HomeMy WebLinkAbout3/5/2003 - STAFF REPORTS (6) G',�
DATE: March 5, 2003
TO: City Council
FROM: Director of Procurement and Contracting and
Director of Parks, Recreation &Facilities
APPROVE PURCHASE OF THE CITY'S ANNUAL 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 annual bulk gasoline and diesel fuel commodity
requirements to The SoCo Group Inc., participating in the County of Riverside Fuel Contract
RIVCO-40500-002-001-08/02 through August 2004.
SUMMARY:
The City has purchased the bulk of its fuel commodity requirements from Lee Escher Oil Co. Inc.
since 1987 when it was awarded the County of Riverside Fuel Contract. In the last competitive bid
process, the County contract was awarded to The SoCo Group Inc. of Perris, CA and the contract
is valid until August 2004, when the County will then go back out to bid. Given our fael volume,
staff believes it is in the best interest and cost savings to the City that we take advantage of the
economies of scale offered by a larger agency and participate in the County contract to procure our
fuel requirements from their contracted vendor.
BACKGROUND:
Staff investigated the State of California Fuel Contract as well as the County of Riverside Contract
to determine which would be most cost effective for the City. Fuel pricing formulas are based on
the Oil Price Information Service(OPIS)weekly newsletter that is an industry standard for reporting
average fiiel prices on a per gallon basis nationally. Each supplier is allowed to charge a
"differential"based upon volume, load, and location. Applicable taxes are then added. The State
Contract was awarded, for our region, to Falcon Fuels of Paramount, CA and the County of
Riverside Contract was awarded to The SoCo Group Inc. of Perris, CA. Although rack fuel prices
fluctuate weekly, cost comparisons between the two vendors proved that the County of Riverside
Contract was less expensive than the State, primarily due to the lower differential charged by The
SoCo Group Inc. For example,recently unleaded gasoline from The SoCo Group was$1.234 per
gallon compared to Falcon's $1.358 per gallon the same week, a .124 per gallon difference. On a
frill load of 8678 gallons, The SoCo Group would be $1076.07 less expensive than Falcon Fuels.
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The City consumes approximately 150,000 gallons ofunleaded gasoline and 32,000 gallons of diesel
fuel per year in eight fuel tanks. Annual fuel costs are budgeted at $210,000.00 for the current
2002/2003 Fiscal Year, and are anticipated to be about the same for the 2003/2004 Fiscal Year.
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.
Therefore, the Director of Procurement and Contracting, 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
SCOTT MIKESELL HAROLD E. GOOD
Director of Parks, Recreation&Facilities Director of Procurement & Contracting
APPROVED:
City Manager
Attachment: Minute Order
REVIEWED BY DEFT.OF FINANCE
MINUTE ORDER NO.
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 ANNUAL BULK GASOLINE
AND DIESEL FUEL COMMODITY
REQUIREMENTS TO THE SoCo GROUP INC.,
PARTICIPATING IN THE COUNTY OF
RIVERSIDE FUEL CONTRACT THROUGH
AUGUST 2004.
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 annual bulk gasoline and diesel fuel
commodity requirements to The SoCo Group Inc., participating in the
County of Riverside Fuel Contract through August 2004, was adopted by
the City Council of the City of Palm Springs, California in a meeting
thereof held on the 51h of March, 2003.
PATRICIA A. SANDERS
City Clerk
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