Forest Service awarded $127.8M for exclusive fixed-wing airtanker services to Neptune Aviation Services, Inc

Contract Overview

Contract Amount: $127,835,168 ($127.8M)

Contractor: Neptune Aviation Services, Inc.

Awarding Agency: Department of Agriculture

Start Date: 2008-03-11

End Date: 2012-10-31

Contract Duration: 1,695 days

Daily Burn Rate: $75.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: EXCLUSIVE USE FIXED-WING AIRTANKER SERVICES

Place of Performance

Location: MISSOULA, MISSOULA County, MONTANA, 59808

State: Montana Government Spending

Plain-Language Summary

Department of Agriculture obligated $127.8 million to NEPTUNE AVIATION SERVICES, INC. for work described as: EXCLUSIVE USE FIXED-WING AIRTANKER SERVICES Key points: 1. The contract value represents a significant investment in aerial firefighting capabilities. 2. Competition dynamics for this contract are noted as 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES', suggesting a potentially complex procurement process. 3. The duration of the contract (1695 days) indicates a long-term need for these specialized services. 4. The firm fixed-price contract type provides cost certainty for the government. 5. The award to a single contractor, Neptune Aviation Services, Inc., warrants scrutiny regarding market concentration. 6. The geographic focus on Montana (st: MT) highlights regional needs for airtanker support.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable service contracts. The total award of $127.8 million over approximately 4.6 years suggests a substantial annual expenditure for exclusive airtanker services. While firm fixed-price contracts offer predictability, they may not always reflect the most cost-effective solution if actual usage is lower than anticipated. Further analysis would require comparing the per-hour or per-mission cost against industry standards and the operational availability provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This specific procurement method implies that while the competition was intended to be open, certain sources may have been excluded initially, possibly due to specific requirements or prior arrangements. The number of bidders (4) indicates some level of competition, but the 'exclusion of sources' clause suggests it might not have been a completely unfettered open competition from the outset.

Taxpayer Impact: The limited competition, even if open after exclusions, could potentially lead to higher prices for taxpayers compared to a fully open and unrestricted bidding process. It necessitates careful review to ensure fair market value was obtained.

Public Impact

The primary beneficiaries are federal agencies, specifically the Forest Service, in their efforts to combat wildfires. The services delivered are exclusive fixed-wing airtanker operations, crucial for aerial firefighting. The geographic impact is concentrated in Montana (st: MT), indicating a focus on wildfire suppression in that region. The contract supports specialized aviation services, potentially impacting the aviation industry and skilled pilots.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition type raises questions about the breadth of market engagement.
Reliance on a single primary contractor for exclusive services could pose risks if performance issues arise or if market conditions change.
The long contract duration might limit opportunities for newer or more innovative providers to enter the market.

Positive Signals

The firm fixed-price structure provides budget certainty for the Forest Service.
The award to Neptune Aviation Services, Inc., suggests a contractor with established capabilities in aerial firefighting.
The contract's duration implies a stable and reliable source of critical firefighting assets.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on specialized aviation services for public safety and resource management. The market for aerial firefighting is highly specialized, often dominated by a few key players with the necessary certifications, aircraft, and operational expertise. Spending in this area is heavily influenced by seasonal needs, environmental conditions, and government budget allocations for wildfire suppression. Comparable spending benchmarks would typically involve analyzing annual budgets for airtanker fleets across different federal and state agencies.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions (ss: false, sb: false). Therefore, this contract does not appear to have been directly awarded to small businesses or through a set-aside program. Subcontracting opportunities for small businesses are not detailed in this summary, but typically, large prime contracts may include clauses encouraging or requiring subcontracting to small businesses, depending on the agency's policies and the nature of the services.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Forest Service, a branch of the Department of Agriculture. Accountability measures would be embedded within the contract's terms and conditions, including performance standards, reporting requirements, and payment schedules tied to service delivery. Transparency is generally facilitated through contract databases like FPDS, where award details are published. The Inspector General for the Department of Agriculture would have jurisdiction to investigate potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Wildland Fire Management
Aviation Support Services
Emergency Response Contracts
Department of Agriculture Procurement
Forest Service Operations

Risk Flags

Limited competition due to source exclusion.
Potential for higher costs due to single-contractor reliance.
Dependency on contractor performance and stability.
Lack of transparency regarding specific performance metrics and pricing breakdown.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $127.8 million to NEPTUNE AVIATION SERVICES, INC.. EXCLUSIVE USE FIXED-WING AIRTANKER SERVICES

Who is the contractor on this award?

The obligated recipient is NEPTUNE AVIATION SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Forest Service).

What is the total obligated amount?

The obligated amount is $127.8 million.

What is the period of performance?

Start: 2008-03-11. End: 2012-10-31.

What is the historical spending pattern for exclusive fixed-wing airtanker services by the Forest Service?

Analyzing historical spending requires accessing detailed procurement data over multiple fiscal years. While this specific award is for $127.8 million, understanding the Forest Service's overall investment in airtanker services involves looking at prior contracts, including those with Neptune Aviation Services, Inc. and other potential providers. Trends might reveal increasing or decreasing reliance on fixed-wing airtankers, shifts in contract values, and changes in the number of awarded contracts. Factors such as wildfire frequency, severity, and evolving firefighting strategies significantly influence these spending patterns. Without access to a comprehensive historical database, a precise trend analysis is not feasible based solely on this single award.

How does the per-hour cost of Neptune Aviation Services' airtankers compare to industry benchmarks?

Determining the precise per-hour cost requires detailed contract line item data, including rates for different operational phases (e.g., flight hours, ground time, maintenance). The provided data summarizes a total award value over a duration, not specific hourly rates. To benchmark, one would need to compare the effective hourly rate derived from the total contract value and estimated flight hours against rates charged by other providers for similar aircraft types and services. Industry benchmarks can vary based on aircraft model, capacity, age, and service provider. A comprehensive comparison would involve analyzing multiple public contracts and industry reports to establish a fair market rate.

What are the specific risks associated with relying on a single contractor for exclusive airtanker services?

Relying on a single contractor for exclusive services presents several risks. Firstly, it can lead to reduced bargaining power for the government, potentially resulting in higher costs over time if competition is stifled. Secondly, it creates a dependency; if the contractor experiences operational failures, financial instability, or performance issues, the government has limited immediate alternatives, potentially impacting critical wildfire suppression efforts. Thirdly, it may disincentivize innovation from other market players who are excluded from competing for the exclusive service. Finally, a sole-source or limited-competition scenario can sometimes mask inefficiencies or higher-than-market pricing.

What performance metrics are typically included in contracts for exclusive fixed-wing airtanker services?

Contracts for exclusive fixed-wing airtanker services typically include stringent performance metrics focused on availability, response times, safety, and operational effectiveness. Key metrics often involve guaranteed aircraft availability during specified periods (e.g., fire season), maximum response times to dispatch orders, adherence to flight safety regulations, and successful completion of mission objectives (e.g., accurate retardant drops). Performance may also be evaluated based on maintenance schedules, pilot qualifications, and reporting accuracy. Failure to meet these metrics can result in penalties, reduced payments, or contract termination.

How does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement method impact price discovery?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method is a nuanced approach. While it aims for broad competition, the initial exclusion of certain sources suggests that the government had specific criteria or reasons for limiting the pool of potential bidders. This limitation can impact price discovery because it may prevent the most competitive offers from entering the bidding process. If the excluded sources represent significant market players or possess unique capabilities, their absence could lead to less downward pressure on prices. The effectiveness of price discovery hinges on whether the remaining pool of bidders adequately represents the market and whether the exclusion criteria were justified and transparent.

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: 2 CORPORATE WAY, MISSOULA, MT, 01

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Small Disadvantaged Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $127,845,168

Exercised Options: $127,845,168

Current Obligation: $127,835,168

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: NO

Timeline