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July 28, 2026
ITEM TITLE
Agreements: Approve an Agreement with Southern Counties Oil Co., a CA Limited Partnership DBA SC Fuels, and an Amendment to the Agreement with SC Commercial, LLC DBA SC Fuels for Fuel Supply and Delivery Report Number: 25-0205
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 State California Environmental Quality Act (“CEQA”) Guidelines. Therefore, pursuant to State CEQA Guidelines Section 15060(c)(3), no environmental review is required.
Recommended Action
Adopt the following resolutions:
A) Approving an agreement with Southern Counties Oil Co., a CA Limited Partnership DBA SC Fuels (“SCOC”); and
B) Approving an amend ed agreement with SC Commercial, LLC DBA SC Fuels (“SC Commercial”) to provide motor vehicle fuel supply and delivery.
SUMMARY
The City of Chula Vista (“City”) purchases g asoline and renewable diesel for use in City vehicles and equipment. The City recently solicite d bids for motor vehicle fuel supply and delivery. Staff award ed a contract to “SC Fuels” for the purchase of motor vehicle fuel on an as-needed basis. On May 5, 2026, Council approved an agreement with SC Commercial for these services. Due to SC Commercial and SCOC being two separate legal entities , it is necessary to amend the agreement with SC Commercial and enter into a new agreement with SCOC. Staff recommends: 1) approving an agreement with SCOC, and 2 ) amending the agreement with SC Commercial to reduce the not-to-exceed amount.
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ENVIRONMENTAL REVIEW
The proposed action was reviewed for compliance with the California Environmental Quality Act (“CEQA”), and it was determined that the activity 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
DISCUSSION
The City purchases 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 c omprehensive 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 recommend ed award of the contract to “SC Fuels”. The proposal was submitted as a combined submission by SC Commercial and SCOC (both with the same DBA “SC Fuels”), which are two separate legal entities. 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 Price Information Ser vice (“OPIS”) “Unbranded Low Rack” fuel price benchmark for San Diego. The “Unbranded Low Rack” is a P a g e | 3
snapshot of the lowest supplier posting in the OPIS rack market for the day. The RFP required contractors to propose a Market Differential for the OPIS Rac k 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 cost and profit compo nents 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.
Original Agreement with SC Commercial
On May 5, 2026, Council approved the agreement with SC Commercial for the purchase of fuel supply and delivery based on the aforementioned RFP process. At the time of award, the agreement was entered into solely with SC Commercial, DBA SC Fuels under the understanding that the single DBA designation would cover all operational vehicles required for the required services.
In practice, the DBA “SC Fuels” is utilized by two separate legal entities (SC Commercial and SCOC) that split the operational logistics by volume, with SC Commercial handling deliveries for up to 3,800 gallons of fuel and SCOC handling deliveries for up t o 7,800 gallons of diesel/8,800 gallons of unleaded gasoline. Due to both SC Commercial and SCOC conducting business under a sing le, shared DBA “SC Fuels”, the division of labor by volume limits was inadvertently not reflected in the final contract structure, resulting in a need to more accurately reflect the division of labor . The agreement with SC Commercial included an initial three- year agreement term with two (2) one-year options to extend and a not-to-exceed amount listed on the SC Commercial agreement as $6,000,000. Council approved a total not -to-exceed amount by resolution of $10,000,000 intended to cover the totality of the required services to be completed by SC Fuels, which includes work to be done by both SC Commercial and SCOC.
Amendment with SC Commercial and New Agreement with SCOC
The fuel storage tank capacity at the Fire Station sites range from 500 gallons to 2,000 gallons. The capacity at these sites make it ideal for SC Commercial’s bobtail truck to make these volume deliveries. (See Exhibit E of the original agreement for tank sizes at each location.)
The Public Works Corp Yard fuel site has a storage capacity of 12,000 gallons each (unleaded gasoline & diesel). SCOC’s full transport or “truck and trailer” deliveries can supply up to 7,800 gallons of diesel or 8,800 gallons of unleaded gasoline. This truck delivery size is more suitable for the fuel needs of the Public Works Corp Yard fuel site and makes delivery more cost effective. It is important to note, that truck and trailers are not able to deliver to the Fire Stations sites due to size constraints.
Staff recommends approval of an amendment to the agreement with SC Commercial and approving an agreement with SCOC. As previously noted, SC Commercial and SCOC are two separate legal entities with a shared DBA “SC Fuels” and therefore, two separate agreements are required to reflect the division of labor.
Each agreement for fuel supply and delivery will be for an initial term of three (3) years, with two (2) one - year options to extend.
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Approval of Resolution A will amend the agreement with SC Commercial to reflect an updated not-to-exceed limitation. The amended agreement will be effective July 28, 2026 and is anticipated to conclude on June 30, 2029. During the period, the agreement will have a not-to-exceed amount of $3,300,000. Should both options to extend the agreement are executed, the total agreement amount shall not exceed $5,500,000. The first amendment to the agreement with SC Commercial is included as Attachment 1.
Approval of Resolution B will authorize entering into an agreement with SCOC. The agreement with SCOC will have an initial term effective July 28, 2026 and is anticipated to conclude on June 30, 2029, and shall not exceed $2,700,000. If both options to extend are executed, the maximum agreement amount will be limited to $4,500,000. The agreement with SCOC is included as Attachment 2.
The initial term for both agreements through June 30, 2029 shall not exceed $6,000,000. The combined not- to-exceed amount for both agreements , with optional extensions exercised, will be $10,000,000. This collective maximum is consistent with Resolution No. 2026-069 for the original a greement with SC Commercial, and no new costs are being added as a result of this action.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has 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 is not independently aware and ha s 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
Funding for motor vehicle fuel supply and delivery is included in the fiscal year 2026-27 Central Garage Fund budget. The approval of the amendment with SC Commercial and new agreement with SCOC do not provide for additional funding capacity and instead splits the original agreement amount between the two agreements. The combined not -to-exceed total of $10,000,000 is consistent with Resolution No. 2026-069 for the original agreement amount with SC Commercial. There is no additional fiscal impact from approving these agreements.
ONGOING FISCAL IMPACT
Approval of the resolution splits the existing contract with SC Commercial between two distinct legal entities (SC Commercial and SCOC) operating with a shared DBA. This change does not increase the term of the agreement or the not-to-exceed contract amount.
Due to various factors including the volatile nature of fuel prices and a continuously growing fleet, the total amount of both agreements (SC Commercial and SCOC) allows for an annual expenditure of up to $2.0 million per year ($1.1 million for SC Commercial and $0.9 million for SCOC) during the term of the agreement. Costs relating to services provided by SCOC and SC Commercial in subsequent fiscal years will be considered as part of the annual budget development process.
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If the two agreement extension s are authorized, the table below outlines the not -to-exceed amount for the 60-month term. Agreement capacity is $2.0 million total per year but actuals will fluctuate from year to year based on actual demand:
Description
Initial Term
FY 2027 - FY
2029
Extension 1
FY 2030
Extension 2
FY2031 TOTAL
Fuel Supply And Delivery
Services – SC Commercial $3.3M $1.1M $1.1M $5.5M
Fuel Supply And Delivery
Services - SCOC $2.7M $0.9M $0.9M $4.5M
Total
$6.0M $2.0M $2.0M $10.0M
ATTACHMENTS
1. First Amendment to Agreement - SC Commercial
2. Two-Party Agreement - SCOC
Staff Contact: Alicia Granados, Senior Management Analyst Angelica Aguilar, Director of Public Works