Washington State Agencies, Higher Education and Cooperative members Contract type:

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1 State of Washington Current Contract Information Award Notice Activation Date: May 4, 2006 Contract number: Commodity code: 9130 Contract title: Purpose: FUEL KEEP-FULL & BULK DELIVERY SERVICES Award Notice Contract Term April 13, 2006 through: April 12, 2007 Bulk Marine April 12, 2008 Bulk Land April 12, 2008 Keep-Full Services Original award date: April 13, 2006 Maximum Term: Not to exceed 5 years of award date Estimated Annual Worth: $102,248,850 Estimated Volume (gallons): 45,443,933 For use by: Washington State Agencies, Higher Education and Cooperative members Contract type: This contract has been designated MANDATORY use for state agencies but CONVENIENCE use for: Higher Education (Colleges & Universities) Co-op members (counties, city, school districts etc.) Any small capacity remotely located fuel storage tank. (As determined by the State Contract Administrator) Scope of contract: This contract is intended to satisfy the on-going replenishment of state s network of gasoline, heating oil, and diesel (including biodiesel) fuel storage tanks as well as marine fuel tanks such as the Washington State Ferries (WSF). Refueling services for the San Juan Islands fall outside of the scope of this contract as does barge and pier refueling services. Contractors: Region Keep-Full Bulk-Land Peninsula Associated Petroleum Wilcox & Flegel North Puget Sound Associated Petroleum Associated Petroleum Central Puget Sound Associated Petroleum Associated Petroleum Southwest Wilcox & Flegel Wilcox & Flegel North Central No Bidders No Bidders South Central Yakima Cooperative Wilcox & Flegel North East Mountain Oil Company Coleman Oil Company South East Mountain Oil Company Busch Distributors Marine Associated Petroleum Current participation: $0.00 MBE $0.00 WBE $102,248, OTHER $0.00 EXEMPT MBE 0% WBE 0% OTHER 100% EXEMPT 0% This page contains key contract features. Find detailed information on succeeding pages. For more information on this contract or if you have any questions, please contact your local agency Purchasing Office or you may contact our office at the numbers listed below. State Procurement Officer: Bob Paulson Office Assistant: Mi'isha Hamilton Phone Number: (360) Phone Number: (360) Fax Number: (360) Fax Number: (360)

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3 NOTES: I. Best Buy: The following provision applies to mandatory use contracts only. This contract is subject to RCW (2) & RCW (7): which authorizes state agencies to purchase materials, supplies, services, and equipment of equal quantity and quality to those on state contract from noncontract suppliers. Provided that an agency subsequently notifies the Office of State Procurement (OSP) State Procurement Officer (SPO) that the pricing is less costly for such goods or services than the price from the state contractor. If the non-contract supplier's pricing is less, the state contractor shall be given the opportunity by the state agency to at least meet the non-contractor's price. If the state contractor cannot meet the price, then the state agency may purchase the item(s) from the non-contract supplier, document the transactions on the appropriate form developed by OSP and forwarded to the SPO administering the state contract. (Reference General Authorities document) If a lower price can be identified on a repeated basis, the state reserves the right to renegotiate the pricing structure of this agreement. In the event such negotiations fail, the state reserves the right to delete such item(s) from the contract. II. III. IV. State Agencies: Submit Order directly to Contractor for processing. Political Subdivisions: Submit orders directly to Contractor referencing State of Washington contract number. If you are unsure of your status in the State Purchasing Cooperative call (360) Only authorized purchasers included in the State of Washington Purchasing Cooperative (WSPC) and State of Oregon Cooperative Purchasing Program (DASCPP/ORCPP) listings published and updated periodically by OSP and DAS may purchase from this contract. It is the contractor s responsibility to verify membership of these organizations prior to processing orders received under this contract. A list of Washington members is available at: Contract Terms: This Document includes excerpts of terms and conditions published in the original IFB, including Standard Terms and Conditions, and Definitions, included in the Competitive Procurement Standards published by OSP (as Amended). V. Any existing mandatory use contracts for items that may be encompassed in the scope of this contract offering will be considered the first source of supply for state agency purchasers. Page 3

4 Associated Petroleum Federal Tax ID #: Phone : Fax : CONTRACTOR PROFILES Credit Cards Accepted: None Sales Usage Report: Traci Hamilton Toll Free Phone # Phone: ext Emergency ( 24/7 ) Dispatch Department Address: thamilton@associatedpetroleum.com Street Address: 2320 Milwaukee Way Billing From: 2320 Milwaukee Way City, State Zip: Tacoma, WA City, State Zip: Tacoma WA Payment Address: PO Box 1397 Orders sent to: 2320 Milwaukee Way City, State Zip: Tacoma WA City, State Zip Tacoma WA Customer Service: Becky Anderson Contract Administrator: Frank Pupo Phone: ext Phone: Address: banderson@associatedpetroleum.com Address: fpupo@associatedpetroleum.com Cost Savings Initiatives: Bidders were encouraged to be creative and propose various (optional) ideas that if applied may help our customers realize additional savings. Associated Petroleum proposed a prompt payment discount cost savings initiative which could yield meaningful savings but requires the customer to commit to paying invoices (via electronic fund transfer) within10 days or 20 days. For more information please review the embedded document below or contract the Associated Petroleum Contract administrator. Prompt Payment CSI doc Additional Clarification: 1. The prompt payment clock would begin on the date of delivery (this is the way our system works, as it has no way of knowing when the invoice receipt date is). However, it is APP s intention to have all invoices to its customers within 72 hours. APP requires all invoices are posted in system within a 24 hour period. Each invoice will reflect the delivery date and the due date for payment, as well as the terms of payment. 2. The terms will be offered on a delivery site location. It will not be necessary for the entire organization or agency to select the same terms take advantage of this CSI. Page 4

5 Wilcox & Flegel Federal Tax ID #: Phone: Fax: Toll Free Phone # Emergency ( 24/7 ) Bulk Land Keep Full Dispatch Department Credit Cards Accepted: Visa, MC, AX Sales Usage Report: Leora Booth Phone: Address: Leora@wilcoxandflegel.com Street Address: PO Box 69 Billing From: PO Box 69 City, State Zip: Longview WA City, State Zip: Longview WA Payment Address: PO Box 69 Orders sent to: PO Box 69 City, State Zip: Longview WA City, State Zip Longview WA Customer Service: David Walling Contract Administrator: Sherry Frankovich Phone: Phone: Address: david@wilcoxandflegel.com Address: sherry@wilcoxandflegel.com Cost Savings Initiatives: Bidders were encouraged to be creative and propose various (optional) ideas that if applied may help our customers realize additional savings. Wilcox & Flegel proposed a tiered discount structure for their OPIS price multipliers as identified below: Here is how the example table would look with the sliding scale multiplier. OPIS contract average Multiplier $ $ $ $ $ $ $ $ $ Please contract the Wilcox & Flegel Contract administrator to learn more. Page 5

6 Yakima Cooperative Federal Tax ID #: Phone : Fax : Credit Cards Accepted: None Sales Usage Report: Traci Hamilton Toll Free Phone # Phone: ext Emergency ( 24/7 ) Address: thamilton@associatedpetroleum.com Street Address: 2202 South First Street Billing From: 2202 South First Street City, State Zip: Yakima WA City, State Zip: Yakima WA Payment Address: 2202 South First Street Orders sent to: 2202 South First Street City, State Zip: Yakima WA City, State Zip Yakima WA Customer Service: Heather Marsh Contract Administrator: Kevin Skolrud Phone: Phone: Address: heather@yakimacoop.com Address: kevin@yakimacoop.com Cost Savings Initiatives: Bidders were encouraged to be creative and propose various (optional) ideas that if applied may help our customers realize additional savings. No Cost Savings Initiative are available from this contractor. Page 6

7 Mountain Oil Federal Tax ID #: Phone : Fax : Credit Cards Accepted: None Sales Usage Report: Al Chang Toll Free Phone # Phone: Emergency ( 24/7 ) Tim Henderson Address: Acchang@mtnoil.com Street Address: 1205 N 11th Billing From: PO Box 2216 City, State Zip: Walla Walla WA City, State Zip: Walla Walla WA Payment Address: PO Box 2216 Orders sent to: Tim Henderson City, State Zip: Walla Walla WA Phone: Customer Service: Bill Morris Contract Administrator: Bill Morris Phone: Phone: Address: wjmorris@mtnoil.com Address: wjmorris@mtnoil.com Cost Savings Initiatives: Bidders were encouraged to be creative and propose various (optional) ideas that if applied may help our customers realize additional savings. Mountain Oil will be providing Keep-Full services for the Northeast and Southeast regions. Mountain Oil proposed the following Cost Savings Initiative: We will only charge one service fee where two or more tanks are at one physical location. For additional Keep Full discounts for these regions, please see the below or contact the Mountain Oil contract administrator. FW NE region proposal.msg Page 7

8 Coleman Oil Federal Tax ID #: Phone : Fax : CONTRACTOR PROFILES Credit Cards Accepted: None Sales Usage Report: Sheril Hudson Toll Free Phone # Phone: Emergency ( 24/7 ) Pete Buukarl Street Address: 335 Mill Road Billing From: Address: sheril@colemanoil.com Sheril Hudson 335 Mill Road City, State Zip: Lewiston, ID City, State Zip: Lewiston, ID Payment Address: 335 Mill Road Orders sent to: Pete Buurkarl 335 Mill Road City, State Zip: Lewiston, ID City, State Zip Lewiston, ID Customer Service: Larry Vincent Contract Administrator: Katie Hollingshead Phone: Phone: Address: larry@colemanoil.com Address: Katie@colemanoil.com Cost Savings Initiatives: Bidders were encouraged to be creative and propose various (optional) ideas that if applied may help our customers realize additional savings. No Cost Savings Initiative are available from this contractor. Page 8

9 Busch Distributors Inc Federal Tax ID #: Phone : Fax : Credit Cards Accepted: Visa, MC, and AX Sales Usage Report: Jess Scourey Toll Free Phone # Phone: Emergency ( 24/7 ) Steve Gill Address: jess.scourey@buschdist.com Street Address: 7603 SR 270 Billing From: PO Box 8188 City, State Zip: Pullman, WA City, State Zip: Moscow ID Payment Address: PO Box 8188 Orders sent to: PO Box 8188 City, State Zip: Moscow ID City, State Zip Moscow ID Customer Service: Jim Shook Contract Administrator: Eric Busch Phone: Phone: Address: jim.shook@buschdist.com Address: eric.busch@buschdist.com Cost Savings Initiatives: Bidders were encouraged to be creative and propose various (optional) ideas that if applied may help our customers realize additional savings. In providing Bulk delivery services in the Southeast region, Busch Distributors indicated that they can pull fuel from any one of three racks (Pasco, Wilma or Spokane) and has agreed to pull fuel from the cheapest rack and pass the savings on to the customer. Below is an that clarifies the proposed cost savings initiative and interested customers are encourage to contract Busch Contract administrator to take advantage of this CSI. FW SmartBuying Fuel bid Reque Page 9

10 1 OVERVIEW The Office of State Procurement (OSP) develops purchasing contracts for use by state agencies, higher education and approximately 700 co-op members which include city, county, school districts and some non-profit organizations throughout Washington. Many of our customers manage an assortment of fuel storage tanks serving police cars, fire engines, school buses, public transportation services and many other essential public services. The SmartBuying Fuel contract began in the spring of 2005 and aggregates five fuel contracts (03400, 14003, 07804, 01500, and 11499) into one. So as to most effectively leverage the state s collective buying power, co-op members were invited to participate. This action boosted the projected volume of fuel to be leveraged by approximately seventy-eight percent for a total projected annual volume of 45.5 million gallons of fuel. A total of 981 fuel storage tanks were profiled and included in the bid document. The SmartBuying fuel team consisted of large volume purchasers representing Washington State Ferries, Washington Department of Transportation, Department of Corrections, King County Metro Transit and The City of Seattle. Our strategy was to most effectively position the state in partnering with the fuel haulers. By improving the viability of the resulting contract, the state hoped to increase competition and thereby achieve more aggressive pricing but without sacrificing quality. The state hosted a biodiesel round table discussion and two vendor forums with the objective of developing best of class terms and conditions. As a result, the SmartBuying fuel team completely overhauled the way the state acquires fuel. Vendor forums revealed that there is no one hauler positioned to service the entire state but rather many small businesses compete with one another on a regional basis. Thus, vendor forum attendees worked together to assist the state in redrawing the Washington State map to best reflect existing market coverage and 8-regions were formed as reflected in the map below. The breakdown of this Fuel contract awards are: Page 10

11 1.1 SCOPE The purpose SmartBuying Fuel effort was to establish fuel contracts for the on-going replenishment of state s network of gasoline, heating oil, and diesel (including biodiesel) fuel storage tanks as well as marine based fuel tanks such as the Washington State Ferries (WSF). Refueling services for the San Juan Islands fall outside of the scope of this contract as does barge and pier refueling services. Besides satisfying our customer s tank refueling requirements, the state expects our contractors to play a leadership role in maximizing efficiencies and savings. To that end, the state endeavors to partner with the most conscientious fuel suppliers who are committed and capable of optimizing the replenishment of the state s network fuel storage tanks. The refueling services to be offered include KEEP-FULL and BULK DELIVERY SERVICES (a discussion of each of these services is included: 8-Regional awards for Keep-Full delivery services 8-Regional awards for Bulk (Land) delivery Services 1-Regional award for Bulk (Marine) deliveries 1.2 CONTRACT DESIGNATION This contract has been designated MANDATORY use for state agencies but CONVENIENCE use for: Higher Education (Colleges & Universities) Co-op members (counties, city, school districts etc.) Any small capacity remotely located fuel storage tank. (As determined by the State Contract Administrator) Note: It is the intention of the state that the winning bidder for each region be awarded those customers contained in that region. However, a customer located in close proximity to the regional boundary (as determined by the state contract administrator) may be awarded to the neighboring contractor if it is agreeable to all involved parties. 1.3 TERM OF CONTRACT The initial contract term for Keep-Full and Bulk Land delivery services will be for two (2) years. The initial contract term for Bulk Marine delivery services will be for one (1) year. However, be advised that the new Department of Ecology mobile transfer rule (slated for completion in October 2006) may impact the viability of Bulk Marine delivery services and the decision to extend some or all portions of the Bulk Marine delivery services. Therefore, the state reserves the right to terminate for convenience the Bulk Marine portion of the contract if the state determines that this would be in the best interest of the state. The state reserves the right to extend any of the resulting contracts for a total life of not more than 5-years from the date of award. It is the intention of the state that the contract reaches the maximum 5-year life. However, the decision to extend this contract with any or all contractors will be at the discretion of the state and upon mutual agreement with contractors. 1.4 ESTIMATED USAGE Although the state does not guarantee volume commitments, the total projected gallons and annual term worth for each of the delivery services are as follow: Keep-Full Service $26,794,865 Gallons: 11,908,829 Bulk (Land) Deliveries $50,209,210 Gallons: 22,315,204 Bulk (Marine) Deliveries $25,244,775 Gallons: 11,219,900 Page 11

12 Projected Total $102,248,850 Gallons: 45,443,933 Page 12

13 1.5 PURCHASERS Purchasers will be state agencies, higher education, and political subdivisions who are members of the State of Washington Purchasing Cooperative (WSPC). Contractor(s) shall not process contract orders from unauthorized purchasers. A list of WSPC members can be found via the web at: Be advised that contract usage could be considerably more than current estimates should more co-op members choose to utilize this contract. The state accepts no responsibility for payment by WSPC members. 1.6 PURCHASES BY NONPROFIT CORPORATIONS Legislation allows nonprofit corporations to participate in state contracts for purchases administered by OSP. By mutual agreement with OSP, the contractor may sell goods or services at contract pricing awarded under this contract to self certified nonprofit corporations. Those organizations purchasing under this contract shall do so only to the extent they retain eligibility and comply with other contract and statutory provisions. The contractor may make reasonable inquiry of credit worthiness prior to accepting orders or delivering goods or services on contract. The state accepts no responsibility for payments by nonprofit corporations. Contractor may not change contracted payment terms for nonprofit orders. 1.7 COST MITIGATION STRATEGIES In accordance with sec. 608 of ESSB 6091, the State reserves the right to employ various cost mitigation strategies (i.e. hedging) in acquiring fuel via our contractors. These strategies may include but are not limited to futures contracts, swap transactions, option contracts, costless collars, and long-term storage at no additional costs to our contractor(s). The cost mitigation strategies are intended to reduce overall fuel costs and offer our customers an improved level of budgetary certainty when procuring fuel. The Office of State Procurement in consultation with The State Treasurer and the State Investment Board are to explore and implement these cost mitigation strategies as feasible. These financial instruments are to be offered to our customers on an elect to use basis and be in compliance with our customers bylaws and/or regulations. Customers must receive written approval from the State Contract Administrator before utilizing these financial instruments via this contract and the state accepts no responsibility for payment for the financial services provided to contract users. Customers who elect to utilize these cost mitigation strategies may be charged a fee or other funding mechanisms may be applied to cover the cost of deployment of these cost mitigation strategies. 1.8 CONTRACTOR QUALIFICATIONS Successful bidders: Must be an authorized supplier of the fuel to be delivered with facilities, personnel, equipment, certifications and or approvals as required to successfully perform and comply with all contractual requirements. Are required to comply with the rules, regulations and laws relative to the fuel to be supplied and the services to be performed. Shall have the capability of fulfilling contract deliveries and terms within 15 business days of contract award date (April 13, 2006). May be required to provide copies of their fuel supply contracts or letter from their suppliers (on supplier s letterhead) showing they have sufficient sources and volumes of fuel available to satisfactorily perform in accordance to contract terms and conditions. Page 13

14 1.9 ORDER QUANTITIES The minimum order quantity for Bulk Land deliveries is 8,000 gallons but there will be no minimum order quantities for the Keep-Full service as the bidders service fee is to cover costs (other than fuel costs) irregardless of the amount of fuel delivered. Keep-Full contractors will be expected to optimize the states network of small volume tanks and therefore initiate orders as tanks near the minimum allowable volume. Bulk deliveries are intended to be full transport loads but customers may order split loads as well. Note: Due to weight restrictions and unless otherwise noted DOC McNeil island deliveries are not to exceed 7,500 gallons. 2 General Information 2.1 FUEL TYPES Streamlining fuel types to be purchased, advancing the use of biodiesel and making a successful transition to ultra low sulfur diesel (ULSD) were important objectives of this contracting effort. The state recognizes that to meet these objectives and to achieve savings goals requires coordination with our business partners and the exchange of strategic information. The price worksheets identify the types of fuel to be purchased for each tank as well as forecasting data. Whenever possible, it is the state s intention to provide contractors with at least 30-days advance notice of a major shift in fuel selection or standards. A discussion of the state s overall strategy for each type of fuel the state intends to purchase follows. a) Unleaded Regular Gasoline For gasoline tanks, the state intends to standardize on unleaded regular gasoline. The purchase of other gasoline grades via this contract will require justification and written pre-approved by the State Contract Administrator and would likely occur in response to an emergency such as a marketplace shortage of unleaded regular gasoline. b) Low Sulfur #2 dyed diesel (LS) / Ultra Low Sulfur # 2 dyed diesel (ULSD) For now, state agencies intend to standardize on Low Sulfur #2 dyed diesel. Many large volume co-op members have already transitioned to Ultra Low Sulfur Diesel ahead of the federal mandate but the state does not intend on transitioning to ULSD until summer of 2006 and WSF won t do so until market conditions favor such action. c) LS #1 dyed / ULS # 1 dyed The #1 grade of either low sulfur or ultra low sulfur will mainly be used as a winter additive for colder climates. Unless otherwise stipulated, the winter blend is to consist of equal parts of #1 and #2 grade diesel. d) Heating Oil #2 (High sulfur #2 diesel dyed) The state intends to standardize on heating oil #2 which is also referred to as high sulfur #2 diesel. The high sulfur (HS) #2 dyed diesel OPIS prices will be used to establish heating oil prices. e) Biodiesel (B100) Biodiesel goals have been established for our customers yet the state recognizes that biodiesel is an emerging market posing significant challenges. A number of high volume co-op members have already introduced biodiesel and many other customers have expressed a desire to do so once the market matures and availability allows. The Washington State Ferries and some co-op members have very stringent biodiesel Page 14

15 specification and mixing requirements that must be met to function properly and/or to fulfill environmental mandates. Still other customers biodiesel specification requirements are much less stringent. Therefore, in an effort to advance the development and maturity of the biodiesel market, the state intends to offer customers two grades of biodiesel on a limited basis and broaden its use as market conditions dictate. As the biodiesel market matures, the state expects that biodiesel production will increase and become readily available. Until then, Contractors are expected to make a good faith effort to meet the state s demand for biodiesel. The state will define B#1 and B#2 biodiesel grades in the specification section of this IFB (See BioDiesel Specifications section 7.2). Written pre-approval from the State Contract Administrator will be required before contract customers will be allowed to purchase biodiesel via this contract. Granting permission to utilize biodiesel will be based largely on market availability and the customer s readiness to transition to a biodiesel blend. f) Future fuel types Because the OPIS price index will serve as the basis for establishing contract pricing and bid multipliers are to be applied to all gasoline and diesel family of fuels, then the introduction of any new gasoline or diesel type tracked by OPIS may (at the discretion of the state) be added to the contract. g) Additives/Conditioners/Treatments At the purchaser's request, contractors may be required to supply and blend a fuel additive, conditioner or treatment products to the fuel purchased. The price charged for additives, conditioners or treatments shall not exceed the lowest price charged to other purchasers and the prices are to be comparable to current market rates of other suppliers. At the customer s request, the contractor is to provide supporting documentation to validate price compliance. h) Dyed Diesel Contract purchasers operating highway maintenance vehicles, publicly owned fire fighting equipment, and public transportation systems are authorized to purchase red dyed diesel fuel which is exempt from federal and state highway taxes. Other customers may also purchase red dyed diesel by completing the Department of Licensing Special Use Fuel User Permit and conforming to requirements. Nonetheless, there are a few large volume customers (as identified in the price worksheets) who are required to purchase clear fuel. Even so, the state intends to standardize on dyed diesel and the purchase of clear fuel via this contact must be pre-approved by the State Contract Administrator. i) Customer Fuel Demand Profiles The price worksheets included demand profiles for each individual tank (or vessel) requiring refueling and are intended to assist bidders in formulating bid prices. Be advised that although demand profiles reflect the best available information and projections, the state would not guarantee its accuracy or volume commitments and therefore bidders were instructed to formulate their prices accordingly. Page 15

16 3 Fuel Delivery Services 3.1 KEEP-FULL The most notable change in this contract is the manner in which small storage tanks will be scheduled for service. In the past, each individual customer initiated refueling orders and therefore the economies of coordinating delivery schedules from an enterprise-wide perspective were never realized. Furthermore, because contractors were forced to react to customer initiated orders, fuel suppliers could not effectively forecast and employ bulk purchasing strategies when market conditions favor such action. Joining together in this contracting effort has opened the door for an enterprise-wide vendor managed Keep-Full tank replenishment service which naturally promotes coordination of delivery schedules while empowering fuel contractors to forecast and employ any variety bulk purchasing strategies. The Keep-Full service is intended to refuel those tanks that cannot accommodate a full truck & trailer load in accordance with industry standard best practices. With the Keep-Full service, the contractor is to guarantee that that storage tanks always retain sufficient inventory to satisfy the customer s needs and never go dry. In general, the state expects that tank levels never go below 20% of capacity before refueling occurs but customers will be allowed adjust this percentage up or down depending upon their own unique business requirements. Keep-Full customers will be responsible for ensuring that the contractor is sufficiently informed of tank level volumes and whenever possible notify the contractor of any anticipated unusual increases in fuel demand. So as to promote enterprise-wide delivery schedule coordination, customers will be encouraged to identify the broadest possible refueling time windows allowable and immediately notify the contractor of any schedule changes. Be advised that many customer delivery parameters do not allow unrestricted access to fuel storage tanks. In such cases the contractor is to accommodate the customer s delivery profiles and timelines when ensuring that tanks always have an adequate amount of fuel to meet the customer s requirements. Besides conforming to the standard contract terms as defined herein, the following will be applicable to Keep-Full deliveries: a) Initiating Keep-Full contract coverage Prior to initiating Keep-Full contract coverage, customers will be required to provide their assigned contractor a completed delivery profile questionnaire (See Keep-Full Service Activation Worksheet) which identifies such information as: Fuel tank profile information (i.e. site location, site contact, tank size, fuel type, etc.) Available delivery time frames and or the days and times when deliveries can or cannot occur. Minimum allowable tank level percentage before refueling is to occur. Delivery access procedures and protocols and or special instructions if any. Requested activation date (not to exceed 5-calander days of request) Note: A Keep-Full Service Activation Form was ed to those organizations whose fuel demand profiles were included in the original solicitation which incorporated the customer fuel demand profile information. Once the contractor is in receipt of the completed delivery profile questionnaire, the contractor is to identify on the questionnaire how often the tank level readings are to be provided by the customer so as to ensure that the tanks covered never go dry (see below). Afterwards, the contractor Page 16

17 is to return (fax, mail, ) the completed delivery profile questionnaire to the customer and Keep-Full coverage is then to become active. b) Inventory Management To most effectively manage tank inventories, contractors will need to monitor tank inventory levels. Therefore, Keep-Full customers will be responsible for providing tank level data to the contractor. The contractor is to identify via the delivery profile questionnaire how often tank level data is to be communicated relevant to the customer s fuel demand profile and the preferred communication method (e.g. , fax, voice mail etc). Alternatively, if Keep-Full tanks are equipped with an electronic tank level monitoring system, the customer may (at their own discretion) choose to grant the contractor remote access to the data on a read only basis. Additionally, if both parties agree, the contractor (at their own expense) may equip tanks with electronic tank level monitoring equipment. The contractor will be responsible for the cost of maintaining the equipment. At the end of the contract, the Contractor may retrieve their tank level monitoring equipment provided that it is removed within 3-months of the contract termination date and this action is to be coordinated with the customer. c) Keep-Full Contract Additions During the life of the contract, customers may activate additional tanks or new customers may initiate Keep-Full coverage for fuel storage tanks not identified in the price worksheet. Therefore, for each county associated to the eight regions identified, bidders are to propose a not to exceed service fee for: A NEW TANK (for an existing Keep-Full customer site) A NEW LOCATION (for a new Keep-Full customer or location) The contractor s already established fuel price coupled with the contract addition service fee (New Tank or New Location) is to cover all costs associated to fueling a new tank and fulfillment of contract terms. Points have been allotted to each county relative to the population of that region. The Bidder s NEW TANK and NEW LOCATION proposed service fees for each county will be added together when evaluating the bidder s Keep Full contract addition score. d) Keep-Full deactivation There may be occasions when a fuel storage tank is to be deactivated and in such cases the customer is to immediately notify the contractor of this decision. Should a co-op member or higher education customer choose to terminate Keep-Full coverage a minimum of 30-days advance written notification must be given to the contractor as well as the State Contract Administrator. e) Tank Testing There may be occasions when customer tanks need to be topped off for testing purposes. In such cases, the customer will be allowed to initiate a top off order and the already established contract pricing is to be applied. If the customer requires the delivery to occur on a specific date, the customer is to provide the contractor with at least 7-days advance notice. f) Remote Small Capacity Tanks Although bidders will be required to provide pricing and coverage for all tanks identified in the price worksheet (relevant to the regions bid), the state recognizes that it may be more economical to have a more localized hauler service some small capacity Page 17

18 remotely located tanks. In such cases the state reserves the right to solicit competitive bids outside of this contract, for the service of these tanks. The State Contract Administrator will determine which refueling sites apply and these tanks will be designated as Convenience use. Page 18

19 3.2 BULK (LAND) DELIVERY SERVICES The Bulk (Land) Deliveries are intended to service those fuel storage tanks that are capable accommodating a full truck and trailer load (minimum order volume of 8,000 gallons) in accordance with industry standard best practices. Each customer will initiate a bulk delivery order but it s not uncommon for bulk deliveries to be ordered on a regular basis (see customer demand profiles in the price worksheet). Customers are to provide contractors with as much advance notice of an order as practical. However, some high volume purchasers on occasion will only be able to provide the contractor with one days advance notice of an order. The service fee coupled with the fuel OPIS bid multiplier is to cover all cost associated to a typical bulk (land) delivery. Besides conforming to the standard contract terms as defined herein, the following will be applicable to Bulk Land deliveries: a) Routine Deliveries Unless otherwise indicated, Bulk (Land) Deliveries are to be scheduled during normal working hours and the contractor is to guarantee order fulfillment of not more than 2-calendar days after receipt of an order. The Central Puget Sound contractor shall guarantee order fulfillment of not more than 1-calendar day after receipt of an order. b) Bulk (Land) Delivery Additions The state reserves the right to add bulk land delivery sites not identified in the price worksheet. The service fee for a new delivery site is to be comparable to an already established delivery site in close proximity and distance between the source of fuel and delivery location will serve as the criteria used to establish the comparable service fee. So as to establish a service fee for a delivery site that has no comparable counterpart, bidders are to propose a not to exceed service fee for each county in the region bid. The bidder s already established OPIS multiplier will be used to calculate the fuel price. Points have been allotted for each county relative to the population of that region. c) Emergency (Land) Deliveries In the event of an emergency, the contractor will guarantee fulfillment of an emergency bulk delivery within a maximum of 6-hours of a verbal, electronic (i.e. phone, pager, , etc.) written or faxed order. Emergency orders are to be top priority and the contractor must be equipped and prepared to successfully fulfill an emergency delivery 7-days a week, 24-hours a day. The contractor shall furnish emergency order contact information and always be poised to receive and respond to an emergency order. Bidders will be asked to propose a fixed emergency delivery fee that is to be added to the invoice (as a separate line item) in addition to normal contract delivery fees and margins. Points have been allotted to the Emergency Delivery Fee relative the estimated occurrence. Split Loads Because split loads represent additional labor (i.e. pick up and delivery) for the contractor, bulk deliver contractors will be allowed to charge the customer an additional fee of $35 for split deliveries. Page 19

20 3.3 BULK DELIVERY (MARINE) SERVICES Bulk (marine) deliveries are intended to service the unique requirements of Washington State Ferries. Many of WSF vessels utilize either a truck & trailer combination or a tank wagon for refueling. The delivery vehicle will board the vessel where the fuel is then unloaded. The price worksheet included detailed delivery profiles for the vessels that are to be fueled. Bidders were instructed to propose a fixed service fee for all delivery sites as well as an OPIS diesel price multiplier. The service fee coupled with the fuel OPIS price multiplier is to cover all cost associated to a typical marine delivery. Besides conforming to the standard contract terms as defined herein, the following will be applicable to bulk marine deliveries: a) U. S. Coast Guard Regulations & Environmental Regulations Bulk marine must be certified by the U.S. Coast Guard and may be asked to proof of this certification. Throughout the contract life, contractors and approved subcontractors are responsible for maintaining their Coast Guard certification. Failure to do so may result in termination of the applicable portion of the contract. The contractor shall comply with all (current and any future) applicable U.S. Coast Guard and Department of Ecology regulations affecting the delivery of marine fuel. Additionally, the Contractor must furnish relevant refueling hardware which includes but is not limited to proper sized U.S. Coast Guard approved hose and fittings. b) Bulk (Marine) Delivery Additions Deletions The state reserves the right to add or remove vessels or delivery locations. Whenever possible, customers are to provide at least 30-days advance notice of deletions of regularly scheduled bulk marine deliveries. Although contract fuel pricing is to remain firm, the fixed service fee is to be negotiated and comparable to the contractors already established service fees with regard to contract additions. c) Standby Fee WSF will make every reasonable effort to ensure that vessels arrive at the terminal on time to receive fuel deliveries. However, unexpected or unavoidable delays occasionally occur. The bidders proposed service fee (coupled with the fuel pricing) is to cover all normal costs associated to a marine delivery and is to include ⅔ hour of free standby time for each marine delivery. Unless otherwise indicated in the demand profile price worksheets, additional delivery time (as a result of delays beyond ⅔ hours) may be charged for at a rate of $75.00/hour, broken into ⅓ hour increments. To receive compensation for standby, the charges are to be identified on the invoice as a separate line item and the customer representative must identify on the bill of lading the length of delay beyond the free ¾ hour standby time. In the unlikely event that WSF turns the contractor away from a scheduled delivery (for reasons unrelated to the contractor s control) the contractor may bill the customer the amount of the already established service fee. In such cases, the customer representative is to make note on the bill of lading that the refueling was refused. d) Emergency Delivery Fee In the event of an emergency, the contractor will be required to fulfill an emergency bulk delivery within 6-hours of a verbal, electronic (i.e. phone, pager, , etc) written or faxed order. Emergency orders are to be top priority and the contractor must be equipped and prepared to successfully fulfill an emergency delivery 7-days a week, 24-hours a day. Therefore, the contractor shall furnish emergency order contact information and always be poised to receive and respond to an emergency order. Bidders will be asked to propose a fixed emergency delivery fee that is to be added to Page 20

21 the invoice as a separate line item following the success fulfillment of an emergency order. 4 Pricing Although there are slight variations to Keep-Full and Bulk-Delivery (marine & land) contract pricing both services will include a combination of a SERVICE FEE and FUEL PRICING methodology. So as to insulate the Contractor(s) from the impact of any modifications to fuel related taxes and fees (i.e. first possessor fees or hazmat fees), all fuel related taxes and fees are to be added to invoices on a pass through basis and identified as a separate line item. Below is an overview of how fuel prices will be calculated and how the service fees will be applied. 4.1 FUEL PRICING Because fuel pricing fluctuates from one day to another, the Oil Price Information Service (OPIS) subscription service has become the defacto standard for the basis of establishing fuel contract prices. OPIS regularly collects and reports the fuel prices at the refueling terminals (also referred to as the Rack ) across thee nation. Fuel contract prices will be allowed to increase or decrease during the life of the contract and OPIS DAILY CONTRACT AVERAGE rack prices (correlated to the actual delivery date) will serve as the basis for establishing contract fuel prices. With the possible exception of biodiesel, no other price change publication shall be considered. Bidders were instructed to propose a Not-to-Exceed OPIS price multiplier for gasoline, diesel family of fuels as well as a Biodiesel price multiplier. Below is an example calculation that illustrates how fuel prices are to be calculated: OPIS Daily Contract Average (delivered on April 1) x Contractor s Diesel OPIS Price Multiplier x gallons = Fuel Price $2.00 x x 10,000 = $20,100 (OPIS Daily Contract Average for ULSD April 1) (Contractors Diesel price multiplier) The page that follows identifies the OPIS price multiplies and reference city for each of the 8 regions and the marine OPIS reference city will be used to establish fuel prices for all deliveries located in that region irregardless of where the contractor sources the fuel to be delivered. 4.2 BIODIESEL PRICING All bidders were instructed to propose a Not-to-Exceed biodiesel OPIS multiplier for the B#2 grade of biodiesel as defined herein (Product Specifications section 7.2) and Bulk Marine and Central Puget Sound Bidders are to propose a biodiesel price multiplier for the B#1 grade as well. The OPIS BioDiesel daily report (the Tacoma B100 rack price) will serve as the basis for establishing biodiesel contract pricing. The state reserves the right to add biodiesel reference cities or adopt other biodiesel price change publications should the marketplace warrant such action. The decision to do so will be at the discretion the State Contract Administrator and the contractors bid profit margins are not to increase as a result of such action. Note: The state will always retain the right to negotiate lower prices but the state is not to arbitrarily introduce a biodiesel price change mechanism that adversely impacts the contractor s biodiesel bid margins. Biodiesel purchasers are to receive the appropriate proportion of B100 necessary to achieve the requested biodiesel blend. For example if the customer desires 1000 gallons of a ULSD-B20 blend, the contractor would acquire and blend (in accordance with biodiesel specifications) 800 gallons of ULSD with 200 gallons of B100. Additionally, the customer is to receive all Page 21

22 applicable Blender tax credits which are to be identified on the invoice as a separate line item (or as a comment line on the invoice) as a credit. OPIS Daily Contract Average (delivered on April 1) x Contractor s BioDiesel OPIS Price Multiplier x gallons = Fuel Price $3.00 x x 1,000 = $3,030 (OPIS Daily Contract Average for ULSD April 1) (Contractors Diesel price multiplier) Page 22

23 4.3 OPIS PRICE MULTIPLIERS AND RACK REFERENCE CITIES Keep-Full OPIS Price Multipliers Region Gasoline Diesel BioDiesel B#1 (B100) BioDiesel B#2 (B100) OPIS Rack Reference City Contractor Peninsula N/A Anacortes Associated Petroleum North Puget Sound N/A Tacoma Associated Petroleum Central Puget Sound Tacoma Associated Petroleum Southwest N/A Portland Wilcox & Flegel North Central Spokane No Bidders South Central N/A Pasco Yakima Cooperative North East N/A Spokane Mountain Oil South East N/A Pasco Mountain Oil Bulk Land OPIS Price Multipliers Peninsula N/A Anacortes Wilcox & Flegel North Puget Sound N/A Tacoma Associated Petroleum Central Puget Sound Tacoma Associated Petroleum Southwest N/A Portland Wilcox & Flegel North Central Spokane No Bidders South Central N/A Pasco Wilcox & Flegel North East N/A Spokane Coleman Oil South East N/A Pasco Busch Distributors Bulk Marine Deliveries Clinton/Mukilteo N/A Anacortes Associated Petroleum Anacortes N/A Anacortes Associated Petroleum Fauntleroy N/A Tacoma Associated Petroleum Port Townsend N/A Tacoma Associated Petroleum Bremerton N/A Tacoma Associated Petroleum Point Defiance N/A Tacoma Associated Petroleum Page 23

24 4.4 OPIS DAILY POSTING The state will make available to our customers the OPIS daily averages for the purpose of validating contract prices have been correctly calculated. If it appears that an error has occurred with regard to an OPIS posting, the state shall contact the publisher for clarification and the correct average price shall be applicable. Contractor shall be required to maintain their own subscription to OPIS in order to correctly calculate contract fuel prices. Please visit to view OPIS Daily Contract Average pricing 4.5 SERVICE FEE In general, a fuel hauler s cost for servicing a storage tank for each location remains constant irregardless of the amount of fuel that is supplied. Therefore, bidders were instructed to propose a fixed Not-to-Exceed service fee for each delivery site identified in the price worksheets. The fuel price coupled with the service fee is to cover all costs that are normally associated to fueling a tank and fulfillment of contract terms. However, customers may be charged additional miscellaneous fees (i.e. an emergency delivery fee a standby fee or a split load fee) when applicable. Below is a sample contract delivery calculation: $100 (Service Fee) + $20,100 (ULSD Fuel Price) + $3,030 = $23,230 ( Contract delivery price) Note: all other applicable fees (i.e. emergency delivery fee, etc) and taxes would also be added to the Contract Delivery price Keep-Full Service Activation forms which includes the contractors bid prices (i.e. service fees, OPIS price multipliers) have already been ed to those organizations whose fuel demand profiles were incorporated in the original solicitation. Bulk Land customers were also ed contract prices for their locations. Below is a summary of successful bidder s prices Keep Full Service Price Summar Bulk Land Price Summary.xls WSF Contract Price Summary.xls a) New Contract Users If your organization s fuel storage tanks were not included in the original solicitation then all that is needed to establish contract coverage is a service fee for your location as OPIS price multipliers have already been established. To streamline contract coverage for new customers, bidders were instructed to propose a Not-to-Exceed service fee for a new fuel storage tank location for each of Washington State counties. The table that follows identifies the results. Additionally, bidders also proposed a New Tank fee for those Keep Full customers who add a new tank to a location that is already being serviced by this contract. If for example, a new Keep Full customer in Thurston County would pay a service fee would pay $40 per delivery. If the same customer later added another fuel storage tank at this location then the customer would only be charged $10 to service the new tank. The OPIS price multipliers identified in the table in section 4.3 are to be used to establish the price of the fuel delivered. Page 24