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Agenda Item 23.

City Council Meeting

Meeting Date:	03/06/2018
FROM:	Bill Gallardo

Subject:

Agreement to Provide Motor Fuel

RECOMMENDATION

Approve the agreement with SC Fuels, Inc. to provide as-needed Motor Fuels; and
Authorize the Purchasing Agent to issue purchase orders in an aggregate not to exceed amount of $400,000 through December 31, 2018.

BACKGROUND/DISCUSSION

The City of Brea purchases its motor fuel requirements on an as-need basis, which is normally done through national cooperative purchase agreements as they offer more competitive prices based on larger volumes than Brea could purchase on its own. Periodically, these agreements reach the end of their contract life, which is the case with SC Fuels. Since there were no other available cooperative or piggybackable agreements with SC Fuels, they offered to allow Brea to purchase fuel at the same competitive pricing as the City of Anaheim which generates much higher volume than Brea. Since the Anaheim contract did not have any piggyback or cooperative agreement clauses, Brea would have to establish its own contract to purchase fuels from SC Fuels at the Anaheim prices, which is now being recommended for approval. The City has the right to terminate this contract with at least a 30-days notice.

Because the Anaheim contract expires December 31, 2018 with no remaining contract extensions available, the Purchasing Division has begun the process of soliciting price and delivery information from the various national cooperative agreements, piggybackable contracts, other contracts that have been competitively bid, or consider a joint procurement with other interested governmental agencies. Staff will return to Council with a recommendation for whichever solution provides the best available pricing and is in the best interest of the City.

In the meantime, staff requests that City Council approve the agreement with SC Fuels and authorize the Purchasing Agent to issue purchase orders for motor fuel to ensure that fuel is delivered without interruption and take advantage of competitive prices commensurate with Brea's requirements.

COMMISSION/COMMITTEE RECOMMENDATION

The Finance Committee reviewed staff's recommendation at their February 13, 2018 meeting and it was recommended for City Council approval.

FISCAL IMPACT/SUMMARY

The City Council adopted Fiscal Year 2017-18 Budget has sufficient funding available for the requested amount for these purchases in the Public Works Department, Equipment Maintenance Division Expenditure Account for Fuel (480-51-5161-4361). Amounts for these purchases are subject to available budget appropriations for each fiscal year in which they occur. The requested not-to-exceed amount is based on the average annual purchases over the past two years and includes a contingency to allow for fluctuation in fuel prices.

RESPECTFULLY SUBMITTED:

William Gallardo, City Manager
Prepared by: Neil Groom, Procurement and Contracts Administrator
Concurrence: Cindy Russell, Administrative Services Director and
Tony Olmos, Public Works Director

Attachments
Agreement
Certificate of Insurance