REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize the City Manager to Execute Purchase Orders with Flyers Energy, LLC to Provide Various Mobil and Chevron Oils and Lubricants to Silicon Valley Power
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The City of Santa Clara's electric utility, Silicon Valley Power (SVP), utilizes various oils and lubricants in the generation equipment at its power plants. The manufacturers of the equipment require specific brand products (Chevron and Mobil) to be used in order to maintain the manufacturers' warranties and ensure reliable and efficient operation.
DISCUSSION
Pursuant to City Code Section 2.105.140(d), a formal Request for Bids (RFB) was conducted as the solicitation method for this procurement with the award going to the lowest responsive and responsible bidder.
The RFB for various Mobil and Chevron oils and lubricants was published on the City's e-procurement system on December 5, 2023. Over 2,200 vendors were notified of the bid opportunity through the e-procurement system, including the current providers for these products. The RFB requested bids from qualified sources to provide various Chevron and Mobil oils and lubricants, as required for operations at Donald Von Raesfeld Power Plant (DVR). One bid was received from Flyers Energy, LLC. Staff deemed the bid prices to be fair and reasonable compared to previous prices paid.
Based on historical purchases, the estimated annual cost is $100,000. The initial term is one year, with an option to extend it for four additional years. Any price increases must be approved by the City and substantiated by the contractor to the satisfaction of the City. Staff will evaluate price adjustments by comparing proposed pricing changes to the Producer Price Index (PPI) for Petroleum Oil and Grease Manufacturing and/or other applicable market indexes.
Staff has negotiated modified terms to the City's standard Pur...
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