Forest Service awards $93M for exclusive fixed-wing airtanker services to Aero Union Corporation

Contract Overview

Contract Amount: $92,989,650 ($93.0M)

Contractor: Aero Union Corporation

Awarding Agency: Department of Agriculture

Start Date: 2008-03-11

End Date: 2011-12-31

Contract Duration: 1,390 days

Daily Burn Rate: $66.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: EXCLUSIVE USE FIXED-WING AIRTANKER SERVICES

Place of Performance

Location: CHICO, BUTTE County, CALIFORNIA, 95973

State: California Government Spending

Plain-Language Summary

Department of Agriculture obligated $93.0 million to AERO UNION CORPORATION for work described as: EXCLUSIVE USE FIXED-WING AIRTANKER SERVICES Key points: 1. The contract value is substantial at $92.99 million. 2. Aero Union Corporation is the sole awardee. 3. The contract was awarded under full and open competition after exclusion of sources. 4. The service is critical for wildfire suppression.

Value Assessment

Rating: fair

The contract value of $92.99 million over approximately 3.8 years suggests a significant investment. Benchmarking against similar airtanker service contracts is difficult without more specific performance metrics and service levels.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract utilized full and open competition after exclusion of sources, indicating an attempt to broaden the competitive pool. However, the specific exclusion criteria and their impact on price discovery warrant further examination.

Taxpayer Impact: Taxpayers are funding essential wildfire suppression services, with the cost spread over several years. The effectiveness of the competition method in securing the best value for taxpayer dollars is a key consideration.

Public Impact

Ensures critical aerial firefighting resources are available to combat wildfires. Supports national efforts to protect lives, property, and natural resources from fire damage. Provides employment and economic activity within the aviation and firefighting sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price escalation over the contract duration.
Dependence on a single provider for exclusive services.
Geographic concentration of services in California.

Positive Signals

Secures essential wildfire suppression capability.
Utilizes a competitive bidding process.
Long-term contract provides stability for service provision.

Sector Analysis

The contract falls within the transportation and logistics sector, specifically for specialized aerial services. Spending on wildfire suppression is highly variable and dependent on seasonal conditions and fire activity.

Small Business Impact

The data does not indicate any specific provisions or awards made to small businesses under this contract. Further analysis would be needed to determine small business participation.

Oversight & Accountability

The contract was awarded by the Department of Agriculture's Forest Service, a key agency for land management and wildfire response. Oversight would involve monitoring service delivery, performance, and adherence to contract terms.

Related Government Programs

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

Risk Flags

Sole awardee for exclusive service.
Potential for price increases over contract life.
Dependence on a single contractor's operational capacity.
Geographic concentration in California.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $93.0 million to AERO UNION CORPORATION. EXCLUSIVE USE FIXED-WING AIRTANKER SERVICES

Who is the contractor on this award?

The obligated recipient is AERO UNION CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Forest Service).

What is the total obligated amount?

The obligated amount is $93.0 million.

What is the period of performance?

Start: 2008-03-11. End: 2011-12-31.

What specific criteria were used to exclude sources during the full and open competition, and how did this impact the final price?

The exclusion of sources during a 'full and open competition' suggests that while the initial solicitation was broad, certain potential bidders were disqualified based on specific requirements. These could include technical capabilities, safety records, or operational readiness. Understanding these exclusion criteria is crucial to assess whether they were justified and if they inadvertently limited competition, potentially affecting the final price achieved for the airtanker services.

How does the per-unit cost or operational cost of these airtankers compare to industry benchmarks for similar services, considering the exclusive nature of the contract?

Benchmarking the cost of these exclusive fixed-wing airtanker services is challenging without detailed operational data. Factors like aircraft type, capacity, flight hours, maintenance, and geographic operational area influence costs. Comparing the total contract value ($93M) against the duration (1390 days) and the number of aircraft (4) provides a rough estimate, but a true benchmark would require detailed cost breakdowns and comparisons with contracts for similar services, accounting for the exclusivity and specific mission requirements.

What is the assessed risk of service disruption or performance failure given the exclusive nature of the contract and the reliance on a single provider?

The exclusive nature of this contract inherently increases the risk of service disruption if the sole provider, Aero Union Corporation, faces operational issues. This could include mechanical failures, pilot shortages, or financial instability. While a long-term contract might imply provider stability, the lack of immediate backup options means any failure could significantly impact wildfire response capabilities. Mitigation strategies and contingency plans within the contract are essential to address this risk.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: AG024BS070016

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 100 A LOCKHEED AVE, CHICO, CA, 01

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $92,989,650

Exercised Options: $92,989,650

Current Obligation: $92,989,650

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: NO

Timeline