Item 4G CITY OF
SOUTH LAKE
MEMORANDUM
October 4, 2016
To: Shana Yelverton
From: Sharen Jackson, Chief Financial Officer
Tim Slifka, Purchasing Manager
Subject: Item 4G Approve Annual City Fuel Purchasing from Martin Eagle Oil
through use of a Cooperative Purchasing Agreement with National
IPA and City of Fort Worth in an Amount Not to Exceed $377,482
Action
Requested: Approve annual City fuel purchases through a cooperative
purchasing agreement with National Intergovernmental
Purchasing Alliance (National IPA) and City of Fort Worth from
Martin Eagle Oil.
Background
Information: The City purchases fuel from Martin Eagle Oil utilizing a
cooperative purchasing agreement with National IPA and the City
of Fort Worth. This agreement is based on a nationally awarded
cooperative purchasing fuel contract. At this time, this contract
provides the City with the best overall pricing for our required
fuels. It is in the City of Southlake's best interest to continue to
purchase fuel through the National IPA and City of Fort Worth fuel
contract at this time. The estimated fuel cost for FY 2016 is
$220,000.
Fiscal Year Budgeted Actual
FY 2014 $456,494 $393,779
FY 2015 $460,908 $312,070
FY 2016 $404,717 $220,000 (est.)
FY 2017 $377,482 N/A
Financial
Considerations: Maintain lowest available fuel cost for the City. These purchases
will be funded through department fuel budget for FY 2017.
Strategic Link: B2 — Collaborate with select partners to implement service
solutions.
Citizen Input/
Board Review: None
Legal Review: Interlocal purchasing is allowed through Local Government Code
271.102. City Attorney's have reviewed interlocal agreements.
Alternatives: Do not use cooperative purchasing for City fuel purchases and
release our own bid for fuel.
Supporting
Documents: Interlocal Agreements with National IPA and City of Fort Worth
Staff
Recommendation: Approve purchasing City fuel through National IPA and City of Fort
Worth national fuel contract from Martin Eagle Oil.
NATIONALIPA
a PROVISTA company
Motor Fuels and Aviation Fuels
Executive Summary
Lead Agency:City of Fort Worth,TX Solicitation: RFP 14-0121
RFP Issued:June 4, 2014 Pre-Proposal Date:June 19, 2014
Response Due Date:July 10, 2014 Proposals Received: 7
Mansfield
Fuels. Simplified. Aww�Eenergy
Awarded to: and
J / .W T, r
(Texas agencies only)
The City of Fort Worth,TX Purchasing Division issued RFP 14-0121 on June 4, 2014, to establish a national
cooperative contract for Motor Fuels and Aviation Fuels to include; motor fuels, aviation and jet fuels and Diesel
Exhaust Fluid (DEF).
Notice of the solicitation was sent to potential offerors, as well as advertised in the following:
• Fort Worth Star-Telegram
• Hawaii Tribune—Herald, HI
• Daily Journal of Commerce, OR
• The State, SC
• The Olympian, WA
• Times Union, NY
• The Salt Lake Tribune, UT
• National IPA website
On July 10, 2014 proposals were received from the following offerors:
• Gold Star Petroleum
• Indigo Energy
• Littlefield Oil Company
• Mansfield Oil Company
Pagel of 4
• Martin Eagle Oil Company
• Petroleum Traders
• Truman Arnold Companies (TAC Energy)
The proposals were evaluated by an evaluation committee. Using the evaluation criteria established in the RFP,
the committee invited the following firms to participate in an interview:
• Mansfield Oil Company
• Truman Arnold Companies (TAC Energy)
• Martin Eagle Oil Company (Texas agencies only)
The committee evaluated the revised offers, interviews and the relative strengths and weaknesses of each
proposal with regard to the evaluation criteria stated in the RFP. As a result,the committee recommended
entering into negotiations with the intent to award a contract to the top ranked offerors:
• Mansfield Oil Company(Service Nationwide)
• Truman Arnold Companies (Service Nationwide)
• Martin Eagle (Texas agencies only)
The City of Fort Worth, National IPA and the offerors successfully negotiated contracts and the City of Fort
Worth executed contracts with Mansfield Oil Companies,Truman Arnold Companies and Martin Eagle upon
approval by City of Fort Worth Council with a contract effective January 1, 2015.
Contract includes:
• Unleaded E10
• Unleaded E85
• Aviation Gas (Finished)
• Jet-A Fuel
• Ultra Low Sulfur Diesel
• Diesel 70/30 Blend
• B2 ULSD
• B5 ULSD
• B10 ULSD
• B15 ULSD
• Diesel Exhaust Fluid (DEF)Tote
• 55 DEF, 2 % DEF and 55 DEF Drum Fee
• Compressed Natural Gas (CNG)
• Propane-Liquefied Petroleum Gas (LPG)
• Fuel card program.
Term:
Initial one year agreement from January 1, 2015 through January 1, 2016 with the option to renew for
four (4) additional one-year periods through January 1, 2019.
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Pricing/Discount:
Fuel procurement is extremely difficult to manage and control. Usage is not easily reduced, particularly
in public safety and utilities departments and prices are established via commodity markets with
inherent volatility.The City of Fort Worth,TX cooperative agreement allows agencies to effectively
manage fuel costs by establishing a verifiable price structure.
The pricing structure is based on the Oil Price Information Service (OPIS) Daily Published Benchmark for
each location. OPIS is the is the world's most widely accepted fuel price benchmark for supply contracts
and establishes a verifiable baseline price per gallon based on the date of delivery. Fuel prices offered
through the agreement are based on the lowest unbranded published price in each market on the date
of delivery, plus the applicable differential per terminal city. Freight charges from the terminal to the set
destination will be included. Fuel price may be calculated based on the following formula:
Benchmark Index
+ Market Differential*
+ Freight (direct pass-through cost from supplier)
+Taxes (if applicable)
= Delivered Price
*The Market Differential is the mark-up added to or subtracted from the benchmark index for a given
fuel product, at a given delivery size and are specific to a supplier for a given fuel product in a given Rack
City.
Agencies now realize convenience and savings on bulk fuel purchases, as well as efficiency gains through
elimination of numerous individual fuel contract bids.
Comprehensive Analysis
Due to the many factors affecting motor fuel pricing (including daily commodity pricing fluctuations,
multiple industry pricing benchmarks, and varying fuel products available in each market) an accurate
analysis of the national program involves many dynamic variables.TACenergy,,Martin Eagle and
Mansfield Oil can help provide an analysis specific for your agency for your unleaded, diesel and aviation
fuel requirements.
You will be asked to provide copies of recent invoices for each fuel product purchased (including freight
and taxes), along with the pricing benchmark and related mark-up being used to price your current fuel
purchases. A historical analysis will be completed comparing your current program to the fuel contract
available through National IPA. Spot-checking pricing for individual days is not recommended due to
averages, daily volatility, historical trends in each Rack City and other factors.
Page 3 of 4
For assistance with analysis of the award, please contact:
Josh Epperson, Director Government Services
Mansfield Oil
Ph: (970) 333-1475
0epperson@mansfieldoil.com
David Zarfoss, Director of Pricing
Mansfield Oil
Ph: (678)450-2107
dzarfoss@mansfieldoil.com
Clayton Wilson, Sales Manager Associate
Truman Arnold Companies
Ph: (972) 807-7873
cwilson@tacenergy.com
Casey Bostain, Sales Manager Associate
Truman Arnold Companies
Ph: (972) 807-7873
cbostain@tacenergy.com
(Texas agencies only)
Phillip (Corky) Childers III, Martin Eagle Oil Company, Inc.
Ph: (800) 316-6148, Ext. 233
p.childers@martineagle.com
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