New fuel purchasing plan could save district $500K

Posted on March 10, 2011

RALEIGH, N.C. — A new diesel fuel purchasing plan proposed by the Wake County Public School System (WCPSS) staff and approved by the district’s finance and purchasing departments earlier this year will save the district about half a million dollars in school bus operating costs, according to officials.

In the past, the district would purchase fuel on a weekly or as-needed basis, with the price of the diesel fuel varying with each purchase. However, sensing that fuel prices would likely continue to rise for the foreseeable future, Bob Snidemiller, WCPSS senior director of transportation, and his staff started looking for alternative ways to purchase fuel.

"We anticipated our need for fuel to be 1.3 million gallons between Feb. 1 and June 30, so we decided to put the 1.3 million gallons out to bid," he said. "We accepted the low bid price of $2.85 per gallon and paid $3.7 million for the fuel to be stored at the vendor’s location fully insured and with free delivery all included in the bid price."

(Staff put the fuel out to bid the first week of February.)

On Monday, the state contract price, which varies and is used by most districts to purchase their fuel, was at $3.24 per gallon. Under this new purchasing plan, if prices were to remain at that rate until June 30, WCPSS would see an approximate total savings this year of $500,000. If prices continue to rise, savings will be even greater.

Scott Doolittle, senior director of purchasing for WCPSS, said the district’s size helped it secure a bid that will result in a huge savings for the district.

"We decided to take advantage of our volume to try some different purchasing methods to save money," he said. "We felt confident that with everything going on in the Middle East right now, it would turn out to be a good decision."

WCPSS operates 920 buses and typically uses more than 60,000 gallons of diesel fuel per week. More than 73,000 students in Wake County are transported on WCPSS buses each day, covering more than 17 million miles per year.

Related Topics: cutting costs

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