Staff Report #11 – Contract Award – Diesel Fuel

Staff Report #11

March 30, 2026

To All Commissioners

Re: Contract Award – Diesel Fuel

Recommendation

That the Commission:

1. APPROVE the award of a contract to Suncor Energy Products Partnership (Suncor) for the supply and delivery of diesel fuel covering the period May 1, 2026 to April 30, 2031, with the option of either two one-year renewals or one two-year renewal upon mutual agreement of the parties; and
2. DIRECT Administration to finalize contract details with Suncor noting the contract will be in keeping with the tender submission.

Background

The current contract for the provision of diesel fuel with Suncor was awarded through the Elgin Middlesex, Oxford Purchasing Co-operative (EMOP) in March 2019. The contract provided for an initial five-year term, with an option for a two-year extension, which was exercised. The two-year extension expires on April 30, 2026.

London Transit Administration, acting as the calling agent for this tender, issued a tender call for the supply of fuel for the EMOP group for a five-year period May 1, 2026 to April 30, 2031. There are 12 participating members of EMOP with an estimated 12.1 million litres of diesel fuel and 3.3 million litres of gasoline covering 128 locations. London Transit accounts for approximately 60% of EMOP’s diesel fuel requirements. All bidders were required to use a published London Rack Price and specify any discount on that price as well as the addition of transportation charges for each participating location. Bidders were also required to specify whether the pricing would be based on a weekly average or daily spot buy.

The request for tender was issued and processed in accordance with established procedures. The term of the contract is for five years commencing May 1, 2026 and expiring April 30, 2031 with either two one-year renewal options or one two-year renewal option available upon mutual agreement of all parties.

Seven compliant bids were received. The following table provides the estimated annual cost for London Transit based on each of the bids, noting these estimates do not take the current volatility of the global market into consideration.

As highlighted in the table above, all but one submission provides an improvement to the current annual fuel contract. Suncor was the low-cost bid with estimated annual fuel costs of $8,927,100, 4.6% less than the current contract. Suncor also holds the current contract, and they have provided consistent and reliable service during the terms of both the expiring contract as well as prior terms. Administration has confidence in their ability to continue supplying the same level of service.

Diesel fuel costs in 2026 are budgeted to account for approximately 9% of the Commission’s annual conventional operating budget (totaling $9.4 million).

EMOP Participation

Fuel requirements were also provided for all participating EMOP members with all bidders providing contract pricing for each location and fuel requirement. The submissions were also evaluated for all EMOP members, with Suncor also being the lowest cost bidder for the group. Each EMOP member will be provided with the necessary analysis of the bids received for each to determine whether to participate individually in the contract.

Recommended by:

Mike Gregor, Director of Finance

Shakeel Ahmad, Manager of Purchasing

Concurred in by:

Kelly S. Paleczny, General Manager