SR-205-003 (411)
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Councl1 Meetlng NoveMber 2'i~ 19B3
Santa MonLcd, Callfornla
205..-pc:>3
6G-
#~fle
TO:
MAYOR AND CITY COUNCIL
FROM: CITY STAFF
SUBJECT: SuppleMental RecoMMendatlon To Award BId For PetroleUM
Products BId No. 1922
In .!1:..Qd uc t]. on
ThlS report concerns award of bld for var1DUS petroleUM products at
the unit prlces offered for the perlod froM DeceMber 1, 1983 through
NoveMber 30, 1984 wlth two addltlonal one-year optlons as noted.
BackqrQund
Addltlonal lnforMatlon regardlng thlS BId Award h~s COM~ to the
attent10n of the City Council and Staff subsequent to th~ or1g1nal
reCOMMendatlons for award, staff report to Councll dated NoveMber
22, 1983.
(copy attached) As noted 1n that report, the bld~ of
Chevron and Gasco on the dlesel fuels are very close conslderlng
the estlMated total usage fiqures.
The subsequent 1nforMatlon
provlded by Gasca has convlnced staff tha' Gasca lS d responslble
bldder and that, based upon 1t5 low bld, 1t should b~ awarded the
contract for .1 D1esel fuel (1t~M 44).
Rec oM!':jenda, 1: 101;1.
It 1~ reCOMMended that the award of B1d i 1922 be Made to to Gasca
Gasollne~ Inc., Oxnard, Cdllfornld for +1 Dlesel fuel, lteM t4, at
the un1t prlce~ bld for the perlod frOM D~LeMber 1, 1983 through
NoveMber 30, 1984 plus two addltloncl] one ypar optlonsi Chevr~n USA,
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Council Meetlng NoveMber 29, 1~83
Santd MonIca, Call'orn~a
Inc., La Habra, Ca11fornla for the gasDllne and the 12 dIesel ~uel
IteMS +1,2,3, & 5
at the unlt prIces bId for the perIod frOM
DeceMber 1, 1983 through NoveMber 30, 1984 plus two addltlonal one
ypar options; to Texaco, Inc,> Lo~ Angele~> Callfornlcl for lube otls
IteMS (IteMS 6-11) at the unIt prIces bld for th~ perIod ~roM
DeceMber 1, 1983 through NoveMber 30, 1984 pJus two add1\Jonal
one-year op,1ons and to A.G. Layne, Inc., Los Angeles, CalIfornIa on
the sQlvent lteM (IteM 12) at the unit prlce~ offered for the period
frOM DeceMber 11 1983 through NoveMber 30, 1984 plus two addltlonal
one-year optIons,
Prepared By: P, N. Aronoff, Director of Purchaslnq
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Councll MeE'tlng
Santa Monlca~ Callfornla
NOl/eMber
.1)-'..)
.......,
1983
TO: MAYOR AND CITY COUNCIL
FROM: CITY STAFF
SUBJECT: RecoMMendation 10 Award BId For PetroleUM P~odvcts
Bld No, 1922
1!l!1' .0 d tl C :! J. 0 n
lhln report concerns award of bld for varIous petroleUM products at
the unIt prIces offered for the perIod frOM DeceMber 1, 1983 through
NoveMbt:>r 30, 1984 wlth two addlt1.0nal one-ye~r optlons as noted.
~ac k~ro u.n..!!.
In response to publIshed NotIce Invltlng B!ds (publl~heu 9-19-83> to
furnIsh and delIver petroleUM products 1n accordance WIth (:~ty
speclflcatlons, bIds were receIved and publ1.cly open~d and read on
October 20, 1983.
Proposal forMS were MaIled to 79 vendors clnd
not1.f"es
wer~ adver11sed 10 accordance wlth C1.ty Charter ~nd
Mun1c~pal Code prnV)~Jons.
S~xtep-n proposals were re~elved clS
follows:
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PU:RNA:fMJ
Counell Meetl.ng
Santa Monlca) Callfornla
NoveMber
I.)~j
<-<-~
1983
.
Costs shown are for representatlve aMounts of products b~~ed llpon
estlMated total usaqp.
Totals for SOM~ 1teMs are hlgher than
expected actual usage.
VENDOR GASOL INfS
UNlEADFD PREMIUM UN L E" A 15r'.i)' REGllLfiR
5000+ 400-4l}99 5000+ 400-4999 5 (} (} tl+ 400-4999
GALLONS GALLONS GALLONH
ITEM t 1 ITEM t;~ rrl::.M 1.3
CHEVRON 23,301 24,300 190..320 201..600 45,'1HO 48..600
J.E. DEI..n 1 T 22,737- 23..007- 190,0.08- 192,408- 45,6H:4- 46,284-
23,007 25,167 192,40B 211..608 46..?B4-- 51.. 084
GASCD NO BID NO BID NO IHD
GALE BARSTOW 23,841 24,786 200,400 210,00 48,300 50,/00
E.XXON * NO B1D 18b..OOO NO BID 44, 100 NO BID
ROSEMEAD NO BID NO BID NO BID
UNION NU }:ill) 195,600 207,600 4b,800 49,800
DIAMOND NO 'BID 24 , 1 65 NO BID 20~~,200 NO }:lJD 48../:50
AMER1CAN
. PETRULEUM NO BID NO BiD NO BID
A.G. LAYNE NO E11D NO BiD NO lolLD
USA
LUBRiCANTS NU 'BID NO BID NO BTD
TEXACO NO BID NO BID NO I-d D
DUNBAR NO BID NO BJD NO BiD
WESTERN
PETROLEUM NO FID NO BID NO BID
BRAY ~ NO BID NO BlD NO BJD
UNITLD
WILSHIRE. NO BID NO B1D NO BID
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Counc11 Mee1~ng NoveMber 22, 1983
CHEVPON
J,E. DEWITT
GASCa
GALl:::
ltARS10W
EXXON<<
ROSEMEAD
UNION
DIAMOND
AMERICAN
P ETR ULEUM
A.G. LAYNE
USA
UJBR r CANTS
TEXACO
DUNBAR
WESTE.RN
PETROLEUM
BRAY x
UNtTE"D
W1LSH1RE
Dl_[SElc_
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Santa Monlca, CallfarOla
DIESE..L t1
5000+ 400-4999
GALLONS
ITEM fA
1~347,200 1,456,000
NO BID
DIESEL 12
5000+ 400-4999
GALLONS
I1EM t5
137,160
139,086-
142~6B6
NO BID
1,336,960 1,416,960
1 , 355 ) 2 0 U 1)519,200 146,'700
NO FID NO BID
NO BID NO BID
NO BID NO BID
NO BID NO :BID
NO BID NO BID
NO BID NO BID
NO BID NO BID
NO BID NO BID
NO BID NO BID
NO BID NO BlD
NO liID NO B1D
NO BID NO BID
149,400
142,686-
15'5,283
153,(tUO
1'5(1,300
LUB!::, OILB
~ GREASE.S
lTEM i6-11
153,546
115,938
NO BID
NU BID
NO BID
110,578
109,653
114/363
111,2.57
NO BtD
130,353
1 07 ~ r! 18
x*
115~272
X'X
139>107
'Xx= The blds of Dunbar and Bray were on SOMe but not all Lube o~l
anrl gr-eases ~roduc ts . None of tl,elr lnd 1'.' '1 dUd 1 1 teM b 1 ds was
low,
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Santd Manrca, Callfornld
PU:RNA:fMJ
Counc1.1 Meet1.nq
CHEVRON
J.E. DEWITT
GASCO
GALl:.
BARSTOW
E.XXON*
RDSEMFAD
UNION
DIAMOND
AMERICAN
Pr~ TROL E.UM
A,G. LAYNE
USA
LUBR ICANTS
TEXACO
DUNBAH
WESffRN
PE fROLEUM
BRAY ~
UNITI:.D
WILSHIRE
No veM-ber'
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1983
SOLVENTS
1 TEM 6-11
9>928
9,350
TI:.I<MS
NO 1:IID
NE.T
xx~ ,8% 10 D~YS ON GASOLINE
NeT 30 ALL ELSE
Nf::.f
NO BID
NO BID
9></5::'
NO BID
9,24U
NET
Nl:.f
NF~ r
N[T
Ntl 30 DAYS
9,790
8,030
N F--T
Nf- T
9,625
NO BID
Nl::T 30 DAYS
xx?:: 17. 10 DAYS
NI~ f 30
NET 3B DAYS
NO BID
8 , 1 95
13)475
1/2 OF 1% 20 DAYS
NfT 30 DAYS
*= lhe bJ.ds of' Exxon and Bray were not secured by a Blddprf<;
1 I) ,725
NEl
Securlty or Bond and wpre not Oil the Cltyfs forM a~ requIred.
~*~= The bIds of J.E. DeWItt Co. and of Texaco offerpd terMS for
paYMe>nt wlthln ten days froM d<"'IH' of 1.0VOIce. S;tnc€, proC"e>sS1.ng of
these lovalces IS not always possIble wIthIn ten days these tprMS
were not cons~derpd In evaluatIon. These dJscounts u~ll be takpn
whenever posslble when purchases are Made froM these vendors.
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Counc21 Meet~ng NoveMber 22} 1983
Santa MonIed} C~11fornla
The bids OT Chevron and J,E, DeWItt on the gasollnes are very close.
St~ff reLoMMends the bJd of Ch~vron as the lowest and best bld for
I1eMs .1~2,3 for adMlnlstrdtlve purpo~es and for the purpose of
Malntalnlng a suppl1er of MaJ~r capabll111es offerlng a unlforM~ty
OT product, AdMInistration oT a Purchase Order wlth Chevron would
be Much ~lMpler and Jess expensive for th~ City adMInlstrallv~ly
SInce only two prIce ranges would ex!~t dependIng upon the SlZ~ of
loads ordf'red,
In the ca~e of J,t, DeWItt} there are at lea~t ftve
dlfferent prltlngs dependIng upon the Slze of loads ordered.
The blds of Chevron and Gas,o on the dlebel fuels are also very
close conS!derlng ~he estIMated t~tcll usag@ fIgures, Transportatlon
DepartMent and P(lrCha~lng DepartMent staff both reroMMend} Wtth the
concurrence of the CIty Manager, that the dward be Made to Chevron
for the followLng reasons~
A. lhe CIty has not been able to persui~de a MilJor !:>uppller to b~d
these products to The CIty sInce the 011 crlS~S of 1973, fhe
benefIt of a MaJor supplIer for LteM t4} t1 dIesel fuels}
prIMarIly for the Santa MonIca MunIcIpal buse~,ls dn assured
supply durlng perl-ods af short supply,
SInce the Clty has no
control over world sltuatlons WhiCh May upset supplle~ o~ thl~
product}Q More assured sup~ly l~ a ~aluable asset to the CIty,
The dIstrIbutors of thIS product whIch have been supplIng the
CIty for the past ten years all buy frOM the threp MaJor
producer-suppll~rs In thIS area} Chevron, Texaco and Arco. In
tlMPS of stress we have found ourselv~s faced Wtth our supplter
tellIng us that hIS suppl~es are curtaIled. The ~uppller then
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Co une 11 Meet lng
Sdnta MonlCd) CalIfornIa
NoveMber
?':>
......)
19U3
atteMpts to ratlon us accordlngly. We have had to get fedpra1
allo~Ment aSslstance tWJce durlng the last ten year~ 10 order to
M<i\1nt a In
our fuel flow.
Even durlng the recent surplus
sltuatlon durlng the past Y0ar} our lndependent dl~trlbutor was
short of thlS product to the pOlnt that we were forced to go to
the open Market to Mainta~n a greater than two-day supply of
fuel for our buses. Gasca, also an lndependent dlstrlbutor)
Mlght well flnd !tself 1n the saMe Pos!t!on regardlng our needs.
Chevron) belog a MaJor producer -~upplJer 1~ 1n a Much MOr?
secure pOS1tlon to honor lt5 COMMltMents to 1t5 ellents.
B. SInce Chevron 1S a produc~r of th\~ product there l~ a
uIl"lforMlty ]nherent ln thelr pr'oduct Whlf"h would not nece~>'H1rJ.ly
be found WIth a non-produclng suppller such as GaqcQ. Gaseo
MIght ftnd It advantageous to Itself to change supplIers a~
prlce frOM the varIous suppllers flu~tuated) causLng changes ln
op~ratlng perforMance of the product whIch the Clty MLghi
receIve.
C. DurIng the past ten years when the CIty has bpen unable to
attract a prodUCIng bldderj staff has MonItored other agencJ~s
to cOMparp prIces be"lng priJd for the ~l DIesel fuel product.
There has been) over that perlod of t1Me) a .04 cents to .08
cents per gallon dlfference In favor of the aqencJ.Ys beIng
dIrectly served by the MaJor producers) Chevron) Texaco and
Area.
Con~:> 1 d er 1 n 9 S.,) n taM () n L c a I s usa q e ) t h l!:> h cl S M~ ant a C 0 S t
to the CIty of frOM $50jOOO to $100,000 per year Slnce we have
been supplIed by non-producIng dIstrIbutors.
Further') 1. t 1<;
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Counc~l MeetIng NoveMber 22, 1983
Santa Monlca~ Cdllforn18
stafF's opinIon that If the CIty were to be supplIed by a MaJor
producer, 1t would stIMulate cOMpet1tlon, 1nduclng the other
MaJor producers to enter the b.Lddlng process, S.Lnce when the
MajOr producers do not sell through ~ dlstrlbutor, there lS one
less prof1t center to be servpd) the Inference 1S that the CIty
could benef~t by the closer COMpetatlve atMospher.. COMp~rlng
SOMe of"
the recent prIces paId by SOMe other agencl~s show
InterestIng results:
1. The Cl'ty of' Torrance has a Much SMaller bus operatIon than
Santa
Monlca's,therefore Torrance Ubes 1/6th the Tuel
prOduct.
Torr~nce has been supplIed fuel by a MajOr
producer for the past ten years, Santa Mon1ca has b~.n
supplIed hy non-producers. PurchaSing staff h~~ MonItored
Torrance's
fuel prIces dorlng that t1Me annually,
to
Mdlnta1n 4 pulse on the Market and acted dS a "prod>> of
staff to contJnually "woo" direct b1dd1ng by produc~r5,
DurJng that tlMe Torrance's prlce has been .02 c~nts 'to .06
cents per gallon lower than Santd Monica/s.
Due to lhe
lncrPdsed COMpetatlve sltuat~on burroundlng thl~ request for
blds~ a MajOr producer ha~ responded to Santa MonIca's bId.
Thp hld prIce 1S 1.3 centb per gallon lower than Torrance IS
presently paYIng.
2. long Beach PublIC Transportat1on Co., 11ke the C~ty o~ Santa
MonIca has b~en suppl1ed by non-prodUCing dlstrlbutors. In
July 1982 Lonq Beach was pSY3nq $1.15 per gallon, Santd
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Counc11 Meetlng NoveMber 22, 1983
Santa Montra, Ca11forn1a
Man1ca was pay\nq $1.0889 per gallant To~rance was pdY1ng
.9485 per gallon.
In January 1983, both long Beach and Snnta Mon1ce were
pay1ng
,975 per gallon,
.9035 per
rorranc~ was paylng
gallon.
Recently Long Beach sWltched
to a prodUCIng
suppller. They currently pay .865 per gallon. Santa Honlca
currpntly pays .8875 through Its non-produc1ng dJstrlllutor,
Torrance IS paYIng
,855. Santa MonJe. has an offer ~roM
Chevron, U.S.A. to buy at ,842 ppr grlllon a~ of DeceMber 1,
1983.
When staff asked G~sco for references of other publ~c dqencles
WIth WhOM they have SIMIlar arrangeMents to that proposed 10
thIS bId, we were gIven
the naMes of four large Northern
CalIfornIa bus lInes who have full-tlMe fuel buyers who buy on
thp "spot" Market rather than frOM a contract. Sdnta MonIca and
the other agencIes dIscussed above do not have the resource~ to
purchase 1n thIS Manner.
The~e larger Northern Cal~fornla
agenCIes acknowledge an on-gOing satIsfactory non-contracludl
relat!onshlp wlth Caseo,
1n none of the Instanee~ does a t~Me-
prIce agreeMent such as that requested In the subJect bid ~xl~t.
Gasco dlstr~buted a total of slIghtly leGS than 1tOOO,OOO
gallons of th1s produc~ to these Northern CalIfornla custoMer~
durlng the past year. Santa MonLca's need for tIllS product lS
est1Mated at 1,600,000 gallons next year.
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Councll Meetlng NoveMber 22, 1983
Santa Monlca, CalIfornIa
.
lhey (Gasco) have no custoMers 1n Southern Callfornla to WhOM
they have sold thIS product,
They hav~ no pUbllC agency
custoMers on a tIMe-prIce ~ontr~ct for thIS product at thIS
tlMe.
In sUM~ary, for the reasons of a More a~sured supply, UnJfOrM!ty
of product, prOMotIon of COMpetltlon dMonq all ~uppllers and thp
relatlye lack of experIence of Gasco as a supplIer of the
proportIons requlred by the Clty, 1t IS reCOMMended that the bId
of Chevron, U.S.A. IS the lowest and best for IteM t4, t1 d\sswl
fuel and that the best Interests of the Clty wlIl be served by
awardlng to Chevron.
. RegardIng IteMS +1-5: On FrIday, NoveMber 11,1983 a copy of' 1hl':;
report was sent to each bldder on those IteMS lnvltlng theM to be
present at the NoveMber 22, 1903 CouncIl MeetIng and to contact the
City Clerk at that tIMe If they w~sh to speak on thls IteM.
B u J!.!l~.ll!'.-U f..!.n 8J) cia 1 . ~ M P a,!= t,
FIscal Year 1983-84 8~proprlatlon authorIty for thIS purchase IS In
the varl0US USIng Depar1Ments. For the perlod of July 1, 1984 -
NoveMber :~O)
19tH appropr J.at J on au th or]. t y w.d 1 be as set for th In
the Flscal year 1984-85 budget for the varlOUS uSlng DepartMents.
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Coune]l MeetIng
Santa MonIca, Callfornla
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1983
NoveMber
g~~oMMendatlon
It 15 reCOMMended that the award of Bld t 1922 be M<<de to Chevron
USA, Inc., La Habra, CalIfornIa for the gasolIne ann dIesel fuel
LteMs (IteMs 1-5) at the unit prIces bId for the perIod frOM
DeceMber I, 1983 through NoveMber 30, 1984 plus two additional one
year optlon~; to Texaco, Inc., Los Angeleg, CalIfornIa for lube OIls
IteMS (IteMs 6-11) clt the unit prl~es bid for th~ perIod frOM
DeceMber 1, 1983 through NoveMber JO, 1984 pJvs two addItIonal
one-year options and to A.G. Layne, Inc., Los An~eles, CalIfornia on
the solvent IteM (IteM 12) at the unlt prJces offered for the period
frOM DeceMber 1, 1983 through NoveMber 30, 1984 plus two addJtJonal
one-year options.
Prepared ~y: R. N. Aronoff, Director of PurchaSing
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