GAO evaluates the Coast Guard’s acquisition of C-27J aircraft

GAO Coast Guard C-27J acquisition

In 2013 the U.S. Forest Service was expecting to receive seven C-27J aircraft from the Air Force. The Air Force was giving them up even though the oldest were only a few years old, and the newest ones were still to be delivered from the manufacturer.

In mid-2013 the USFS contracted for a report about the aircraft prepared by Convergent Performance, LLC in Colorado Springs, Colorado at a cost of $54,000. The report’s conclusions:

  • If used as an air tanker it could carry up to 1,850 gallons of retardant in a conventional gravity-assisted tank, or 1,100 gallons in a mini-MAFFS slip-in tank, if a mini-MAFFS were designed, built, and purchased.
  • It could transport between 24 and 46 smokejumpers.
  • The C-27J could carry two 20-person crews, except, for example, at Reserve, New Mexico, elevation 8,143′ with a 4,777′ runway, it could land with two crews, but could take off with only one.
  • The aircraft could carry between 12,222 and 25,353 pounds of cargo.
  • The hourly flight cost would be between $5,800 and $7,400 if used for 250 to 400 hours a year.
  • The C-27J is training intensive and requires constant skill application by the aircrews to remain proficient and mission-ready.

As it turned out, the USFS did not get the seven C-27Js. Those plus another seven were given to the U.S. Coast Guard, while seven of the Coast Guard’s old HC-130H aircraft were ordered to be transferred to the USFS after being converted by the Air Force into air tankers. This was etched in stone when the National Defense Authorization Act of 2014 was passed in December, 2013. The conversion of the first of the seven HC-130Hs is partially complete, as evidenced by Tanker 118 being stationed at McClellan Airport this week.

C-27J

In April, 2015 the Government Accountability Office released a study of the Coast Guard’s acquisition of the C-27J, titled Transfer of Fixed-Wing C-27J Aircraft Is Complex and Further Fleet Purchases Should Coincide with Study Results. Below are highlights of their report:

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“What GAO Found
As of January 2015, the Coast Guard had transferred 2 of the 14 C-27J aircraft it is receiving from the Air Force to its aircraft maintenance facility, with plans to field 14 fully operational C-27Js by 2022. According to initial Coast Guard estimates, while the aircraft come at no cost, the Coast Guard needs about $600 million to fully operationalize them. This process is complex and significant work and risk remain. For example, the Coast Guard must establish its needs and purchase a set of spare parts for each aircraft, but faces hurdles due to potential pricing issues and delivery delays from the manufacturer.

Also, the Coast Guard does not have access to the manufacturer’s technical data that are required for modifications to the aircraft’s structure to, for example, incorporate radar. These and other risks may inhibit the Coast Guard’s ability to operate the aircraft as planned. However, the Coast Guard is working to mitigate these risks.

The C-27J will improve the affordability of the Coast Guard’s fixed-wing fleet, but the fleet as currently planned may not be optimal in terms of cost and flight hour capability. The Coast Guard submitted a business case to Congress in 2013 that determined the C-27J would save $837 million over 30 years, compared to the program of record, without reducing fleet performance. GAO estimates that the fleet the Coast Guard is currently pursuing achieves nearly all of these savings. However, the source of these savings has shifted. A significant portion of the savings now results from an 18 percent drop in flight hours due to a change in the mix of aircraft the Coast Guard intends to pursue.

GAO used updated information in conducting its analysis, such as the expected service life of each aircraft type. Consistent with congressional direction, the Coast Guard is conducting a multi-phased analysis of its mission needs—including its flight hour goals and fleet of fixed-wing assets—but will not present the full results prior to its 2019 budget request. In the meantime, the Coast Guard has prudently paused its existing HC-144 acquisition program.

However, since 2000, the Coast Guard has received 12 HC-130Js without budgeting for them and it may continue to receive these aircraft while it studies its fixed-wing fleet needs. If the Coast Guard continues to receive these aircraft in the near term, the capability and cost of the Coast Guard’s fixed-wing fleet runs the risk of being dictated by the assets the Coast Guard already owns rather than what it determines it needs.

Why GAO Did This Study
The Air Force is transferring 14 C-27J aircraft to the Coast Guard. Once modified into surveillance aircraft, the C-27Js will be a part of the Coast Guard’s fixed-wing aircraft fleet. In 2007, the Coast Guard established a baseline of aircraft quantities and costs known as the program of record. This baseline established the cost and quantity of aircraft necessary to achieve its goal of 52,400 flight hours per year. The Coast Guard’s aircraft, including the HC-144 and HC-130J/H, are integral to its missions, such as counterdrug and search and rescue.

GAO was asked to review the transfer of the C-27J to the Coast Guard. This report assesses (1) the status of the transfer and risks the Coast Guard faces in fielding the transferred aircraft; and (2) the extent to which acquiring the C-27J affects the overall cost and performance of the Coast Guard’s fixed-wing aviation fleet.

GAO analyzed program documents and maintenance records for the C-27J. GAO interviewed Coast Guard and Air Force officials and private contractors. GAO also analyzed the Coast Guard’s C-27J business case.

What GAO Recommends
The Department of Homeland Security (DHS) and the Coast Guard should advise Congress of the time frames for the Coast Guard’s fleet analysis and to modify the provision of additional HC-130Js, as appropriate, in the interim. DHS agreed with the first recommendation, but did not agree with the second recommendation. If the Coast Guard accepts additional HC-130Js before completing the fleet mix study, the aircraft may be in excess of the Coast Guard’s need.”

Protests delay awards of air tanker contracts

Tanker 101, an MD-87
Tanker 101, an MD-87 operated by Erickson Aero Tanker, during the grid retardant test, January 15, 2014. Photo by Jeff Zimmerman. (click to enlarge)

The U.S. Forest Service (FS) had hoped to have as many as seven additional “Next Generation” large air tankers working under contract on May 30, 2015, but protests filed by two companies could push that date back by several months.

The FS first awarded contracts for Next-Gen air tankers in 2013 at the end of a 555-day process that also included protests which delayed the awards. Next-Gen air tankers are required to have capabilities not present in the previous generation of Korean War vintage machines. They must fly faster, be powered by turbine or jet engines, and have a capacity of at least 3,000 gallons of fire retardant.

Two companies have filed protests about this latest round of potential contracts, Coulson Aviation and Erickson Aero Tanker. The protests were lodged with the U.S. Government Accountability Office which has the responsibility of deciding whether the protests have merit, which they are required to do by July 9 for Coulson’s protest and July 17 for Erickson’s. Both companies later amended their original complaints, which complicates the procedure for the GAO, so it is unlikely that anything will be decided much before those mid-July due dates.

No contracts have been awarded yet, nor has the FS announced what their intentions are about the contracts. The two companies are protesting the terms of the solicitation which was first posted on February 19, 2015, and then amended five times. Responses from bidders were due on April 9, 2015.

In researching this article we reached out to Erickson Aero Tanker and Coulson Aviation, but did not receive replies by our publication deadline.

When the awards were announced for the first round of Next-Gen contracts in May, 2013, Neptune Aviation did not receive one of the seven contracts and filed a protest. A few weeks later Neptune dropped their protest which allowed the FS to finalize the contracts form the other seven air tankers. It was disclosed later that the FS and Neptune had entered into a written agreement under which the agency agreed to award Neptune a sole-source contract for two Next-Gen large airtankers in exchange for Neptune withdrawing its protest.

In December, 2013  the FS awarded the promised sole source contract to Neptune for the two air tankers beginning in 2014. The estimated minimum value of the contract was $141,000,000 and had a base period of four years with the possibility of adding five more. If those five years were tacked on it would could have brought the value of the contract up to almost half a billion dollars.

The basis for awarding the non-competitive sole source contract to Neptune, according to the FS, was that the company was in danger of going out of business. The agency used the industrial “mobilization exception” to the requirement to conduct a competitive procurement. Their rationale was that without Neptune, the FS could not field an adequate number of air tankers. In March, 2014 we wrote a very detailed article about the sole source award and how it developed.

That sole source contract was protested by three companies, Coulson Aviation, 10 Tanker Air Carrier, and Minden Air Corp. The GAO upheld the protest, writing in their March 2014 decision that the sole-source award to Neptune in exchange for Neptune’s withdrawal of an earlier protest, was not a reasonable basis for the agency’s action. GAO also disputed the claim that Neptune was in danger of going under, and recommended that the FS reimburse Coulson, 10 Tanker, and Minden for their costs of filing and pursuing the protests, including reasonable attorneys’ fees.

GAO releases details of air tanker contract protest decision

GAOThe General Accountability Office has released their 23-page decision documenting why the agency 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 $141 million to $496 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.

In our previous article about the decision we included the text of a press release issued by the GAO, but this 23-page document provides much more detail.

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.

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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.
Continue reading “GAO sustains protest of air tanker contract”

A sole source air tanker award, how it developed

BAe-146 drops on Devore Fire
A Neptune BAe-146 drops on the Devore Fire, November 5, 2012. Photo by Rick McCLure.

Today, March 11, the Government Accountability Office will hold a hearing at their office in Washington, DC to consider the protests filed by three air tanker companies over the propriety of the U.S. Forest Service’s (USFS) noncompetitive contract award to Neptune Aviation Services, Inc., for next-generation large airtankers. The hearing was scheduled to begin at 9 a.m. ET, but was a closed session, open only to GAO personnel, attorneys for the three companies that protested the contract, and two individuals from the Department of Agriculture who have been asked to be available to testify, Lisa Wilusz, a Senior Procurement Executive, and Gregory Parham, the Chief Acquisition Officer. Even the owners of the protesting companies are prohibited from attending, to prevent them from being exposed to their competitors’ trade secrets.

Protesting the sole source award for two BAe-146 air tankers to Neptune, are Coulson Aviation (USA), Inc; 10 Tanker Air Carrier, LLC; and Minden Air Corp. If only the basic two air tankers are signed up, the value of the contract would be about $141 million. If the options for the five additional tankers are utilized, it would be hundreds of millions.

The GAO is required to make their decision about the propriety of the sole source award by March 28.

Fire Aviation has reviewed almost three dozen documents filed by the protesting companies as well as the USFS’ Motion to Dismiss the protests. The files contain letters of protests, supplementary protests, transcripts of Congressional hearings, “declarations” written by some of the principles, an NTSB report, and an article from FireAviation.com. While it remains to be seen which side the GAO will favor, regardless of the outcome it is clear that after the dust settles the attorneys will probably close shop for two weeks and take their families to Bora Bora.

Most of the documents have redactions, some more than others. One or two are virtually useless as a result, but most still contain a great deal of information. We will elaborate on them, but first, get a cup of coffee–it’s a long story.
Continue reading “A sole source air tanker award, how it developed”

GAO air tanker report says more data and planning needed

A P2V on the Whoopup Fire, 2011
A P2V on the Whoopup Fire, 2011. Photo by Bill Gabbert

A report released by the Government Accountability Office yesterday about air tankers pointed out some of the same issues that were in a 2009 audit by the USDA’s Office of Inspector General. Both reports emphasized that the U.S. Forest Service and the Department of Interior need to collect data about the effectiveness of air tankers and put together a coherent plan on the management of the fleet, and a plan for the acquisition and justification of additional aircraft.

This is the 11th report about air tankers since 1995.

The GAO report was in response to a March, 2012 request by four U.S. Senators asking for a review of “the nation’s depleted fleet of firefighting aircraft and the remedies needed in the face of increasingly severe fire seasons.” The Senators were Ron Wyden, Lisa Murkowski, Dianne Feinstein, and Mark Udall.

The GAO conducted an “audit”, between August 2012 and August 2013. Their product assembled a great deal of information about the current state of the aerial firefighting fleet which has dwindled from 44 in 2002 down to 8 to 11 this year. But it does not have a lot of new, specific, and practical “remedies”, other than collect data and develop a coherent plan. It concluded:

None of the agencies’ studies and strategy documents contained information on aircraft performance and effectiveness in supporting firefighting operations, which limits the agencies’ understanding of the strengths and limitations of each type of firefighting aircraft and their abilities to identify the number and type of aircraft they need.

The GAO had three recommendations:

  • Expand efforts to collect information on aircraft performance and effectiveness to include all types of firefighting aircraft in the federal fleet;
  • Enhance collaboration between the agencies and with stakeholders in the fire aviation community to help ensure that agency efforts to identify the number and type of firefighting aircraft they need reflect the input of all stakeholders in the fire aviation community; and
  • Subsequent to the completion of the first two recommendations, update the agencies’ strategy documents for providing a national firefighting aircraft fleet to include analysis based on information on aircraft performance and effectiveness and to reflect input from stakeholders throughout the fire aviation community.

The report included some information that is not widely known about Neptune’s BAe-146 air tankers. The Interagency AirTanker Board refused to extend the interim approval of the drop system in December, 2012 due to problems with the retardant delivery system and deficient performance. However, in February 2013, the National Interagency Aviation Committee overrode the IATB decision citing a shortage of air tankers. The committee granted an extension of the interim approval of the retardant delivery system through December 15, 2013. Neptune has recognized the problem and said a redesigned system is being installed in its’ third and fourth BAe-146s and next winter the problematic design in the first two will be upgraded.

The USFS’s recent Request for Information to possibly lease 7 to 15 aircraft outfitted with high-tech sensors to serve as platforms for aerial supervision could be partially in response to the GAO’s criticism about the lack of aircraft effectiveness data. These aircraft would be equipped with Infrared/Electro-Optical sensing systems with color camera and FLIR systems which would have recording capability. If the personnel on board had time, when they are not managing aircraft, they could record air tanker drops and monitor the location long enough to determine if the water or retardant had the desired effect on the spread of the fire. The aircraft would have an aft crew station for two people designed for training which would have a duplicate set of controls and radios, which could possibly also be used for evaluating drop effectiveness when not used for training.

 

Thanks go out to Rick and the others who let us know about this.