Metro OPERATIONS COMMITTEE JANUARY 20,201 1 SUBJECT: CNG ENGINE OIL AWARD CONTRACT FOR CNG ENGINE OIL RECOMMENDATION

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1 Metro Los Angeles County Metropolitan Transportation Authority One Gateway Plaza Los Angeles, CA OPERATIONS COMMITTEE JANUARY 20,201 1 SUBJECT: CNG ENGINE OIL ACTION: AWARD CONTRACT FOR CNG ENGINE OIL RECOMMENDATION Authorize the Chief Executive Officer to award a 36-month, indefinite deliverylindefinite quantity, firm fixed price contract under Bid Number to The Jankovich Company, the lowest responsive and responsible bidder for CNG engine oil for an amount not to exceed $3,748,976 inclusive of sales tax and two one-year options. RATIONALE The engine oil under this procurement is needed throughout MTA to maintain and service the CNG bus fleets. The engine oil is changed out periodically in accordance with the engine manufacturer's preventive maintenance program requirements. MTA's fleet of buses cannot function without it. The contract to be awarded is a "requirements type" agreement in which we commit to order only from the awardee, up to the specified quantity for a specific duration of time, but there is no obligation or commitment for us to order any or all of the engine oil that may be anticipated. The bid quantities are estimates only, with deliveries to be ordered and released as required. Engine oil will be purchased and maintained in inventory and managed by Material Management. As the engine oil is issued, the appropriate budget project numbers and accounts will be charged. FINANCIAL IMPACT The funding of $1,641,212 for CNG engine oil is included in the FYI 1 budget under multiple bus operating cost centers and various operating and capital projects under Line Item 50406, Lubricant - Revenue Equipment.

2 Since this is a multi-year contract, the cost center manager and Chief Operations Officer will be accountable for the budgeting of the cost in future fiscal years. In FY10, a total amount of $1,215,899 was expended on this category. Impacts to Bus and Rail Enterprise Fund Operating and Capital Budgets The source of funds for this project is Enterprise Funds (EF) such as fares, sales taxes and TDA4. This procurement is part of the on-going maintenance costs of the bus maintenance programs. ALTERNATIVES CONSIDERED The alternative is not to award the contract and continue to procure engine oil on an asneeded basis at a higher cost. This approach is not recommended since it does not provide a commitment from the supplier to ensure availability and price stability. ATTACHMENTS A. Procurement Summary A-I. Procurement History A-2. List of Subcontractors B. Bid Tabulation Prepared By: Tanya Allen, Procurement Planning Administrator John Roberts, Deputy Executive Officer, Operations

3 LM~ 7- Mitchell Chief Operations Officer Arthur T. Leahy Chief Executive Officer

4 p~ I I. I Contract Number: BOARD REPORT ATTACHMENT A PROCUREMENT SUMMARY CNG ENGINE OIL Recommended Vendor: The Jankovich Company, Garfield Avenue, Paramount, CA CostIPrice Analysis Information: BidIProposed Price: I Recommended Amount: B. Details of Significant Variances are in Attachment A-1.D Contract Type: Fixed Price Procurement Dates: A. Issued: B. Advertised: C. Pre-bid Conference: NIA D. ProposalsIBids Due: E. Pre-Qualification Completed: NIA F. Conflict of Interest Form Submitted to Ethics: Yes Small Business Participation: A. BidIProposal Goal: 5% Date Small Business Evaluation DALP recommended Completed: B. Small Business Commitment: 5% DBE Anticipated Level of Participation (DALP) was recommended. Invitation for BidIRequest for Proposal Data: BidsIProposals Picked up: BidsIProposals Received: NIA 9 Evaluation Information: Award based on item by item evaluation - not total bid. A. BiddersIProposers Names: BidIProposal Amount: Best and Final Valvoline Company $2,002,543 Offer Amount: Rosemead Oil Products, Inc. $3,337,644 The Jankovich Company $3,748,976 NIA Cosby Oil Company $3,775,274 Patten Energy, Inc. $3,966,090 Goodspeed Distributing Inc. $4,285,639 A.P. Fischer, Inc. $4,384,774 Mobil Delivery Service, Inc. $4,478,900 Saturn America $4,583,922 B. Evaluation Methodology: Selection of the lowest responsive, responsible 9. Protest Information: A. Protest Period End Date: 1/25/11 B. Protest Receipt Date: NIA C. Dis~osition of Protest Date: NIA Contract Administrator: 1 Telephone Number: 4

5 A. Background on Contractor BOARD REPORT ATTACHMENT A-I PROCUREMENT HISTORY CNG ENGINE OIL The responsive and responsible low bidder, The Jankovich Company (TJC), located in Paramount, CA has been in the lubricant business since TJC has distributed lubricants to other agencies, including LA DWP and other transit agencies. In the past, TJC has provided satisfactory service and delivery of engine oil to Metro. B. Procurement Background Evaluation of the 9 bids received was based on the submittal of offers for technical specifications which included all products approved by Cummins and Detroit Diesel. The Diversity and Economic Opportunity Department recommend a 5% Disadvantaged Business Enterprise Anticipated Levels of Participation (DALP) for this procurement. C. Evaluation Criteria Technical review and selection of the lowest responsive, responsible bidder Bidder #I Valvoline Company in the amount of $2,002,543 is in full compliance to the technical specifications and bid requirements. Valvoline Company bid on only two of the six items, and their unit prices were not the lowest. Bidder #2 Rosemead Oil Products, Inc. in the amount of $3,337,644 requested to withdraw their bid because of an error in their bid pricing. Bidder #3 Bidder #4 Bidder #5 Bidder #6 The Jankovich Company in the amount of $3,748,976 is in full compliance to the technical specifications and bid requirements. Cosby Oil Company in the amount of $3,775,274 is in full compliance to the technical specifications and bid requirements Patten Energy Inc. in the amount of $3,966,089 is in full compliance to the technical specifications and bid requirements Goodspeed Distributing Inc. in the amount of $4,285,639 is in full compliance to the technical specifications and bid requirements. 5

6 Bidder #7 Bidder #8 Bidder #9 A.P. Fischer, Inc. in the amount of $4,385,774 is non-compliant to the technical specifications. A.P. Fischer, Inc. did not submit approval documentation from the Cummins and or Detroit Diesel by the deadline. Mobil Delivery Service, Inc. in the amount of $4,478,900 is in full compliance to the technical specifications and bid requirements. Saturn America in the amount of $4,583,922 is in full compliance to the technical specifications and bid requirements. D. CostlPrice Analysis Explanation of Variances The recommended bid price of $3,748,976 has been determined to be fair and reasonable based upon adequate price competition and selection of the lowest responsive and responsible bidder. Price savings based on historical figures are $54,000.

7 BOARD REPORT ATTACHMENT A-2 LIST OF SUBCONTRACTORS CNG ENGINE OIL PRIME CONTRACTOR The Jankovich Company Small Business Commitment % Other Subcontractors Total Commitment %

8 A

9 A.P. Fischer Inc. Jankovich Company as bidder and recommend the award to them for total pric ate' Signature