Agriculture's $54.8M Next Generation Airtankers contract to Coulson Aviation faces scrutiny over competition and value

Contract Overview

Contract Amount: $54,782,056 ($54.8M)

Contractor: Coulson Aviation (USA), Inc.

Awarding Agency: Department of Agriculture

Start Date: 2013-05-30

End Date: 2023-05-29

Contract Duration: 3,651 days

Daily Burn Rate: $15.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF CRITICAL FUNCTION- NEXT GENERATION AIRTANKERS

Place of Performance

Location: VICTORVILLE, SAN BERNARDINO County, CALIFORNIA, 92394

State: California Government Spending

Plain-Language Summary

Department of Agriculture obligated $54.8 million to COULSON AVIATION (USA), INC. for work described as: IGF::CT::IGF CRITICAL FUNCTION- NEXT GENERATION AIRTANKERS Key points: 1. Contract awarded through full and open competition after exclusion of sources, raising questions about the initial bidding process. 2. The contract duration of over 10 years suggests a long-term commitment to a specific solution. 3. Firm Fixed Price contract type provides cost certainty but may limit flexibility. 4. The significant value of the contract warrants a close examination of performance and cost-effectiveness. 5. The contract's focus on aerial firefighting highlights critical infrastructure and public safety needs. 6. The geographic focus on California may indicate specific regional requirements or risks.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics and comparable contract data for next-generation airtankers. The firm fixed price structure provides cost predictability. However, the extended duration and significant total value necessitate ongoing scrutiny to ensure continued cost-effectiveness and alignment with evolving firefighting needs. Without detailed operational data, a definitive assessment of value for money is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This designation suggests that while the competition was intended to be broad, certain sources may have been excluded at some stage, potentially limiting the pool of bidders. The number of bids received (8) indicates some level of interest, but the 'exclusion of sources' clause warrants further investigation into why certain entities were not considered, which could impact price discovery.

Taxpayer Impact: The limited competition, particularly if specific capabilities were excluded, may have resulted in less competitive pricing for taxpayers. Understanding the rationale behind the source exclusion is crucial for ensuring the government secured the best possible value.

Public Impact

The primary beneficiaries are federal and state agencies involved in wildfire suppression, ensuring critical resources are available. The contract delivers essential aerial firefighting capabilities, directly supporting efforts to combat large-scale wildfires. The geographic impact is significant, particularly in regions prone to wildfires, such as California. Workforce implications include support for specialized aviation personnel and ground crews involved in aerial firefighting operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to 'exclusion of sources' could impact long-term cost efficiency.
The long contract duration may not adapt well to rapidly evolving aerial firefighting technologies.
Dependence on a single contractor for critical airtanker services poses a risk if performance issues arise.

Positive Signals

Firm Fixed Price contract provides budget certainty for the Forest Service.
The contract addresses a critical national need for wildfire suppression resources.
Awarding to Coulson Aviation, a known entity in aerial firefighting, suggests a focus on established capabilities.

Sector Analysis

The aerial firefighting sector is a critical component of national security and environmental management, particularly in regions susceptible to wildfires. This contract for next-generation airtankers fits within the broader aerospace and defense services market, with specialized applications. Spending in this area is often driven by environmental conditions and federal mandates for resource protection. Comparable spending benchmarks would typically involve other large-scale aviation support contracts for emergency response or specialized transport.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this contract. This suggests that the focus was on specialized capabilities likely held by larger, established firms. There is no explicit information on subcontracting plans for small businesses, which could be an area for further inquiry to understand potential impacts on the small business ecosystem within the aerospace and defense sector.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Agriculture's Forest Service contracting officers and program managers. Inspector General audits may be conducted to ensure compliance and identify potential fraud, waste, or abuse. Transparency is generally maintained through contract award databases, but detailed performance reporting and specific oversight mechanisms would require further investigation into the contract's terms and conditions.

Related Government Programs

Wildfire Suppression Support
Aviation Services Contracts
Emergency Response Aircraft
Department of Agriculture Procurement
Forest Service Operations

Risk Flags

Limited competition due to source exclusion.
Long contract duration may lead to technological obsolescence.
Lack of detailed performance metrics hinders value assessment.
Potential for reduced price discovery due to limited bidders.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $54.8 million to COULSON AVIATION (USA), INC.. IGF::CT::IGF CRITICAL FUNCTION- NEXT GENERATION AIRTANKERS

Who is the contractor on this award?

The obligated recipient is COULSON AVIATION (USA), INC..

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Forest Service).

What is the total obligated amount?

The obligated amount is $54.8 million.

What is the period of performance?

Start: 2013-05-30. End: 2023-05-29.

What is the specific justification for the 'exclusion of sources' in this Full and Open Competition?

The designation 'Full and Open Competition After Exclusion of Sources' implies that while the competition was intended to be open, certain potential bidders were excluded based on specific criteria. The exact justification for this exclusion is not detailed in the provided data. Typically, such exclusions might be based on specific technical requirements, security clearances, past performance issues, or the need for specialized capabilities that only a limited number of contractors possess. Without further documentation from the Department of Agriculture, it is difficult to ascertain the precise reasons. This exclusion is a critical point because it directly impacts the level of competition and potentially the final price paid by the government. Understanding this rationale is key to assessing whether the government truly received the best value and if the exclusion was justified and properly documented.

How does the performance of Coulson Aviation on this contract compare to industry benchmarks for aerial firefighting services?

Assessing Coulson Aviation's performance against industry benchmarks requires access to detailed performance metrics, such as aircraft availability rates, response times, mission success rates, and safety records. The provided data does not include this granular performance information. However, Coulson Aviation is a known operator in the aerial firefighting sector, suggesting a level of established capability. To conduct a thorough comparison, one would need to analyze post-award performance reports, incident data, and potentially compare their operational statistics against those of other major airtanker providers. Without this specific data, any performance assessment remains speculative. The long duration of the contract (over 10 years) implies a degree of satisfaction or necessity, but does not inherently guarantee optimal performance or value compared to market alternatives.

What are the potential risks associated with the long duration (over 10 years) of this contract?

The extended duration of this contract, spanning over 3,651 days (approximately 10 years), presents several potential risks. Firstly, technological advancements in aerial firefighting could render the 'next-generation' capabilities specified at the contract's inception obsolete before its completion. This could lead to the government operating with less efficient or effective equipment than newer market offerings. Secondly, long-term contracts can reduce flexibility; if the nature of wildfire threats or suppression strategies changes significantly, adapting this contract might be difficult or costly. Thirdly, prolonged reliance on a single contractor can diminish market pressure for innovation and cost reduction over time. Finally, the extended commitment ties up significant federal resources for an extended period, potentially limiting future budget flexibility for other critical needs or more modern solutions.

Given the contract value and duration, what is the estimated annual spending trend for this service?

The total contract value is approximately $54.8 million over a duration of 3,651 days. To estimate the annual spending, we can divide the total value by the number of years. 3651 days is approximately 10.003 years. Therefore, the estimated annual spending is roughly $54.8 million / 10 years = $5.48 million per year. This figure represents an average annual expenditure. Actual spending may fluctuate year-to-year based on operational needs, wildfire activity, and specific task orders issued under the contract. This consistent, significant annual investment underscores the ongoing importance of aerial firefighting resources for the Forest Service.

How does the firm fixed price (FFP) structure impact the government's exposure to cost overruns compared to other contract types?

A Firm Fixed Price (FFP) contract structure, like the one used here, places the primary responsibility for cost control on the contractor. This means that Coulson Aviation is obligated to perform the work for the agreed-upon price, regardless of their actual costs. Consequently, the government's exposure to cost overruns is significantly limited compared to cost-reimbursement contracts. If the contractor's costs exceed the fixed price, the contractor absorbs the loss. Conversely, if the contractor's costs are lower than anticipated, they retain the profit. This structure provides the government with high cost certainty, which is beneficial for budgeting. However, it can also incentivize contractors to cut corners on quality or performance to protect their profit margin if not adequately monitored.

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: AG-024B-S-11-9009

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 610 SW ALDER ST STE 910, PORTLAND, OR, 97205

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $54,782,056

Exercised Options: $54,782,056

Current Obligation: $54,782,056

Actual Outlays: $14,717,891

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline