How to improve air tanker contracting

Tanker 48, a P2V
Tanker 48, a P2V, at Rapid City while working the Myrtle Fire, July 21, 2012. Photo by Bill Gabbert for Wildfire Today.

Dean Talley has some thoughts about how to improve the contracting process for air tankers, which would hopefully improve the value to the customer (the Government) while the vendors would be able to provide better equipment and have a more stable, predictable income.

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“The cost of providing equipment, owned, operated and staffed by government entities, be it aircraft, engine, or shovel, is paid for up front by the agency. The value of the investment is recognized and the outcomes they produce are not measured in profit. Yet it is recognized these investments produce public safety and economic benefits.

The cost of providing equipment, owned, operated and staffed by contractors, be it aircraft, engine, or shovel, is paid for up front by the contractor. New developments and technology are paid for by private enterprise. In a competitive marketplace there is no guarantee these investments will be rewarded.

The regenerating fleet of airtankers is presenting new challenges to the models and tactics used to control or suppress wildfires. These changes could be opportunities if the various agencies charged with managing and using these resources address basic systemic issues that have led to higher cost, lost efficiencies, and accidents.

I believe the most basic issue is contracting and a fractured budgeting process pitting, for profit, private industry needs against the interests and objectives of the end users, the boots on the ground.

Exclusive use contracts are typically awarded based on price and performance. Performance as a measure of past availability rates and safety record for example. Over time availability rates have increased but they still do not reflect the cost of providing the resource.

For an airtanker, that would be the ‘fixed’ costs of the asset. The cost of the airframe and retardant system depreciated by the expected life of the airframe and system. The annual maintenance expenses. Training and recurrent training expenses for maintenance and flight crews.

All costs associated with providing an airworthy and current aircraft and crew on the ramp ready to go to work should be reflected in the availability rate. An individual airtanker on an exclusive use contract should not have to fly a single hour to be economically viable. The operational expenses associated with flight; fuel; oil; any item that wears out or times out based on flight time; etc., should be expensed and marked up for minimal profit based on a flight rate. 

Contractors could compete.

Call when needed contracts represent the least desirable option for both the agencies and the operators. It leads agencies into reactive scenarios, responding to problems as opposed to possibly preventing or mitigating incidents. The motive is often, once again, budgetary. The suppression costs do not show up initially in a budget. These resources are often employed after their use would be most effective. Expenses associated with their use flow through ‘emergency’ funds or fire scenarios paid for with little accountability.
For the operators it’s often boom or bust. Flight rates are high. You can get rich quick or die on the vine. Is it reasonable to provide an airworthy asset and experienced qualified crew on a wish and a hope for the worst?

Flight pay in the SEAT contracts is another cost shuffled out of budgets into fire scenarios. Pilot compensation for availability, the budgeted expense, is minimal. Often daily availability is comparable to the hourly flight rates up to $500. A pilot can make from $500 up to $4000 on a given day. $500 is budgeted. If success is measured as a fire stopped, failure is profitable. It is a system counterintuitive to logic, ripe for abuse, and conducive to poor decision-making.

If contracts and budgets recognized the value and the need for economic entities to compete and succeed when the outcomes are not easily quantifiable, the appropriate tools could more readily be employed in a timely and efficient fashion. Contracted resources would not be competing with each other for survival. If the firefighters want a VLAT it could load and go without regard for an arbitrary position in rotation. Strategies could evolve knowing what type of tanker to expect. There is no perfect solution but in the last years I’ve seen scenarios where a tanker is ordered and the IC did not know if he would get a SEAT or a VLAT. Lead planes struggle to evolve strategies not knowing what will show up.

There are valid reasons why contracting and budgeting are structured the way they are now. But over time the reasons have become rationalizations for contracts and budgets that do not honestly deal with the realities of business and the needs of the boots on the ground.

I enumerate a number of problems but the common denominator is the type of contracts and the way contracts are written. The problems are a symptom of the flawed contracting process that disguises the actual cost of providing the equipment. It threatens the viability of contractors, creates potential for shoddy or deferred maintenance, and potentially accidents, because of high turnover among crews who struggle without a predictable income.”

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Dean Talley is in his 36th year of flying air tankers on fire contracts for Minden, Aero Union, CAL FIRE and others. Currently he is flying a P2V.

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14 thoughts on “How to improve air tanker contracting”

  1. Dean
    As usual yor words are right on. Very little has changed, but there have been “some” changes since I started in 68.

  2. Canada has had good success with exactly what you are suggesting. 10 year contracts with a daily rate that covers the cost of owning and operating the machine has been the norm for LAT’s for many years. Of course Canada has a huge advantage as the Provincial Forest Ministries are responsible for virtually all the forest protection in their Province; so it is a one stop shop. It is much harder when you have a multitude of Federal and State agencies all having a piece of the pie.

  3. Dean,

    In order to write a good solid contract, it is necessary to have a very solid understanding of your requirements. A case could be made that air tanker requirements, desired capabilities, and services are not sufficiently understood.

    A stable departmental budget is absolutely critical for a predictable dependable long term contracting process but Congress “rewickers” every department’s budget every year; sometimes/ usually for political reasons. It takes extraordinary commitment backed by extraordinary data and analysis to successfully defend a budget year after year in D.C.

    As long as profit is the incentive and contracts are competitive, some contractors may “low ball” their bids to win a contract award and then cut corners to make a profit. It doesn’t help that all the safety regulations, FAR’s, and maintenance requirements designed to prevent “cutting corners” don’t adequately address the use of converted aircraft flying an air tanker mission they were not designed to do.

    1. The agency and operators have never done an adequate job of quantifying the “what if”. There is no systemic attempt to quantify the potential damage in an after action type of review. What were the wind, slope, fuels, fuel moisture, humidity, structures and resources threatened, etc. along with some sort of subjective estimate of the potential damage had the incident not been thwarted.
      I appreciate the challenge of trying to evaluate the airworthiness of an individual airframe or type of airframe. Certainly the challenge of inspecting an 802 vs a high time airliner are scales of magnitude a different challenge. Experienced knowledgeable inspectors need to be employed in the carding process.
      Knowing you’re going to have adequate funds to do maintenance over an extended contract period, even if you have slow years, allows the operators to have a long term planning. This is why performance is a factor, the contractor has to perform for an extended period.
      One creative bid system selects the bid in the middle. Contractors really have to do their homework.

      1. bean on, I just remembered. Joel Lane, ASM, Air Attack, among other things, I believe did his Masters Thesis on airtankers. I think he came up with some algorithms in the process looking at the “what if”. He also created an “after action” form. If you are interested in data to support the tanker program you should talk to him. He’s already on the payroll.

  4. How to improve airtanker contracting??

    Pretty simple.. use the well known leadership principle. …

    Task.. Purpose.. End State…. and keep the “bean counters” out of operational decisions that affect the success of the mission.

  5. …. or at least put the “bean counters” on an even keel (or in the same room) with the final decision makers.

    Right now… “Fire Management” is an allied function of “State and Private Forestry”…. while the bean counters are more directly linked to the Chief through the Associate Chief of Business Operations ( See ASC Reorganization, etc or other “successfull” programs.

  6. Dean can you clarify the following quote:
    “Flight pay in the SEAT contracts is another cost shuffled out of budgets into fire scenarios. Pilot compensation for availability, the budgeted expense, is minimal. Often daily availability is comparable to the hourly flight rates up to $500. A pilot can make from $500 up to $4000 on a given day. $500 is budgeted.”

    $500 to $4000 is quite a variable. What sort of base rate and or hourly pay would this pilot be on call for?

    1. The base rate is 500/day. A I Believe a SEAT pilot is limited to 7 hours. 7×500=3500. The 3500 is billed to the fire if the max flight time were accumulated.

      1. Still not following you. I have flown seats for many years and I sure dont make that kind of money.
        Are you telling me that some seat pilots are being paid $500/flight hour?

  7. In most cases in the Forest Service, the decision makers (line officers) have never been in a position of fire management or fire leadership.

    Nowhere in the history of the Forest Service has an employee who devoted themselves in a career of firefighting EVER advanced to a Deputy Regional Forester.. Regional Forester… or other upper level decision making position (Associate Chief, Deputy Associate Chief, etc.)

    Maybe Mr. Baird will break that mold after serving as Tom Harbour’s deputy…. and after he completes his new assignment as FOREST SUPERVISOR on the Los Padres National Forest???

  8. Received a “correction”.

    Joe Cruz promoted through the fire ranks to R5 Fire Director.. to R5 Deputy Regional Forester (line officer).. and then was demoted to National Fire Director in the WO (Staff position, non-line officer).

  9. 500 is a figure I have been told was paid per hour. It is the highest figure I have heard but I believe it is accurate for one operator. It is also easy to do the math and try to make a point. It would be interesting to hear from people like you, with SEAT experience, and build a better picture of the industry. The SEAT community looks a lot like the large airtanker industry looked 30 or 40 years ago. Many operators, all with a different play book. To me that is one of the values of a sight like this. Thank you Bill.

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