Government aircraft on the cheap

Business Jet Traveler » June 2010
Looking for a bargain on a Cessna Caravan or other aircraft? You may find one
Tuesday, June 1, 2010 - 5:00am

Every year the federal government auctions off to the public a handful of its used business-class jets, turbine helicopters and turboprops at prices that, at first glance, seem ridiculously low. Over the last decade, buyers walked away with deals that have included $30,000 for a Falcon 20, $101,000 for a Sabreliner 75A, $387,000 for a Turbo Commander 690A and $399,000 for a Gulfstream II. Not all of these are junkers or were previously flown by now-incarcerated cocoa-growing enthusiasts from South America. A few years ago, a late-model Pilatus PC-12 turboprop sold this way for around $2 million-less than half the price of a new one.

Before you get your hopes up, keep in mind that the site often lists no bargain aircraft-or no aircraft at all. To grab a deal, you have to check listings regularly, and then move fast if you find something you want. Moreover, when it comes to buying surplus government lift, caveat emptor definitely applies, said Drew Della Valle, a spokesman for the U.S. General Services Administration's personal property division, the office charged with disposing of surplus government aircraft.

For the airplanes it sells, the GSA makes "no guarantees of quality," he said, noting that aircraft are auctioned off on an agency Web site (gsaauctions.gov) much like you would buy merchandise on eBay, with minimum bids and price reserves. Buyers are allowed to inspect aircraft before they bid, however. And information about aircraft for sale, including their location and prices, can be found on the Web site. Spotting a junker is fairly easy as it typically does not command a minimum bid and generally is missing a major component you would rather not do without. Like an engine. "If we have a Learjet that has been stripped, then we might not put a bid deposit or minimum bid on it," Della Valle said. 

The aircraft, which typically sell in about 20 days, come from government agencies that no longer need or want them, but the GSA does not handle all aircraft sales for federal agencies. Exempted agencies include the Department of Defense and the U.S. Marshall's Service. The Department of the Interior also is allowed to sell up to 10 aircraft per year directly. The Department of Defense tends to park most of its surplus aircraft in the Arizona desert at Davis-Monthan Air Force Base near Tucson-sometimes for years-before stripping them of parts or selling them. And the department makes a habit of not selling fighters and bombers to the general public or unfriendly nations. 

Nevertheless, more government aircraft could soon be finding their way onto the open market thanks to a new policy creating what are known as "exchange sales." The policy allows the agency disposing of the property to use sale proceeds-whether from another government entity or the general public-to acquire replacement property similar to what was sold on a one-for-one basis. Sounds good in theory, but what this really does is encourage all government agencies to buy new equipment as opposed to seeking out and reusing donated or transferred aircraft from other agencies.

Local and state governments, in the past often the beneficiaries of donated federal property, are being particularly hard-hit by the practice. Agencies can still acquire property from each other, but now they have to pay market price for it. This is the equivalent of asking your kids to choose between paying for hand-me-downs out of their own pockets or just asking you-or in this case, Congress-to buy them new stuff.

Not surprisingly, the policy often "prevents reutilization of aircraft" by the government, Della Valle said. So off to the open market it goes, and when it sells the GSA takes a cut for its disposal service, which, Della Valle pointed out, at least pays for GSA expenses and overhead associated with its aircraft sales activities. And buyers often get a deal.

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