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 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”

Four air tanker companies protest Neptune’s new contract

BAe-146 drops on Devore Fire
Neptune’s BAe-146 drops on the Devore Fire, November 5, 2012. Photo by Rick McClure.

Four air tanker companies are protesting the non-competitive contract that the U.S. Forest Service gave to Neptune Aviation for two BAe-146 air tankers on December 12. As we reported that day, the contract, with a potential value of at least $141 million over four to nine years, justified the refusal to allow competition because of a necessity to “keep vital facilities or suppliers in business or make them available in the event of a national emergency, or prevent the loss of a supplier’s ability and employees’ skills”.

The Missoulian reported the information late on Tuesday. Below is an excerpt from their article:

Four aerial firefighting companies have protested the U.S. Forest Service’s decision to award two next-generation air tanker contracts to Missoula-based Neptune Aviation.

Neptune received the $8.7 million annual contract for two BAe-146 jet fire bombers on Dec. 13. The challengers, Coulson Aviation USA, Minden Air Corp. and 10 Tanker Air Carrier LLC, each filed a protest on Dec. 23 with the Government Accountability Office.

GAO attorney Gary Allen said he could not discuss the protest claims Tuesday, because they contained “protected information” that couldn’t be disclosed until after a decision was rendered. That decision is due by March 28, but Allen said he expected a resolution would be reached before then.

An earlier version of the Missoulian article incorrectly reported that we had written at Fire Aviation that the Coulson gravity-assisted RADS retardant tank was going to be installed in the seven C-130H aircraft being transferred from the Coast Guard to the U.S. Forest Service, to convert them into air tankers. We had only said that “It would not surprise us if the U.S. Air Force will be calling [Coulson] for a quote” for the tank system. We thank reporter Rob Chaney for making the correction.

 

Thanks and a hat tip go out to Scott and Dick