Once the red-headed stepchild of the U.S. Air Force, the C-27J tactical airlifter has become a hot commodity in the U.S. government.

The service’s decision early this year to mothball its 21 brand-new, twin-engine C-27Js — labeling the Alenia Aermacchi transports a niche capability too expensive to sustain alongside its other airlifters — triggered an interagency squabble between the U.S. Forest Service, bent on using them as much-needed firefighting tankers, and the U.S. Coast Guard, which was intent on employing them to plug a gap maritime patrol capability.

After some wrangling, Sen. John McCain (R-Ariz.) has drafted an amendment to the fiscal 2014 defense authorization bill that could resolve the dispute.

As the Forest Service and the Coast Guard made their cases, Deputy Defense Secretary Ashton Carter on Oct. 25 signed orders to dedicate the first seven of the aircraft to Army Special Operations Command for use in soldier free-fall training, replacing aging Casa 212s. “There is no plan to upgrade the aircraft at this time,” says Lt. Col. Darryl Gerow, requirements and resources officer for the Army’s special operations forces. However, Socom rarely operates single-use platforms, and the command previously shelved mature plans to outfit the C-27J with a gunship kit due to bureaucratic wrangling over the program at the Pentagon. It is possible the command could unearth the concept, especially in light of Italy’s decision to move forward with its own gunship variant.

However, it is unlikely Socom would push a gunship modification kit now, as it is in the beginnings of buying its AC-130J fleet and converting MC-130W Dragon Spear aircraft to the AC-130W configuration, and any competing program could raise questions on Capitol Hill.

Three of the seven have already been transferred for special operations use, with the remaining four to be delivered from Alenia, according to an industry source.

Meanwhile, officials at the Pentagon, Department of Homeland Security and Department of Agriculture are haggling over the disposition of the remaining 14 airlifters. Both the Forest Service and the Coast Guard have made a play for the aircraft. Some experts suggest federal regulations on the transfer of excess defense hardware give priority to military departments over other government agencies, bolstering the case made by the Coast Guard.

Coast Guard Commandant Adm. R.J. Papp says transfer of the remaining 14 C-27Js to his service would allow for cost avoidance of at least $1.3 billion for its maritime patrol mission and fill its operational need eight years faster than current plans. “The receipt of 14 or more C-27Js would allow the Coast Guard to return (maritime patrol aircraft/medium-range surveillance) capability to the West Coast,” and outfit three units, Papp says in an Aug. 13 memo to lawmakers. Maritime patrol is currently handled by the aging Lockheed Martin HC-130H and HC-144 (a missionized EADS Casa CN-235). Papp says the C-27J can provide “approximately three-quarters of the capability at half the operating cost” of the HC-130H.

But the Forest Service, which has pushed its own case for converting the small airlifters to fire tankers, has been backed by McCain, a powerful voice on Capitol Hill, making some in the Pentagon concerned the transfer will get mired in further wrangling over a deal. McCain is known for digging in his heels on matters, especially when Pentagon force structure and management issues are involved.

Romania conducted a test of using bladders on a G.222 — an early generation version of the C-27J — for aerial water tanker needs, reinforcing McCain’s case for a firefighting capability. “The C-130J has consistently performed as an outstanding air tanker, and we believe the C-27J has the potential to perform as an excellent air tanker as well,” says Thomas Vilsak, secretary of the Agriculture Department, which oversees the Forest Service.

McCain’s compromise amendment would satisfy the Forest Service’s needs for aircraft by transferring seven old Coast Guard HC-130Hs to the Forest Service for conversion to tankers, while the C-27Js would go to the Coast Guard. The tricky part was figuring out how to pay for much-needed structural improvements to the center wing boxes for the HC-130H aircraft. The amendment would allow the Defense Department, which must transfer the aircraft from the Coast Guard to the Forest Service, to reprogram previously unobligated C-27J funding to pay for the repairs, according to a congressional aide.

Coast Guard officials did not return calls for comment on the issue.

“With their greater lifting capacity, C-130Js could be a better fit for firefighting than C-27Js. At the same time, C-27Js are well suited for long-distance maritime patrols, and share avionics and engines with the Coast Guard C-130J fleet,” says Sen. Mark Begich (D-Alaska), who has two Coast Guard air stations in his state. “I’m hopeful we can find a way for the Forest Service to get refurbished Coast Guard C-130Hs, clearing the way for the Coast Guard to get the 14 C-27Js. A deal like that would allow both agencies to get what they need, but as always, the devil is in the details.”

Prior to the transfer of seven C-27Js to Socom, the Coast Guard argued that taking over all 21 aircraft from the Air Force would allow it to retire its HC-144A fleet; ownership of 14 would require the service to maintain a mixed fleet.

This bickering over the aircraft is the latest chapter in its inglorious introduction into the U.S. fleet. After beating the EADS Casa C-295 in a hard-fought competition in 2007 for the U.S. Army — staunch backers of the need for an aircraft smaller than the C-130 for direct delivery of troops and supplies on the battlefield — the Pentagon abruptly agreed in 2009 to shift control of the fleet to the Air Force.

That shift to the Air Force, parochial backers of the C-130 family, was the beginning of the end of the program at the Pentagon. The Army’s requirement was once at least 54 aircraft, and the Air Force sliced it to 38 but would eventually only buy 21 before terminating the program and grounding the aircraft.

Alenia was once teamed with Lockheed Martin, which agreed to provide marketing support for the twin-engine “mini-C-130,” as some call it, in the U.S. Sensing a potential threat, however, the U.S. defense giant eventually walked away from the agreement, leaving Alenia to handle its own sales to the Pentagon.

For now, Lockheed’s lobbying and sales efforts stateside have stunted the C-27Js once-promising push into the largest defense market on the globe. However, Alenia could see positive results with sales efforts abroad from taking on a U.S. customer — such as the Forest Service or Coast Guard — that actually wants the aircraft, unlike the Air Force.