USDA Forest Service awards $31.3M for exclusive use of Airtanker MATCO, raising questions on competition and value

Contract Overview

Contract Amount: $31,294,018 ($31.3M)

Contractor: Aero AIR, LLC

Awarding Agency: Department of Agriculture

Start Date: 2024-05-17

End Date: 2026-12-31

Contract Duration: 958 days

Daily Burn Rate: $32.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: AERO AIR - AIRTANKER MATCO 2023 EXCLUSIVE USE TASK ORDER - 160 DAY MAP

Place of Performance

Location: BOISE, ADA County, IDAHO, 83705

State: Idaho Government Spending

Plain-Language Summary

Department of Agriculture obligated $31.3 million to AERO AIR, LLC for work described as: AERO AIR - AIRTANKER MATCO 2023 EXCLUSIVE USE TASK ORDER - 160 DAY MAP Key points: 1. Significant contract value for specialized aerial firefighting services. 2. Exclusive use model may limit flexibility and potentially increase costs. 3. Competition method warrants scrutiny for potential price discovery limitations. 4. Sector relies heavily on such assets during high-risk fire seasons.

Value Assessment

Rating: questionable

The $31.3M award for 958 days of service, averaging approximately $32,666 per day, appears high compared to typical daily rates for similar exclusive-use airtankers. Benchmarking against historical data and other agency contracts is crucial to assess if this pricing reflects fair market value.

Cost Per Unit: $32,666 per day

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition approach. While this may be justified by specific operational needs, it raises concerns about whether a broader competition could have yielded better pricing or more options.

Taxpayer Impact: The limited competition and potentially high daily rate suggest taxpayers may be overpaying for this critical service, especially if alternative, more cost-effective solutions were not fully explored.

Public Impact

Ensures critical aerial firefighting capacity for wildfire suppression. Potential for increased costs impacts the overall budget for wildfire management. Dependence on a single provider for exclusive use could create supply chain risks. Timely availability of these assets is crucial for public safety during fire season.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises cost concerns.
Exclusive use may not be the most cost-effective model.
Lack of small business participation noted.

Positive Signals

Provides essential wildfire suppression capability.
Firms up critical resource availability for the season.

Sector Analysis

The aerial firefighting sector is highly specialized, with significant barriers to entry due to equipment costs and regulatory requirements. Spending benchmarks are difficult to establish precisely due to the unique nature of exclusive-use contracts and varying operational demands during fire seasons.

Small Business Impact

The contract data indicates that neither Aero Air, LLC nor the task order itself involved small business participation (ss: false, sb: false). This suggests a lack of opportunities for small businesses in this specific procurement, which is common in highly specialized sectors like large aerial firefighting assets.

Oversight & Accountability

Oversight is needed to ensure the Forest Service is maximizing value for taxpayer dollars, particularly given the limited competition and potentially high daily rate. Regular performance reviews and market analysis should be conducted to ensure continued justification for the exclusive-use model and pricing.

Related Government Programs

Nonscheduled Chartered Freight Air Transportation
Department of Agriculture Contracting
Forest Service Programs

Risk Flags

High per-unit cost compared to benchmarks.
Limited competition restricts potential cost savings.
Exclusive-use model may lead to overpayment.
Lack of small business involvement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $31.3 million to AERO AIR, LLC. AERO AIR - AIRTANKER MATCO 2023 EXCLUSIVE USE TASK ORDER - 160 DAY MAP

Who is the contractor on this award?

The obligated recipient is AERO AIR, LLC.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Forest Service).

What is the total obligated amount?

The obligated amount is $31.3 million.

What is the period of performance?

Start: 2024-05-17. End: 2026-12-31.

Could a broader competition have secured a more competitive price for the Airtanker MATCO service?

The contract's 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation suggests that while competition occurred, it was not entirely open. A truly open competition, potentially including more providers or different contract structures (e.g., on-call vs. exclusive use), might have driven down the per-day cost. Further analysis of the justification for excluding sources is warranted to determine the potential impact on price discovery.

What are the primary risks associated with an exclusive-use contract for aerial firefighting assets?

The primary risks include higher costs due to guaranteed availability regardless of actual need, potential underutilization during low-risk periods, and a lack of flexibility to switch providers if a better option emerges. There's also a risk of vendor lock-in, making it difficult to adapt to changing operational requirements or technological advancements without incurring significant transition costs.

How effectively does this contract ensure the government receives good value for its investment in wildfire suppression?

The effectiveness in terms of value is questionable. While the contract secures a critical asset, the high daily rate and limited competition raise concerns about whether the government is paying a premium. Value is maximized when essential services are procured at fair market prices, which may not be the case here without further benchmarking and justification for the exclusive-use model.

Industry Classification

NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Freight Air Transportation

Product/Service Code: NATURAL RESOURCES MANAGEMENT › NATURAL RESOURCE CONSERVERVAT SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FS-AT23-EU-01

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2050 NE 25TH AVE, HILLSBORO, OR, 97124

Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $51,655,868

Exercised Options: $33,348,898

Current Obligation: $31,294,018

Actual Outlays: $20,932,010

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 1202SA23T9101

IDV Type: IDC

Timeline