MTPR

Dispute Delays Next-Generation Air Tanker Contracts

Jun 19, 2015

A contract dispute has created uncertainty and potential lost revenue for the companies that supply firefighting air tankers, including Missoula’s Neptune Aviation.

The conflict is over long-term contracts for jet engine, so-called "next generation" planes that bring more to the table than the Korean War-era prop-driven tankers firefighters have been using for decades.

"These are larger, faster aircraft capable of carrying at least 3,000 gallons of retardant and (flying) at least 300 miles per hour, designed to better take the stresses and strains of what we ask these airtankers to do these days." 

That's Tom Harbour, Forest Service Director of Fire and Aviation Management. The agency currently has at least six “next generation” tankers ready to go this fire season and hoped to have up to another seven planes contracted for by now.

But that’s plan’s now on hold.

Two out-of-state air tanker companies - Coulson Aviation, and Erickson Aero Tanker - protested provisions of the government's airtanker contracting process.

Details of those complaints filed with the Government Accountability Office aren't public.

The managing editor of fireaviation.com, Bill Gabbert, says those protests have since been amended.

"It slows things down a bit. The GAO has 100 days in order to adjudicate these protests, but then when a company files an amendment and then later, another amendment that throws a monkey wrench into the proceedings."
 
The GAO is now forced to go back to square one.

"And I've talked to a representative of GAO who told me that they're probably going to need the entire 100 days in order to figure out what's going on with these protests.  That puts it into the end to the mid to end of July," Gabbert says.

In other words, the heart of fire season in the Rocky Mountains.

"Well, we'll have things covered one way or another," says Tom Harbour of the U.S. Forest Service.

"If we've gotta work our way and provide coverage with shorter-term contracts, we'll do that. But in any case, we're going to provide for coverage. No question about that."

Missoula's Neptune Aviation has several of its older, prop-driven tankers working for the government, but only one of its five active jet tankers is contracted for service.

Neptune CEO Ron Hooper says the Forest Service is now advertising for a "call when needed" opportunity.

"Their intent, as I understand it, is they would access those 'call-when-needed' aircraft on as 'as-needed' basis while they're pending resolution under their next-gen 2.0 contracts."

So what's the status of the call-when-needed process?

"They have not been awarded yet," Hooper says. "My understanding talking with some of the contracting leadership last week, it could be two to three more weeks before those get awarded."

But assuming Neptune lands that call-when-needed contract, nobody gets paid unless those new tankers are working; far less security - and money - than what otherwise would be provided under those five year contracts now stalled by protests filed with the GAO.

"The numbers I would use without revealing our pricing structure is if we had four of our aircraft on those contracts for one year, you're probably looking in the area of $15-million to $20-million total," Hooper explains. "If you take that times five years for four aircraft then $20-million by five years is $100-million."

So, in other words, lots of money is tied up in this existing contracting process that can be so easily derailed.

Bill Gabbert of fireaviation.com says protests are now commonplace.

"So, on the last next-gen contract it took 555 days from the time from when they first advertised it until they finally order the contracts. Since this is not a perfect world and you should expect some contracts to be protested, perhaps the Forest Service should plan ahead and allow an extra six to 12 months to allow for those protests to occur," says Gabbert.

Neptune's Ron Hooper agrees. He says specs dictating air tanker technical details such as cruising speed, cost, and engine type must be uniform for all tanker companies submitting bids to the Forest Service.

"I think there has to be a tightening up of the specifications and there has to be a willingness on the part of the government to enforce those specs, whether it's pre-award or post-award. Being willing to entertain changing specifications at the request of various vendors just sets up the potential for protests. I think there needs to be more discipline in the process."

Forest Service Director of Fire and Aviation Management, Tom Harbour, says the agency must be flexible when working with the private sector companies that supply the bulk of the government's firefighting aircraft.

"Their insights are needed. Their insights are wanted," Hooper says. "So, we have this balance between listening and being insistent upon the specifications we want. Through listening and learning we hope to come to a place where ultimately we determine a specification and then you bet - we'll enforce that specification."

While the contract dispute means tanker companies won’t have long-term contracts in place with the Forest Service for additional next-gen tankers until at least next month, the government’s existing tanker fleet will be hard at work overhead during what could be a busy fire season in the Rocky Mountains.