GAO sustains protest of air tanker contract

Neptune's Ait Tanker 41

Neptune’s Tanker 41, a BAe-146, at Missoula, August 11, 2012. Photo by Bill Gabbert.

(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.”

25 thoughts on “GAO sustains protest of air tanker contract

  1. I don’t understand any of this $141 million for two 3000 gallon air tankers? As a taxpayer I think I have a right to know what is really going on? What does Cal Fire and Oregon’s fire aviation programs cost annually? Is this like the $348,000 toilet seat for the space shuttle? If the Feds low-ball of eighteen air tankers is accomplish (big if) are we now in the billions? Maybe its time to slam on the brakes and take another track? What did New Foundland pay (own) for their scoopers? See how many radial engine operators ( DC 6,7) will come out of the “woods” if a solicitation for hire, 3000 gallon retardant tanker, radial engine acceptable. I can see why Colorado is not wanting to make the jump.

    • Bill,
      I’d like to know the math behind 141mil. Seems as though the “experts” on here are having a tough time. Thanks.

  2. Johnny

    We ALL deserve to know. You are right about that.

    Now it needs a deeeper GAO and a 3rd party OIG audit from many Federal levels.

    Time for the USFS to get taken to the woodshed for lack of business acumen amongst other things.

    Johnny…..I am sure this was no suprise to all of us. If just would have been better if TRUE aviation professionals were at the helm rather than some Regional or District Foresters who do not fly or maintain aircraft in their professional CV.

    But it proves one thing, These folks had the USFS in a corner in some form or another…….

  3. That’ll make things interesting. Undoubtedly 10 TAC had a reasonable protest with another proven aircraft sitting without a contract. And Coulson as well if they were told that funding for other aircraft was not available on sound footing. The question I ask, given the previous article outlining the protest and how it came about, is “what happens in Neptune can’t sustain it’s business?” That’s seven aircraft that could disappear. One audit says that Neptune will be solvent through 2016 while another says it can’t. Was it a bluff by Neptune or not who knows. Either way, everyone will be in a world of hurt if those aircraft aren’t available.

    • Likely a bluff in light of several Neptune Aviation contracts in hand; a majority over all other operators. Agreed we need additional airtankers; however, more importantly is a tragic and troubling trend of fatal crashes by Neptune. Sustainability and solvency relate directly to a company’s ability to operate safely. Just as critical as these airplanes are to our ability to fight wildfire is to ensure safe companies operate them.

  4. We updated the article to include the complete text of a statement that was released this morning by the GAO which provides a few more details about their decision. We have reached out to the USFS for their response to these developments.

  5. Forest Service response?

    It will canned,scripted. and not much in detail….cuz the must think their info much be secret and will be wrapped around some sort of FOUO, classified, super secret and the sort ……like most of the info on the tanker program the last 12 plus years

    I will buy company propietary (sp), but not some transparency quotes….

  6. Obviously, the protest and and sustaining it is justified. Sounds like malfeasance on the part of an (several?) official(s) at the USFS. That they couldn’t award the additional tankers on the ‘Next-Gen’ contract, but could negotiate and enter into a contract with an agency that couldn’t compete seems makes it seem like there are people that should be looking for new jobs.

    OTOH, even if ALL of the ‘Next-Gen’ tankers are flying, don’t we still come up short of the desired number of LATs? I think keeping Neptune’s tankers flying is important. Of course, allowing the BAe-146 to replace the P-2s on the Legacy contract seems to be a better vehicle to me. How many hours on those P-2 airframes now?

    I suspect the entire process is a significant part of Neptune’s financial issues.

  7. Obviously there was some seriously fishy stuff going on within the Forest Service(is anyone really surprised?)

    I wonder what would have had happened if the USFS had just issued a 1 or 2 year sole source contract for air tankers. That they might be able to justify. I’m sorry to lose any extra tankers this year, but not at the risk of having one company basically be allowed to monopolize the industry(never good for anyone involved).

    So my question is though, what is the status of the other Next Gen Tankers at this point. I know several of them have gone through the cup test, but no one seems to have any info on the status of the aircraft. Anyone out there know anything about the status of the next gen tankers(specifically, Minden’s, Aeroflite, and Erickson Aero Tanker).

  8. We added to the article a response from the USFS. We asked them for their reaction to the GAO decision, and will other air tankers 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.

  9. The “Great Airtanker Debacle of 2014″

    Proving they the USFS still CAN NOT get heavy Airtanker operations right since the 1990’s

    Maybe they could do an AAR, FLA, SAIR….or a “Lessons Learned”
    Maybe the USFS can get Mission Centered Solutions, Avid, or Convergent to do another bunch of “studies” to rectify this Whole thing for the future:……….

    OR NOT.

  10. Wanted Air Tankers to Rent: We (Feds) pay (5) 2000 gallon airplane $8000/hour wet. Guaranteed availability at same hourly rate. Need: (20) 3000 gallon air tankers $12,000/hour same for daily. (10) 4000 gallon air tankers $18,000 hour wet, same daily. (5) Air Tankers 11,000 gallon, $36,000 per hour same daily. Over 12,000 gallons call us. Crew and aircraft must hold a current appropriate FAA license or certificate. PIC must have a current initial attack card. Tank system must be “board approved”. Other conditions and different locations apply. Needed 40 good air tankers immediately. First forty approved get the job.

    • To straighten out their contracts like you suggest would be great but …

      1, The USFS has to know what they want.
      2. They must be able to justify their requirement when it comes around to the budget process.

      Its not apparent that they have a handle on either one.

      • I am very close to a person who practices law. So if the Feds need a model remember the past “44” air tankers? That work well in the ‘past’ and should be the model for the future, past practice why change? Is the world getting cooler and wildfires self extinguish? Better up that number to fifty (50) air tankers.

  11. Good one, Johnny

    Forty approved? At the current rate of professional contracting personnel and issues surrounding the sole source issues….

    Lesssee here……12 years from 40 to 9-11 combo VLAT/ LAT and on again / off again Canadian short term contracts

    Getting back to 40? Could be 2025 AD

    Again……I have been wrong before……

    • With the P2’s going away, maybe sooner than later, and the way so called contracting is handled there is little chance that anything will be accomplished in the next ten years. Did any one add up the numbers to see what it would cost to have a fleet of forty air tankers available seven days a week on 100 day contracts? How hard can this be?

  12. The key point is that the Forest Service (executive branch) sees that the GAO opinion (legislative branch) is a “recommendation”.
    When it comes to a stalemate like this…. it always ends up in arbitration or litigation….. costing taxpayers even more in the long term.

  13. And the USFS is not big on “recommendations” are they?

    Especially the RAND report from approx 2 yrs ago…

    Pay for a study that they pay for US with tax dollars, lollygag, and then ooooohhh now we got one Scooper on contract.

    But the USFS can do what they want AND provisions in laws are being exercised by the operators of aircraft because they see an issue in the contract system that is befuddled FUBAR

    Yep……litigation looks like a fixit for a recommendation

  14. Government Accountability Office () is an independent, nonpartisan agency that works for Congress. Often called the “congressional watchdog,” investigates how the federal government spends taxpayer dollars.

  15. I am jes’ say’n this -but I see more state involvement, More SEATS (not a bad thing) More cooperation between states.
    As the Feds slowly unwind….
    I hope I am wrong…
    The USFS need someone with Command Authority..

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