Title
Renewable Liquefied Natural Gas Contract - IFB PTD22-005 Request for Award (Ordinance S-49794)
Description
Request to authorize the City Manager, or his designee, to enter into a contract with Sapphire Gas Solutions to provide renewable liquefied natural gas to the Public Transit Department for use in operating the transit fleet. Further request to authorize the City Controller to disburse all funds related to this item. The total value of the contract will not exceed $59,262,584.
Report
Summary
Renewable Liquefied Natural Gas (RLNG) is a fuel product generated from the decomposition of organic waste streams, or "biomass." RLNG captures the naturally occurring gas from society's waste streams for use as a carbon-neutral and reliable energy source. Typical sources of biomass production are landfills, livestock operations and dairy farms, wastewater treatment and other industrial sources.
In furthering its efforts to reduce the City's carbon footprint and implement the tactics outlined in the City's Climate Action Plan, the Public Transit Department (PTD) will transition to using RLNG to power its compressed natural gas heavy-duty buses which currently comprise approximately two-thirds of the bus fleet. The City's Climate Action plan calls for identifying sources of renewable energy and to utilize renewable natural gas sources as a substitute for fossil natural gas. This contract will supply RLNG to PTD's three transit operating facilities (North Transit Facility, South Transit Facility and West Transit Facility) for the next five years. During this time, the PTD will also begin Phase 1 of its Zero Emission Heavy-Duty Bus Fleet Transition plan as approved by City Council in December 2022, which includes acquiring and testing, on a long-term basis, newer-technology zero emission buses.
Procurement Information
An Invitation for Bid procurement was processed in accordance with City of Phoenix Administrative Regulation 3.10.
Two vendors submitted bids deemed to be responsive to posted specifications and responsible to provide the required goods and services. Following an evaluation based on price, the procurement officer recommends award to the following vendor:
Selected Bidder
Sapphire Gas Solutions: $59,262,584.
Contract Term
The contract will begin on or about July 1, 2023, for a two-year initial term with one, two-year option to extend followed by another one-year option to extend (both options to be exercised at the City's sole discretion), for a total term of up to five years.
Financial Impact
The contract value will not exceed $59,262,584. Funding is available in the Public Transit Department's operating budget.
Concurrence/Previous Council Action
The Transportation, Infrastructure and Planning Subcommittee recommended approval of this item on May 17, 2023, by a vote of 4-0.
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Public Transit Department.