(13)AR 121807 Poma Distributing Company

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CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF DECEMBER 18, 2007 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: DILU DE ALWIS, FINANCE DIRECTOR SUBJECT: Award contract to purchase Gasoline and Diesel fuel as needed from Poma Distributing Company through August 31, 2010. DATE: December 10, 2007 ITEM #13 BACKGROUND: The City currently piggybacks on San Bernardino County's contract to purchase approximately 135,000 gallons of unleaded and diesel fuels, and hydraulic and motor oils annually. On August 21, 2007, the City Council approved increasing the Blanket Purchase Order to Poma Distributing Company in an amount not to exceed $370,000. The County recently re -bid their contract to supply an estimated 2,583,323 gallons annually to various locations throughout the County. Poma Distributing Company was advised on October 5, 2007 that after a competitive evaluation of the bids, they were awarded the contract through August 31, 2010. DISCUSSION/ANALYSIS: Colton Municipal Code Section 3.08.140(c) waives the competitive bidding requirement, either formal or informal for non-public projects "when the authorized contracting party determines that a competitive bid procedure has been conducted by another public agency (e.g. through CMAS or GSA) and the price to the City is equal to or better than the price to that public agency." Included in the San Bernardino County's RFP language was a clause that would require the awarded vendor to extend the terms of the contract with Municipalities as though they were expressly identified in the bid. The City of Colton has the opportunity to utilize a very favorable bid for fuel by the County. This was a competitive bid and offers lower prices to the City than the City can obtain on its own. The County bid was structured such that bidders were essentially quoting a price differential above/below the current LA Spot market. The cost to the City for Unleaded fuel is 0.0029 below the Oil Price Information Service (OPIS) plus a 0.0224 per gallon delivery differential. The cost to the City for Diesel fuel is 0.005 below the Oil Price Information Service (OPIS) plus a 0.0224 per gallon delivery differential. The formula to figure the City pricing for unleaded fuel is as follows: OPIS Fuel price — Discount (0.0029) + Del Diff (0.0224) = Price per Gallon For example, on November 13, 2007, the City purchased 5,933 gallons at $2.739 per gallon: 2.7195 (OPIS) - 0.0029 + 0.0224 = $2.739 per gallon