REPORT TO COUNCIL
SUBJECT
Title
Approve a Services Agreement with Frederick Burton Johnson, dba Interstate Auto Sales for Automobile Broker Services in an Amount Not-to-Exceed $3,000,000 for a Three-Year Period and Authorize the City Manager to Execute up to two Additional One-Year Extensions, Subject to Budget Availability (F26-315)
Report
REPORT IN BRIEF
Staff recommends that Council approve a Services Agreement with Frederick Burton Johnson, dba Interstate Auto Sales, of Fresno, for Automobile Broker Services in an amount not-to-exceed $3,000,000 for the purchase of used vehicles by the Department of Public Works for various City departments. Staff also recommends that Council authorize the City Manager to execute up to two one-year extensions and amend the not-to-exceed amount, subject to available budget and if pricing and service remain acceptable to the City.
EXISTING POLICY
Pursuant to Chapter 2.08.040 of the Sunnyvale Municipal Code, City Council approval is required for the procurement of goods and/or services exceeding $250,000 in any one transaction.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) as it consists of organizational or administrative activities of government that will not result in direct or indirect physical changes in the environment.
BACKGROUND AND DISCUSSION
The City utilizes an automobile broker to provide quality used vehicles as fleet replacement for the Department of Public Works and other departments depending on the applicable uses.
A bid for Automobile Broker Services was advertised on PlanetBids on March 13, 2026. Sixteen (16) vendors requested bid documents. Sealed bids were opened on April 8, 2026, with one responsive and responsible bid received. Frederick Burton Johnson, dba Interstate Auto Sales, submitted the sole responsive and responsible bid with a transaction fee of $500 per vehicle (Attachment 1, Bid Summary). This transaction fee is in addition to the purchase price of each vehicle.
Recently, purchasing lightly used vehicles has become a more viable option for replacing the fleet compared to purchasing new vehicles, as manufacturing continues to be affected by supply chain disruptions. Due to the long lead times for new vehicles and the urgent need to replace aging equipment, the City has determined that an automobile broker agreement provides the flexibility needed to act quickly when suitable used vehicles become available. Used car pricing varies by type of vehicle being procured. The contract is anticipated to fund the purchase of approximately 20 used vehicles annually.
FISCAL IMPACT
Budget is available for fleet replacement in Fund 7021 - General Services/Fleet Services Subfund. This fund is financed by citywide internal service charges based on equipment use.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Take the following actions:
- Approve a Services Agreement with Frederick Burton Johnson, dba Interstate Auto Sales for Automobile Broker Services in an amount not-to-exceed $3,000,000 in substantially the same form as Attachment 2 to the report;
- Make a finding of categorical exemption from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378(b)5;
- Authorize the City Manager to execute the contract when all necessary conditions have been met; and
- Authorize the City Manager to execute two one-year renewals and amend the not-to-exceed amount, subject to available budget and if pricing and service remain acceptable to the City.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
_X Competitively bid contract*
___ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
___ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: David Battaglia, Purchasing Officer
Reviewed by: Matthew Paulin, Director of Finance
Reviewed by: Ramana Chinnakotla, Interim Director of Public Works
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Bid Summary
2. Draft Services Agreement to the Automobile Broker Services