On April 16, 1997, at 2050 mountain daylight time, a Boeing 737-300, N962WP, operating as Western Pacific Airlines flight 169 from Houston, Texas, to Colorado Springs, Colorado, had an auxiliary power unit (APU) fire while on final approach to land at Colorado Springs. There was no damage to the aircraft and no injuries to the 5 crew or 120 passengers. The flight was operating under 14 CFR Part 121 when the incident occurred and an IFR flight plan was filed. According to the pilot in command, the APU fire warning activated when on final approach approximately 200 feet above ground level. The crew performed the appropriate procedures and shortly after landing, the fire warning light extinguished. They had the fire department inspect the aircraft and follow the aircraft as it taxied to the gate where the passengers were deplaned in normal fashion. Inspection revealed there had been a fire in the APU which was contained in the compartment. Visible damage was limited to the exhaust gas temperature (EGT) wiring harness. The wiring harness was replaced and the APU was test run at the facilities of Triumph Air Repair, Phoenix, Arizona. In attendance were the NTSB Investigator-in-Charge, representatives of Western Pacific Airlines, Boeing Commercial Airplane Company, Triumph Air Repair, FAA, and Allied Signal, who manufactured the APU. Documents provided by Western Pacific Airlines provided information that the APU (Allied Signal Series 85 P/N P40108) had a total time of 25,976 hours and 351 hours since overhaul. According to maintenance records, the APU had consumed 3 quarts of oil in the preceding 167 hours of service and 2 quarts in the preceding 57 hours. The maintenance manual does not specify maximum oil consumption limits. The APU was visually inspected and boroscoped to determine its condition. It was then mounted in a test cell and a normal start sequence was initiated. The start proceeded in a normal fashion until the APU accelerated to approximately 35% revolutions per minute (rpm) when the start attempt was aborted due to high turbine bearing scavenge pressure and smoke in the exhaust. The normal turbine bearing scavenge pressure is a vacuum of 0 to minus 25 psi and the recorded pressure was in excess of 15 psi. Following this attempted start, the APU was removed from the test cell for inspection. Visual inspection provided evidence of turbine oil on all surfaces of the exhaust assembly. Disassembly inspection provided evidence that the carbon element of the seal assembly (P/N 693616) was scored around its circumference. Oil residue coking at the aft face of the seal provided evidence that this was the source of the oil leak which ignited in the exhaust containment area. The seals are on each side of an oil cavity that is scavenged by the oil pump. Witness marks provided evidence that the cavity had become pressurized from the second impeller seal surface forcing oil across the aft turbine seal into the combustion gas path. Examination determined that the cause of the oil leak into the exhaust was from leaking oil seals P/N 3609143-4 and P/N 693616-1. According to Triumph Air Repair, during the past year they have experienced several rejections of new seal assemblies. The seals were rejected because they would not hold sufficient vacuum during assembly or final testing. According to Allied Signal, turbine seal leakage is a normal wear-out item on 85 series APUs. Leakage of oil in sufficient quantities to result in burning of oil outside of the APU can generally be caused only by leakage of compressed air past the forward (compressor side) turbine cavity seal. The subsequent pressurization of the turbine cavity forces oil past the aft turbine seal into the hot gas stream. Allied Signal technicians said that seal leakage was a common problem in the 1960s, 1970s, and into the 1980s. In 1988, Allied Signal incorporated changes to both the turbine seal and seal running surface that eliminated such leakage. The seal running surface, which is applied to the shaft of the second-stage impeller, was changed from a Metco spray to Tungsten carbide. All second stage impellers processed by Allied Signal since 1988 have had the Tungsten carbide coating; however, the older style of coating was also left in the repair manual due to the difficulty for some operators to obtain the Tungsten carbide treatment. The Western Pacific APU which had been overhauled by Triumph Air Repair used the Metco spray coating in compliance with the repair manual.