and the total cost of the fuel is likely to be
less than could be obtained through an independent City competitive process.
Funds are budgeted and available in the following accounts:
Gasoline : 510-5470-42035
Diesel : 510-5470-42045
0
B ' dl&A . JOkiN ON DAVID BARAKIAN
Procurement & ontracting Manager Director of Public Works
APPROVED:
--------- m
City Manager
Attachment:
1) Minute Order
REVIEWED BY DEPL OF FINANCE
I
MINUTE ORDER NO.
AUTHORIZING THE ISSUANCE OF A BLANKET
PURCHASE ORDER, NOT TO EXCEED THE
BUDGETED AMOUNT APPROVED EACH FISCAL
YEAR, FOR THE CITY'S BULK GASOLINE AND
DIESEL FUEL COMMODITY REQUIREMENTS TO
THE SoCo GROUP INC., PARTICIPATING IN THE
COUNTY OF RIVERSIDE FUEL CONTRACT
THROUGH DECEMBER 2007.
I HEREBY CERTIFY that this Minute Order authorizing the issuance of a Blanket
Purchase Order, not to exceed the budgeted amount approved each fiscal year,
for the City's bulk gasoline and diese". fuel commodity requirements to The SoCo
Group Inc., participating in the County of Riverside Fuel Contract through
December 2007, was adopted by the City Council of the City of Palm Springs,
California in a meeting thereof held on the 15" of December, 2004,
Kathie Hart
Acting City Clerk