ADMINISTRATIVE REPORT

Date: May 04, 1999
Author/Local: Susanne Siu/7258
RTS No. 00708
CC File No. 1805

Council: May 18, 1999

TO:	Vancouver City Council
FROM:	Manager of Purchasing Services
SUBJECT:	Contract No. 97-01 Extension: Supply of Diesel and Gasoline Fuels

RECOMMENDATION

THAT Council approve the extension of the contract to Chevron Canada Limited, for the supply of diesel and gasoline fuels as, if and when required for an additional 24-month period from June 01, 1999, at an estimated annual cost of $2,900,000, including all applicable taxes.

GENERAL MANAGER'S COMMENTS

The General Manager of Engineering Services RECOMMENDS approval of the foregoing.

COUNCIL POLICY

The policy of Council is to award contracts for the purchase of equipment, supplies and services that will give the highest value based on quality, service and price.

On March 04, 1980, City Council authorized co-operative purchasing "when benefits to the City are indicated".

Contracts with a value over $300,000 are referred to Council.

BACKGROUND

On February 18, 1997, City Council authorized Sid Fancy, the previous Manager of Purchasing Services, as a member of the co-operative negotiating team, to negotiate and accept on behalf of the City of Vancouver, the contract for Proposal 97-01, for the supply of gasoline and diesel fuels.

On July 08, 1997, City Council accepted and approved the "Information" Report submitted by the Manager of Purchasing Services which advised that Chevron Canada Limited was thesuccessful supplier and awarded a 2 year contract from June 01, 1997 to May 31, 1999.

The contract provides for an additional 2-year extension by mutual agreement between the BC Petroleum Products Buying Group (BCPPBG) and the contractor.

Funds will be provided for in the Capital and Operating Budgets.

DISCUSSION

At the beginning of this contract, the combined co-operative fuel purchase volume was estimated at 22 million litres with 31 communities participating in the BCPPBG. The City of Vancouver's annual portion was approximately 6.3 million litres. There has been an increase in the membership and the annual volume has since grown to approximately 31 million litres of fuel. Chevron Canada has agreed to extend for a 2-year period with a reduction in price provided the entire membership renews the contract. All other terms and conditions remain the same.

The combined new volume with the revised price will result in an annual price reduction by approximately $99,000 or $198,000 for the 2-year period for the City of Vancouver. It is further advantageous to extend as there is provision in the contract to re-negotiate with Chevron during the extended period if additional new members join into the BCPPBG, thereby likely to further reduce the extended price.

We therefore, RECOMMEND that this contract be extended with Chevron Canada Limited for an additional 2-year period until May 31, 2001.

* * * *

(c) 1998 City of Vancouver