Title
Consider and take action on a resolution authorizing a one-year renewal agreement with Bay Oil Company for the purchase and delivery of fuel and petroleum products in an amount not to exceed $1,230,000 (Director of Public Works)
Background:
Approval of this item will authorize a one-year renewal agreement with Bay Oil Company for the purchase and delivery of fuel and petroleum products from December 1, 2024 through November 30, 2025 in an amount not to exceed $1,230,000. This is the second and final renewal and this service will be rebid in FY2025.
Renewal agreement amount based on the following:
1. Fuel - pricing is determined on a daily basis by the Oil Price Information Service (OPIS). OPIS provides daily fuel pricing based on pertinent regional petroleum market influences. The proposed one-year amount accounts for the most recent one-year usage history and a contingency amount for unforeseen conditions. At the time of this writing OPIS fuel pricing is $2.77 for unleaded and $3.11 for diesel.
2. Delivery - the cost for delivery service is represented as a price per gallon above the OPIS market rate. Bay Oil proposes a cost of $0.04 per gallon for orders over 2,000 gallons and $0.14 per gallon for deliveries under 2,000 gallons for unleaded and diesel fuel.
Estimated costs:
Petroleum (unleaded & diesel) - $1,068,790
Delivery Fee - $ 21,450
Lubricants - $ 20,881
Remote Locations (Generators) - $ 12,000
Potential Fuel Price Volatility - $ 106,879
Not to Exceed Total - $1,230,000
On September 12, 2023, Council approved: 1) a one-year renewal agreement with Bay Oil Company for the period December 1, 2023 through November 30, 2024 in a not to exceed amount of $1,225,000 and 2) an amendment to increase funding by $200,000 for the remaining term which ended November 30, 2023 in a total not to exceed amount of $2,700,000.
On November 10, 2020, Council approved a three-year agreement with Bay Oil Company RFP #20-FLEET-016 for the period of December 1, 2020, through November 30, 2023, in a total not to exceed amount of $2,500,000, with two (2) additional one-year renewal options.
On, September 29, 2020, the City issued a Request for Proposal (RFP) #20-FLEET-016 for this item. Six (6) responses were received on October 19, 2020, from: Bay Oil Company, Colonial Oil, MidTex Oil, Pinnacle Petroleum, Suncoast Resources and Sundance Fuel. Five of the six submittals met the qualifications outlined in the RFP, with Colonial Oil being declared non-responsive due to an inability to provide fuel tanks in an emergency. A four-member evaluation team comprised of City Staff (Assistant City Manager, Director of Public Works, Fleet Manager, and Fleet Service and Parts Lead) evaluated all proposals.
Staff recommends the second and final renewal option of the current contract agreement with Bay Oil Company in an amount not to exceed $1,230,000 for a total five-year contract value of $5,155,000.
Three-Year Original Contract - $2,5000,000
First Amendment - $200,000
Total Three-Year Contract - $2,700,000
First One-Year Renewal - $1,225,000
Second/Final One-Year Renewal - $1,230,000
Total Five-Year Contract Value - $5,155,000
Bay Oil Company has agreed to the terms of this renewal and Staff’s recommendation is to renew the agreement for the purchase and delivery of fuel and petroleum products based on performance history and fair market pricing.
Attachments:
1. Proposed Resolution
2. Exhibit A - Agreement with Bay Oil Company
3. Contract Renewal Letter
4. Approved Data Sheet 9-12-2023
5. Approved Data Sheet 11-11-2020
6. Original Agreement
7. Vendor Report Card
CONTRACT ORIGINATION: Agreement has been reviewed by the City Attorney’s Office
FUNDING
{X} Funds are available in FY2025 from Motor Pool Fund. Funding in FY2025 totaling $1,230,000 include:
$893,808 to account 40103600-51455 Fuel Inventory Expense
$83,000 to account 40103600-51457 Fuel Inventory Expense-FS #3
$80,000 to account 40103600-51458 Fuel Inventory expense-FS #4
$21,450 to account 40103600-52300 Vehicle Repair & Maintenance
$3,857 to account 10207500-51450 Wastewater Gas & Oil
$3,857 to account 10207300-51450 Water Gas & Oil
$3,429 to account 4400000-51450 Sportsplex Gas & Oil+
$857 to account 3650000-51450 Facilities Gas & Oil
The remaining $139,742 will be used in FY2026
STRATEGIC PLANNING
{X} Addresses Strategic Planning Critical Success Factor #1 - Develop and Maintain Our Infrastructure