SR-205-003 (415)
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Santa Monlca~ Cdllfornla
P U : R NA : f M J
CouncIl Meetlng NoveMber 22, 1983
t,u" w j..,. ...ttI~
TO: MAYOR AND CITY COUNC1L
~ROM: CI1Y STAFF
SU~JECT: RecoMMendatIon r~ Award B~d For PetroleUM Products
Bld No. 1922
In..l.r .j!,9..!J c t ;!,J) n
ThIS report ~oncerns a~drd of bId fur varlOUS petroleUM products at
the unIt prLces offered for the perIod frOM DeceMber 1) 1983 through
NoveMber 30~ 1984 WIth two addltIonal ~ne-y~ar optIons as noted.
Q<':l ck CI r9 t.l n c;l
In response to pUblIshed NotIce InVIting BIds (publIshed 9--19-83) to
furnIsh and delIver petroleUM products 1n accordance WIth CIty
speclf1catlons, bIds were receIved and publIcly opened and read on
October 20, 1983.
Proposal forMS were MaIled to 79 vendors and
not ices
were advertIsed In accordance WIth CIty Charter and
MunICIpal Code prOVISIons.
SIxteen proposals were receIved as
followsl
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Nrv 2 2 198J
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Santa MonIca, Callfornla
P U : R NA ; f M J
Counell MeetIng NoveMber 2c, 19B3
Costs shown are for representat1ve aMounts of products bas&d upon
estlMated total usage.
Totals for SOMe IteMs are higher than
expected actual usage.
VENDOR GASOLINES
UNLEADED PREMIUM UNLEADED REGULM~
5600 i- 400-4999 5000+ 400-4999 5000+ 400-4999
GALLONS GALLONS GALLON~3
I TE M to 1 ITEM t2 ITEM .3
CHEVRON 23}301 24}300 190}320 201,600 45}780 48 } 60 ()
J .E. DEWITT 22}737- 23}OO7- 190}OO8- 192)408- 45}b84- 46}284-
23..007 25} 1 b 7 192}408 211}608 46} 284- 51} 084
GASCO NO BID NO BID NO BID
GALE BARSTOW 23}841 24}7B6 200}400 210,00 48,300 50 .. 70 (}
EXXON ~ NO BID 186,000 NO BID 44}100 NO BID
ROSE HEAD NO BID NO BID NO BID
UNION NO BID 195..600 207)600 46}800 49}BOO
DIAMOND NO BlD 24} 165 NO BID 202}200 NO BID 48,'750
AHER I CAN
P ETR OLEUM NO BID NO BID NO BID
A.G. LAYNE NO BID NO BID NO BID
USA
LUBRICANTS NO BID NO BTD NO BTD
TEXACO NO BID NO BID NO BID
DUNBAR NO FID NO BID NO BID
WESTERN
PETROLEUM NO BID NO B1D NO BlD
BRAY * NO B1D NO IeID NO BJD
UN.ITED
WIL SHIRE: NO BID NO BID NO BID
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C 0 u n C 11 th!e t ] n 9
Santa Monlca~ Callfornla
NoveMber
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1983
P.J.g) E.,=.
DIEstL .1 DIESE.L :1:2 LUlll:.~ U1LS
5000.. 400-4999 5000+ 400-4999 ~ GREASEH
GALLONS GALLONS
ITEM ..4 ITEM +5 ITEM il=6-11
CHEVRON 1~347~200 1 ~ 4~...6 , 0 0 0 137,160 149,400 153,546
J.E, DEWITT NO BID 139~08b- 142~bB6- 11::',9,:>8
142~686 155}283
GASCa 1}336)960 1}-4l6;-960 NO BID NU BID
GALE
BARSTOW 1}355,200 1}519}200 146}700 153}-900 NO B1D
EXXON* NO BID NO BID NO BID
R OSEMEAD NO BLD NO BID 110}578
UNION NO BID NO BID 109}b~:J3
DIAMOND NO BJD NU BrD 1~O}300 114~363
AMERICAN
PETROLEUM NO BID NO BID 111~2.57
A,G. LAYNE NO BID NO BID NO II! 1)
USA
LUBRICANTS NU BID NO BID 130~353
TEXACO NO BID NO BID 10'l.2lU
DUNBAR NQ BID NO BID ~~
WESTERN
PETROLEUM NO ElID NO BID 115~272
BRAY * NO BID NO BID i(X
UNITED
WILSHIRE NO ElID NU BID 139~107
**= The b1ds of Dunbar and Fray were on SOMe but not all lube 011
and grease~ products, None of' thelr lndlllldual iteM blds was
low,
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Santa MonlCd, Call~ornla
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C au n c 11 Mee t 1 n g
CHEVRON
J.E. DE.WITT
GASCa
GALE
BARSTOW
EXXON*
ROSEMEAD
UNION
DIAMOND
AMERICAN
PETROLEUM
A.G. LAYNE
USA
LUBR lCANTS
TEXACO
DUNBAR
WESTERN
PEl ROLtUM
BRAY *
UNITED
WILSHIRE
NoveMber
'J':)
r...'-.>
1983
SOLVENTS
1 fEM 6-11
9,928
9,350
TERl'I~)
NE J
*** .8% 10 DAYS ON GASOLiNE
NEr 30 ALL ELSE
NE T
NO BID
NO BID
NO BID
9,95t..
NO BID
9,240
NET
Nl::l
NE:.T
NI- T
NI:.T 30 DAYS
9,790
8,030
NET
tU-T
9,625
NO BID
NF.:.T 30 DAYS
**~ 1/; 10 DAYS
NET 30
NET 30 DAYB
NO BID
a , t 9~
13)475
1/2 OF 11 20 DAYS
NET 30 DAYS
*= The bIds of E:.xxon and Bray were not secured by a &Idder'<.
101725
NE:.T
SecurIty or Bond and were not on the CIty'S forM as requIred.
***= The blds of J.E. DeWItt Co. and of Texaco offered terMS for
paYMent wlthln ten days frOM date of InVOIce. SInce process1ng of
these InVOIces 15 not always pOSSIble WIthIn ten day~ these terMS
were not consldered 1n evaluatlon. These d~scounts wlll be taken
whenever posslble when purchases are Made frOM these vendors.
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Councll Meetlng NoveMber 22, 1983
Santa Monlca~ CalIfornIa
The bIds oT Chevron and J.E. DeWItt on the gasollnes are very close.
Staff recoMMends the bId of Chevron as the lowest and b~s1 b1d for
iteMs 11,2,3 for adMinlstratlve purposes and for the purpose of'
Mdlntalnlng a suppller of MaJor capabllltles offerIng a unlforMlty
of product. AdMlnlstratlon of a Purchase Qrder wIth Chevron woul~
be Much slMpler and less expenslve for the CIty adMInlstratlvely
Slnce only two prlce ranges would eXIst dependlng upon the Slze of
load<s ordered.
In the case of J.E. DeWltt~ there are at least flve
dIfferent prlClngs dependIng upon the SIze of load~ ordered.
The bIds of Chevron and Gasco on the d~esel fuels are also very
close conSIderIng the eSl1Mated total usage fIgures. TransportatIon
Depart~en1 and Purchaslng DepartMent staff both reCOMMend} wlth the
concurrence of' 'the CIty Manager, that the award be Made to Chevro\l
Tor the followIng reasons:
A. ihe Clty has not been able to persuade a MaJor suppller to bld
these products to the CIty Slnce the 011 crISIS of 1973. Th~
benefIt of a MdJor supplIer for IteM 14, +1 dIesel fuel~,
pr1.MarIly for the Santa MonIca MUnlc.ipal buses,l.':; all assured
~upply durIng perIods of short supply.
Since the CIty has no
control over world s1tuatlons whIch May upset supplIes of thl~
produ~t,a More a~sured supply IS a valuable asset to the Clty,
The dlstrlbutors of thIS product which have been supplIng thp
CIty for the past ten years all buy frOM the three MaJor
producer-supplIers In this ar~a~ Chevron, Texaco and Areo. In
tIMes of streGS we have found ourselves faced WIth our supplIer
telling us that hIS SUppliES are curtalled. The slJpplH~r then
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Councll Meetlng
Santa Mon1ca, CalIfornIa
NoveMber
':)':)
r.......,
1983
atteMpts to rat10n us accord~ngly. We have had to get federal
allotMent aSSIstance tWIce durIng the la~t ten years In order to
MaIntaIn
our fuel flow.
Even durIng the recent surplu~
;ltuatlon durIng the past year) our Independent dIstrlbutor WdS
short of th1s product to the pOInt that we were ~orced to go to
the open Market to MaIntaIn a greater than two-day supply of
Tuel for our buses. Gasco, dlso an Independent dIstributor,
MIght well fInd Itself In the saMe POS\tlon regardlng our need~.
Chevron, beIng a MajOr producer -suppller IS 10 d Much More
~eture posltlon to honor It~ COMMItMents to Its cllentb.
&. SInce Chevron 15 a producer of thl& product there lS d
unlforMlty Inherent In theIr product WhICh would not necessarIly
be found With a non-produclng suppller such as Gas~o. Caseo
MIght fInd 1t advantageous to 1tself to change supp11ers a~
prIce frOM the various suppllers fluctuated, causlng rhanges In
operatIng perforMance of the product WhlCh the CIty Mlght
reCeI\/e.
c. DurIng the past ten years when the C1ty has been unaule to
attract a prodUCIng b1dder, ~taff has Monltored oth~r agenrles
to COMpare prlces beIng paId for the +1 DIesel fuel product.
There has been, over that perlod OT tIMe, a .04 cents to .6U
cents per gaJlon dlfference In favor of the agenLies beIng
dIrectly served by the Major producers, Chevron) Texaco and
Areo.
Considerlng 5dnta MonIca's usage, this has Meant a cost
to the CIty of frOM $50,000 to $1001000 per yedr Slnce we ha~~
been supplled by non-prodUCIng dLstrlbutors,
Further, 1t IS
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CouncIl MeetIng NoveMber 22~ 1983
Sdnta Monlca~ CalIfornIa
~ta~f's Oplnton that If the CIty were to be supplIed by a MdJor
producer, It would stIMulate COMpetItIon)
InducIng the other
Major producers to enter the bIddJng process. SInce when the
MaJor producers do not sell through a dIstributor) there 1S one
less proflt center to be served) the Inference lu that the CIty
could benefIt by the closer COMpetatlve atMospher~, COMparIng
hOMe of the recent prJces paId by SOM~ other agencies show
InterestIng results~
1. The CI t Y of T orranee has a f"Iuch SMa 11er bus operat I on than
Santa
Monlca's,therefore Torrance uses 1/6th the fuel
produc t.
Torrance has been supplIed fuel by a MajOr
producer for the past ten years. Santa Monica has been
~uppl1ed by non-producers. PurchaSIng staff has MonItored
Torrancefs
fuel prIces durIng that tIMe annuallv, to
Ma1nta1n a pulse on the Market and acted as a ~prod" o~
staff to contInually "woo" dIrect blddlng by producers.
DurIng that tIMe Torranceis prIce has been ,02 cents to .06
cents per gallon lower than Santa Monlcais.
Due to tn€"
1ncreased COMpetatlve SItuatIon surroundIng thls request for
bIds} a MaJor produLer has responded to Santa Monlcais bId.
The bId pr1ce 15 1.3 cent~ per gallon lower than Torrance IS
presently paYIng.
2. Lonq B~ach PublIC TransportatIon Co,) lIke the CJty of Santa
MonIca has been supplIed by non-prodUCIng d~strlbutQrs. In
July 1982 Long Beach was paYIng $l.lS per gallon, Santa
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CouncIl Meetlng No~eMber 22, 1983
San~a Mon~ca> Callfornld
Monlca was paYlng $1.0889 per gallon, Torrance was paYlng
.9485 per gallon.
In January 1983, both Long Beach and Sania Monlca were
paYJ.ng
.975 per gallon~ Torrance was paYlng
.9035 per
gallon.
Recently Long Beach sWltched to a produclng
Suppller. They currently pay ,865 per gallon. Santa Monlca
currently pay~ .8875 through lts non-produclng d~strlbutor.
Torrance 15 paYIng
.855. Santa MonIca ha~ an offer frOM
Chevron, U.S.A. to buy at .842 per gallon as of DeceMber 1,
1983.
When staff a~ked Gasco for referenc~s of other publlC agencles
wlth WhOM they have slMllar arrangeMents to that proposed 1n
thlS bid, we were gluen the naMes of four large Northern
Callfornla bus Ilnes who have full-tlMe fuel buyers who buy Qn
the Hspot" Market rather than frOM a contract. Santa MonIca and
the other agencIes dIscussed above do not have the resources to
purchase 1n thIS Manner.
These larger Northern Cal~fornla
agencIes acknowledge an on-goIng satIsfactory non-contractual
relatlonsh~p WIth Gasco.
In none of the lnstances does a tlMe-
prIce agreeMent such as that requested In the subJect bId eXIst.
Gasco dJstrlbuted a total of slIghtly less than 1,000,000
gallons of thIS product to these Northern Callfornla custoMer~
durIng the past year. Santa MonIca's need for thIS product l~
estIMated at 1,600,000 gallons next year.
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CouncIl Meeting NoveMber 22, 1983
Santa MonlC:a,.. Callfornld
They (Gasco) have no custoMers ~n Southern Cal1~ornla to WhOM
they have sold thls product.
They have no public agency
custOMers on a tiMe-price contrdct for thiS product at thlh
t .LMea .
In sUMMary, for the reasons of a More assured supply, uniforMity
of product, proMotlon of cOMpetitIon aMong all suppliers and th~
relative lack of experlenc~ of Gasco as a ~uppller of the
proportlons reqUired by the City, It 1S reCOMMended that the bld
of Chevron} U.S,A. IS the lowest and best for IteM t4} 11 dIesel
fuel and that the best intere~ts of the CIty Will be served by
awardlog to Chevron.
Hegardlng IteMs t1-5: On Friday, NoveMber It} 1983 a copy of thIS
report was sent to each bidder on those IteMs lnvltlng theM to b~
present at the NoveMber 22,.. 1983 Councl} M~etlng and to contact the
CIty Clerk at that tIMe IT they wish to speak on thIS Iten.
l:<udq et a ruY IF 1 n a_nc 1 all Mp ac..!.
~lscal Year 1983-84 approprlat~on author1ty for th1S purchase 1S In
the var10US uSing DepartMent~. For the per10d of July 1) 1984-
NoveMber 30, 1984 approprlatlon authorlty w]ll be as set forth 1n
the FIscal year 1984-85 budget for the varlOUS uSlng DepartMents.
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Santa Monlcd) CdllTurnld
PU:RNA:TMJ
Councll Meetlng
No lIeMber
>:)';)
....,;. ,
1Y83
RecOMr-tendatlon
It LS recoMMended that the award oT B2d . 1922 be Made to Chevron
USA, Inc" La Habra, Call7orola 70r the gasollne and dlesel fuel
iteMs (~teMs 1-5) at the unlt prIces bId for the perlod froM
DeteMber 1, 1983 through NoveMber 30, 1984 plus two dddltLon~l on~
year optlons) to Texaco, Inc., Lo~ Angeles, CalIfornia for lube 0115
IteMs (IteMS 6-11) at the un1t prices bld for the perIod frOM
DeceMber 1, 1983 through NoveMber 30, 1984 plus two addItIonal
one-year optlons and to A.G. Layne, Inc" Los Angeles, Callfornld on
the solvent IteM (IteM 12) at the unlt prIces offered fur the perIod
frOM DeceMber 1, 1983 through NoveMber 30, 1984 plus two addl1Jona]
one-year optIons.
Prepared By: R. N. Aronoff) Dlrector of Purchaslng
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