v . 0 0 5 P a g e | 1
May 5, 2026
ITEM TITLE
Approve Agreement: Approve Agreement with SC Commercial, LLC DBA SC Fuels to Provide Motor Vehicle Fuel Supply and Delivery
Report Number: 26-0001
Location: No specific geographic location
Department: Public Works
G.C. § 84308 Regulations Apply: Yes
Environmental Notice : The proposed action is not a "Project" as defined under Section 15378 of the California Environmental Quality Act State Guidelines . Therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Adopt the resolution approving an agreement with SC Commercial, LLC DBA SC Fuels (“SC Fuels”) to provide motor vehicle fuel supply and delivery.
SUMMARY
Gasoline and renewable diesel are purchased for use in City vehicles and equipment. The current contract is set to expire on June 30, 202 6. The City recently solicited bids for motor vehicle fuel supply and delivery.
Staff recommends awarding a contract to SC Fuels for the purchase of motor vehicle fuel on an as -needed basis.
ENVIRONMENTAL REVIEW
The proposed action was reviewed for compliance with the California Environmental Quality Act ( “CEQA”), and it was determined that the activi ty is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
P a g e | 2
DISCUSSION
The Public Works Department procures gasoline and renewable diesel to support the operation of City vehicles and equipment. The City maintains a fleet of over 650 vehicles and equipment units that utilize City fueling stations.
Request for Proposal Process
On October 24, 2025, the City posted a Request for Proposals ( “RFP”) P15-2026 to PlanetBids, seeking a competitive proposal from qualified vendors to provide the Public Works Department with fuel supply and delivery services . Through PlanetBids, 48 potential bidders were notified with 19 prospective bidders downloading the bid documentation. Of the 19 prospective bidders, the City received five (5) responsive proposals.
A selection committee composed of Public Works Department staff completed a comprehensive evaluation of the proposals based on criteria that included the contractors ’ experience with fuel supply and delivery, the ability to provide the services, price, and references.
Following the evaluation, the selection committee is recommending award of the contract to SC Fuels. A Notice of Intent to Award was issued to all firms that submitted proposals on February 5, 2026.
Scope of Work
SC Fuels shall provide bulk fuel services for unleaded, and renewable diesel fuels to all City fixed fuel sites on an “as needed” basis. City fuel sites include the following:
Fire Station 3 (100 Moss St)
Fire Station 4 (850 Paseo Ranchero)
Fire Station 5 (341 Orange Ave)
Fire Station 7 (1640 Santa Venetia)
Public Works Corp Yard (1800 Maxwell Road)
Pricing
The price of the fuel is determined on the date of delivery and is based on the Oil Pr ice Information Service (“OPIS”) “Unbranded Low Rack” fuel price benchmark for San Diego. The “Unbranded Low Rack” is a snapshot of the lowest supplier posting in the OPIS rack market for the day. The RFP required contractors to propose a Market Differenti al for the OPIS Rack market for each given delivery item listed in the RFP. The Market Differential is a four-digit decimal numerical value, that is added to the benchmark index for the price of a given fuel product. The market differential includes all co st and profit components determined by the contractor, excluding any applicable fuel taxes. The rack price plus the market differential is the total price to be paid by the City upon delivery of fuel. To ensure the City is receiving the best possible price , staff will monitor the fuel delivery invoices.
Contractor Agreement
The agreement for fuel supply and delivery will be for a n initial term of three (3) years, with two (2) one - year options to extend, with a total not-to-exceed limitation of $10,000,000. The initial term of the agreement is effective July 1, 2026 and is anticipated to conclude on June 30, 2029, and shall not exceed $6,000,000. The agreement with SC Fuels is included as Attachment 1.
P a g e | 3
DECISION-MAKER CONFLICT
Staff have reviewed the decision contemplated by this action and have determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff are not independently aware and have not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
The proposed agreement is effective July 1, 2026, resulting in no current-year fiscal impact.
ONGOING FISCAL IMPACT
Due to various factors including the volatile nature of fuel prices and a continuously growing fleet, the contract allows for an annual expenditure of approximately $2.0 million per year during the term of the contract. Funding for this contract is included in the Central Garage Fund budget and is included in the fiscal year 2026-27proposed budget. Costs relating to services provided by SC Fuels in subsequent fiscal years will be considered as part of the annual budget development process.
If the two agreement extensions are authorized, the table below outlines the not -to-exceed amount for the 60-month term. Contract capacity is $2.0 million per year but actuals will fluctuate from year to year based on actual usage.
Description
Initial Term
FY 2027 - FY
2029
Extension 1
FY 2030
Extension 2
FY2031 TOTAL
Fuel Supply And Delivery
Services $6.0M $2.0M $2.0M $10.0M
ATTACHMENTS
1. Two-Party Agreement
Staff Contact: Alicia Granados, Senior Management Analyst Angelica Aguilar, Director of Public Works