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Item 4C CITY OF SOUTHLAKE MEMORANDUM October 3, 2017 To: Shana Yelverton From: Sharen Jackson, Chief Financial Officer Tim Slifka, Purchasing Manager Subject: Item 4C Authorize Annual City Fuel Purchases from Martin Eagle Oil for City Vehicles and Equipment in an Amount Not to Exceed $351,500 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. The contract provides the City with the best overall pricing for fuel. The estimated fuel cost for FY 2017 is approximately $266,000. Fiscal Year Budgeted Actual FY 2015 $460,908 $312,070 FY 2016 $404,717 $230,245 FY 2017 $377,482 $266,000 (est) FY 2018 $351,500 N/A Financial Considerations: Maintain lowest available fuel cost for the City. Fuel purchases will be funded through department budgets for FY 2018. 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: Deny, City release local fuel bids for fuel or purchase fuel retail. 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. a NATIONALIPA a PRQVISTA 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 rw4lMans ieId Fuels. Simplified. 1 en + "" Awarded to: • and (Texas agencies only) The City of Fort Worth,TX Purchasing Division issued RFP 140121 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 Page 1 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 U LSD • 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. Page 2 of 4 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. OPTS 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 iepperson@mansfieldoi_l,c_om 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 cwilsoniEtacenergy.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@martineap,le.com Page 4 of 4 City of Fort.Worth Annual Agreement Renewal June 9, 2017 Martin Eagle Oil Company, Inc. 2700 James Street Denton,TX 76205 Attn: Phillip Childers III Email Address: pc3@martineagle.com Phone#:(940)38323511 Fax#:(940)382-9342 REQUEST TO EXERCISE RENEWAL OPTION Motor Fuefs and Aviation Fuels CURRENT AGREEMENT NO.: 14-0921 P.O.No.: 15-00686156 On December 31,2017,the Motor Fuels and Aviation Fuels Agreement between Martin Eagle Oil Company, Inc.,and the Clty of Fort Worth will be up for annual renewal.If you agree to extend the existing agreement for an additional 12-month period,please mark the appropriate box,sign below and return to the Purchasing Division within 48 hours. Final approval is dependent upon the Purchasing Manager and fund availability.A [notice of Blanket Award with the new purchase order number will be forwarded to you upon completion of the renewal process. Please return your signed renewal letter along with a copy of your current insurance certificate. In order to ensure receipt of bid and agreement notices,vendors are responsible for maintaining their contact information with the City. To review or update contact information,vendors shell log onto the City's BuySpeed Online system at https.ilbso.fortworthgov.orgibso/login.isp and update the company information. If you have any questions concerning this correspondence,please contact the undersigned at 817-392-8381. Thank you for your prompt attention and for your continued interest in doing business with the City of Fort Worth_ Sincerely, Laurena Hamilton Purchasing Division Financial Management Services Department 817-392-8381—Direct 817-392-8440—Fax New(Agreement Term:1/1/18 through 12/31/18 Vendor. l"en �s�C, City of Fort Horth 1 t )® Yes,Renew this agreement No, Do Not Renew this agreementarian G In: Cant rac fpllian�ce Speci st Philli�Childers III G,� .Iacl ale, _,CPP (!; 'Lv Purchasing Manager