(Originally published at 3:15 p.m. MT, March 31, 2014; updated at 8:40 a.m. MT April 1, 2014 with the text of a statement released by the GAO, and again at 11:20 a.m. MT April 1, 2014 with a response from the USFS.)
The Government Accountability Office announced today that they sustained the protest filed by three companies over the sole source air tanker contract that the U.S. Forest Service awarded to Neptune Aviation December 12, 2013. The non-competitive contract, worth about $141 million, specified that Neptune would supply two or more next-generation air tankers, BAe-146s, for the next four to nine years beginning in 2014.
A spokesperson for the GAO said their review concluded that the U.S. Forest Service “could not reasonably justify” the non-competitive process used in awarding the contract to Neptune.
The three companies that protested the sole source contract were Coulson Aviation (USA), Inc; 10 Tanker Air Carrier, LLC; and Minden Air Corp. If only the minimum two air tankers were signed up, the value of the contract would be about $141 million. If the options for five additional tankers were utilized, it would be hundreds of millions.
The protest automatically halted the activation of the sole source contract when it was filed in December.
We asked the USFS for their reaction to the GAO decision, and if other air tankers will be brought on, either by activating options under existing legacy or next-gen contracts, or will additional contracts be pursued? We received the following statement issued by their Washington office Tuesday morning:
The U.S. Forest Service is committed to ensuring that we have all of the resources we need to fight wildland fire and protect the lives and property of the American people. Airtankers are an important part of our efforts and we are currently reviewing the GAO recommendation.
In the protest filed with the GAO, hundreds of pages were submitted, listing dozens of reasons why the three companies felt the sole source contract should be terminated.
The Coulson company argued that on several occasions they told the USFS that they could supply more than the one C-130, but were told that the funding situation was too uncertain to commit more air tankers. Then a few months later, the USFS issued a contract potentially worth at least $141 million.
10 Tanker made similar offers, and in fact had a second DC-10 fully certified and on a call when needed contract that they would have liked to convert to an exclusive use next-gen contract. They also said they are working on retrofitting a third DC-10 which they expect to have ready to go by the end of calendar year 2014.
This was the third USFS air tanker contract that has been officially protested in the last two years. Two of those were sustained by the GAO, the recent sole source contract and the original attempt to issue contracts for next-gen air tankers, while the third, filed by Neptune, was dropped five months before the company received the sole source award in December.
Neptune will have six Korean War vintage P2Vs (2,082 gallons each) and one jet-powered BAe-146 (3,050 gallons) on exclusive use contract this year in what the U.S. Forest Service calls the “legacy” air tanker category. The company expects to have four additional BAe-146s ready to fight fire this year that are not currently on contract.
10 Tanker Air Carrier has one DC-10 Very Large Air Tanker on exclusive use contract and another on a call when needed contract. The company is in the process of retrofitting a third DC-10. They each carry 11,600 gallons of fire retardant.
Coulson has one 3,500-gallon C-130Q on exclusive use contract and hopes to acquire and convert a second C-130.
Minden has a contract for a BAe-146 but it has not yet been tested or approved by the Interagency AirTanker Board.
The complete text of a statement by the GAO about the decision is below. It was written March 31 and released April 1, 2014.
“The following is a statement from GAO regarding today’s decision resolving bid protests filed by Coulson Aviation (USA) Inc., 10 Tanker Air Carrier, LLC, and Minden Air Corp., B-409356.2 et al., March 31, 2014.
On March 31, the U.S. Government Accountability Office (GAO) sustained, or upheld, the protests filed by Coulson Aviation (USA) Inc., of Port Alberni, British Columbia, Canada, 10 Tanker Air Carrier, LLC, of Albuquerque, New Mexico, and Minden Air Corp., of Minden, Nevada, challenging the sole-source award of a contract by the Department of Agriculture (USDA), U.S. Forest Service, to Neptune Aviation Services, Inc., of Missoula, Montana, for airtanker services to support wildland firefighting. The contract contemplates Neptune providing at least two modern large airtankers for up to 9 years (the contract also contains options to add up to five additional aircraft in each year). The total estimated value, based on all possible aircraft over all years, is approximately $496 million.
In June 2013, the Forest Service entered into a settlement agreement with Neptune in which Neptune agreed to withdraw an earlier protest in exchange for the award of a sole-source contract. On December 9, 2013, the agency justified the noncompetitive award of a 9-year contract to Neptune under the authority of 41 U.S.C. § 3304(a)(3)(A) (2006), which provides for a noncompetitive award to a particular source to maintain an industrial mobilization base.
The protesters argued that the sole-source contract awarded to Neptune was promised in exchange for Neptune’s withdrawal of an earlier bid protest and was not justified. The protesters contend that Neptune is not a vital supplier of large airtankers and, more importantly, that Neptune does not require a sole-source contract to remain a source of large airtankers.
Based on our review of the record, including a hearing held at our Office, GAO concluded that the agency had failed to demonstrate that that the noncompetitive award of a 9-year contract was justified.
We recommended that the Forest Service reassess whether a sole-source contract with Neptune–for industrial mobilization reasons or any other reason–was necessary to meet the agency’s needs with regard to large airtanker services. We recommended that, if the agency reasonably determined that the award of a contract on a sole-source basis to Neptune was necessary for large airtanker services, the agency should execute a properly-reasoned justification for the sole-source award. We also recommended that, if the agency determined that the award of a contract on a sole-source basis to Neptune for large airtanker services was not necessary, or that the contract awarded to Neptune did not reflect the agency’s reasonably justified needs, the agency should terminate the contract or modify it as appropriate. We also recommended that the agency reimburse Coulson, 10 Tanker, and Minden the costs of filing and pursuing their protests, including reasonable attorneys’ fees.
Because this protest decision contains proprietary and source selection sensitive information, release of the decision, at this point, is limited to USDA personnel and to outside counsel who have been admitted under the GAO protective order issued for these protests. The parties have been directed to submit proposed redactions for the purpose of preparing a public version of the decision. GAO expects to publish a public version of the decision as soon as possible. When the public version of the decision is available, it will be posted to our website, www.gao.gov.”