Title
CATS Ultra-Low Sulfur Diesel Fuel
Action
Action:
A. Approve unit price contracts for the purchase of Ultra-Low Sulfur Diesel fuel for an initial term of three years to the following:
‒ PAPCO Inc.,
‒ Lykins Energy, and
B. Authorize the City Manager to renew the contracts for up to one, two-year term with possible price adjustments and to amend the contracts consistent with the purpose for which the contracts were approved.
Body
Staff Resource(s):
John Lewis, CATS
Allen Smith, III, CATS
Explanation
§ The Charlotte Area Transit System manages fuel purchases using both fixed-price forward and variable index-price methods, in order to ensure a consistent supply of fuel for bus operations and to reduce price volatility. These methodologies are standard practice in an industry where prices are volatile.
§ On April 28, 2020, the city issued an Invitation to Bid for both fixed-price and variable index-price fuel supply contracts; 11 bids were received.
§ PAPCO Inc. was selected as the lowest responsive, responsible bidder for the fixed-price contract.
§ Lykins Energy was selected as the lowest responsive, responsible bidder for the variable index-price contract.
§ The annual expenditure for diesel fuel through both contracts is estimated to be $6,500,000 ($5,000,000 fixed-price; $1,500,000 variable index-price), subject to available needs.
Charlotte Business INClusion
Per Charlotte Business INClusion Policy: Part C: Section 2.1(a), the city shall not establish Subcontracting Goals for Contracts where: (a) there are no subcontracting opportunities identified for the Contract; or (b) there are no MWBEs or SBEs certified to perform the scopes of work that the city regards as realistic opportunities for subcontracting.
These contracts meet the provisions of (a) - No subcontracting opportunities
Fiscal Note
Funding: CATS Operating Budget