HomeMy WebLinkAbout07/21/2020 Motion to accept NWMC/SPC Fuel bid in an amount not to exceed $363,222.�f
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wubject Motion to accept NWMC/SPC Fuel bid in a
amount not to exceed $363,,222.
Meeting July• R • MEETING OF THE MOUNT
PROSPECT A BOARD
k • ! Amount $363,222
• . Source Vehicle Maintenance
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Action1%.". a t e g o ry VILLAGE MANAGER'S REPORT
Type
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d • 1
For more than 20 years, the Village has utilized the Northwest Municipal Conference
(NWMC)/Suburban Purchasing Cooperative (SPQ bid contract to purchase fuel for vehicles
and equipment. This joint purchasing contract pools the purchasing volume of more than
15 municipalities to procure over 1,400,000 gallons of fuel each year. Generally, the ability
to aggregate purchasing power in this manner has resulted in lower fuel costs.
Since July 6, 2016, the contract was held by Gas Depot, of Morton Grove, Illinois. The
contract had provisions for three (3) additional one (1) year contract extensions. Each
year, • • ! the initial award, • all of • .extensions.
The final contract extension! on 0
NWMC/SPC recently let bids for a new fuel contract. On June 30, 2020, staff received
notice that the collaborative awarded a new fuel contract to Al Warren Oil Company, Inc.,
#f Hammond, Indiana. Two (2) fuel supply firms participated in the public bidding process.
1
Tabulated results are attached. Please note that the bid specifications include a wide range
of fuel types and quantities. Fuel types and quantities commonly purchased by the Village
are highlighted in yellow.
The NWMC/SPC bid utilizes the Oil Price Information Service (OPIS) low rack price on the
day of the bid opening as the baseline cost. Suppliers are then asked to provide an add-on
fee that incorporates all profit, overhead, and other costs necessary to procure and deliver
the fuel. Due to the vagaries of supply and demand, the cost of fuel per gallon will vary
over time but will always be billed at the OPIS low price on the day the Village places an
order. The supplier add-on cost (prof it/overhead) is a flat fee that will not change during
the term of the contract.
The lowest cost bid was submitted by Al Warren Oil Company. The firm's bid was for
$0.0450 (4.5 cents) over (profit/overhead) the OPIS low rack cost of fuel for both
unleaded gasoline and #2 bio -diesel. This fuel bid award is in effect from July 6, 2020 to
July 5, 2021. The contract provisions also contain three (1) one-year extensions at the
same terms.
The final NWMC/SPC fuel contract extension that just expired with Gas Depot was for
$0.0335 (3-35 cents) over the OPIS low rack cost of fuel for unleaded gasoline and
$0.0435 (4-35 cents) for #2 bio -diesel. In summary, the fees paid to fuel suppliers for
profit/overhead (i.e. net the cost of fuel and taxes) will increase 1.15 cents per gallon for
unleaded fuel and 0.15 cents per gallon for diesel. Applying these increases to five
year average volumes for unleaded gasoline (87,000 gallons) and diesel fuel (53,000
gallons), the Village will incur a slight increase of $1,080 compared to last year's pricing
through the Gas Depot contract.
Attached is a fuel cost worksheet that compares last year's Village contract pricing with the
new bid award pricing.
Throughout the potential four-year term of this contract (initial award and three (3) one-
year extensions), the OPIS low rack price may rise and fall on a daily basis but the amount
of money paid to Al Warren Oil Company as profit/overhead will not change. It will remain
fixed at $0.0450 over the OPIS low rack price for both unleaded gasoline and #2
diesel.
The Al Warren Oil Company has been serving the Chicagoland area since 1948,
has an experienced staff, and sales for their last fiscal year totaled $200,000,000.
All reference checks came back with outstanding results. Staff is confident the
firm can fulfill this contract at the bid prices indicated.
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Staff recommends the Village Board accept the NWMC/SPC bid award and execute a new
2020/2021 fuel contract with Al Warren Oil Company, Inc., of Hammond, Indiana, in an
Rmount not to exceed $363,222. This contract will be in effect from July 22, 2020 to July
5f 2021. In addition, staff also recommends that the Village Board authorize staff to
execute up to three (3) one (1) year extensions if approved by the NWMC/SPC governing
boa rd -
Alternatives
1. Accept Northwest Municipal Conference (NWMC) / Suburban Purchasing
Cooperative (SPQ joint purchasing bid for fuel.
2. Discretion of the Village Board.
:4010111111 L-.4 I to'M. Is] 0
Staff recommends the Village Board accept the Northwest Municipal Conference
(NWMC)/Suburban Purchasing Cooperative (SPQ bid award and execute a new 2020/2021
fuel contract with Al Warren Oil Company., Inc., of Hammond, Indiana, in an amount not to
exceed $363,222. This contract will be in effect from July 22, 2020 to July 5, 2021. In
addition, staff also recommends that the Village Board authorize staff to execute up tt
three (3) one (1) year extensions if approved by the NWMC/SPC governing board.
ATTACH M E NTS:
2020 Fuel RFP # 198. Final. 05.22.20. pdf
2020 Fuel RFP 3198 Addendum #4.06.05.20.pdf
2020 Fuel RFP #198 Addendum #2 05-29.20.pdf
2020 Fuel RFP #198 Addendum #1 05-28-20--pdf
2020 Fuel #198 Award -Al WarrenSigned..06.30.20.pdf
2020 Fuel RFP 3198 Addendum 3 06-02.20.pdf
2020 NWMC FUEL BID TAB.pdf
FUEL COST WORKSHEET 2020.pdf
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