REPORT TO THE CITY COUNCIL
FROM: BRIAN BARR, Director
General Services Department
BY: SZARINA LOZANO, Management Analyst II
General Services Department
SUBJECT
Title
Award a requirements contract for Liquid Natural Gas (LNG) fuel to Clean Energy of Newport Beach, California for two years, with three optional one-year extensions, for an amount not to exceed $2,059,500 per year plus annual CPI adjustments (Bid File 12400370)
Body
RECOMMENDATION
Staff recommends Council approve the award of a requirements contract for liquid natural gas (LNG) fuel to Clean Energy of Newport Beach, California for two years, with three optional one-year extensions, for an amount not to exceed $2,059,500 per year plus annual CPI adjustments.
EXECUTIVE SUMMARY
The General Services Department, Fleet Management Division, requests approval to establish a requirements contract for the purchase of liquid natural gas (LNG) fuel. This contract will stabilize supply and pricing for liquid natural gas (LNG) fuel used by the City’s refuse truck fleet. The Department of Public Utilities, Solid Waste Management Division utilizes 110 refuse trucks to pick up residential waste from residents of the City of Fresno, covering 103 square miles. Due to historical and anticipated costs for this product, the Purchasing Division has recommended a multi-year requirements contract be established to conform to purchasing best practices.
BACKGROUND
The General Services Department, Fleet Management Division is responsible for purchasing, storing, and dispensing LNG fuel for the City of Fresno’s refuse truck fleet. The Solid Waste Management Division operates 110 refuse trucks powered by LNG. These trucks collect municipal solid waste, recyclables, and green waste for over 119,000 residential customers.
The LNG fuel purchased through this contract will be renewable natural gas (RNG) that is derived entirely from biogas purified to meet pipeline natural gas specifications. Biogas is derived from the anaerobic decomposition of organic waste sources, including landfills, wastewater treatment plants and agricultural sources. Renewable LNG derived from RNG is identical in composition to fossil LNG and has been liquefied in the same manner as fossil LNG.
Competitive bids were solicited for LNG fuel on October 6, 2023. On October 31, 2023, two bids were received at the public bid opening. Clean Energy of Newport Beach, California was determined to be the lowest responsive and responsible bidder with a term of two years with three optional one-year extensions, for an amount not to exceed $2,059,500 per year plus annual CPI adjustments. The Purchasing Division has approved this contract and recommends Council approval. The City Attorney has approved the contract as to form.
ENVIRONMENTAL FINDINGS
The action being considered does not constitute a "project" within the meaning of the California Environmental Quality Act ("CEQA") pursuant to CEQA Guidelines section 15378(b)(2) (administrative and maintenance activities including purchases of supplies).
LOCAL PREFERENCE
Local preference is not applicable.
FISCAL IMPACT
No general funds will be used to purchase these items. The funding to cover the purchase cost of LNG fuel has been included in the FY2024 adopted budget under the operations of the General Services Department, Fleet Management Division.
Attachments:
Bid Evaluation