Revision of Timber Sale Contract Forms FS-2400-6 and FS-2400-6T

AGENCY:

Forest Service, USDA.

ACTION:

Notice; final timber sale contracts.

SUMMARY:

The Forest Service is implementing revisions to its timber sale contracts, Form FS-2400-6, for scaled sale procedures, and Form FS-2400-6T, for tree measurement timber sale procedures. The revisions are the first substantive changes in the standard timber sale contract provisions in over 30 years. A notice with request for comment on the proposed contract revisions was published in the Federal Register on December 19, 2003 (68 FR 70758). The Forest Service made appropriate changes to the contracts in response to the public comments. The final revised contracts and a detailed summary of the Forest Service responses to public comments are available for review, as provided in the ADDRESSES section of this notice.

DATES:

The final revised timber sale contract forms are effective May 6, 2004.

ADDRESSES:

The final revised timber sale contract forms and the Forest Service response to public comments are available for public review on the Forest Service World Wide Web/Internet site at: http://www.fs.fed.us/forestmanagement/infocenter/newcontracts/index.shtml. Alternatively, the contracts and responses to comments can be reviewed in the office of the Director of Forest and Rangeland Management, Third Floor, Northwest Wing, Yates Building, 201 14th Street, SW., Washington, DC. Visitors are encouraged to call ahead to (202) 205-0893 to facilitate entry into the building.

FOR FURTHER INFORMATION CONTACT:

Richard Fitzgerald, Forest and Rangeland Management Staff, (202) 205-1753.

SUPPLEMENTARY INFORMATION:

Background

Timber sale contract Forms FS-2400-6 and FS-2400-6T are used by the Forest Service for the sale of all large, complex timber sales. Timber sale contract Form FS-2400-6 is used when timber is measured for payment after it is harvested, and timber sale contract Form FS-2400-6T is used when the basis for payment is measurement prior to sale. These contracts were originally brought into use in July 1970 and January 1972, respectively, and were the result of extended discussions between the Federal Timber Purchasers Committee and the Forest Service. These contracts were revised in September 1973 and October 1973, respectively, to incorporate modifications based upon experience gained and policy changes since their inception.

From 1973 until July 2001, the requirements of new legislation and Forest Service policy were implemented in the contracts by issuing special provisions that replaced or added to the standard contract provisions. In July 2001, new versions of timber sale contract Forms FS-2400-6 and FS-2400-6T were issued. The July 2001 versions incorporated the special provisions that had been brought into use since 1973, but did not make any other changes that affect the rights and obligations of the Forest Service and timber sale purchasers.

Summary of Comments

In response to public comments, over 75 changes were made to timber sale contract Forms FS-2400-6 and FS-2400-6T, including:

1. Adding a contract provision to provide for an emergency rate redetermination after severe market declines.

2. Changing the procedure for reimbursing purchasers for changes in road construction cost to provide more timely reimbursement.

3. Removing the contract provision requiring that purchasers comply with other Federal, State, and local laws, since they have this obligation anyway.

4. Shortening the time requirement for the Forest Service to inspect the timber sale purchaser's completed work from 10 days to 5 days.

5. Adding a contract provision to allow the timber sale purchaser to terminate the contract if the market declined substantially during a Forest Service suspension.

6. Based on information it currently has, the Forest Service believes the appropriate level for liquidated damages should be increased from 7 percent to 15 percent. The Forest Service will monitor liquidated damages to determine if further adjustments are needed.

7. Adding a contract provision to provide for reducing the performance bond during a Forest Service suspension.

Contract Revisions

The final revised timber sale contract Forms FS-2400-6 and FS-2400-6T provide a better balance of risk between the timber sale purchaser and:

1. Clarify and simplify the remedies available when contracts are suspended, modified, or terminated for environmental reasons.

2. Incorporate special provisions that are applicable to all timber sales into the standard contract provisions.

3. Correct inconsistencies and clarify language that has accumulated by the addition of 30 years of special provisions to the timber sale contracts.

4. Make organizational and editorial changes intended to eliminate duplicative and unnecessary provisions.

5. Provide for liquidated damages when the Forest Service unilaterally terminates or partially terminates a timber sale contract.

6. Provide for a rate redetermination after a specified time when the Forest Service orders the delay or interruption of operations for specific reasons.

7. Provide for an emergency rate redetermination if there is a severe market decline after the timber sale is purchased.

The final revised contracts and responses to public comments are available electronically and in paper copy, as provided in the ADDRESSES section of this notice.