Council approves five-year Vulcan Materials contract for asphalt, citing oil-indexed pricing adjustment

The San Diego City Council unanimously approved a five-year contract with Vulcan Materials Company to supply paving materials and asphalt concrete, authorizing a not-to-exceed amount of $60 million over five years.

Deputy Director Philip Lowery said the contract will support Transportation, Public Utilities and Stormwater, and noted the contract isolates the asphalt binder (a petroleum-based component) to fluctuate monthly with a California crude oil price index to reduce contingency and avoid a high fixed-price baseline. “The requested action is for you to authorize the mayor or his designee, to award this 5 year contract ... for a not to exceed amount of $60,000,000,” Lowery told the council.

Sean Harris of the Office of the Independent Budget Analyst said the prior five-year contract had a $20 million cap and the new request reflects expanded in-house mill-and-pave work; Harris noted Vulcan has been the sole responsive bidder across multiple solicitations since 2012 and recommended a regional price comparison to help judge unit prices.

Council members pressed staff on why so few bidders respond, whether smaller local suppliers could provide capacity, and how the city compares contractor unit costs with in-house mill-and-pave work. Purchasing Director Claudia Barca said staff could perform a regional comparison but would need to adjust for timing and product differences. After discussion, Council member Whitburn moved to approve the staff recommendation and the measure passed 6–0, with Council members Moreno, Von Wilpert and Campbell absent.

Staff said the contract includes an oil adjustment factor that would change monthly when the index moves more than 5% from a June 2026 baseline and that other components would follow capped annual adjustments tied to the San Diego area CPI or 5%, subject to city approval.