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SR-205-003 (415) e e b-G 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 1 fo- b Nrv 2 2 198J e e 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 2 e e PU:RNA:fMJ C 0 u n C 11 th!e t ] n 9 Santa Monlca~ Callfornla NoveMber ':)':l ......~ 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, 3 e e Santa MonlCd, Call~ornla PU:RNA:fMJ 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. 4 e e PU:RNA:ff'\j 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 5 e e PU:RNA:fMJ 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 b e e PU: RNA: fMJ 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 7 e e ~) U: R N A : f M J 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. 8 e e PU:RNA:fMJ 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. II ~ e e 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 10