December 18, 2003
SUBJECT: Amendment of Existing Contract for Vehicle Fuel (F0312-35)
REPORT IN BRIEF
Approval is requested for the amendment of an existing contract with Malaco International, Inc., of Walnut Creek for vehicle fuel for the Department of Public Works Fleet Maintenance Division.
BACKGROUND
On November 10, 1998, Council authorized the issuance of a three-year blanket purchase order to Malaco International, Inc., to supply unleaded and diesel fuel for City vehicles (RTC #98-421). Fuel is stored in several underground storage tanks which are monitored by Central Stores staff.
On October 2, 2001, Council authorized a two-year extension of the purchase order (RTC #01-339) and authorized expenditures of $1,395,000 for vehicle fuel throughout the contract term.
The five-year contract expired on November 15, 2003. At that time, the Purchasing Officer extended the purchase order through December 31, 2003, to support the City's needs pending completion of a local agency cooperative purchase for vehicle fuel. Although it appeared that the authorized expenditure amount of $1,395,000 would be sufficient through December 31, 2003, in fact, that is not the case; and it is necessary to amend the contract by increasing the total authorized expenditures by $100,000.
DISCUSSION
The Sunnyvale Purchasing Division has taken the lead in the development of a cooperative purchase between the Cities of Sunnyvale, San Jose and Santa Cruz and the County of Santa Clara. With a combined annual purchase volume of more than 4 million gallons, this cooperative purchase is expected to achieve much better fuel pricing for the City than could be achieved with an individual purchase of approximately 185,000 gallons per year.
The cooperative purchase will be made via an online reverse auction in mid-December. It is anticipated that award of a new contract will be requested at Council's first meeting in January 2004.
FISCAL IMPACT
As the result of the requested $100,000 increase in authorized expenditures for vehicle fuel, the total not-to-exceed amount for the contract with Malaco International will be $1,495,000. Funds are available in Public Works Activity 763031 - Provide Fuel and Lubricants.
RECOMMENDATION
It is recommended that Council amend an existing contract with Malaco International for vehicle fuel by increasing authorized expenditures by an amount not to exceed $100,000.
Prepared by:
Elaine Wesely
Purchasing Officer
Reviewed by:
Mary Bradley
Director, Finance
Reviewed by:
Marvin Rose
Director, Public Works
Approved by:
Robert S. LaSala
City Manager