Fuel Cost Relief On Stone Delivery Bids

VTCA, with the assistance of several VTCA aggregate members from the Marketing Committee, has reached an agreement with VDOT Maintenance and VDOT Procurement to permit Aggregate Delivery Contract Holders the ability to adjust their pricing to compensate for the sudden and significant increase in the cost of diesel fuel required for aggregate deliveries made directly to VDOT for maintenance requirements.  

This is a one-time adjustment offered by VDOT for aggregate suppliers to cover additional hauling costs due to increased fuel costs. This relief will be offered on all active Aggregate Delivery Contracts.    

As you may be aware, the Aggregate Delivery Contracts do not have any mechanism, within the existing contract, to permit any price adjustments in the delivered pricing to the Department. Following an initial meeting earlier this month, where VTCA outlined this issue, VDOT Maintenance and Procurement folks, this morning, unveiled a solution that will enable all Aggregate Delivery Contract Holders the option to adjust their prices on the h-orders.  

VDOT can only offer this solution as a “Contract Modification” where the terms of the contract are adjusted allowing vendors to reprice the deliveries. VDOT refers to these as Contract Concessions.  
There will be two Contract Concessions required by VDOT – For reference, these are both in the IFB for Delivered Stone, in Section IV Specifications / Contract Requirements:   

• DELIVERY NOTIFICATION: The Contractor shall provide VDOT advance delivery notification at least twenty-four (24) hours prior to intended delivery. Contact information for each delivery location is listed in the comments section under each bid line. – This will be amended to - The Contractor shall provide VDOT advance delivery notification at least forty-eight (48) hours prior to intended delivery. 
• DELIVERY COMPLETION: Complete delivery of the ordered quantity in full shall NOT EXCEED FIVE (5) BUSINESS DAYS after notification to deliver, unless otherwise specified. This will be amended to DELIVERY COMPLETION: Complete delivery of the ordered quantity in full shall NOT EXCEED THREE (3) BUSINESS DAYS after notification to deliver, unless otherwise specified.

In return for these amended contract considerations – Aggregate Suppliers are given the ability to adjust their delivered pricing to account for higher delivery costs. IMPORTANT – VDOT reserves the right to not accept any suppliers pricing adjustments. VTCA and our Marketing Committee strongly encourage that suppliers making price adjustments consider only requesting what is truly their delta between what delivery trucks are now requiring and what suppliers are collecting as the freight costs. 

VDOT Procurement will begin immediately sending out all existing contracts for adjustments. Please expedite completing and submitting your adjusted pricing once you receive your contracts.  

Below is a formula VTCA shared with VDOT in what we calculated as an average increase on a 20-mile haul: 

AHQ Average Distance = 20-mile round trip = 40 miles 
Fuel Burn Rate = 5 miles per gallon 
Fuel Consumed = 8 gallons 
Fuel Price Variance = $5.09 - $3.35 = $1.74 per gallon 
Extra Cost of Fuel to AHQ = $13.92 
Extra Cost per ton (19-ton Truck) = $.73 per ton 

Again, VDOT had no obligation to offer Aggregate Delivery Contract Holders any relief to adjust for the increase cost of fuel.  

Contact Rob Lanham if you have any questions or require additional information.