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HomeMy WebLinkAbout _ 4.11(e)--Award of Request for Proposal (RFP) Schedule 5569 CITY OF REDDING REPORT TO THE CITY COUNCIL Recommendation Authorize and approve the following actions relative to Request for Proposal (RFP) Schedule No. 5569, Cardlock Fuel Purchases: (1) Award RFP to Ed Staub & Sons through August 31, 2028; and (2) Authorize the City Manager, or designee, to extend the contract annually, if mutually agreeable, through August 31, 2030. Fiscal Impact Fuel expenses are accounted for by each department during the budget process for all types of fuel purchases. For Fiscal Year 2025-26 the City of Redding (City) wide budget for fuel and lubrication ($4.27 million) is anticipated to provide adequate funding, assuming that bulk fuel rates remain constant. Alternative Action The City Council could choose not to award the proposal for cardlock fuel purchases and provide alternate direction to staff. Background/Analysis The previous contract was in effect form June 1, 2020, through May 31, 2022, with three additional one year extensions through May 31, 2025 where all pricing stayed the same with the markup of $0.105 for diesel fuels and $0.10 for unleaded fuels. The most recent contract for cardlock fuel purchases was set to expire on May 31, 2025. On April 1, 2025, Council approved a contract extension to August 31, 2025. The extension was requested due to necessary contractual changes and additional requirements needed in the succeeding contract and staff needed time to prepare a well refined solicitation. On August 19, 2025, Council approved another extension through September 30, 2025, due to ongoing contract MEETING DATE: September 16, 2025 ITEM NO. 4.11(e) FROM: ***APPROVED BY*** mwebb@cityofredding.org btippin@cityofredding.org SUBJECT: 4.11(e)--Award of Request for Proposal Schedule 5569, Cardlock Fuel Purchases Michael Webb, Public Works Director Report to Redding City Council September 10, 2025 Re: 4.11(e)--Award of Request for Proposal (RFP) Schedule 5569 Page 2 negotiations as additional time was needed to ensure the final agreement protects the City’s interests. On May 8, 2025, the City directly solicited proposals for cardlock fuel purchases from 11 potential vendors with various fuel sites, fuel options, and vehicle accommodations. The RFP was also advertised in the local newspaper as well as on the City’s website. On Monday, June 9, 2025, the City formally received a proposal from only one vendor, Ed Staub & Sons. The proposal received from Ed Staub & Sons is for a cost of $0.15 (an increase of $0.05 from previous contract) above the wholesale costs for both diesel and unleaded fuels for preferred/in- network locations and $0.19 (an increase of $0.09 from previous contract) above the wholesale costs for both diesel and unleaded fuels for non-preferred/out of network locations. The markup (margin over cost) includes all aspects of overhead and profit only, and shall not include environmental fees and taxes. The markup shall remain firm for the entire contract term and any subsequent renewal periods. The wholesale cost per gallon for both diesel and unleaded fuel is published daily by the Oil Price Information Service, commonly known as OPIS, the established industry standard publication of wholesale fuel costs. After evaluation, it has been determined that the proposal from Ed Staub & Sons is responsive and will meet the City’s needs related to cardlock fuel services. Environmental Review This activity is not a project as defined by the California Environmental Quality Act , and no further action is required. Council Priority/City Manager Goals • This agenda item is a routine operational item. Attachments Exhibit B- Updated Ed Staub Contract- Draft GMS edits Exhibit A Exhibit B AGREEMENT PRICES The 9:00 a.m. EST Oil Price Information Service (OPIS) Wholesale Rack with CAR for Chico shall be used to determine the cost of fuel. Vendor markup (margin over cost) shall reflect the amount to be charged above the daily rack average OPIS price plus the fees and taxes listed below. Markup shall include all aspects of overhead and profit only, and shall not include environmental fees and taxes. Applicable fees and taxes shall be itemized separately. The margin over cost shall remain firm for the entire contract term and any subsequent renewal periods. Environmental fees shall be itemized on the invoice. The City of Redding is exempt from Federal Excise Taxes. Vendor shall notify the City representative of any fee or tax rate changes throughout the duration of the contract. The City will track the pricing invoiced and may require assistance in ensuring proper calculations for auditing purposes. Proposer shall pass along to the City of Redding any and all rebates, allowances, or other pricing reduction incentives being offered to customers of the proposer, including any pass-through incentives from refineries. It shall be the vendor’s responsibility to ensure the City is properly invoiced including taxes and fees, in accordance with all state and federal laws and regulations. The fees (per gallon basis) the City may pay, if applicable, are as followed: Unleaded $ 0.001 US EPA L.U.S.T. fee https://www.epa.gov/ust/leaking-underground-storage-tank-lust-trust-fund $ 0.0021 Federal Oil Spill Liability Trust Fund Fee https://www.opisnet.com/resources/oil-spill-supplier-tax-list/ $0.00405 Superfund Recovery Tax (May be adjusted annually) https://www.opisnet.com/resources/oil-spill-supplier-tax-list/ CA AB32 Fuel Fee (2024/25 fiscal year) (This number changes each year, dependent on the approval of the state budget) https://ww3.arb.ca.gov/cc/adminfee/historicaldata.htm $ 0.596 State Excise Tax on Gasoline https://www.cdtfa.ca.gov/taxes-and-fees/sales-tax-rates-for-fuels.htm 2.25% Sales & Use Tax on Gasoline https://www.cdtfa.ca.gov/taxes-and-fees/sales-tax-rates-for-fuels.htm Diesel $0.001 US EPA L.U.S.T. fee https://www.epa.gov/ust/leaking-underground-storage-tank-lust-trust-fund $ 0.0021 Federal Oil Spill Liability Trust Fund Fee https://www.opisnet.com/resources/oil-spill-supplier-tax-list/ $0.00405 Superfund Recovery Tax (May be adjusted annually) https://www.opisnet.com/resources/oil-spill-supplier-tax-list/ CA AB32 Fuel Fee (2024/25 fiscal year) (This number changes each year, dependent on the approval of the state budget) https://ww3.arb.ca.gov/cc/adminfee/historicaldata.htm $ 0.454 State Excise Tax on Ultra Low Sulphur Diesel https://www.cdtfa.ca.gov/taxes-and-fees/sales-tax-rates-for-fuels.htm 13.00% Sales & Use Tax on Diesel https://www.cdtfa.ca.gov/taxes-and-fees/sales-tax-rates-for-fuels.htm If environmental fees are changed by the governing authority during the contract term, vendor shall notify the City of those changes in advance and itemize those fees on the invoice. All other terms and conditions will remain the same. If the OPIS publication is canceled or modified, the City of Redding reserves the right to re-establish the pricing mechanism or cancel all or part of the contract without prejudice to any party of the contract. Ftdtral Certifieafions Attechmant f, CERT'FICATION ANB RESTRICTIONS ON LOAEYIIIIG RrEuired \Y, Suilmission I) tiie r{offcid} t4 J reby cerb'fy 4!L Sr.,s fi. iJOn behalf of -,,15 lhali {Name Name) . No tadaBlappmpriated tuods have be€n paad or vrillae paid, by or on behaliol lhe undeGigned,lo any person for inliuencing or attempting to inii.lence an offcer or employee of any agency, a Member o, Ccrgress, and oftcer or employe8 of Cong,ess, or an employee of a Member of Congress in connectiofl wilh he awadi.g of any fede.6l con .Ect, the mski.€ of a']y aederal grant, lhe making of any fede€l loan. the e*lering into of any roope.ative agresment, and ihe axiension , ccniinuation, rece'r,al, amg1dmeril, or modiicalion of any federsl conliaci, grant. loan. or coop€Elive agreernenl . lf any lunds qther than federal sppaopriated funds have beo( paid !| Mli be paid to any i€rson idllenciag or aliemgtiog 1o iniuenae an off|cer or empioyee ofany age.cy, a Member of Congross. and ofilcsr oremployee of Corgr€ss, or an employ€e of a Member of Congress ln connection wilh the federal oonlract grant, loan. or cooperatve agreement, the undercigned shall complete and submit Standa.d Form - LLL, 'Discloaur€ Form {o Report Lobbying," in accordance with ils inslructiort3. . Tt]e undersigned shall require that the language cf this eerli$cation be incladsd in iJre awad documenls ao. all sub-a$?rds at all ti€ls (iflcluding suFcontracts, sub{rants and contacls lnder grants, loans, and cooperalive afeements) and that all sub-.recipients shall cartify and disclose accordingly. This certi$cgtion is a ateaal reprgBenlatjoo of faci upon lyhich reliance was placed \dhen this irar-acdlon was madg or er{€red into. Submission of this certificaiion is I p.erequisite for making or enlering into this traosaction ir.posed by 31 U.S.C. S 1352. Any perso. vr'lto tails to file the requi.eC cartilication shall be subiecl to a cidl pehalty ol not lgss lhar 510,000 and nol nore than $100,080 ior sach such tailure.. Name of Bidd€rlcompany Narne:a Type orpdn! Signature ot aulForiued rgpresenbivs i1 |r Dale b | Z-DL;' Cardlo.k F'rel 5569 Page 37 of,l1 Redpients, contlaclors, and subcontraclo.s that ente. inlo coyer€d tansactions ar€ rgquired lo veritl lhat the eniity (as w€ll as ils p.incipals aMaffliales) with !,thi.h thBy propose to 6onkacl or subcontEct is nol excluded qr disqlalitied- ?tris is dime t1t 6ai cruiciing ir,e slirl lr*usions: 1u1oolectng a cerlincauofl Irom that pe.son (ao{.rnd belo!v}; o{ {c) adding a darse o. conditio, L the contrgct oisuacontrait. lnstnrcllons for CBrllflcatidn: Sigrrng beloyr indicales ihe prospectivs 10\,,16r iiBr padicjpanl is provjding Itre signed cerlltcalion. (1) lt ull conrply and lac-ililate c.nplrance wi*i U.S. DOT r€grlations, 'NonFo.uromenl Sugpensjon and O€barmen!" A CFR pad 1200, whieh adopts and sLpplements lhe u.S. Ofllce ot Vanagem€nl and Budget {U.S. OMB) "Guidelines to Agences oa Govemm€.twide Debarrlent and Suspension(No,1procuremehl),' 2 CFR prrl 180, (2) To the best of ils kr,owledge and baliet, ihat ia Princlpas and Subrscipionts at the frst lie. a. Ar9 eligiblo to padicipate in covBrgd hEnsactions al any Fsderrl departnent ry agency and a€ not praserltyl 1" Debaned. 2. Suspension, 3^ Proposed ior deb@r'nant, 4. Declared inetigible, 5. Volunladly exdud6d. ot 6. Oisqualified b. lls managemeot has oot witrrin a thrco-yerr period p.eceding ils latqst applicalbn o, proposai been .onvictod gf or had a civi pdsr0ent rendarBd against any ot them for: 1. Co'I:fiissbn ot traud o. a cdminal ofsn$ in col!1ection vrih obtsining, att€rnpt*}g 1o obtaln, or pe.fgrmiBg a publio {Fede€}, State, or local) taansaclion, or cont€Cl unde. a public Lrnsaction, 2, yolatlon ot ady Fgd€ral or Sliale arrikusl statute, o., 3. Commissbn of embealg,rent hetl, iorgery, bribe.r, lal3iFcalion o. destmclicn ot rsmrds, making any laase skte.ient, or recelving sl,clen property, c' lt is not tr6sen{y i.diclgd tor, 6r othera{i$e criMinall, or civilly d€rgsd by a gqrert,lmanlai el]t:tf {Fedelal, Strle, or local) wilh comrnisdon of any oflhe olenses tisled in lh6 preoedirg sobseqion 2.b of this Ce4rfication, d' lt has ,ot had one ot rrore puuic lEnsaclions {Fsd8.al, State, or lacal) lerrnlnat€d for cause or defaull wlhin a thrae-yEa. period pre{eding thag Certiie6tion. e. ll, al I later time, it tBceivss any info..nation that coniradicts the stal€merb of subssclions 2.a - 2.d above, it will pErnp{y provide thai idormalon b FfA, f. lt ralll taeat gach lov!6r tier conlact or lordBr taer subconlracl und6r its Poject as a covered lows. tier conlraat for Furposes ot 2 CFR paE 1 200 and2 CFR part 180 il lt: Lequired wl $ubrnis:ion GOVERNMENT.WIDE DEBARMENT ANN SUSPENSION (NONPRoCUREME|{T) 1. Equals or exceeds $25,CC0, 2, ls for audlt ssMc€s, o., 3. Requires the consentofa Fed€ld ofrcia,, ?nd g. lt rrrif requjrethat e3ci covered lor,rer liet canlic{or and sL]bcootrarta.: '1, Comply and lacililatB compliance wjth the Fede.al requnamenE ol2 CFR parls 180 and 12S0, and 2. AssuE that each lo$€r li€r panicipanl h iis Proiect is not presenily d€daaed by any Fede.al depart tent or agency to be: a. ,ebard from pa.tlaipation in ils fed€Bllytu[ded Prcj.st, b. Suspended fom par{icipalion in its f6de.alv ft&ded proj6c! e. Prop8ed for dob..m.nt fo.n pa*iclpalion in l'.s f€dere(y tunded Prqect, d. OE bred ingnglble to padidpatg in its fed6.€lly tnnded Pmjecl, e- Voluntarily excltlded t'om paiicipatlon in ils federdlly lundsd Projec! or f" Ditqudlfed from paiicipa{oo in its ted€rally tunded Project, and (3) lt will Frovide a llliten exFienalioa as indicatEd on a ,)age atlached in FfAt TiAMS plEtfonn or the si€naturs Page if it or any of its pdncipals. including any of its frEt tier Subrecip,ents or it' Third-Par1y Pa'ti,cipants at s lolil,er liar, i$ unable to {edify eorcpllan€e with the prB.xding s{alernen{s in lhir CertiEcation Gloup. Cartiricati.on ED C{SaCcntrario/i Signau€ ot Athoria€d N€me end mb ot Cont{aclols _Q1orzrg'<w t(9 Csrcilock Flel 5569 /; r} Daie Page 38 of 41 SPECIAL NOTICE CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION 651 Bannon Street, Suite 100 Sacramento, CA 95811 GAVIN NEWSOM Governor NICOLAS MADUROS Secretary Government Operations Agency TRISTA GONZALEZ Director CDTFA WEBSITE www.cdtfa.ca.gov CUSTOMER SERVICE CENTER 1-800-400-7115 TTY 711 JUNE 2025 L-978 Tax Rates for Motor Vehicle and Diesel Fuels Rates in effect from July 1, 2025, through June 30, 2026 Sales and Use Tax Rates Type of Fuel Prepayment per Gallon Sales and Use Tax Rates* Gasoline (motor vehicle fuel)7.5 cents ($0.075)2.25% Aircraft jet fuel 12.5 cents ($0.125)7.25% Diesel fuel 38.5 cents ($0.385)13.00% Aviation gasoline Not applicable Not applicable * You must add district taxes where applicable. District tax rates for your area are available on our website at www.cdtfa.ca.gov/formspubs/cdtfa105.pdf. Excise Tax Rates per Gallon Type of Fuel Through June 30, 2025 Effective July 1, 2025 Gasoline (motor vehicle fuel)59.6 cents ($0.596)61.2 cents ($0.612) Aircraft jet fuel**2 cents ($0.02)2 cents ($0.02) Diesel fuel 45.4 cents ($0.454)46.6 cents ($0.466) Aviation gasoline 18.6 cents ($0.186)19 cents ($0.19) ** The excise tax on aircraft jet fuel is not subject to an annual adjustment. How are the sales and use tax prepayment rates determined? We calculate the prepayment rate for each gallon of gasoline, aircraft jet fuel, and diesel fuel at 80 percent of the combined state and local sales tax on the average selling price of the fuel, excluding sales tax, as reported by industry publications. We are required to establish the sales tax prepayment rates by March 1 of each year.1 We may continue to adjust these rates during the year if changes in fuel prices cause fuel retailers to prepay too much or too little tax. How are the excise tax rates determined? We are required to adjust the motor vehicle fuel2 and diesel fuel3 excise tax rates on July 1 of each year, based on the percentage change in the California Consumer Price Index, as calculated by the Department of Finance. The excise tax rate for aviation gasoline is adjusted using the same calculation as motor vehicle fuel and diesel fuel. For more information If you have questions regarding this notice, call our Customer Service Center at 1-800-400-7115 (TTY:711). Customer service representatives are available Monday through Friday from 7:30 a.m. to 5:00 p.m. (Pacific time), except state holidays. For additional information about fuel taxes, please see our Fuel Tax and Fee Guides at www.cdtfa.ca.gov/taxes-and-fees/fuel-tax-and-fee-guides/ or our Tax Guide for Gas Station Operators at www.cdtfa.ca.gov/industry/gas-stations.htm. You may also view current and previous prepayment rates at www.cdtfa.ca.gov/taxes-and-fees/prepayment-rates-fuels.htm. 1 www.cdtfa.ca.gov/lawguides/vol1/sutl/6480-1.html 2 www.cdtfa.ca.gov/lawguides/vol3/mvftl/mvftl-7360.html 3 www.cdtfa.ca.gov/lawguides/vol3/dftl/dftl-60050.html ____________________________________________________________________________________________ Consulting and Professional Services Agreement Page 1 Rev. 8/23 CITY OF REDDING CONSULTING AND PROFESSIONAL SERVICES CONTRACT THIS CONTRACT (“Contract”) is made at Redding, California, by and between the City of Redding (“City”), a municipal corporation, and Ed Staub & Sons Petroleum Inc. (“Contractor”) (collectively the “Parties, individually a “Party”) for the purpose of cardlock fuel purchases. WHEREAS, City does not have sufficient personnel to perform the services required herein thereby necessitating this Contract for personal services. NOW, THEREFORE, the Parties covenant and agree, for good consideration hereby acknowledged, as follows: SECTION 1. CONTRACTOR SERVICES Subject to the terms and conditions set forth in this Contract, Contractor shall provide to City the services described in Exhibit A, attached and incorporated herein. Contractor shall provide the services at the time, place and in the manner specified in Exhibit A. SECTION 2. COMPENSATION AND REIMBURSEMENT OF COSTS A. City shall pay Contractor for services rendered pursuant to this Contract, at the times and in the manner set forth in Exhibit B, attached and incorporated herein. This sum includes all out-of-pocket travel, lodging and incidental expenses incurred by Contractor that are reasonably associated with the provision of services under this Contract. The payments specified herein shall be the only payments to be made to Contractor for services rendered pursuant to this Contract. B. Contractor shall submit weekly invoices to City for work completed to the date of the invoice. All invoices shall be itemized to reflect the employees performing the requested tasks, the billing rate for each employee and the hours worked. C. All correct, complete and undisputed invoices sent by Contractor to City shall be paid within fifteen (15) calendar days of receipt, but City will not be penalized if paid within thirty (30) days. SECTION 3. TERM AND TERMINATION A. Contractor shall commence work on or about October 1, 2025 and complete said work no later than August 31, 2028. If mutually agreeable, with all prices (with allowed adjustments as outlined), terms, and conditions remaining the same, the contract may be extended on an annual basis for two (2) additional one (1) year periods, through August 31, 2030. ____________________________________________________________________________________________ Consulting and Professional Services Agreement Page 2 Rev. 8/23 B. If Contractor fails to perform its duties to the satisfaction of City, or if Contractor fails to fulfill in a timely and professional manner its obligations under this Contract, then City shall have the right to terminate this Contract effective immediately upon City giving written notice thereof to Contractor. C. Either Party may terminate this Contract without cause on thirty (30) calendar days’ written notice. Notwithstanding the preceding, if the term set forth in Section 3.A. of this Contract exceeds ninety (90) calendar days in duration, Contractor’s sole right to terminate shall be limited to termination for cause. D. Contractor hereby acknowledges and agrees that the obligation of City to pay under this Contract is contingent upon the availability of City’s funds which are appropriated or allocated by the City Council. Should the funding for the project and/or work set forth herein not be appropriated or allocated by the City Council, City may terminate this Agreement by furnishing at least thirty (30) calendar days’ written notice of its intention to terminate. In the event of a termination pursuant to this subdivision, Contractor shall not be entitled to a remedy of acceleration of payments due over the term of this Agreement. The Parties acknowledge and agree that the power to terminate described herein is required by Article 16, Section 18, of the California Constitution, and that constitutional provision supersedes any law, rule, regulation or statute which conflicts with the provisions of this Section. E. In the event that City gives notice of termination, Contractor shall promptly provide to City any and all finished and unfinished reports, data, studies, photographs, charts or other work product prepared by Contractor pursuant to this Contract. City shall have full ownership, including, but not limited to, intellectual property rights, and control of all such finished and unfinished reports, data, studies, photographs, charts or other work product. F. In the event that City terminates the Contract, City shall pay Contractor the reasonable value of services rendered by Contractor pursuant to this Contract; provided, however, that City shall not in any manner be liable for lost profits which might have been made by Contractor had Contractor completed the services required by this Contract. Contractor shall, not later than ten (10) calendar days after termination of this Contract by City, furnish to City such financial information as in the judgment of the City’s representative is necessary to determine the reasonable value of the services rendered by Contractor. G. In no event shall the termination or expiration of this Contract be construed as a waiver of any right to seek remedies in law, equity or otherwise for a Party’s failure to perform each obligation required by this Contract. SECTION 4. MISCELLANEOUS TERMS AND CONDITIONS OF CONTRACT ____________________________________________________________________________________________ Consulting and Professional Services Agreement Page 3 Rev. 8/23 A. City shall make its facilities accessible to Contractor as required for Contractor’s performance of its services under this Contract, and, upon request of Contractor, provide labor and safety equipment as required by Contractor for such access. B. Pursuant to the City’s business license ordinance, Contractor shall obtain a City business license prior to commencing work. C. Contractor represents and warrants to City that it has all licenses, permits, qualifications and approvals of any nature whatsoever that are legally required for Contractor to practice its profession. Contractor represents and warrants to City that Contractor shall, at its sole cost and expense, keep in effect or obtain at all times during the term of this Contract any licenses, permits and approvals that are legally required for Contractor to practice its profession. D. Contractor shall, during the entire term of this Contract, be construed to be an independent contractor and nothing in this Contract is intended, nor shall it be construed, to create an employer/employee relationship, association, joint venture relationship, trust or partnership or to allow City to exercise discretion or control over the professional manner in which Contractor performs under this Contract. Any and all taxes imposed on Contractor’s income, imposed or assessed by reason of this Contract or its performance, including but not limited to sales or use taxes, shall be paid by Contractor. Contractor shall be responsible for any taxes or penalties assessed by reason of any claims that Contractor is an employee of City. Contractor shall not be eligible for coverage under City’s workers’ compensation insurance plan, benefits under the Public Employee Retirement System or be eligible for any other City benefit. E. No provision of this Contract is intended to, or shall be for the benefit of, or construed to create rights in, or grant remedies to, any person or entity not a party hereto. F. No portion of the work or services to be performed under this Contract shall be assigned, transferred, conveyed or subcontracted without the prior written approval of City. Contractor may use the services of independent contractors and subcontractors to perform a portion of its obligations under this Contract with the prior written approval of City. Independent contractors and subcontractors shall be provided with a copy of this Contract and Contractor shall have an affirmative duty to assure that said independent contractors and subcontractors comply with the same and agree to be bound by its terms. Contractor shall be the responsible party with respect to all actions of its independent contractors and subcontractors, and shall obtain such insurance and indemnity provisions from its contractors and subcontractors as City’s Risk Manager shall determine to be necessary. G. Contractor, at such times and in such form as City may require, shall furnish City with such periodic reports as it may request pertaining to the work or services ____________________________________________________________________________________________ Consulting and Professional Services Agreement Page 4 Rev. 8/23 undertaken pursuant to this Contract, the costs or obligations incurred or to be incurred in connection therewith, and any other matters covered by this Contract. H. Contractor shall maintain accounts and records, including personnel, property and financial records, adequate to identify and account for all costs pertaining to this Contract and such other records as may be deemed necessary by City to assure proper accounting for all project funds. These records shall be made available for audit purposes to state and federal authorities, or any authorized representative of City. Contractor shall retain such records for three (3) years after the expiration of this Contract, unless prior permission to destroy them is granted by City. I. Contractor shall perform all services required pursuant to this Contract in the manner and according to the standards observed by a competent practitioner of Contractor’s profession. All products of whatsoever nature which Contractor delivers to City pursuant to this Contract shall be prepared in a professional manner and conform to the standards of quality normally observed by a person practicing the profession of Contractor and its agents, employees and subcontractors assigned to perform the services contemplated by this Contract. J. All completed reports and other data or documents, or computer media including diskettes, and other materials provided or prepared by Contractor in accordance with this Contract are the property of City, and may be used by City. City shall have all intellectual property rights including, but not limited to, copyright and patent rights, in said documents, computer media, and other materials provided by Contractor. City shall release, defend, indemnify and hold harmless Contractor from all claims, costs, expenses, damage or liability arising out of or resulting from City’s use or modification of any reports, data, documents, drawings, specifications or other work product prepared by Contractor, except for use by City on those portions of the City’s project for which such items were prepared. K. Contractor, including its employees, agents, and subcontractors, shall not maintain or acquire any direct or indirect interest that conflicts with the performance of this Contract. Contractor shall comply with all requirements of the Political Reform Act (Government Code § 8100 et seq.) and other laws relating to conflicts of interest, including the following: 1) Contractor shall not make or participate in a decision made by City if it is reasonably foreseeable that the decision may have a material effect on Contractor’s economic interest, and 2) if required by the City Attorney, Contractor shall file financial disclosure forms with the City Clerk. ____________________________________________________________________________________________ Consulting and Professional Services Agreement Page 5 Rev. 8/23 SECTION 5. INSURANCE A. Unless modified in writing by City’s Risk Manager, Contractor shall maintain the following noted insurance during the duration of the Contract: Coverage Type Minimum Amount Commercial General Liability (CG-0001) ____2,000,000_ per occurrence ____4,000,000_ general aggregate Comprehensive Vehicle Liability (CA-0001) ____2,000,000_ Workers’ Compensation and Employers’ Liability ____1,000,000__ Professional Liability (Errors and Omissions) ______________ B. The following additional requirements apply to those coverage requirements specified above: 1. Commercial General Liability Insurance shall include but not be limited to bodily injury, personal injury and property damage. The coverage shall be for the amounts not less than the amounts stated in Section 5.A. of the Contract; 2. Comprehensive Automobile Liability Insurance, shall provide for at least the total limits specified above as combined single limits per accident applicable to all owned, non-owned and hired vehicles; 3. Both the Workers’ Compensation and Employers' Liability policies shall contain the insurer's waiver of subrogation in favor of City, its elected officials, officers, employees, agents and volunteers; 4. Professional Liability (Errors and Omissions) Insurance shall be appropriate to Contractor’s profession, against loss due to error or omission or malpractice. 5. The City does not accept insurance certificates or endorsements with the wording “but only in the event of a named insured’s sole negligence” or any other verbiage limiting the insured’s insurance responsibility. 6. For any category of insurance above as stated in Section 5.A. of the Contract with coverage amounts designated as “N/A,” “$0,” or “0,” insurance of that type is not required by this Contract. ____________________________________________________________________________________________ Consulting and Professional Services Agreement Page 6 Rev. 8/23 C. Any deductibles or self-insured retentions must be declared to and approved by City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its elected officials, officers, employees, agents and volunteers; or the Contractor shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense expenses. D. The General Liability shall contain or be endorsed to contain the following provisions: 1. City, its elected officials, officers, employees, and agents are to be covered as additional insured as respects liability arising out of work or operations performed by or on behalf of Contractor; premises owned, leased or used by Contractor; or automobiles owned, leased, hired or borrowed by Contractor. The coverage shall contain no special limitations on the scope of protection afforded to City, its elected officials, officers, employees, agents and volunteers. 2. The insurance coverage of Contractor shall be primary insurance as respects City, its elected officials, officers, employees, agents and volunteers. Any insurance or self-insurance maintained by City, its elected officials, officers, employees, agents and volunteers, shall be in excess of Contractor’s insurance and shall not contribute with it. 3. Coverage shall state that the insurance of Contractor shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 4. Each insurance policy required by this Contract shall be endorsed to state that coverage shall not be canceled except after thirty (30) calendar days' prior written notice has been given to City. In addition, Contractor agrees that it shall not reduce its coverage or limits on any such policy except after thirty (30) calendar days’ prior written notice has been given to City. E. Insurance is to be placed with insurers with a current A.M. Best rating of no less than A-VII. F. Contractor shall designate the City of Redding, 777 Cypress Avenue, Redding, CA 96001 as a Certificate Holder of the insurance. Contractor shall furnish City with certificates of insurance and original endorsements effecting the coverages required by this clause. Certificates and endorsements shall be submitted electronically via the PINS Advantage system. A link will be provided for the Contractor, or their insurance agent, to enter and upload documents directly to PINS Advantage. The certificates and endorsements for each insurance policy are to be signed by a person authorized by the insurer to bind coverage on its behalf. All endorsements are to be received ____________________________________________________________________________________________ Consulting and Professional Services Agreement Page 7 Rev. 8/23 and approved in PINS Advantage by the City’s Risk Manager prior to the commencement of contracted services. City may withhold payments to Contractor if adequate certificates of insurance and endorsements required have not been submitted as described above or provided in a timely manner. G. The requirements as to the types and limits of insurance coverage to be maintained by Contractor as required by Section 5 of this Contract, and any approval of said insurance by City, are not intended to and will not in any manner limit or qualify the liabilities and obligations otherwise assumed by Contractor pursuant to this Contract, including, without limitation, provisions concerning indemnification. H. If any policy of insurance required by this Section is a “claims made” policy, pursuant to Code of Civil Procedure § 342 and Government Code § 945.6, Contractor shall keep said insurance in effect for a period of eighteen (18) months after the termination of this Contract. I. If any damage, including death, personal injury or property damage, occurs in connection with the performance of this Contract, Contractor shall immediately notify City’s Risk Manager by telephone at (530) 225-4068. No later than three (3) calendar days after the event, Contractor shall submit a written report to City’s Risk Manager containing the following information, as applicable: 1) name and address of injured or deceased person(s); 2) name and address of witnesses; 3) name and address of Contractor’s insurance company; and 4) a detailed description of the damage and whether any City property was involved. SECTION 6. INDEMNIFICATION AND HOLD HARMLESS A. Consistent with California Civil Code § 2782.8, when the services to be provided under this Contract are design professional services to be performed by a design professional, as that term is defined under Section 2782.8, Contractor shall, to the fullest extent permitted by law, indemnify protect, defend and hold harmless, City, its elected officials, officers, employees, and agents, and each and every one of them, from and against all actions, damages, costs, liability, claims, losses, penalties and expenses (including, but not limited to, reasonable attorney’s fees of the City Attorney or legal counsel retained by City, expert fees, litigation costs, and investigation costs) of every type and description to which any or all of them may be subjected by reason of, or resulting from, directly or indirectly, the negligence, recklessness, or willful misconduct of Contractor, its officers, employees or agents in the performance of professional services under this Contract, except when liability arises due to the sole negligence, active negligence or misconduct of the City. B. Other than in the performance of professional services by a design professional, which is addressed solely by subdivision (A) of this Section, and to the fullest extent permitted by law, Contractor shall indemnify protect, defend and hold harmless, City, its elected officials, officers, employees, and agents, and each and every one of ____________________________________________________________________________________________ Consulting and Professional Services Agreement Page 8 Rev. 8/23 them, from and against all actions, damages, costs, liability, claims, losses, penalties and expenses (including, but not limited to, reasonable attorney’s fees of the City Attorney or legal counsel retained by City, expert fees, litigation costs, and investigation costs) of every type and description to which any or all of them may be subjected by reason of the performance of the services required under this Contract by Contractor its officers, employees or agents in the performance of professional services under this Contract, except when liability arises due to the sole negligence, active negligence or misconduct of the City. C. The Contractor’s obligation to defend, indemnify and hold harmless shall not be excused because of the Contractor’s inability to evaluate liability. The Contractor shall respond within thirty (30) calendar days to the tender of any claim for defense and indemnity by the City, unless this time has been extended in writing by the City. If the Contractor fails to accept or reject a tender of defense and indemnity in writing delivered to City within thirty (30) calendar days, in addition to any other remedy authorized by law, the City may withhold such funds the City reasonably considers necessary for its defense and indemnity until disposition has been made of the claim or until the Contractor accepts or rejects the tender of defense in writing delivered to the City, whichever occurs first. This subdivision shall not be construed to excuse the prompt and continued performance of the duties required of Contractor herein. D. The obligation to indemnify, protect, defend, and hold harmless set forth in this Section applies to all claims and liability regardless of whether any insurance policies are applicable. The policy limits of said insurance policies do not act as a limitation upon the amount of indemnification to be provided by Contractor. E. City shall have the right to approve or disapprove the legal counsel retained by Contractor pursuant to this Section to represent City’s interests. City shall be reimbursed for all costs and attorney's fees incurred by City in enforcing the obligations set forth in this Section. SECTION 7. CONTRACT INTERPRETATION, VENUE AND ATTORNEY FEES A. This Contract shall be deemed to have been entered into in Redding, California. All questions regarding the validity, interpretation or performance of any of its terms or of any rights or obligations of the parties to this Contract shall be governed by California law. If any claim, at law or otherwise, is made by either party to this Contract, the prevailing party shall be entitled to its costs and reasonable attorneys' fees. B. This document, including all exhibits, contains the entire agreement between the parties and supersedes whatever oral or written understanding each may have had prior to the execution of this Contract. This Contract shall not be altered, amended or modified except by a writing signed by City and Contractor. No verbal agreement or conversation with any official, officer, agent or employee of City, either before, ____________________________________________________________________________________________ Consulting and Professional Services Agreement Page 9 Rev. 8/23 during or after the execution of this Contract, shall affect or modify any of the terms or conditions contained in this Contract, nor shall any such verbal agreement or conversation entitle Contractor to any additional payment whatsoever under the terms of this Contract. C. No covenant or condition to be performed by Contractor under this Contract can be waived except by the written consent of City. Forbearance or indulgence by City in any regard whatsoever shall not constitute a waiver of the covenant or condition in question. Until performance by Contractor of said covenant or condition is complete, City shall be entitled to invoke any remedy available to City under this Contract or by law or in equity despite said forbearance or indulgence. D. If any portion of this Contract or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Contract shall not be affected thereby and shall be enforced to the greatest extent permitted by law. E. The headings in this Contract are inserted for convenience only and shall not constitute a part hereof. A waiver of any party of any provision or a breach of this Contract must be provided in writing, and shall not be construed as a waiver of any other provision or any succeeding breach of the same or any other provisions herein. F. Each Party hereto declares and represents that in entering into this Contract, it has relied and is relying solely upon its own judgment, belief and knowledge of the nature, extent, effect and consequence relating thereto. Each Party further declares and represents that this Contract is made without reliance upon any statement or representation not contained herein of any other Party or any representative, agent or attorney of the other Party. The Parties agree that they are aware that they have the right to be advised by counsel with respect to the negotiations, terms, and conditions of this Contract and that the decision of whether or not to seek the advice of counsel with respect to this Contract is a decision which is the sole responsibility of each of the Parties. Accordingly, no party shall be deemed to have been the drafter hereof, and the principle of law set forth in Civil Code § 1654 that contracts are construed against the drafter shall not apply. G. Each of the Parties hereto hereby irrevocably waives any and all right to trial by jury in any action, proceeding, claim or counterclaim, whether in contract or tort, at law or in equity, arising out of or in any way related to this Agreement or the transactions contemplated hereby. Each Party further waives any right to consolidate any action which a jury trial has been waived with any other action in which a jury trial cannot be or has not been waived. H. In the event of a conflict between the term and conditions of the body of this Contract and those of any exhibit or attachment hereto, the terms and conditions set forth in the body of this Contract proper shall prevail, excluding any indemnification required of Contractor under such exhibits or attachments. In the event of a conflict between ____________________________________________________________________________________________ Consulting and Professional Services Agreement Page 10 Rev. 8/23 the terms and conditions of any two or more exhibits or attachments hereto, those prepared by City shall prevail over those prepared by Contractor. SECTION 8. SURVIVAL The provisions set forth in Sections 3 through 7, inclusive, of this Contract shall survive termination of the Contract. SECTION 9. COMPLIANCE WITH LAWS - NONDISCRIMINATION A. Contractor shall comply with all applicable laws, ordinances and codes of federal, state and local governments. B. In the performance of this Contract, Contractor shall not discriminate against any employee or applicant for employment because of race, color, ancestry, national origin, religious creed, sex, sexual orientation, disability, age, marital status, political affiliation, or membership or nonmembership in any organization. Contractor shall take affirmative action to ensure applicants are employed and that employees are treated during their employment without regard to their race, color, ancestry, national origin, religious creed, sex, sexual orientation, disability, age, marital status, political affiliation, or membership or nonmembership in any organization. Such actions shall include, but not be limited to, the following: employment, upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of compensation and selection for training. SECTION 10. REPRESENTATIVES A. City’s representative for this Contract is James Schmitz, telephone number (530) 224-6091, email address jschmitz@cityofredding.org. All of Contractor’s questions pertaining to this Contract shall be referred to the above-named person, or to the representative's designee. B. Contractor’s representative for this Contract is Nikki Terry telephone number (530) 941-4314, email address nikki.terry@edstaub.com. All of City’s questions pertaining to this Contract shall be referred to the above-named person. C. The representatives set forth herein shall have authority to give all notices required herein. SECTION 11. NOTICES A. All notices, requests, demands and other communications hereunder shall be deemed given only if in writing signed by an authorized representative of the sender (may be other than the representatives referred to in Section 10) and delivered by facsimile, with a hard copy mailed first class, postage prepaid; or when sent by a courier or an ____________________________________________________________________________________________ Consulting and Professional Services Agreement Page 11 Rev. 8/23 express service guaranteeing overnight delivery to the receiving party, addressed to the respective parties as follows: To City: City of Redding Attn: Fleet P.O. Box 496071 Redding, CA 96049-6071 Phone: 530-224-6201 To Contractor: Ed Staub & Sons Attn: Nikki Terry P.O. Box 990327 Redding, CA 96099 Phone: 530-638-8933 Fax: 530-241-7683 B. Either party may change its address for the purposes of this paragraph by giving written notice of such change to the other party in the manner provided in this Section. C. Notice shall be deemed effective upon: 1) personal service; 2) two calendar days after mailing or transmission by facsimile, whichever is earlier. SECTION 12. AUTHORITY TO CONTRACT A. Each of the undersigned signatories hereby represents and warrants that they are authorized to execute this Contract on behalf of the respective parties to this Contract; that they have full right, power and lawful authority to undertake all obligations as provided in this Contract; and that the execution, performance and delivery of this Contract by said signatories has been fully authorized by all requisite actions on the part of the respective parties to this Contract. B. When the Mayor is signatory to this Contract, the City Manager and/or the Department Director having direct responsibility for managing the services provided herein shall have authority to execute any amendment to this Contract which does not increase the amount of compensation allowable to Contractor or otherwise substantially change the scope of the services provided herein. SECTION 13. EFFECTIVE DATE OF CONTRACT The effective date of this Contract (“Effective Date”) shall be the date it is signed by City. ____________________________________________________________________________________________ Consulting and Professional Services Agreement Page 12 Rev. 8/23 IN WITNESS WHEREOF, City and Contractor have executed this Contract on the days and year set forth below: CONTRACTOR Dated: ___________, 20____ ___________________________________ By: Nikki Terry Tax ID No.:________________________ CITY OF REDDING, A Municipal Corporation Dated: ___________, 20____ __________________________________ By: Barry Tippin ATTEST: APPROVED AS TO FORM: __________________________________ ___________________________________ Sharlene Tipton, City Clerk Christian Curtis, City Attorney Exhibit A SCOPE OF WORK A. CARDLOCK SYSTEM 1. Vendor shall provide all fuel cards and replacement cards at no expense to City. 2. Fuel cards shall also be accepted in cardlock "foreign" facilities located outside of the cities of Redding and Anderson, CA. 3. Vendor shall have a card type system capable of recording at a minimum the following: a) Unique employee/driver PIN code b) Vehicle’s identification c) Type and amount of fuel pumped d) Time, date and location of each transaction e) Vehicle odometer reading f) City Division number 4. Card system shall provide a method of identifying both the vehicle and the driver separately on each fuel transaction. Driver’s identity must be a designated PIN or a separate card, even if card is a virtual card with designated PIN. B. SYSTEM OPERATIONAL RESTRICTIONS 1. Upon request by the City, Vendor can set up to five (5) lock-out zip codes. 2. If Fleet requests card to be disabled, it must be an instant disablement. 3. Odometer reading must be input at fueling station by City employee while fueling. 4. Card suspended once two (2) failed attempts, per CFN fraud guidelines. 5. Ability to restrict transactions to fuel only. 6. Ability to set gallons per card or fuel type. 7. Cards that fuel diesel must have option to fuel Diesel Exhaust Fuel (DEF). 8. Card should have ability, if requested, to fuel both regular and diesel. C. LOCATION/FACILITY REQUIREMENTS 1. Vendor must have fueling locations within Redding City Limits. 2. Vendor must have fueling locations throughout California. 3. Cardlock fueling facilities shall be able to provide 24-hour unattended cardlock service seven days a week. 4. Each cardlock facility shall offer unleaded gas 87 octane and 91 octane premium unleaded gas, and #2 Clear Ultra Low Sulfur Diesel fuel. Diesel Exhaust Fuel (DEF) is available at certain locations. 5. Local cardlock facilities shall be accessible by heavy equipment, public transit buses, trucks with trailers, and provide sufficient pump island and on-site turning space to accommodate all types of large equipment, i.e., street sweepers, dump trucks, road graders, etc. Safe ingress/egress to the public street is essential. 6. Be capable of accepting vehicles with a maximum height clearance of 13’6” high. 7. It is desirable that each cardlock facility be set up with functioning security cameras. 8. Maintain/provide map and list showing all in-network or preferred locations. 9. Provide updated list and map any time list or map is revised or changed. 10. Provide 24-hour notice when in-network/preferred fueling stations are scheduled to be out of service. 11. For in-network/preferred stations, provide a contact list for station support when/if station is not staffed; Nikki Terry- 530-941-4314 Steve Lewis- 530-604-5577 D. CARD DESIGN 1. The physical card must contain the following information; Name(optional), City, Division number, vehicle/equipment number. 2. Cards shall be the same size and strength as a normal credit card and resistant to modification or tampering. E. CARD REPLACEMENT, ADDITIONS, OR REMOVAL 1. Time frame for vendor to provide new employees or new vehicle cards once Fleet notifies vendor is same day, if needed, for EMS vehicles. All others within 1-2 business days after request is sent to vendor. 2. The City will initially provide the vendor a list of all vehicle ID numbers, description of vehicle, fuel type, and maximum fuel tank capacity by department and notify the vendor each time a vehicle is added or removed from service. 3. All changes or updates to cards or PINs must be authorized by the Fleet Department, outside departments may hold no authority in the contract. F. INVOICING 1. Each invoice is required to have a unique invoice number, invoice date, invoicing period (i.e., 3/16/25 to 3/22/25). 2. Weekly invoicing preferred. 3. Invoice sortable by department number. 4. Employee name printed on invoice. 5. Invoices emailed or electronically uploaded. 6. Monthly consolidated statements requested. 7. Example of data details that should be present on invoices; a) CPA/Po number b) Invoice number c) Card number or portion of number d) Department number e) Card label f) Fleet number g) Vehicle ID number h) Driver name i) Date & time of transaction j) Location code and city k) Volume of fuel per transaction l) Type of fuel per transaction m) Odometer reading n) Itemized listings of taxes and applicable fees o) Total dollar amount per transaction p) Total dollar amount per invoice G. PAYMENT 1. Payment terms; Net 15. Assuming all invoice data received is accurate and can be processed as received. If data received is inaccurate or cannot be processed as received the 15 days will start once the data can be processed. The City will pay by invoice. Each invoice must provide all needed data to record and process the payment. City will not be penalized if paid within 30 days. 2. Vendor to provide dispute process relating to payment or charges. 3. The City does not pay late fees. H. REPORTING 1. Vendor responsible for maintaining Fleet ID list supplied by City. 2. Vendor’s system will be required to generate the following reports upon request by City: a) Transaction detail reports b) Transaction exception reports c) Lost/Stolen Cards d) Fuel Volume Report (Quantity purchased, amount spent, fuel type purchased by division) e) Comprehensive All-Inclusive Fuel Volume Report (Total volume of all participating divisions) f) Monthly Past Due Status Reports g) Cardholder Activity (Transaction detail reports by card) h) Transactions by Vehicles (Transaction detail reports by vehicle) i) Transactions by division/department j) Vendor/Location Usage (Transaction detail reports by vendor) k) Odometer reading per transaction reports or history 3. Additional reporting information may be requested during the term of the agreement. I. DATA MANAGEMENT 1. Vendor has an online/web-based account management system. 2. Vendor will provide up to ten (10) log-ins at no additional cost to the City. 3. Permission controls; admin accounts limited to Fleet management staff and two (2) Finance staff. 4. System is accessible 24/7. 5. There is a process for reporting issues from web-based system. J. DATA TRANSFER 1. City will be using an Excel workbook to process invoices, so the data needs to come in an Excel usable format, either in a workbook (preferred) or in CSV format. Note, the more usable the data upon receipt the faster payments can be processed. 2. Data will include the same details as the invoice. K. FRAUD PROTECTION 1. City to notify Vendor within 2 days of any removal of employees. 2. City will carefully review all invoices in a timely manner for potential fraud. 3. In respects to the City, all divisions will monitor their departments invoicing. If fraud is suspected, that department will notify fleet. At that time fleet will cancel the card, talk to vendor, and get the police report for the vendor. 4. Vendor shall indemnify and hold City harmless for any and all fraudulent charges made on City cards. L. SECURITY AND CONFIDENTIAL INFORMATION Security measures for safeguarding City information; names, account numbers, passwords, personal information, etc. Proposer to limit access to certain users and include description of data security measures. 1. Firewalls & Network Segmentation Firewalls filter traffic between internal networks and the internet, blocking unauthorized access. Network segmentation separates sensitive systems form less critical ones, limiting exposure 2. Antivirus & Endpoint Protection Software that detects and blocks malware, viruses, and ransomware on workstations, laptops, and mobile devices. 3. Strong Authentication & Access Control Enforcing strong passwords, multi-factor authentication (MFA), and least-privilege principles so employees only access what they need. 4. Regular Software Patching Keeping operating systems, applications, and hardware firmware up to date to close known security vulnerabilities. 5. Data Backup & Recovery Regularly backing up critical data to secure, offline, or cloud-based locations. M. TRAINING/TESTING 1. Vendor to designate at least one representative, Nikki Terry, with experience handling large accounts to assist the Fleet Department in testing and troubleshooting the system as a “test phase” prior to “Go-Live”. During the test phase the City will take the two highest scores and perform a two-week test period to be confident the awarded vendor is able to perform with the City’s needs. There will be no charge/cost to the City for the “test phase” as it is a continuation of the evaluation process. 2. Throughout the duration of the contract, the vendor must provide on-going training and support without additional costs. 3. Vendor must provide written user-guides and reference material. N. UP CHARGES 1. No start-up costs, set-up or training costs may be invoiced separately. 2. Costs associated with the administrative side of the contract and implementation of the cardlock system shall be inclusive of quoted prices. O. VENDOR PERSONNEL 1. An inside sales representative and/or area supervisor, as well as accounts receivable staff, familiar with the City’s account shall be available during normal business hours to answer questions and resolve problems. 2. The Vendor warrants that all persons employed have satisfactory past records indicating their ability to accept the kind of responsibility anticipated in this type of work. P. INSURANCE REQUIREMENTS Vendor will hold City harmless from any claims for damages of any kind whatsoever by any person occasioned by Vendor personnel's activities. Current insurance certificates, per the attached insurance requirements will be required throughout the contract period. Proposer must also submit with their proposal, a letter from the proposer’s insurance carrier indicating that the insurance company has read the insurance requirements stated herein, and will be able to provide the certificate and endorsement for the coverage required. Q. TERMINATION OF CONTRACT Upon termination or other expiration of the contract, each party will assist the other party in orderly termination of the contract and the transfer of all assets, tangible and intangible, as may facilitate the orderly, non-disrupted business continuation of each party. R. FOR CAUSE In the event the Vendor fails to meet the performance requirements of the contract, as determined solely by the City, the City may terminate the contract without penalty and be relieved of any further consideration to the Vendor. Notice of such termination shall be in writing and shall take effect ten (10) calendar days after mailing such notice. In the event of termination, the full extent of City liability shall be limited to an equitable adjustment and payment for materials and/or services authorized by and received to the satisfaction of the City prior to termination. S. FOR CONVENIENCE City may terminate the contract resulting from this RFP at any time, and without cause, upon thirty (30) calendar days' written notice. T. ASSIGNMENT OF CONTRACT - No assignment by the successful/awarded contractor of any portion of the resulting fuel contract shall be recognized. No third-party contracting or sub-contracting permitted.