HomeMy WebLinkAboutEmailByrnes, Terry
:-riser.: JAMEnvironmental@aol.com
Sent: Monday, April 27, 2009 3:08 PM
Tor Byrnes, Terry
Subject: JAM Environmental & Vacuum Services, LLC - Used Oil Services Contract
;Gear Mr. Byrnes,
Per our conversation this morning, Monday, April 27,2009 JAM Environmental & Vacuum Services, LLC wishes to
cornmuicate our current standing with respect to the bid award for Used Oil Services. We have two issues to discuss:
1) We are still awaiting our insurance agents response for the increase in our insurance policy. Our agents, Keen Battle
Mead and Company are awaiting a quote from the underwriter. Apparently there is a general slowdown in the Issuance of
policy changes due to the current economic turmoil in the insurance industry.
2) JAM Environmental & Vacuum Services, LLC (JEVS) also needs to aprise you of a major shift in the used oil and
related services industry. Our service; used oil, used oil filters and petroleum contaminated materials and our pricing is
directly related to the economy in general and the construction industry specifically.
As you very well know; used oil is processed into a replacement fuel primarily for the asphalt industry (some kilns and
other industries as well). There is and expected for the balance of 2009, very little construction underway. Yet, the amount
of used oil generated has only decreased slightly (people are still getting their oil changed, just not as much).
This has resulted in a severe over supply condition in which the process plants have no available storage and therefore
are willing to sell the product at reduced prices just to make space for incoming un -processed oil.
We discussed this issue at the required 1st. pre-bid meeting attended by Safety Kleen, Ricky's Oil Service and our
company. At the time of the pre-bid JEVS was receiving $0.85 per gallon of dry used oil (no water contamination).
Each of the attending parties expressed concern about the economic climate and the effect on used oil value. We each, I
am sure calculated the anticipated worst case scenario for used oil, the cost of services for the balance of the contract
items and submitted a careful conceived offer to the City of Miami.
I am sure that most if not all of the bidders are surprised at the status of the industry, it is unprecedented in its scope and
effects. We currently are being paid $0.25 per gallon for delivered oil to a process plant, when we can find a buyer that
has storage space.
Also, we have been warned that the price will be going down. As a reference, process plants were receiving $1.20 to
$1.75 at the time of the bid and are currently selling from the high $0.40's to the low $0.60's
Considering the costs of collection, storage, treatment and delivery they are in the same general condition as JEVS; there
is no value in Used Oil in Florida at this time.
JEVS regrets to inform the City of Miami that we require a reconsideration of the contract terms to proceed for 2009.
JEVS thanks you for your time, effor"L and patience but the current economic realities are obvious, extreme and very real.
The long term viability of the industry is in doubt since only a very few of us will survive. JEVS, as a small business and a
CDBE in Broward County, intends to be one of the survivors.
Please feel free to call me with any questions, comments or concerns and we hope that our current actions and situation
does not negatively impact a future positive relationship.
I can always be reached at 954.625.2310.
Brian S. (Jack) McCully
JAM Environmental & Vacuum Services, LLC (JEVS)
Lauderhill, FI