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Council Agenda Item Cover <br /> <br />________________________________________ <br />MEETING DATE: <br /> October 6, 2008 <br />AGENDA ITEM TITLE: <br /> Annual Fuel Bid <br />AGENDA SECTION: <br /> Consent <br />CAN THIS ITEM BE RESCHEDULED? : <br />No <br />BACKGROUND REVIEW: <br />The City solicited bids from regional fuel suppliers to provide <br />90,000 gallons of diesel and bio-diesel blends for diesel fueled city vehicles and equipment. <br />The City requests bids based on the rack (wholesale) price plus mark-up. The rack price <br />fluctuates daily according to market conditions. The bidder that provides the least mark-up <br />over the rack price represents the lowest bidder. The cost per gallon below is as of the bid <br />date August 15, 2008. Two vendors responded. The bid results are as follows: <br />Company Diesel #2 Bio 5% Bio 11% Bio 20% <br />Petroleum Traders Corp <br />Fuel Cost/Gallon $3.38 $3.48 $3.56 $3.89 <br />Total Cost $304,164 $313,407 $320,409 $350,055 <br />Energy Petroleum <br />Fuel Cost $/gallon $3.51 No Bid No Bid No Bid <br />Total Cost $315,531 <br />Purchasing Diesel #2 represents the least cost option for the City. Bio5 costs 3% more than <br />diesel #2 (or $9,243 more). Bio11 costs 5.3% more than diesel #2 (or $16,245 more). Bio20 <br />costs 15% more than diesel #2 (or $45,891 more). <br />Generally, any biodiesel blend over Bio5 may void manufacturer current warranties. Further, <br />based on our pilot biodiesel blend project last year, during the warmer months Public Works <br />was able to use Bio11 successfully in all but one emergency vehicle. Therefore, Public <br />Works recommends that the City use a maximum blend of Bio11. Generally, during warm <br />weather Bio11 will be used. During the winter months, up to Bio5 will be used to ensure <br />equipment reliability (i.e., cold biodiesel blends can gel which could prevent equipment from <br />starting reliably or cause equipment failure on the road.) <br />RECOMMENDATION: <br />Taking all of this into account, the Public Works Fleet Division recommends the contract be <br />awarded to Petroleum Traders since they provided the lowest bid for all fuel blends for their <br />low bid of Bio11 for $320,409, although the City may use and purchase different levels at <br />different times. <br /> <br />