| Title: Disposal of National Forest Timber: Cancellation of Timber Sale Contracts |
| Abstract: Unlike governmentwide rules governing procurement contracts, the existing cancellation regulations at 36 CFR 223.40 and 36 CFR 223.116 places an inappropriate amount of financial liability on the Forest Service when the Agency must, for reasons of public policy or statutory direction, cancel a timber sale contract. The need for a consolidated and revised contract cancellation rule arises from changing circumstances over the past 2-3 decades surrounding forest product sales. This includes the increased likelihood that a forest product sale may have to be modified or cancelled to comply with changing laws, court orders ensuing from environmental litigation, and changing environmental conditions such as the listing of new species under the Endangered Species Act. Forest Service managers must have contractual flexibility to adjust management activities on National Forest System lands within reasonable economic limits in order to comply with new laws and court orders. Conversely, forest products purchasers need to know that they will receive appropriate compensation if a contract has to be cancelled for reasons beyond their control. Consequently the current cancellation regulation needs to be amended to clarify when, why, and by whom a contract can be cancelled and to establish an equitable balance of risk and liability between forest products purchasers and the government when contracts must be cancelled or partially cancelled. The Forest Service takes every precaution before authorizing a particular activity on National Forest System lands to ensure that its authorization conforms with existing laws and with existing conditions on the ground at the time of the authorization. Establishing reasonable limits to the Government's exposure to financial liability and burden of risk in the event of contractual changes or contract cancellations required to comply with new laws and/or court orders is critical to protect the public's financial interests. Conversely, purchasers of forest products need to know that they will be entitled to reasonable compensation if a forest products contract has to be cancelled. In 2003, the Forest Service proposed revising timber sale contract forms FS-2400-6 and FS-2400-6T (68 FR 70758). The proposed revisions were the first substantive changes in the standard timber sale contact provisions in over 30 years. Significant changes to the contracts included adding new provisions allocating risk and compensation to purchasers when contracts were delayed, suspended, modified or cancelled for environmental reasons. After considering the comments and making appropriate changes, final contracts were adopted 5/6/2004 (69 FR 25367). The FS-2400-13/13T stewardship contracts were modeled after the 2004 FS-2400-6/6T contracts. The FS continued receiving comments about the revised contracts and especially the new cancellation provisions which also addressed replacement timber and liquidated damages. In response the FS hired a former administrative law judge with expertise in government contracts to review the new contracts and after evaluating his findings additional changes were made to the contracts. On 7/31/2006, the FS published Notice of Availability of Revised Standard Timber Sale Contracts (71 FR 43096) - that notice discussed the consultant's report and FS response to the findings. |
| Priority: Substantive, Nonsignificant | Agenda Stage of Rulemaking: Proposed Rule |
| Major: No | Unfunded Mandates: No |
| CFR Citation: 36 CFR 223.40; 36 CFR 223.116; 36 CFR 223.30
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Code of Federal Regulations
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|
| Legal Authority: Not Yet Determined |
| Legal Deadline: None |
| Timetable: |
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Action
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Date
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FR Cite
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| | NPRM
| | 01/00/2012
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| Regulatory Flexibility Analysis Required: No | Government Levels Affected: No |
| Small Entities Affected: No | Federalism: No |
| Energy Affected: No |
Agency Contact: LaRenda C King
Assistant Director, Directives and Regulations
Department of Agriculture
Forest Service
ATTN: ORMS, D&R Branch 1400 Independence Avenue
Washington
,
DC
20250-0003
Phone:
202 205-6560
E-Mail:
larendacking@fs.fed.us
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