City Council Meeting:  June 14, 2011

Agenda Item: 3-EE

To:               Mayor and City Council

From:           Carol Swindell, Director of Finance

Subject:        Reject Bid #3047 to Supply and Deliver Biodiesel Fuel



Recommended Action

Staff recommends that the City Council:

1.     Reject all bids received for Bid #3047 for the supply and delivery of biodiesel fuel.

2.     Authorize an increase to the bid award amount of Bid #2984 made to General Petroleum Corporation , a California-based company, in an amount not to exceed $850,000, for the period July 1 through September 30, 2011 or until a formal bid is awarded for a total amount $2,650,131. 



Executive Summary

Staff recommends that City Council reject all bid responses to Bid #3047 to supply and deliver biodiesel fuel as the bid responses received were noncompliant with the bid notice and specifications.   Staff also recommends extending the current agreement with General Petroleum Corporation for three months for an amount not to exceed $850,000 which would allow for the purchase of biodiesel fuel until new bids are obtained and the City Council awards the biodiesel fuel contract.  This increase will bring the total expenditure to $3,500,131 for the 15-month term. 




On January 19, 2010, City Council awarded Bid #2984 to General Petroleum Corporation for the purchase of biodiesel fuel through June 30, 2010.  On June 8, 2010, City Council authorized staff to exercise a renewal option offered by General Petroleum Corporation to supply and deliver biodiesel fuel blends to the Big Blue Bus and Public Works Fleet Management Division, for the period July 1, 2010 through June 30, 2011 in an amount of $2,050,131, and on May 10, 2011, City Council authorized an increase of $600,000 to the existing purchase orders for a new total of $2,650,131.



In April 2011, the City published Notices Inviting Bids to supply and deliver biodiesel fuel as required in accordance with City specifications.  Although vendors were not individually contacted by City staff, the bid was posted on the City’s on-line bidding site.  Vendors who expressed interest in bidding on this in the past were encouraged to register online so that they would receive an email notification when the bid was posted.  Notices were also advertised in the Santa Monica Daily Press in accordance with City Charter and Municipal Code provisions.  Eight bids were received and publicly opened on April 27, 2011.  The bid notice and specifications requested that bid prices include sales tax, fees/surcharges and if applicable, state excise tax.   However, all of the bid responses failed to include one or more of the items in their bid and staff could not discern what was included.  Consequently, bids submitted could not be compared as they were not an accurate representation of actual prices requested.  Based upon the bid responses received, staff recommends rejecting all bids due to noncompliance with bid notice and specifications and issuing a revised Notice Inviting Bids.


Financial Impacts & Budget Actions

Funds for the purchase of biodiesel fuel are included in the proposed FY 2011-13 budget submitted to Council for review and approval in the following line items.   

·       Fleet:  $145,000 in account 54554.522910, “Vehicles-Fuels/Lubrication.”

·       BBB:   $690,000 in account 41654.522911, “Fuel-Revenue Vehicles.”

·       BBB:   $15,000 in account 41654.522840, 60W, “Fuel & Oil Taxes.”


Prepared by:  Kimberlie Nimori, Acting Purchasing Agent





Forwarded to Council:







Carol Swindell

Director of Finance


Rod Gould

City Manager