Fuel Management

5 Steps to Creating A Fuel Consortium

July 2008, Government Fleet - Feature

by Shelley Mika - Also by this author

Texas may be known for its "black gold," but that doesn’t mean fleets in the state are exempt from the ever-rising costs of fuel. Just like fleet operations in the rest of the nation, they struggle to balance budgets while fuel expenditures go through the roof. For some, that means purchasing hybrid vehicles or relying on alternative-fuel technology to find a way to reduce mileage. However, fleet leaders from the City of Fort Worth, Texas, had another plan — form a fuel purchasing consortium.

Fuel to Fire up Consortium Need

It works like this: individual governmental agencies, including municipalities, counties, independent school districts, and state colleges request to join the City of Fort Worth fuel agreement. Their addition allows an increase in the number of gallons that can be purchased on the contract. This increased volume translates to a lower price for all. In 2003, the City of Fort Worth’s fuel consortium started between its agency and Tarrant County (the county in which Fort Worth is located). Since then, the consortium has grown from two government entities to 27 north Texas governmental entities today.

CORUM

Wayne Corum, MBA, director of equipment services for the City of Fort Worth, says there is a formal process for joining. "The Purchasing Division of the Finance Department and the Legal Department work with the other governmental agencies to draft an interlocal agreement that allows the agency to join the consortium," he explained. "Once the interlocal agreement is approved by the governing body of each agency, the agency is added to the consortium."

RENDON

The City of Fort Worth’s fuel specialist was the catalyst behind the effort. For the past eight years of his 20-year tenure with the City, Randy Rendon has been writing fuel contracts.

"Randy is continuously looking for innovative ways to cut costs to the City. Rising fuel costs have driven him to create new inroads and programs to cut expenses and the City’s fuel budget," Corum said. "In the beginning, municipalities and governmental agencies have always allowed each other to ride their purchase agreements. With that in mind, Randy networked with other governmental agencies, informing them of the potential savings and motivating them to create a consortium. Knowing the fuel industry, Randy realized the one way to drive costs down was to increase the estimated gallons usage."

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