BACKGROUND

Annually, the Village purchases approximately 165,000 gallons of unleaded gasoline and 75,000 gallons of diesel fuel to operate our vehicles and various pieces of equipment.  The price for our fuel is determined by the Oil Price Information Service (OPIS) price on the day of delivery, plus the vendor’s mark up. OPIS provides the most widely accepted fuel price benchmarks for contracts.  The OPIS benchmark is used by Federal, State, Municipal and County Governments to allow competitive contract pricing while accounting for market volatility.  In 2012, The Village held a public bid for our fuel needs. The contract is for three years, with three optional one-year extensions.  Since petroleum prices change frequently, the Village’s bid was based on the vendor’s mark up only.  Four vendors supplied bids for both fuel types and the Village Board awarded the unleaded gasoline bid to RKA Petroleum Companies, Inc., and the bio-diesel fuel bid to Mansfield Oil Company. 

Per Village policy and contract terms, Staff is recommending the second of three possible one-year extensions.  Both vendors have agreed to hold current prices and have not requested an increase:  -.0088 cents per gallon of Regular Unleaded Gasoline, and .0001 cents per gallon of Bio-Diesel Fuel.  Staff has been satisfied with the fuel delivery times from both companies.

RECOMMENDATION

It is recommended that the Village Board award the second of three possible one-year extensions for regular unleaded gasoline to RKA Petroleum Companies, Inc., and for bio-diesel fuel to Mansfield Oil Company, and authorize Staff to execute the necessary documents.