Item 1.4 - Award of Contract to SC Commercial for Various FuelsG`� { OF POW��
Ty���rYnIN THLgBG0Ja��y
City of Poway
COUNCIL AGENDA REPORT
APPROVED
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APPROVED AS AMENDED
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(SEE MINUTES)
DENIED
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REMOVED
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CONTINUED
RESOLUTION NO.
DATE: May 21, 2019
TO: Honorable Mayor and Members of the City Council
FROM: Michael Obermiller, P.E., Director of Public Works
CONTACT: Eric Heidemann, Assistant Director of Public Works r aintenance
Operations Z°
(858) 668-4705 or eheidemann@poway.org -
SUBJECT: Award of Contract to SC Commercial, LLC (dba The SoCo Group)
for Various Fuels
Summary:
The City currently purchases approximately 68,000 gallons of unleaded gasoline and 30,000
gallons of diesel from The SoCo Group annually. An opportunity to ensure the most favorable
pricing is available through participation in a cooperative fuel purchase agreement led by the City
of San Diego. SC Commercial, LLC (dba The SoCo Group) was awarded a contract through the
City of San Diego's competitive Request for Proposal 10089315-18-K, and agencies may elect to
participate and contract directly with SC Commercial, LLC, citing this RFP. The Poway Municipal
Code Section 3.28.110 authorizes the City to participate in a cooperative purchasing contract with
other government agencies.
Recommended Action:
It is recommended that the City Council award the contract for the purchase of motor vehicle fuel
to SC Commercial, LLC (dba The SoCo Group), for an amount not to exceed $1,385,119 over
the five-year term of the contract, in accordance with the terms and conditions of the City of San
Diego Request for Proposal 10089315-18-K and authorize the City Manager to execute the
necessary documents.
Discussion:
The City of San Diego issued a Request for Proposal (RFP) on May 18, 2018, for unleaded and
diesel fuel delivery. The solicitation was publicly advertised and one hundred forty-five (145)
potential proposers contacted the City of San Diego regarding the RFP. Five bids were received:
The SoCo Group, SC Fuels, Falcon Fuel, Pinnacle Petroleum and Supreme Oil Company. After
a lengthy competitive process and evaluation, the successful bidder was The SoCo Group.
During the City of San Diego's solicitation process, the acquisition of The SoCo Group was
finalized by SC Commercial, LLC. SC Commercial, LLC committed to fulfilling the obligations
made in the proposal submitted by The SoCo Group. The RFP and contract allow, but do not
obligate, the City of Poway to purchase fuel from SC Commercial, LLC pursuant to the terms of
the City of San Diego RFP and contract. The terms and conditions of the cooperative agreement,
including pricing and delivery, will be favorable to the City.
Article IV, Section 5.5 of the City of San Diego contract authorizes public agencies to participate
in the fuel purchase contract subject to the Contractor's acceptance. SC Commercial, LLC has
1 of 3 May 21, 2019, Item #1.4
confirmed that the City of Poway is authorized to contract and participate pursuant to the terms
of the City of San Diego RFP. The City of Poway will benefit from the predictable fuel pricing and
provisions of the RFP.
The price of the fuel is determined on the date of delivery and is based upon the Oil Price
Information Service (OPIS) "Unbranded Low Rack" fuel price benchmark for San Diego. The
"Unbranded Low Rack" is a snapshot of the lowest supplier fuel price posting in the OPIS rack
market for the day. The RFP required contractors to propose a market differential for the OPIS
rack market for each given delivery item (e.g., unleaded fuel, diesel). The market differential is a
four -digit decimal numerical value that is added to the benchmark index for the price of a given
fuel product. The market differential includes all cost and profit components determined by the
contractor, excluding any applicable fuel taxes. The rack price plus the market differential is the
total price to be paid by the City upon delivery of fuel.
Fuel usage of $238,736 per year was estimated for this contract. The table below includes annual
anticipated expenditures increased each year by a 5 percent consumer price index (CPI) per the
terms of the City of San Diego contract, in addition to a 5 percent contingency amount to account
for any unforeseen spike in fuel usage.
Fuel — Citywide Estimated Need Per Year
Year 1
Year 2* Year 3*
Year 4*
Year 5*
Total
$238,736
$250,672 $263,205
$276,365
$290,183
$1,319,161
5% Contingency
$65,958
Total with Contingency
$1,385,119
*Years 2-5 include 5% allowance per year for price increase
The City of San Diego contract with SC Commercial, LLC began on May 18, 2019 and ends on
May 17, 2024. If approved, the length of the City's contract will also be for five (5) years, ending
on May 17, 2024.
Environmental Review:
This item is not subject to California Environmental Quality Act review.
Fiscal Impact:
Funds to award the bid to The SoCo Group are available in the FY 2018-19 Adopted Budget
(413010-31020) as well as included with the Fiscal Year 2019-20 Proposed Budget
(413010-31020) for consideration by Council on June 18, 2019.
Public Notification:
A copy of this report was sent to SC Commercial, LLC.
2 of 3 May 21, 2019, Item #1.4
Attachments:
None.
Reviewed/Approved By: Reviewed By:
Wendy Kaserman
Assistant City Manager
Alan Fenstermacher
City Attorney
Approved By:
Ch 6s Hafgftine
City Manager
3 of 3 May 21, 2019, Item #1.4