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| GAO rules that Agriculture Department acted improperly in awarding lucrative contract | GAO rules that Agriculture Department acted improperly in awarding lucrative contract |
| (about 3 hours later) | |
| To Neptune Aviation Services’ competitors, it seemed like the company had landed a sweetheart deal: In exchange for dropping a bid protest and threats of lawsuits, Neptune would be awarded a huge, non-competitive contract by the U.S. Forest Service, worth as much as a half-billion dollars. | To Neptune Aviation Services’ competitors, it seemed like the company had landed a sweetheart deal: In exchange for dropping a bid protest and threats of lawsuits, Neptune would be awarded a huge, non-competitive contract by the U.S. Forest Service, worth as much as a half-billion dollars. |
| The senior procurement executive for the Department of Agriculture, which oversees the Forest Service, said the contract should not have been awarded without competition. But high-level officials at the department overruled her, granting the sole-source award to Neptune, whose chief executive had formerly served as the Forest Service’s acquisitions director. | The senior procurement executive for the Department of Agriculture, which oversees the Forest Service, said the contract should not have been awarded without competition. But high-level officials at the department overruled her, granting the sole-source award to Neptune, whose chief executive had formerly served as the Forest Service’s acquisitions director. |
| On Wednesday, though, the Government Accountability Office ruled that the agency’s decision to award the contract without competition was improper. | On Wednesday, though, the Government Accountability Office ruled that the agency’s decision to award the contract without competition was improper. |
| The decision to award the contract “so as to comply with the terms of the settlement agreement and avoid a Neptune-threatened lawsuit was without a reasonable basis,” the GAO found. And it recommended that the department should reassess its decision. | The decision to award the contract “so as to comply with the terms of the settlement agreement and avoid a Neptune-threatened lawsuit was without a reasonable basis,” the GAO found. And it recommended that the department should reassess its decision. |
| The battle began last year, after Neptune, based in Montana, bid on a contract to provide the Forest Service with air tankers to fight forest fires. Neptune was not awarded one of the contracts, and soon afterward the company threatened to file a protest “unless an ‘acceptable solution’ could be worked out,” the GAO’s decision said. | The battle began last year, after Neptune, based in Montana, bid on a contract to provide the Forest Service with air tankers to fight forest fires. Neptune was not awarded one of the contracts, and soon afterward the company threatened to file a protest “unless an ‘acceptable solution’ could be worked out,” the GAO’s decision said. |
| The company followed through on its threat, and soon started negotiating with USDA officials, according to the GAO’s decision. | The company followed through on its threat, and soon started negotiating with USDA officials, according to the GAO’s decision. |
| In June, the Forest Service agreed to grant Neptune a sole-source contract for two air tankers, “in exchange for Neptune withdrawing its protest.” But the USDA senior procurement executive refused to sign off on the deal, saying there wasn’t enough evidence to justify a non-competitive award. | In June, the Forest Service agreed to grant Neptune a sole-source contract for two air tankers, “in exchange for Neptune withdrawing its protest.” But the USDA senior procurement executive refused to sign off on the deal, saying there wasn’t enough evidence to justify a non-competitive award. |
| The Forest Service then offered Neptune a contract “of such size that it could be approved below the level” of the procurement executive, the GAO wrote. That threshold is $62.5 million. The company balked at the lower-value contract, according to the GAO. | The Forest Service then offered Neptune a contract “of such size that it could be approved below the level” of the procurement executive, the GAO wrote. That threshold is $62.5 million. The company balked at the lower-value contract, according to the GAO. |
| Federal contracting regulations “promote competition to ensure a fair playing field for firms interested in doing business with the federal government,” the procurement executive wrote in a memo to her superiors, according to the GAO. “Competition encourages innovation and lower prices.” | Federal contracting regulations “promote competition to ensure a fair playing field for firms interested in doing business with the federal government,” the procurement executive wrote in a memo to her superiors, according to the GAO. “Competition encourages innovation and lower prices.” |
| But the USDA’s chief acquisitions officer disagreed, saying a sole-source award was justified because it is allowed to keep vital suppliers in business “in the event of a national emergency.” | But the USDA’s chief acquisitions officer disagreed, saying a sole-source award was justified because it is allowed to keep vital suppliers in business “in the event of a national emergency.” |
| In its ruling, the GAO determined that there is no “evidence to suggest that Neptune intends to go out of business now merely because its future prospects remain uncertain.” | In its ruling, the GAO determined that there is no “evidence to suggest that Neptune intends to go out of business now merely because its future prospects remain uncertain.” |
| The USDA said in a statement late Wednesday: “The U.S. Forest Service is committed to ensuring that we have all of the resources we need to fight wildland fire and protect the lives and property of the American people. Air tankers are an important part of our efforts and we are currently reviewing the GAO recommendation.” | |
| Ronald Hooper, Neptune’s chief executive, said, “Obviously we are disappointed in the decision. ... We have aircraft available, and we had hoped to get them under contract this year.” | Ronald Hooper, Neptune’s chief executive, said, “Obviously we are disappointed in the decision. ... We have aircraft available, and we had hoped to get them under contract this year.” |
| He said it was proper to offer to settle after it did not receive the initial contract. And for now, it’s waiting to see how the Forest Service intends to proceed. | He said it was proper to offer to settle after it did not receive the initial contract. And for now, it’s waiting to see how the Forest Service intends to proceed. |
| “We’re back at a state of limbo waiting to see what the agency is going to do,” he said. | “We’re back at a state of limbo waiting to see what the agency is going to do,” he said. |