REPORT TO COUNCIL
SUBJECT
Title
Modify Blanket Purchase Orders with SC Fuels and Valley Oil for the Purchase of Unleaded Vehicle Fuel (F20-195 & F21-011)
Report
REPORT IN BRIEF
Approval is requested to amend an existing blanket purchase order with SC Fuels of Orange, CA for unleaded gasoline, increasing the not-to-exceed amount by $230,000 for a new not-to-exceed total amount of $325,000 and amend an existing blanket purchase order with Valley Oil of Mountain View, for unleaded gasoline, increasing the not-to-exceed amount by $63,000 for a new not-to-exceed total amount of $143,000.
EXISTING POLICY
Section 2.08.070(b)(3) authorizes the purchase of goods and/or services to be exempted from the competitive bidding requirements when the solicitations of bids or proposals would be impractical, unavailing or impossible.
Pursuant to Section 2.08.040 of the Sunnyvale Municipal Code, City Council approval is required for contracts exceeding $100,000 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(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
BACKGROUND AND DISCUSSION
Most of the City’s fleet of vehicles is powered by diesel and unleaded gasoline. The fuel is stored in underground tanks at various locations in the City and is monitored by Central Stores staff. Currently, the City uses approximately 2,000 gallons of fuel each week and expends over $500,000 annually for fleet vehicles across all departments.
The City’s current contracts for fuel were originally awarded in January 2015 as a result of the County of Santa Clara’s cooperative, multi-agency bid solicitation conducted in October 2014 (RTC No. 14-1106). The City Council awarded blanket purchase orders to SC Fuels and Valley Oil for an initial three-year term with the option for two additional one-year renewals based on the County of Santa Clara’s agreement. In February 2019, the Valley Oil blanket purchase order was amended to allow for the purchase of diesel fuel (RTC No. 19-0178).
The County of Santa Clara (the County) prepared to perform a reverse auction for these fuel services with the cooperative participation of the City and various public agencies in the Fall 2019 before the current contract expired. Unfortunately, CSC was not able to conduct the bid process and instead negotiated pricing holds and issued a delayed contract amendment with the current low bid vendors that extends through January 2021. In discussions with the County, it is expected that a new reverse auction bid for unleaded and diesel fuel will now occur in Fall 2020.
To ensure continuity of fuel service while the County amendment was finalized, the City initiated new blanket purchase orders for SC Fuels and Valley Oil within the City Manager’s approval authority, with a term to expire on January 11, 2021, through a bid exemption based on the urgency, vendor’s competitive pricing hold and the anticipated extension of the County’s contracts for these services. It is now requested that the SC Fuels blanket purchase order be increased by $230,000 and the Valley Oil blanket purchase order be increased by $63,000 in expectation for the projected unleaded fuel services through January 11, 2021.
FISCAL IMPACT
In Fiscal Year 2020/21, approximately $850,000 is budgeted for the purchase of all vehicle fuel and lubricants in the Department of Public Works Operating Program 650 (Fleet, Fuel and Equipment).
Funding Source
Purchase of vehicle fuel is funded through internal service charges applied to the various departments that utilize motorized equipment. The largest user of fuel is the Department of Public Safety funded from the General Fund.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, Sunnyvale Public Library and Department of Public Safety. In addition, the agenda and report are available at the Office of the City Clerk and on the City's website.
RECOMMENDATION
Recommendation
Take the following actions:
1. Authorize the City Manager to amend the existing blanket purchase order with SC Fuels for unleaded gasoline, in substantially the same format as Attachment 1 to the report, increasing the not-to-exceed amount by $230,000 for a new total not-to-exceed amount of $325,000; and
2. Authorize the City Manager to amend the existing blanket purchase order with Valley Oil for unleaded gasoline, in substantially the same format as Attachment 2 to the report, increasing the not-to-exceed amount by $63,000 for a new total not-to-exceed amount of $143,000.
Staff
Prepared by: Gregory S. Card, Purchasing Officer
Reviewed by: Tim Kirby, Director of Finance
Reviewed by: Jaqui Guzmán, Deputy City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. Draft Change Order to Blanket Purchase Order - SC Fuels
2. Draft Change Order to Blanket Purchase Order - Valley Oil