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

15 thoughts on “Four air tanker companies protest Neptune’s new contract”

  1. Well here we go again…….

    Here is a novel new idea never thought of in DC or the USFS

    How about Five to seven sole source contracts????

    Cuz we all KNOW that there are no where near 44 Airtankers, collectively, to get everyone filed up…..

  2. Incredible, there is a national fire emergency. Just look at the panel discussion on this site. $142 million dollar “gift” for one company? What does the taxpayer get for his/her money, five or six untested air tankers over nine years. Sole source where did that come from? Are we building air tankers or secret sophisticated drones in the desert of Nevada near Tonopah? Is Missoula, Montana Area 52…………………………………..

    1. Johnny,

      1-The nation needs LAT’s.
      2-The four companies that have protested already have “Next Gen Awards” respectively. Several of which got them after protesting Neptune’s original award in the initial go around of Next Gen Bids. Leaving Neptune with 0.
      -Two of the these companies have preformed, two have not as of
      yet produced an approved Next Gen Aircraft.
      3-Neptune has several Tanker Board and FAA certified Next Gen aircraft ready, sitting on the ramp in your “area 52” as we speak. These aircraft could legally fly on a fire today if needed, and perform.
      4-Its January, regions will be calling for LAT’s soon.
      5-Would you rather this continue to be tied up in a pissing match as the season approaches or simply allow Neptune to enter the party with all the other cool kids?

      Isn’t everyone trying to do the same thing here, provide quality next gen aircraft to the agency? As Leo and Jerome very accurately state, even if every eligible company were given contracts and able to perform on them, we still need more LAT’s. Lets get the ball rolling and worry about who has what contract when we can afford to.

  3. Commonsense, while I do agree with Neptune getting a contract, I believe there are a couple of errors in your statements.

    I believe their IATB approval is provisional, because of coverage issues. From what I have read, they have an updated tanking system, so if I understand correctly, they should need to get their aircraft drop tested again.

    And, while the LMA’s do end up with aircraft available, the goal isn’t an altrusitic, “let’s provide people with firefighting aircraft”, all of the protests are about money. I don’t have a problem with profit making enterprises, nobody would eat without it. But I wonder how much behind the scenes lobying and infighting really costs me. I have a background in public agency contracting (highway) and some of the things I have learned make me shake my head. When I contract my Type 6 engines and Type 2 tenders, it’s a wet rate. Why aren’t aircraft contracted like that. I suspect if they were, we would see an entirely different mix of aircraft.

    Of course, the total investment is a couple of orders of magnitude different, which is my biggest criticism of the USFS. With that type of investment, I really believe the contract award should be different, a front loaded infrastructure contract, and a long term operational contract. I think that would make for a much better availability of aircraft. as equipment is being built, payments for milestones would allow for more stability. I used to make payments for “Materials on Hand” on larger projects, bridges, interstates on a regular basis. I can see making payments on Annual airworthyness checks, NDT, IATB certification throughout the year. This would help even out cashflow.

    Of course, that’s a whole ‘nother conversation, and I digress.

    1. “When I contract my Type 6 engines and Type 2 tenders, it’s a wet rate. Why aren’t aircraft contracted like that. I suspect if they were, we would see an entirely different mix of aircraft.”

      My understanding that contracts of yesteryear were “wet rates” but the government was able to save a significant amount of money if they purchased the fuel through the DOD fuel program. I could be wrong thought. Anyone know this to be true?

  4. Gordie,

    You are correct, Neptune does have a revised tanking system, however you are quite wrong in assuming that it did not have to undergo IATB drop tests. It’s a new tank, therefore of course it had to go to grid again AND it passed with flying colors. Neptune has proven themselves time and time again. Let’s give them a chance.

    In regards to the rest of your conversation, of course this is a money making enterprise and we should all be concerned with how/where our money is spent. However don’t you feel that the longer these protests continue, the more “lobying and infighting” will continue to cost us? Not to mention capable aircraft not being available this season, as well as the potential of many men and women without jobs that would otherwise have them.

  5. I believe in my first line, I am giving them a chance by saying “I agree with them getting a contract”.

    I assumed it hadn’t passed because I have seen no mention of it passing. If so, great.

    As for the protests, who gets the last one? I wonder why the other contactors are protesting? Do they feel Neptune is getting an unfair opportunity? Is the Neptune contract at a better rate than the NextGen process? Obviously with the number of tankers available last season, there is room for significant growth.

    The protests aren’t without risk. The protesters must feel the benefit outweighs the costs. Maybe they can get a sweetheart deal too? What do they hope to gain?

    In my opinion, the whole process has been mishandled.

  6. I am not involved in the protest, but understand the logic. The customer initially said they wanted aprox 35 tankers then cut that number to 18-28 next gen tankers. Now add aprox 6 gov owned C-130s (recent development) (or should I say subtract 6). That is now down to 12-22 next gen tanker slots available. Each of these companies have sunk way more money into R and D than folks can imagine. If each company is only able to operate 2 next gen tankers and is only able to split those costs over a couple planes they will all go broke. They would probably need to re bid the contracts at twice the current rates to get back to the black. Personal thoughts are the gov needs to get closer to that 35 number to have an effective fleet anyway, but I don’t make the rules

  7. When the Next-Gen contract was being advertised to the contractors. Seven line items were offered for 1 aircraft each with an option to add 4 more aircraft per line item. This would make the Next-Gen contract potentially supplying
    7 x 5 = 35 aircraft.

    Given the obvious and desperate need for air tankers and willingness of USFS to hire them the contractors were enticed to invest money in coming up with a good design that would beat the others on cost and performance to provide the best value to the USFS.

    The race was on to acquire aircraft. Whoever had a fleet of approved (FAA and IAB) aircraft before the others would stand a good chance of winning long term contracts for all of them.

    Aero-Air rushed out and bought 7 MD-11’s and Neptune quickly ramped up their modernization plan for a fleet of BAE-146’s even before winning a Next-Gen line item (they had a head start on everyone).

    Long delays in awarding the Next Gen contract followed by protests and even more delays in the eventual revised award. Neptune, initially in the first award, won 2 line items to possibly supply up to 10 aircraft which confirmed their modernization strategy was valid.

    Months later when the dust settled, Neptune was without a long term contract for any of its Next-Gen aircraft putting their company in financial limbo. This could then cause a ripple effect of potentially parking the majority of the existing P2V fleet as Neptune struggles for financial survival.

    The landscape today has changed with the seven C-130’s coming to the USFS to be converted to air tankers (maybe more in the future?). The USFS have tried for years to acquire C-130’s as part of their long term plan and now are starting to get them. Will the USFS drastically scale back their Next-gen plans?

    It is possible and even likely the contractors are only going to operate just the seven that were awarded the Next Gen contracts with no options taken to add more (depending on how the C-130 conversion goes.) Can the contractors stay in business with only 1 or 2 aircraft on contract when their business plans probably had more than that when they bid for the line items?

    The USFS seemed to have held a contest to bankrupt the air tanker companies.

    The USFS modernization plan only want 18-28 large air tankers.
    9 Legacy P2V’s (8 Neptune, 1 Minden)
    7 Next Gen (1 Minden, 1 Coulson, 1 10-Tanker, 2 Aero-Air, 2 Aero-Flite)
    2 Sole Source (2 Neptune)
    2 CWN VLATS (1-10 Tanker, 1-Evergreen bankrupt?)
    7 USCG C-130’s (Future converted)
    Total = 27 plus another 8 MAFFs and borrowed Alaska/Canada aircraft puts them on target with their plan without any more aircraft.

    What happens when the P2V’s retire, does Neptune and Minden replace them 1 for 1 with their Next-gen aircraft? Does Coulson get to convert the C-130’s and who will operate them? Are any Next-Gen line item options for more aircraft going to be taken? If any Next-gen contractors fail to have their aircraft ready, can other contractors that are certified win their line items? The protests might be more about leveraging future consideration for answering these questions than preventing Neptune from receiving a sole source contract to keep them in business.

  8. Good explanation, John

    Could be even valid.

    The Airtanker program and the USFS desire to acquire the C130 has been a mockery of a program, especially now with “legislation” for the USAF to supply the wing box mod.

    It certainly seems the contracting system appears or appeared to pit aircraft owners against each other. Surely, the USFS has NO understanding of what it takes to modify and rework aircraft that were not designed as an Airtanker in the first place, albeit, they would like the general public to believe that what they are doing is in the best interest of the Nation and the resource.

    If that was the case, this MAY have been settled YEARS ago……or not. One thing is for sure…..we are not going to see 35 LAT this year nor are we going to see the ‘130’s in action this summer……

    The “secret” program of airtankers in the LMA program gives more credence that there is no real plan on the table other than wing box mods for the near future… can sure bet that at the moment

    I have seen more enlisted mechanics do MORE in one year with helicopters than the leadership and 11 LAT studies have done for the last 35 to 50 years to ” improve the efficiency of the LAT program.” Sarcasm there…….because there has been NO efficiency in any way shape or form other than the NDAA of 2014 to have someone else’s dime be spent on aircraft mods that should have been put squarely on the USFS.

    Now the learning curve begins…..if the USFS contracts crews, MX, and training……they are going to see what the costs look like for aircraft ownership. That will be the learning curve of expenditures as shown by all the contractors who have invested their own nickel to get through the embarrassingly contract monkey works.

    It is going to be ANOTHER interesting fire season to say the least…….that 27 to 35 number of aircraft………..maybe……it sure will be moving target this season…

  9. There will be a plan… for a plan… with an eventual plan for an implemention strategy (yet to be developed).

    Analysis paralysis… planning paralysis… = lack of decision making and leadership.

    After the plans and strategies are eventually approved (if ever), we’ll probably have a colony on Mars.

  10. The C130 mystery is causing more uncertainty and confusion than it is worth.
    Let all the private air tankers operators have a clear define path toward the future, build tankers. Use the Cal Fire model (proven over thirty years) to transfer the C 130’s to state resource agencies responsible for protecting private and state lands. Establish one central location for support, heavy/annual maintenance, pilot training, stores, avionics, a private contractor. Two cost; one fixed for the central maintenance facility shared between seven to ten cooperating states, second a flight maintenance account, fuel, parts, based on cost per hour operations. Questions, look at Cal Fire.

    1. Or….take the burden of aircraft maintenance, parts, pilot training, avionics upgrades and anything else to do with operating an aircraft AWAY from any government entity. It is not in the core mandate of any federal or state agency to own a fleet of aircraft, at least it shouldn’t be.

      Just when I get lulled into thinking the end is in sight to this debacle, a new and embarrassing govt-created twist appears. I often wonder why all the operators haven’t simply thrown in the towel and said ‘to hell with it’, but then a $142M windfall for a pair of substandard airplanes reminds me why they’re all still in the game.

  11. I think I have come to my senses. The state resource agencies responsible for wildfire protection probably don’t have the enthusiasm, money or concern to really jump into an air program above a few SEATS. So watch the fires on T.V. and pay the higher insurance premiums, and I mean PREMIUMS. As for the C130’s park them in the desert in Tucson (D.M.) and save tens of millions of dollars. The C130 program reminds me of the person buying a police car (covered up by a paint job) with 200 K miles, being told by a car salesman “the car was only driven 45 m.p.h. tops to church and back home by a little old grandmother.” ……………………………………..

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