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SR-205-003 (411) e It ~t!V/S eJ. PU: RNA: fMJ 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, 1 Reut~~ ,I G #/ztll? e e PU:RNA:fMJ 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 ~ ~ . . . e e PU:RNA:ff"lJ 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: e e 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 . ':l- '- . . e . PU:RNA:fMJ 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_ e 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, 3 . . e e tit 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' ':l":J ......., 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. 4 . . . -- e PU:RNA:F'MJ 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 5 . . . e e PU:RNA:fMJ 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<; 6 . . . e e PU:RNA:fMJ 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 7 . . . e e PU:RNA:fMJ 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. 8 e e PU:RNA:fMJ 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. . 9 . . . e e PU:RNA:fMJ Coune]l MeetIng Santa MonIca, Callfornla ~~ ~~, 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 10