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MOTION TO APPROVE FINDINGS AND ENTER INTO A COOPERATIVE PURCHASING AGREEMENT FOR FUEL DELIVERY SERVICES
recommended action
RECOMMENDATION
It is recommended that the City Council, by motion:
1. Approve findings pursuant to Stockton Municipal Code Section 3.68.070 to justify and support an exception to the competitive bidding process.
2. Approve the use of a Cooperative Purchase Agreement through the Sacramento Area Council of Governments (Contract # CT250004) and Hunt & Sons, LLC (Attachment A) for fuel delivery services for the term beginning January 1, 2025, through August 31, 2027, and a total not-to-exceed amount of $8,400,000.
It is also recommended that the City Manager be authorized to take any appropriate and necessary actions to carry out the purpose and intent of this motion.
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Summary
Summary
The City of Stockton has a need for a fuel delivery contract to meet the City’s operational requirements.
The City’s fuel delivery requirements are complex and include agency protections by defining fuel types (unleaded, diesel #2, red-dyed diesel, jet fuel, etc.), service locations, capabilities including both large truck-trailer split deliveries, and small tank-wagon bobtail deliveries, and timing of deliveries to power the City’s vehicles and equipment.
Deliveries occur primarily at the Corporation Yard, Municipal Utilities, Police Department, and Fire Stations, with smaller deliveries occurring at several locations throughout the City.
It is recommended that Council approve findings to justify and support an exception to the bidding process and authorize the City Manager to execute a Cooperative Purchase Agreement with the Sacramento Area Council of Governments (SACOG) for the total not to exceed amount of $8,400,000 through August 30, 2027.
DISCUSSION
Cooperative purchasing agreements leverage collective buying power of the cooperative partners to negotiate lower prices. The strength in the numbers of cooperative partners enable members to access a contractual solution that could not be achieved on their own. The fuel was solicitated and awarded by SACOG, which is a sole public agency representing regional jurisdictions such as the counties of Sacramento, Sutter, Yolo and Yuba. The SACOG contracts are also available for piggybacking to local agencies.
Background
On November 19, 2019, Council approved an agreement with Ramos Oil Company for a five-year term that ends December 31, 2024. The current contract includes specific requirements and protections by defining fuel type, service locations, tank capabilities, the timing of deliveries, and fixed mark-up fees. Due to the timing and potential savings, Procurement staff worked with department staff to review different cooperative contracts available for fuel.
Present Situation
The Administrative Services Department’s Procurement Division researched and compared pricing between the City’s current service provider and other fueling services cooperative contracts. Based upon this research, it was determined that the SACOG contract with Hunt & Sons LLC provides the most competitive rates for the City. The pricing included in the SACOG contract is based on the weekly Oil Price Information Service rack rates with a markup or mark down percentage per fuel type. In addition, Hunt & Sons will provide emergency and after-hours fuel services, as needed, to the City.
The solicitation and contract documents have been reviewed and determined to meet the City’s Procurement requirements and the fuel needs of the City.
Staff recommends entering into the cooperative agreement with Hunt & Sons for the City’s fueling needs under the SACOG cooperative contract #CT250004 to deliver fuel to the City from January 1, 2025, through August 31, 2027.
FINDINGS
Stockton Municipal Code section 3.68.070(A)(5) provides an exception to the competitive bidding process where the City accesses the terms of a competitively bid and negotiated cooperative purchasing agreement, and where Council has approved findings that justify and support the exception. The following findings justify and support an exception:
1. City’s Procurement Division recommends the utilizing the SACOG Form of Participating Agency Sub-Agreement to enter into a cooperative purchase agreement with Hunt & Sons LLC for fuel delivery services, as it meets the criteria as an exception to the competitive bidding process.
2. Procurement staff confirmed that the SACOG contract was solicited and awarded by an authorized joint powers agency through an open and competitive process and meets the City of Stockton’s procurement requirements.
3. Participation in the SACOG agreement is in alignment with standard procurement practices.
4. Utilizing the SACOG agreement allows the City to secure competitive pricing for fuel delivery services and reduces administrative costs associated with the solicitation, evaluation, and award process.
5. Utilizing the SACOG agreement supports the City’s objective of using local suppliers because Hunt & Sons will provide fuel from their Stockton location.
FINANCIAL SUMMARY
Staff recommend entering into a cooperative purchasing agreement with Hunt & Sons LLC for fuel delivery services for the term January 1, 2025, through August 31, 2027, for a not-to-exceed amount of $8,400,000.
Sufficient funds are available in the Fleet Internal Service Fund (ISF), Account No.4530-707-650004-500-000-00-45-000-000-, in the FY 2024-25 Budget for the purchase of fuel deliveries. Funding in future years will be included as part of the annual budget process. As vehicles are refueled, monthly charges are distributed from the ISF to department accounts based on actual usage for each vehicle. All fuel budgets are evaluated annually and monitored throughout the year, with adjustments made as needed.
Attachment A - Form of Participating Agency Sub-Agreement for Fuel Delivery Services/ SACOG Cooperative Contract #CT250004 with Hunt & Sons, LLC