All of the contract awards for Next Generation exclusive use (EU) air tankers since 2013 have been protested by companies that did not receive a contract. In each case the action delayed activation of the new contracts by months.
Here is the history of Next Gen EU contract protests.
Next Gen 1.0
Neptune filed a protest after the awards were first announced May 6, 2013 when they did not receive a contract. This halted the awarding of the contracts and put the process in limbo until May 30 when actual signed contracts were finally issued to three companies for three air tankers, which the contracting officers felt were not affected by the protest:
10 Tanker Air Carrier for one of their two DC-10s
Minden Air Corp for a BAe-146
Coulson Aircrane (USA) for a C-130Q
Then on June 7 Neptune withdrew their protest. It was disclosed later that the Forest Service 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. The withdrawal of the protest allowed the contracts for the remaining four aircraft to be awarded to:
Erickson Aero Tanker, for two MD87s
Aero Flite, for two Avro RJ85s
The next-gen 1.0 contracts were finalized 555 days after the USFS issued the first solicitation for the aircraft.
As specified in the agreement, on December 12, 2013 the U.S. Forest Service awarded a sole source non-competitive contract to Neptune Aviation to supply two next-generation air tankers for the next four to nine years beginning in 2014. The estimated total value of the contract was $141,000,000 and had a base period of four years with the possibility of adding five more. The hourly rate began at about $8,000 and increased to about $12,000 by the end of nine years.
Call When Needed contract, 2017
In November, 2017 the Government Accountability Office upheld a protest by Global SuperTanker (GST) who contended the Forest Service’s Call When Needed contract restriction on the maximum size of a retardant tank was unduly restrictive of competition. For the first time in their air tanker contracting history, according to the GAO, the FS had restricted the maximum size of retardant tanks, specifying the capacity must be between 3,000 and 5,000 gallons. This eliminated Very Large Air Tankers (VLAT) from being able to compete, since the DC-10 holds 9,400 gallons and the GST 747 carries up to 19,200.
Five additional large air tankers on contract were announced March 26
(UPDATED at 2:46 p.m. MDT April 10, 2020)
Two companies have filed protests with the Government Accountability Office regarding recent contracts for five large exclusive use air tankers. The U.S. Forest Service announced on March 26 that three companies received contracts on the Next Gen 3.0 solicitation — Erickson Aero Tanker for two tankers, Aero Flite for two, and Coulson for one.
Neptune Aviation and 10 Tanker Air Carrier both filed bid protests (here and here) on April 6, 2020. The due date for the GAO to adjudicate the action is July 15, 2020.
Neptune has four tankers and 10 Tanker has two on the existing Next Gen 1.0 and 2.0 contracts. There are a total of 13 aircraft on the two contracts.
Typically a protest halts all work on a new air tanker contract. We asked Kaari E. Carpenter, a Lead Public Affairs Specialist with the Forest Service, if that was the case in this instance, and she replied, “Due to the timing of the protests there is an automatic stay of performance.”
The FS issued a solicitation for Call When Needed air tanker services May 16, 2017. For the first time in their air tanker contracting history, according to the GAO, the FS restricted the maximum size of retardant tanks, specifying the capacity must be between 3,000 and 5,000 gallons. This eliminated Very Large Air Tankers (VLAT) from being able to compete, since the DC-10 holds 11,600 gallons and the GST 747 carries up to 19,200.
10 Tanker Air Carrier, which operates three DC-10’s, attempted to support GST’s protest, but the GAO denied their request to submit an amicus curiae or friend of the court pleading, concluding that the company did not meet the definition of either a protester or an intervenor under the GAO’s Bid Protest Regulations.
The GAO decided that the FS…
…failed to provide reasonable justifications for the challenged specification, such that we are unable to conclude that the challenged specification is reasonably necessary for the agency to meet its needs.
We recommend that the agency make a documented determination of its needs. Once the agency identifies its needs, the agency should revise its solicitation to include specifications that are reasonably necessary to meet those needs. We also recommend that the protester be reimbursed the costs of filing and pursuing the protest, including reasonable attorneys’ fees.
We asked Jennifer Jones, a spokesperson for the FS, for their reaction to the GAO decision, if GST would be reimbursed for their attorney fees, if GST would be considered for a contract, and if there was any bias in the FS against any VLATs. Here is the response:
In accordance with regulations, the U.S. Forest Service is complying with the U.S. Government Accountability Office (GAO) decision for the Call When Needed (CWN) protest. We are reviewing our documentation. After the review is completed, the agency will determine the most appropriate ways to continue to procure Large and Very Large Next Generation Airtankers.
Jim Wheeler, the President and CEO of GST, said:
We are pleased that the GAO sustained our case. We really look forward to working with the Forest Service in the future and hopefully these issues around the [Requests for Proposals] will work themselves out to everybody’s satisfaction.
In 2016 and 2017 the 747 deployed to fires in Israel and Chile and the company currently has a CWN contract with the California Department of Forestry and Fire Suppression. The aircraft was used for several weeks in California in the last part of the summer supporting CAL FIRE, but the FS has not allowed the company to submit a bid to acquire a contract.
In the 22-page decision, the GAO addressed numerous issues introduced by the FS that attempted to justify the agency’s new policy of restricting the maximum size of a retardant tank in a contract solicitation. In each case the GAO argued that the FS was wrong, unreasonable, illogical, or, it did not apply to the issue.
The FS claimed that the solicitation was intended to procure services to support initial attack operations for which VLATs are not suitable. The GAO responded that the solicitation sought to procure aerial firefighting services to support both initial and extended attack operations. And, since it was a CWN contract, the FS could choose whether or not to use the VLAT on initial or extended attack.
The GAO wrote…
…there is also no support for the agency’s contention that VLATs are not suited for performing initial attack operations.
The GAO noted that 10 Tanker Air Carrier’s DC-10s had completed a total of 700 missions in 2017 at the time of the decision and routinely performs initial attack operations.
They also found that…
Indeed, the record is completely silent regarding who, if anyone, at the agency made the decision to include the [maximum tank size] restriction, when the decision was made, and why the decision was made. Notably, none of the pre-solicitation documents contain any reference to a 5,000-gallon maximum restriction.
The cited pages do not lend support to the agency’s position. As an example, the page in the 2005 study merely indicates that the agency prefers larger aircraft over smaller aircraft, not that VLATs are somehow less desirable for initial attack operations.
The  study recommends that the wildland firefighting aircraft fleet be composed of a mix of aircraft, including “Very Large Airtankers (>8000 gallons).” In discussing tank sizes, the study recommends a minimum capacity, not a maximum capacity, and reflects a preference for larger retardant tank capacities.
The Forest Service has not identified any study or analysis, upon which it relied to develop the RFP requirements, that has considered the question presented here: whether VLATs are unsuited for initial attack operations. In sum, the studies relied upon by the agency do not provide a reasonable basis to restrict competition.
Although the agency has reached conclusions regarding the technical limitations of VLATs, and is excluding VLATs from competition based upon such conclusions, the record does not demonstrate that the offered studies support the agency’s conclusions. For this reason, we are unable to find that the agency’s asserted justification for the exclusion of VLATs is reasonable.
The FS pointed out that on two occasions a VLAT struck objects on the ground while taxiing. The GAO said both incidents occurred while FS ground personnel were directing the aircraft. Reviews determined that one was 100 percent the fault of the ground guides and the other was 75 percent the fault of the ground guides.
The FS also listed several other reasons that they contend are significant problems related to the use of VLATs, including, the number of personnel needed on the ground, the amount of fuel and retardant needed, the number of suitable bases, and the need for lead planes.
In their written decision the GAO addressed these and other issues brought up by the FS, and similar to the examples above, shot them all down, saying the FS was simply wrong or the issue was not applicable to the protest. The GAO noted that economies of scale, with the VLATs carrying four to seven times more retardant than a conventional large air tanker, can mitigate some of these issues.
We asked Bean Barrett, a former Naval aviator and frequent contributor to this website, for his take on this issue:
It seems to me that their main contracting focus should be the gallons of retardant required to be delivered per hour or per day and the total cost per gallon delivered and the ability to meet various delivery rates/ coverage levels.
Platform type shouldn’t have any bearing on the issue at all unless there is some performance limitation that impacts its ability to meet delivery requirements.
If they ever get around to defining what constitutes acceptable IA in terms of how much retardant, how far away from base, and how fast, then there may be some platform considerations.
Bean recommends a book by Stephen Budiansky titled Blackett’s War: The Men Who defeated Nazi U-Boats and Brought Science to the Art of Warfare. It tells the story of how efforts led by Winston Churchill before and during World War II to utilize science and careful analysis resulted in innovations that made the British much more successful in warfare. Bean said, “The parallels you can draw with the USFS and fire aviation’s problems are amazing. It’s a very good interesting book and an easy read.”
One reviewer of the book on Amazon wrote that the Churchill-led efforts “…showed how careful quantitative analysis could provide far better guidance for decision makers than tradition, prejudice, and gut feeling.”
It appears from the GAO report that their decision to sustain the protest was not even close to going the other way. The FS seemed to be grasping at straws trying a shotgun approach, throwing out everything they could think of off the top of their head, with little serious thought, in their ill-considered attempt to prevent GST from being allowed to submit a bid on the contract. They came off looking like an inept, bumbling, incompetent, leaderless organization.
This should be an embarrassment for Jeffery Power, the new Assistant Director of Aviation for the FS, and Shawna Legarza, the National Fire Director for the FS.
Fire aviation is very expensive and based on the fatality records, is very dangerous. The Forest Service should consider reorganizing their aviation assets, removing the aviation autonomy from the individual regions and using a more centralized approach led by a Chief Pilot with actual pilot credentials and experience. It is our understanding that only one of the Regional Aviation Officers, who have far too much responsibility and power, is actually a pilot.
The Government Accountability Office has denied two protests over the solicitation for “up to seven” Next-Generation air tankers published by the U.S. Forest Service. Erickson Aero Tanker and Coulson Aviation protested some of the terms of the solicitation process before any announcement was made about awarding contracts. The USFS had hoped to have the air tankers working by May 30, but the protests halted the contracting process. Coulson’s was denied on July 8 and Erickson’s on July 17.
The next step is for the USFS to decide what companies they want to issue contracts to, and then they have to abide by a strange law that requires they notify Congress of their intent, and then wait 30 days before actually awarding any contracts.
At that point, the process will again be vulnerable to an another round of protests over the awards themselves, each of which will take up to 100 days to be adjudicated by the GAO.
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.
“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.”
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.
The 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.
(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.
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. Continue reading “GAO sustains protest of air tanker contract”