Forest Service awards $29.2M contract for helicopter services, highlighting fixed-price adjustments and full competition

Contract Overview

Contract Amount: $29,194,800 ($29.2M)

Contractor: Carson Helicopters Inc

Awarding Agency: Department of Agriculture

Start Date: 2007-07-01

End Date: 2008-04-30

Contract Duration: 304 days

Daily Burn Rate: $96.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 60

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: CWN TYPE 1HELICOPTER SERVICES FOR WILDLAND FIRE

Place of Performance

Location: GRANTS PASS, JOSEPHINE County, OREGON, 97526

State: Oregon Government Spending

Plain-Language Summary

Department of Agriculture obligated $29.2 million to CARSON HELICOPTERS INC for work described as: CWN TYPE 1HELICOPTER SERVICES FOR WILDLAND FIRE Key points: 1. Contract value of $29.2M for specialized helicopter services. 2. Utilizes a fixed-price contract with economic price adjustment clauses. 3. Awarded under full and open competition, suggesting a competitive bidding process. 4. Duration of 304 days indicates a focused, short-term operational need. 5. Geographic focus on Oregon for critical wildland fire support. 6. Contractor Carson Helicopters Inc. secured the award.

Value Assessment

Rating: fair

The contract value of $29.2M for 60 units of helicopter services appears substantial. Without specific per-unit cost data or benchmarks for similar specialized aerial firefighting services, a precise value-for-money assessment is challenging. The fixed-price with economic price adjustment structure aims to manage cost fluctuations, but the ultimate cost can vary. Benchmarking against other similar contracts for wildland fire suppression helicopters would be necessary for a more definitive evaluation of its cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 60 bids suggests a robust and competitive marketplace for these specialized services. A high number of bidders generally leads to better price discovery and potentially lower prices for the government, as contractors vie to win the award.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers, as it likely drove down the final award price compared to a sole-source or limited competition scenario. This ensures that government funds are used more efficiently for essential services.

Public Impact

Provides critical aerial support for wildland fire suppression efforts. Benefits federal agencies, specifically the Forest Service, in managing natural disasters. Impacts the state of Oregon by enhancing firefighting capabilities. Supports the aviation services industry and specialized helicopter operators.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clauses can lead to costs exceeding initial estimates if market prices for fuel or other inputs rise significantly.
Reliance on a single contractor for a critical service like wildland firefighting could pose a risk if performance issues arise.
The fixed-price nature, even with adjustments, may not fully account for unforeseen operational complexities in dynamic fire environments.

Positive Signals

Awarded through full and open competition, indicating a competitive process that should yield fair pricing.
The contract specifies a clear service requirement (Type 1 Helicopter Services), suggesting well-defined expectations.
The contract is for a defined period, allowing for reassessment of needs and contractor performance at its conclusion.

Sector Analysis

The contract falls within the broader aviation services sector, specifically focusing on specialized aerial firefighting. This niche requires unique aircraft capabilities and experienced operators. The market for such services is driven by seasonal demands, particularly during wildfire seasons, and is subject to stringent safety and operational regulations. Comparable spending benchmarks would involve analyzing other contracts for similar helicopter services used in emergency response or natural resource management.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Given the specialized nature of Type 1 helicopter services, it is possible that the primary contractors are larger, established aviation companies. Further investigation would be needed to determine if any subcontracting opportunities exist for small businesses within the scope of this award.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Forest Service contracting officers and program managers. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and approving any economic price adjustments. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed cost breakdowns may not always be publicly available. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Wildland Fire Management
Aviation Support Services
Emergency Response Contracts
Department of Agriculture Procurement

Risk Flags

Potential for cost overruns due to economic price adjustments.
Dependence on a single contractor for critical fire suppression resources.
Need for robust oversight to manage EPA clauses and performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $29.2 million to CARSON HELICOPTERS INC. CWN TYPE 1HELICOPTER SERVICES FOR WILDLAND FIRE

Who is the contractor on this award?

The obligated recipient is CARSON HELICOPTERS INC.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Forest Service).

What is the total obligated amount?

The obligated amount is $29.2 million.

What is the period of performance?

Start: 2007-07-01. End: 2008-04-30.

What is the typical operational cost per hour for a Type 1 helicopter used in wildland firefighting, and how does this contract's implied rate compare?

Determining the precise per-hour operational cost for a Type 1 helicopter under this contract is challenging without more granular data. The contract value of $29,194,800.40 for 60 units over 304 days suggests a significant investment. If we assume the 60 units represent distinct service periods or aircraft deployments, and distribute the total cost across these units and the duration, we can infer an approximate cost. However, 'units' can be interpreted in various ways (e.g., aircraft, flight hours, days of availability). Typical market rates for Type 1 helicopters (like the Sikorsky UH-60 Black Hawk) in firefighting can range from $15,000 to $30,000+ per hour, depending on equipment, crew, and support. Without knowing the exact number of flight hours or the specific type of helicopter and its configuration, a direct comparison is difficult. The economic price adjustment clause also introduces variability. Further analysis would require clarification on what constitutes a 'unit' and the expected flight hours per unit.

What specific economic factors are typically covered by the 'economic price adjustment' clause in this type of contract?

In contracts like this one, which uses a Fixed Price with Economic Price Adjustment (FPEPA) structure, the economic price adjustment (EPA) clause is designed to account for fluctuations in specific economic factors beyond the contractor's control. For aviation services, these commonly include the price of aviation fuel (jet fuel or avgas), labor costs (often tied to specific wage indices or collective bargaining agreements), and potentially the cost of essential parts or maintenance. The clause typically outlines a formula or mechanism for adjusting the contract price based on changes in these pre-defined indices or actual costs incurred. This protects both the government from excessive price increases and the contractor from losses due to uncontrollable market shifts, aiming to maintain the intended value and feasibility of the contract throughout its term.

How does the Forest Service typically evaluate the performance of helicopter service contractors during and after a contract period?

The Forest Service employs a multi-faceted approach to evaluate the performance of helicopter service contractors. During the contract period, Contracting Officers' Representatives (CORs) or other designated personnel monitor daily operations, ensuring adherence to flight schedules, safety protocols, and mission objectives. Performance is assessed against key metrics outlined in the contract, such as aircraft availability, response times, pilot qualifications, maintenance records, and mission success rates. Post-contract, a formal Performance Evaluation Report (PER) is often completed, documenting the contractor's overall performance. This evaluation considers factors like timeliness of service, quality of work, cost control, and adherence to regulations. These evaluations are crucial for future procurement decisions, influencing whether a contractor is considered for subsequent awards and informing source selection processes.

What are the primary risks associated with using fixed-price contracts with economic price adjustments for specialized services like aerial firefighting?

While FPEPA contracts aim to balance risk, they introduce specific challenges. A primary risk for the government is that the economic price adjustment can lead to the final contract cost exceeding the initially estimated fixed price, especially if inflation or specific input costs (like fuel) rise sharply and unpredictably. This can impact budget certainty. For the contractor, the risk lies in the potential for administrative burden and delays in receiving price adjustments, which could impact cash flow if not managed efficiently. Furthermore, the complexity of tracking and verifying the costs or index changes for EPA can increase oversight requirements. If the EPA formula is not carefully constructed, it might not accurately reflect the true cost drivers, potentially leading to disputes or suboptimal pricing for one party.

Can the Forest Service leverage this contract data to benchmark future spending on similar helicopter services?

Yes, the Forest Service can leverage data from this contract, such as the award amount ($29.2M), the number of bids received (60), the contract type (Fixed Price with EPA), and the duration (304 days), as a benchmark for future spending. However, direct comparisons require careful consideration of several factors. The specific capabilities and age of the Type 1 helicopters, the required equipment, crew qualifications, and the geographic location (which impacts operational costs and logistics) all influence pricing. Furthermore, the market conditions at the time of award, including fuel prices and overall demand for firefighting resources, play a significant role. To effectively benchmark, the Forest Service should compare this contract against others awarded for similar services in comparable regions and timeframes, adjusting for inflation and specific technical requirements. Analyzing the per-unit cost, if 'units' can be clearly defined (e.g., per flight hour, per day of availability), would provide a more robust comparison point.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: RFP 49-05-08

Offers Received: 60

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 828 BROOKSIDE BLVD, GRANTS PASS, OR, 02

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $29,194,800

Exercised Options: $29,194,800

Current Obligation: $29,194,800

Timeline