Forest Service awarded $17.3M for exclusive use of large firefighting helicopters, with Erickson Inc. as the sole contractor

Contract Overview

Contract Amount: $17,348,966 ($17.3M)

Contractor: Erickson Incorporated

Awarding Agency: Department of Agriculture

Start Date: 2009-04-02

End Date: 2012-04-30

Contract Duration: 1,124 days

Daily Burn Rate: $15.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 32

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: 2009 EXCLUSIVE USE LARGE FIRE SUPPORT HELICOPTER SERVICES FOR WILDLAND FIREFIGHTING

Place of Performance

Location: CENTRAL POINT, JACKSON County, OREGON, 97502

State: Oregon Government Spending

Plain-Language Summary

Department of Agriculture obligated $17.3 million to ERICKSON INCORPORATED for work described as: 2009 EXCLUSIVE USE LARGE FIRE SUPPORT HELICOPTER SERVICES FOR WILDLAND FIREFIGHTING Key points: 1. The contract's fixed-price structure with economic price adjustment aims to mitigate inflation risks. 2. A 3-year base period with options suggests a need for sustained aerial firefighting capabilities. 3. The contract was awarded under full and open competition after exclusion of sources, indicating a specific justification for limiting initial bidders. 4. The geographic scope is limited to Oregon, suggesting a regional focus for these critical services. 5. The North American Industry Classification System (NAICS) code 481212 points to nonscheduled chartered freight air transportation, highlighting the specialized nature of the service. 6. The contract duration of 1124 days (approximately 3 years) aligns with typical wildfire season needs.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable service contracts. The fixed-price with economic price adjustment structure can lead to cost overruns if not carefully managed. However, the exclusivity of 'large fire support helicopter services' suggests a specialized capability that may command a premium. Further analysis would require comparing the per-hour or per-mission cost against industry standards for similar aircraft and services, considering operational complexities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources.' This phrasing is unusual and suggests that while the competition was intended to be broad, specific circumstances led to the exclusion of certain potential bidders. The number of bidders (32) is substantial, indicating significant interest. However, the 'exclusion of sources' clause warrants further investigation to understand if it limited the competitive landscape and potentially impacted price discovery.

Taxpayer Impact: While a large number of bidders participated, the 'exclusion of sources' clause raises questions about whether taxpayers received the most competitive pricing possible. Understanding the rationale behind the exclusion is crucial for ensuring maximum value for taxpayer funds.

Public Impact

Wildland firefighters and the public benefit from enhanced aerial support during wildfire suppression efforts. The services delivered are critical for containing and extinguishing large-scale wildfires, protecting lives, property, and natural resources. The geographic impact is primarily focused on Oregon, where these helicopters will be deployed for firefighting operations. The contract supports specialized aviation jobs within the Erickson Incorporated workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' clause in the competition method requires further scrutiny to ensure it did not unduly restrict competition and lead to higher costs.
The economic price adjustment (EPA) clause introduces potential for cost increases beyond the initial fixed price, necessitating close monitoring of market fluctuations.
The reliance on a single contractor for 'exclusive use' of large fire support helicopters could create a dependency and limit future flexibility in sourcing these critical assets.

Positive Signals

The contract secured 'exclusive use' of large fire support helicopters, ensuring dedicated resources for critical firefighting missions.
A substantial number of bidders (32) participated, indicating a competitive market for these specialized aviation services.
The fixed-price structure, even with EPA, provides a baseline cost control mechanism.
The contract duration of over three years suggests a stable, long-term commitment to bolstering firefighting capabilities.

Sector Analysis

The contract falls within the air transportation services sector, specifically nonscheduled chartered freight air transportation. This sector is vital for supporting critical government functions like emergency response. The market for specialized aerial firefighting assets is relatively niche, often dominated by a few key players capable of providing large, heavy-lift helicopters. Spending in this area is highly dependent on seasonal needs and federal/state agency budgets for wildfire management.

Small Business Impact

There is no indication that this contract included small business set-asides. The nature of specialized, large-scale aerial firefighting services often requires significant capital investment and operational capacity typically found in larger, established aviation companies. Subcontracting opportunities for small businesses are not explicitly detailed but could potentially exist in areas such as maintenance, ground support, or logistics if not handled in-house by the prime contractor.

Oversight & Accountability

Oversight of this contract would likely be managed by the Forest Service contracting officers and program managers responsible for aviation and firefighting resources. Accountability measures would be tied to performance standards, delivery of services as specified, and adherence to safety regulations. Transparency is generally facilitated through contract databases like FPDS, though detailed operational performance data may be internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Potential for limited competition due to 'exclusion of sources' clause.
Risk of cost escalation through Economic Price Adjustment (EPA).
Dependency on a single contractor for critical 'exclusive use' assets.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $17.3 million to ERICKSON INCORPORATED. 2009 EXCLUSIVE USE LARGE FIRE SUPPORT HELICOPTER SERVICES FOR WILDLAND FIREFIGHTING

Who is the contractor on this award?

The obligated recipient is ERICKSON INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Forest Service).

What is the total obligated amount?

The obligated amount is $17.3 million.

What is the period of performance?

Start: 2009-04-02. End: 2012-04-30.

What is the historical spending pattern for large fire support helicopter services by the Forest Service?

Historical spending on large fire support helicopter services by the Forest Service can fluctuate significantly year-to-year, driven by wildfire activity, budget allocations, and the specific types of aircraft procured. While this $17.3 million contract represents a substantial investment for a three-year period, it is essential to analyze broader trends. Examining spending over the past decade would reveal patterns of reliance on exclusive-use contracts versus call-when-needed services, the average cost per hour or per mission for similar aircraft, and the impact of major fire seasons on procurement volumes. Without access to comprehensive historical data, it's difficult to definitively state if this contract's value aligns with past investments or if it represents an increase or decrease in overall spending for these critical assets.

How does the per-hour cost of Erickson Incorporated's large fire support helicopters compare to market rates for similar services?

Determining the precise per-hour cost benchmark for Erickson Incorporated's large fire support helicopters requires detailed access to the contract's pricing structure and market data for comparable aircraft. The contract is a Fixed Price with Economic Price Adjustment (EPA), which means the base price is set, but can be adjusted for inflation. To assess value, one would need to compare the adjusted hourly rate against rates charged by other providers for similar heavy-lift helicopters (e.g., Erickson S-64 Skycrane) used for firefighting. Factors such as aircraft availability, crew expertise, maintenance, and operational readiness influence these rates. If this contract's adjusted hourly rate is significantly higher than the average market rate for comparable services, it could indicate a fair or questionable value proposition for the taxpayer.

What are the specific risks associated with an 'exclusive use' contract for firefighting helicopters?

An 'exclusive use' contract for firefighting helicopters, like the one awarded to Erickson Incorporated, presents several risks. Firstly, it can lead to a lack of flexibility; the government is committed to paying for the aircraft regardless of the intensity of the fire season, potentially resulting in underutilization during low-activity periods. Secondly, it can stifle competition in the long run, as other potential providers may be discouraged from investing in similar assets if the market is perceived as locked up. Thirdly, there's a risk of contractor dependency, where the government becomes reliant on a single provider, potentially weakening its negotiating position in future procurements. Finally, the 'exclusion of sources' clause, even within a 'full and open' framework, warrants scrutiny to ensure it was justified and did not unduly limit the competitive pool, potentially impacting price and innovation.

What is Erickson Incorporated's track record with federal firefighting contracts?

Erickson Incorporated has a significant track record in providing heavy-lift helicopter services, including for firefighting operations, to various government agencies. They are known for operating the Erickson S-64 Air Crane, a specialized aircraft well-suited for aerial firefighting. Their experience often includes supporting agencies like the U.S. Forest Service, Bureau of Land Management, and other state and international entities. Analyzing their past performance on similar contracts would involve reviewing contract completion records, any past performance evaluations, and instances of contract disputes or awards. A strong, consistent record of successful performance and adherence to safety standards would generally be viewed positively, while any history of significant issues could raise concerns about reliability and value.

How does the competition level ('full and open competition after exclusion of sources') impact the price discovery and potential savings for taxpayers?

The competition method 'full and open competition after exclusion of sources' presents a nuanced impact on price discovery and taxpayer savings. On one hand, 'full and open' implies a broad solicitation, which generally fosters robust competition and drives prices down through market forces. The fact that 32 bidders were involved suggests significant market interest. However, the 'exclusion of sources' element introduces a critical caveat. If the exclusion was based on arbitrary or overly restrictive criteria, it could have artificially limited the number of viable competitors, potentially preventing the most cost-effective solutions from emerging. Understanding the specific reasons for the exclusion is paramount. If the exclusion was justified (e.g., based on unique capabilities or safety requirements), then the competition might still have yielded fair pricing. If not, taxpayers may have foregone potential savings.

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

Offers Received: 32

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

Evaluated Preference: NONE

Contractor Details

Address: 3100 WILLOW SPRINGS RD, CENTRAL POINT, OR, 02

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

Financial Breakdown

Contract Ceiling: $17,348,966

Exercised Options: $17,348,966

Current Obligation: $17,348,966

Timeline