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