DATE: September 15, 2026
TO: Mayor and City Council
FROM: Director of Maintenance Services
SUBJECT: Adopt a Resolution Authorizing the City Manager to Negotiate and Execute Professional Services Agreements with Western States Oil, Efuel LLC, and Flyers Energy for Fuel Supply and Delivery Services in a Total Not-to-Exceed Amount of $7 Million Through Fiscal Year 2031
RECOMMENDATION
That the City Council adopts a resolution (Attachment II) authorizing the City Manager to negotiate and execute professional services agreements (PSA) with Western States Oil, Efuel LLC, and Flyers Energy for fuel supply and delivery services in a total amount not-to-exceed $7,000,000 agreement effective date through Fiscal Year 2031 (FY31).
SUMMARY
The Fleet Division is responsible for the management of over 450 pieces of equipment, with fuel being a key expense. Fuel is stored and dispensed at various city facilities, like fire stations, or via fuel cards at external fueling locations. The current agreements with vendors are expiring. As such, in May 2026, staff released a Request for Quote (RFQ) to seek a qualified vendor(s) to supply fuel and delivery and/or fuel cards and an online management platform/system. After reviewing five (5) proposals, staff is recommending awarding agreements with Western States Oil, Efuel LLC, and Flyers Energy . The sum of all three agreements will not exceed a total amount of $7,000,000 through FY31.
FISCAL IMPACT
This item will be funded through the Fleet Division’s annual operating budget (Fund 735) for the respective contract year. There are no anticipated increases over existing baseline budget.
Contracts are tied to actual use of fuel which is subject to future appropriations.
BACKGROUND
Fuel is stored and dispensed at various city facilities, like fire stations, or via fuel cards at specific fueling locations. For on-site fueling services, where fuel is delivered to specified city locations, contractual costs are primarily based on two factors:
1. Rack Pricing: refers to the wholesale price of fuel at a distribution terminal. It is slightly different that retail pricing, which is the price “paid at the pump” by consumers. For this RFQ, staff outlined that vendors will need to deliver fuel based on the Oil Price Information Service (OPIS), a global price reporting agency for various energy, chemical, and environmental commodity markets. Since Hayward is in between two geographical OPIS markets (San Francisco and San Jose), vendors were notified that they can select either Rack Price Market for their bid.
2. Overhead costs: vendor’s expenses related to delivering the services and products, such as OPIS Rack Price mark-up, shipping fees, minimum order fees, etc.
For off-site fueling services, in which staff use a fuel card to “pay at the pump,” the contractual cost is primarily based on retail fuel price, card access, in- or out- of network locations, and any online/maintenance fees.
DISCUSSION
On May 26, 2026, staff released RFQ 26-046 seeking a qualified vendor(s) to supply fuel and delivery. To support operations best and seek the most qualified vendor given specific criteria, staff outlined four scopes of work. Vendors were able to apply to as many parts as they desired.
1. Parts A and B (on-site fueling): supplying and delivering unleaded gasoline and /or renewable diesel at specified city locations
2. Part C (off-site fueling): providing fuel card s and an online management platform/service for off-site fueling
3. Part D: all three desired services
On June 30, 2026, staff received five (5) bids. After reviewing all proposals, staff recommends awarding agreements with Western States Oil, Efuel LLC, and Flyers Energy , summarized below.
Scope of Work Apparent Winner Summarized Proposals
A and B: On-site fueling Western States Oil
Efuel LLC
-$0.07-$.30/gallon mark -up
fee
-$20-150 delivery fee
-48-72 hour turnaround time
for fuel cards
C: Off-site fueling Flyers Energy
D: All services N/A
For on-site fueling, Western States Oil, and Efuel LLC submitted proposals with reasonable mark-up and delivery fees. Efuel LLC, specifically, submitted a proposal that includes a $0.20/gallon discount for renewable diesel, no delivery fee for any product, and a free tank - monitoring system for seamless fuel readings and order placement.
For off-site fueling services, Flyers Energy submitted the most attractive proposal with no costs associated with its cardlock system and a small discount at in-network gas station locations.
To provide operational flexibility, staff is recommending awarding agreements with all three vendors. The sum of all three agreements over the maximum five-year contract term will not exceed $7,000,000, which includes a contingency to account for fuel market price volatility, changes to the City’s fleet inventory, or emergencies.
Service Estimated 5 -
Year Spend
(FY27-31)
Contingency
(15%)
Total
Estimated
Spend (FY27 -
FY31)
On-Site Fueling $1,500,000 $150,000 $1,650,000
Off-Site Fueling $4,500,000 $850,000 $5,350,000
Total $6,000,000 $1,000,000 $7,000,000
STRATEGIC ROADMAP AND SUSTAINABILITY FEATURES
This item does neither directly support Council’s Strategic Priorities nor have direct sustainability features.
PUBLIC CONTACT
The RFQ was publicized from May – June 2026 with interviews held in July 2026.
NEXT STEPS
If Council approves this request, the City Manager will execute agreements with Western States Oil, Efuel LLC, and Flyers Energy . The sum of all three agreements will not exceed the total amount of seven million ($7,000,000) through FY31.
Prepared by: Manny Grewal, Management Analyst
Recommended by: Todd Rullman, Director of Maintenance Services
Approved by:
_________________________________
Jennifer Ott, City Manager