CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Approve the Award of Option Year Four to Contract 14-042, Fuel, to Luke Oil Co. for an amount not to exceed $858,000.
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DEPARTMENT: Department of Public Works
SUBMITTED BY: Richard Dublinski, Director DPW
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
The Department of Public Works' Fleet Services division manages the fuel supply for the City's fleet. The City's fleet is used by all departments and consumes approximately 330,000 gallons of regular unleaded gasoline and 160,000 gallons of diesel motor fuel per year. Consumption includes fuel provided to other governmental agencies such as School Districts 203 and 204, Nichols Library and Naper Settlement. Consumption for these other agencies are included in fleet totals; however, the agencies are billed monthly for their usage plus an administrative fee for use of the City's fueling equipment.
The City currently has two contracts for fuel. The motor fuel tank wagon contract covers the supply of fuel for the City's above ground tanks. This contract was awarded to Heritage FS for amount not to exceed $204,000 for 45,000 gallons of gasoline and 50,000 gallons of diesel fuel. This contract is for fuel received for above ground tanks.
Because fuel prices vary on a daily basis, contract pricing is based on the Oil Price Information Service (OPIS) daily Chicago market gross low rack rate price for fuel plus a bid mark-up. Contract award was based on lowest mark-up. Prices paid will change with the OPIS price, plus applicable taxes. The mark-up remains the same throughout the contract period. Below is the mark-up price per-gallon on the fuel types the city purchases.
Fuel Type
Mark-Up (Extension Offer)
Gasoline (87 Octane) Ethanol
$ 0.0000
#2 Diesel - ULS, B5
$ 0.0419
#1 Diesel - ULS, B5
$ 0.0689
DISCUSSION:
Staff negotiated a zero-percent increase for this extension and is confident pricing through this contract is competitive an...
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