Annually, the Village purchases approximately 165,000 gallons of unleaded gasoline and 75,000 gallons of 20% bio-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.
On August 14, 2018, the Village held a public bid for our fuel needs. The contract is for three years, with three optional Village Board approved one-year extensions. Since petroleum prices change frequently, the Village’s bid was based on the corresponding mark-up for each fuel type only. Four bids were received and the vendor’s markup is listed below.
Bidder Regular Unleaded 20% Bio-Diesel
Gas Depot Morton Grove, IL - .0326 + .0013
Al Warren Oil Hammond, IN - .0125 + .0300
RKA Petroleum Romulus, MI + .0020 + .0609
Mansfield Oil Co. Gainsville, GA + .3755 + .2267
Gas Depot of Morton Grove, Illinois submitted the bid with the lowest mark-up for both unleaded and bio-diesel fuel. Gas Depot has never worked with the Village before so all references were thoroughly reviewed and the findings were favorable. During our reference checks, it was discovered that Gas Depot holds the current fuel agreement with the Suburban Purchasing Contract (SPC), which is the joint purchasing program sponsored by the Northwest Municipal Conference, and actually submitted a bid price that is lower than that of the SPC agreement.
RECOMMENDATION
It is recommended that the Village Board award a three-year contract to the lowest bidder, Gas Depot of Morton Grove, Illinois, for unleaded gasoline and 20% bio-diesel fuel and authorize Staff to execute the necessary agreements.