2409.15,31-32.22 Page 1 of 23 FSH 2409.15 - TIMBER SALE ADMINISTRATION HANDBOOK WO AMENDMENT 2409.15-92-6 EFFECTIVE 8/3/92 CHAPTER 30 - CHANGES IN STATUS OF CONTRACTS 31 - CONTRACT TERM ADJUSTMENT. 31.1 - Conditions Permitting Term Adjustment. The Contracting Officer may adjust the termination date for a contract when certain circumstances occur. To qualify for this adjustment, the purchaser must give written notice of the lost time not later than 30 days after the end of the Normal Operating Season in which the time was lost and at least 10 days before the termination date. The intent of the 30 day limit for written notice is so that the Forest Service can investigate alleged causes of delay while the evidence is fresh. When the Forest Service actually knows of the excusable cause and the lack of formal notice within the 30 days, does not prejudice the Forest Service, the Forest Service does not need to enforce notice requirement (Comp. Gen. Dec. B167120, Aug. 1, 1960). An example might be when flood or fire destroys a bridge or road, disrupting normal Forest administration along with logging and other public traffic. The Forest Service must respond promptly to the purchaser's written notice as stated in the second paragraph of provision B8.21. The Contracting Officer must sign all contract term adjustments. 31.11 - Delay or Interruption of the Sale Area Operations. Timber Sale Contract Forms 2400-5 and FS-2400-6, provide for adjustment when something interrupts or delays operations. Form FS-2400-6 stipulates that to qualify for a contract term adjustment, an interruption or delay must stop or significantly reduce removal of included timber from the sale area through curtailment of a specific part of the operation that was scheduled pursuant to contract provision B6.31. The purchaser shall make a written request for adjustment within a stipulated period of time, so that the Forest Service can verify the delay or interruption. As a general rule, deny late requests. Honor late requests when the Forest Service knows the events causing the delay or interruption or from sources other than the purchaser that can readily document the delay. Do not grant adjustments for delays or interruptions that do not stop scheduled removal of included timber for 10 or more consecutive days. The Contracting Officer must reply promptly in writing to each request, stating the number of days the adjustment is warranted and the adjusted termination date. 31.12 - Delay in Using of Timber Processing Facilities. Form FS- 2400-6 authorizes adjustment when stated causes affect the disposition or processing of timber. Do not adjust a contract on any other form for such causes unless the purchaser can show that it was not feasible to continue sale operation. 31.13 - Delay or Interruption at the Request of the Forest Service. Contract forms FS-2400-5 and FS-2400-6 provide for adjustment when the purchaser accepts a Forest Service request to delay or interrupt operations for any legitimate purpose, such as operating on other National Forest timber that needs more urgent harvesting. When the purchaser cannot operate on National Forest timber already under contract by the termination date and operate on other timber that needs more urgent harvesting at the same time, grant additional time. However, make such a request of a purchaser only when the Forest Service's intent to use this arrangement is in the prospectus for the timber that needs urgent harvesting. Adjustment may not be granted to permit the purchaser to operate on other than National Forest timber because the Forest Service cannot properly request a purchaser to operate on others' timber. In such cases, grant an early extension if appropriate. Form FS-2400-6 specifically defines fire emergency closures as Forest Service requests and permits adjustment when the accumulated time lost by interruptions exceeds a stipulated amount of time. The Forest Service Representative must keep an accurate record of all such closures implemented during the season. Do not treat operating delays or interruptions that contract C provisions require as delays or interruptions at the request of the Forest Service. Likewise, do not consider suspension of the purchaser's operations, because of failure to comply with contract terms, for term adjustment. 31.14 - Rates. Ordinarily the rates in effect during the adjusted period must be those in effect before the termination date. The rates in effect during the adjustment period may be lower than those to be paid before that time, within the limits originally provided in the contract. For example, rates for a sale whose contract provides for annual rate redetermination may be redetermined if a redetermination date falls within the adjusted period. Thus rates may be raised or lowered if the appraisal justifies such a change and no other clause in the contract prevents it. In flat rate sales with no provision for rate redetermination, the bid rates constitute the floor, despite extensions or contract term adjustments. Quarterly stumpage rate adjustment provisions shall be continued during adjustment periods when the contract so provides. 32 - CONTRACT TERM EXTENSION. The timber sale contract for harvesting National Forest timber clearly establishes the purchaser's obligation to complete cutting and removal, as well as other contractual obligations, within the time limits that the contract specifies. The Contracting Officer shall not extend the contract term unless: (1) the purchaser has operated in a diligent manner; or (2) extension would be in the substantial overriding public interest. 32.1 - Extension for Diligent Performance. 32.11 - Sales Between July 1, 1971, and July 1, 1978. To qualify for an extension of a sale made on or after July 1, 1971, but before July 1, 1978, the purchaser must meet all of the following conditions: 1. Cut and removed at least 50 percent of the advertised volume from the sale area. 2. Specified roads needed to remove the timber harvested to date and to permit planned, orderly development of future sales and those that the prospectus identified. 3. All contractual requirements, such as snag falling, erosion control, and slash disposal, have been accepted on the area cut over except for areas where logging currently is in progress. Purchaser's burning of current slash may be waived as a prerequisite for extension, if weather conditions or other considerations have precluded burning. A decision not to grant an extension when the above conditions are met will be made only when the extension would result in intolerable resource management or protection problems or cause environmental damage that contract modification cannot correct or prevent. 32.12 - Sales Between July 1, 1978, and April 15, 1982. Timber sale contracts for sales made on or after July 1, 1978, shall authorize contract term extensions only if the purchaser has met all the following conditions, unless the Chief finds that there is an overriding public interest that justifies the extension. 1. Constructed specified roads needed to remove all included timber in accordance with the approved plan of operations. The Forest Service accepted these roads before the applicable road completion date. (Not applicable when Forest Service assumes responsibility for constructing roads.) 2. Cut and removed at least 75 percent of the advertised volume from the sale area. 3. Maintained operations to date in acceptable compliance with contract terms and the approved plan of operations. 4. Meet contractual requirements, such as snag falling, erosion control, and slash disposal, on the cutover area, except for areas where logging currently is in progress. Purchaser's burning of current slash or grass seeding of disturbed areas may be waived as a prerequisite for extension if weather conditions or other factors have delayed these activities. 32.13 - Sales After April 15, 1982. In addition to the conditions in item b, the following conditions shall apply: 1. Extended rates must be redetermined rates or current contract rates, whichever is higher. For sales subject to stumpage rate adjustment, adjusted rates cannot be less than tentative rates established for the extension period. 2. In the event an extension is granted and there are uncompleted specified roads, the cost of such roads shall be reestimated, but the purchaser credit limit shall not be increased over that in effect prior to the extension. 3. Extension deposits including amounts for unpaid timber or increased value of remaining timber shall be required. 4. A cash payment shall be required by the termination date to cover increased costs to the Government caused by the delay in completing the sale, including, but not limited to, the following: a. For scaled sales, interest on the value of timber remaining on the sale from termination date until the midpoint of the extension period or, for tree measurement sales, interest on the value of timber remaining and not paid for on the sale from termination date the until midpoint of the extension period. b. Increased regeneration costs, such as nursery stock carryover, loss, or replacement; site preparation; seeding; or planting. c. Costs of remarking timber to be cut or left on the area remaining to be cut over when marked before the extension. 32.14 - Contracts Less Than 2 Years Long. The Chief may authorize using different qualifying conditions for extensions applicable to contracts less than 2 years long. These different conditions must apply to contracts for timber offered during periods of extremely high end-product prices when such prices subsequently decline drastically. A drastic decline is one exceeding 20 percent. Different qualifying conditions shall be authorized only for such contracts and only when there is a determination that a drastic price decline has resulted in an abnormal decline in industry-wide production that has significantly affected the collective rate of operations under such contracts. Any such authorizations must apply to contracts for specified classes of timber, such as softwood sawtimber, awarded during specific periods of time and expiring during specific periods of time. A difference may be recognized between contracts with provisions for escalation, under which stumpage price drops along with the market, and contracts without such provision (flat rates). 32.2 - Extensions Under Substantial, Overriding Public Interest Authority. The Chief authorized extensions under the substantial, overriding public interest authority provided in 36 CFR 223.115 on October 15, 1981. Under this authorization extensions were granted for up to 2 years for sales sold before January 1, 1981, that terminated before April 1, 1985, and authorized an additional extension of up to 2 years for previously extended sales, provided the purchaser had complied with the terms of the original extension. 32.21 - Multisale Extension Authorization. On August 18, 1983, the Chief determined it to be in the substantial, overriding public interest to allow the extension of certain sales bid before January 1, 1982. 1. Eligibility of Sales To Be Extended. To be eligible for extension under the multisale extension program, the extension cannot be injurious to the United States, and the National Forest timber sale contract must meet all of the following minimum criteria: a. The contract is for a sawtimber or pulpwood sale. b. The contract was bid after January 1, 1976, and before January 1, 1982. Sales bid between January 1, 1970, and January 1, 1976, may be eligible if they have received contract term adjustments of 1 year or more to implement environmental modifications or road design changes or to harvest salvage timber in urgent need of removal. c. The purchaser is in substantial compliance with the terms of the contract or there is a bona fide dispute about the compliance. d. Less than 25 percent of the remaining estimated volume of material is subject to rapid deterioration, except as noted in the next paragraph. e. The contract was not awarded to assist in the control of forest pest epidemics, except as noted in the next paragraph. Sales with more than 25 percent of the remaining estimated volume of the material subject to rapid deterioration and sales made to assist in controling forest pest epidemics may be eligible for extension if the Contracting Officer decides that removing the rapidly deteriorating timber or controling the epidemic may be accomplished best by contract extension. 2. Extension Conditions and Requirements. Sales eligible for extension under the multisale extension program are subject to the following conditions: a. The maximum extension is 5 years. Total sale life may exceed 10 years. b. Sales that the Forest Service plans to extend under the program must be part of a harvest schedule that is a part of a multisale extension plan. c. Sales not in breach which will terminate before a multisale extension plan can be approved may be conditionally extended until the multisale extension plan is submitted and approved. There can be no cutting or removal of timber during the conditional extension. When sales which have been conditionally extended are extended under a multisale extension plan, the effective date of the multisale extension plan shall be the date of the start of the conditional extension. d. Extension deposits, or purchaser credit used to meet the extension deposit obligation, previously paid on sales included in the harvest schedule cannot be transferred to other sales or refunded. e. A purchaser who defaults two or more sales in a harvest schedule shall not receive multisale extension program extensions for any other sales in the harvest schedule unless and until: (1) The purchaser pays all damages due the Government as the result of the defaults (one sale may be excluded). (2) The purchaser and the Forest Service agree to a schedule to pay for all damages due the Government as the result of the defaults, and the purchaser furnishes and agrees to maintain a bond in the amount necessary to cover the agreed damage payments. Such a bond may be secured by the same type of instruments as are currently accepted for performance or payment bonds on timber sale contract (FSM 6506.8). One sale may be exempt from the agreements. These conditions do not reduce the purchaser's contractual liability for damages due to default. These plan conditions are such that a purchaser may have an unresolved default on one contract without precluding further multisale extension plan extensions. Contracts in the harvest schedule that terminate during the period of two or more unresolved defaults of sales in the harvest schedule may not be conditionally extended. If these contracts qualify for extension under provision B/BT8.23 and meet the applicable diligent performance requirements, they may receive 1- year extensions under that authority. Defaults must not affect the extension of other contracts under the October 1981 authorization of other contracts if such extensions are currently planned in the harvest schedule. f. The purchaser must agree to substantially complete all specified roads within 1 year of the extension. Those sales containing provision C/CT5.102#, Road Completion Date (10/81), must meet the established requirements therein. Use national provisions C/CT5.102# (8/83) at the time of the extension for other sales being extended that have specified roads not substantially completed. g. Contract base rates may increase at the time of the extension to cover costs of essential reforestation work resulting from inflation during the operating season. The additional costs of essential reforestation due to inflation during the delay will only be distributed to the base rates of those species or species groups that were open for bidding at the time of the sale. The amount of this limitation will be calculated by adjusting the costs of essential reforestation shown in the most recent SAI plan by an inflation factor. The Regional Forester shall issue instructions on the appropriate inflation rate factor (FSM 2477.22). When base rates are to increase, the modification document must include a statement such as, "Not withstanding A/AT5, Base Rates are revised for this extension." h. The Federal Timber Contract Payment Modification Act affirms the implementing policy for the 1983 extension program that prohibits the granting of any further extension to sales extended under the multisale extension program. This limitation applies to further extension of sales extended for 5 years or less under the program. It does not preclude extensions under the Chief's October 15, 1981, waiver of diligent performance criteria as long as the extension under the October 15, 1981, authority occurs before sale extension under the multisale extension program. Delete provisions B/BT8.23 and C/CT8.231 from the contract at the time of extension under the 5-year program. Also delete any diligent performance requirements in form FS-2400-3 contracts being extended under the 5-year program. i. Contracts may be modified to make changes in contract requirements needed to accomplish those silvicultural objectives prescribed for the original sale involving regeneration or protection of the residual stand otherwise included in base rates. Include only those changes resulting from the purchaser's failure to complete the sale before to this extension. j. The Forest Service may establish priority removal dates for felled or decked timber remaining on the sale area at the time of extension. The Forest Service also shall establish priority removal dates for other included timber damaged by fire, insects, or other causes if necessary to prevent rapid deterioration or forest pest epidemics. k. Add a removal schedule and payment requirement to all contracts at the time of extension. Use national provisions C/CT6.31#, Removal Schedule, and C/CT4.262, Removal Schedule Payments, for contracts using forms FS- 2400-6 or FS-2400-6T. If the purchaser plans to harvest a sale in the harvest schedule before the current termination date, add the removal schedule and removal schedule payment provisions before to the scheduled harvest. l. Include C/CT8.31# at the time of the extension of those contracts that had been extended under the October 1981 authorization and had not received interim modification. m. If necessary, include contract provisions relating to traffic management and maintenance to help resolve anticipated problems resulting from the delay in removal. Use national provisions C/CT5.122, Road Restrictions, C/CT5.412, Road Maintenance, and C/CT6.312#, Operating Schedule. If administering these provisions results in delaying the purchaser's operations scheduled during the normal operating season, the affected sales may qualify for contract term adjustment. n. Reappraise the sale and change the contract rates, as appropriate. Use the same appraisal method as was used in the most recent reappraisal of the sale. If the sale has not been reappraised before, use the same appraisal method as was used in the original appraisal. o. Modify the contract at the time of extension and as a condition of extension to include C/CT8.232#. This shall require agreement on the purchaser's responsibility for the cost of remarking timber, restaking roads, or refurbishing identification of features shown on the Sale Area Map. Upon the purchaser's request when preparing the multisale extension plan, the Contracting Officer shall furnish an approximation of the costs of such work based on current information so that the purchaser may consider these costs in developing plans for operating these sales. If the purchaser has paid for needed remarking, restaking, and related costs with previous contract extensions, any additional costs related to this type of work become the Forest Service's responsibility. In these situations, the purchaser shall not need to make deposits for this type of work. In these situations, the purchaser shall not need to make deposits for this work. The purchaser is responsible for any other remarking, restaking, or refurbishing needed for the multisale extension program extensions. The purchaser must sign the collection agreement for extension costs at the time of contract extension. The minimum advance cash deposit must be equivalent to $1.00 per thousand board feet (MBF) of timber remaining at the time of extension unless the purchaser has made an earlier deposit for refurbishment. This deposit covers the costs of determining the adequacy of timber designation or marking, construction staking, and identification of other features shown on the Sale Area Map. This deposit is due before the Forest Service incurs costs for this work. A guideline for payment is that the deposit is due 60 days before the purchaser's operations begin, as shown in C/CT6.3 (Option 1). There may be situations when the purchaser must make the deposits more than 60 days before operations begin. For example, if the purchaser scheduled operations for the early spring and the refurbishment would have to occur in the fall to avoid delaying the purchaser's operations. In addition, earlier remarking and designation may be necessary if the original markings can not last until 60 days before operations begin. If refurbishment is necessary, the Forest Service may bill the purchaser again to cover the additional cost. The additional billing should be far enough in advance of the purchaser's planned operations in those parts of the sale needing refurbishment to avoid delaying the purchaser's operations. If it is estimated that the total cost of refurbishing, including the initial determination of adequacy, exceeds the equivalent of $4.00/MBF remaining at time of extension, it may not be in the public interest. In such situations the Regional Forester shall make a determination, and if the contract is extended, the total refurbishment cost shall be billed to the purchaser. The purchaser shall not use purchaser credit or payment bonds in lieu of deposits and payments for this work. p. Modify contracts to include those provisions required by law, such as nondiscrimination (C/CT8.63 (6/78)) and those required under standard Regional policy to be added at the time of extension, such as those involving changes in scaling, updating fire prevention requirements, or adding growth to tree measurement sales. It is not possible to provide purchasers with a list of all of the provisions added to their contracts for future extensions under the multisale extension program. However, to provide as much information as possible, the Washington Office shall prepare a list of national provisions used in the modifications. Regional Foresters shall prepare similar lists of Regional provisions. There may be additional provisions needed at the time of extension that are essential to carry out the original sale objectives or to protect the environment. Use of provisions not included in the Washington Office or Regional Forester's lists must be approved by the Regional Forester before they are included in a contract at time of a multisale extension program extension. Do not add provisions for stumpage rate adjustment to sales that were sold as flat rate sales. q. Delete provisions B/BT4.226, Use of Deposits, and C/CT4.226, Use of Deposits, at the time of contract extension under the multisale extension program. r. Do not add extension deposit provisions to contracts that the Contracting Officer has not extended previously if the first extension is under the multisale extension program. Add provisions C4.221# (Option 2) and C4.23# (Option 2) or provision CT4.221# ((Option 2) and CT4.23 (Option 2) dated 11/83 or later to these contracts at the time of extension. s. Do not change timber sale contract provisions for calculating damages for failure to cut included timber as a condition of extension under the 5-year extension program. Modify contracts already extended under the program that now include national provision C/CT9.4 (Option 1), Failure to Cut (8/83), to delete that provision and to make the original failure to cut provision effective. t. For convenience in administering contracts extended as part of the multi-sale extension plan, extend contracts from the date they would have terminated, without considering any right to contract term adjustment to which the purchaser has there after become entitled. Add any such contract term adjustment along with any other contract term adjustment to which the purchaser becomes entitled to during the multisale extension program extension to the contract termination date that the extension otherwise establishes. If the multisale extension program extension is at rates higher than the contract rates in effect immediately before the extension, and if the purchaser qualifies for a contract term adjustment before such an extension, the higher rates must not be applicable for a period equal to the amount of earned contract adjustment. If the first extension of a sale in the harvest schedule comes under the October 1981 authorization, include the provision usually added at the time of extension under that authority in the contract. When the Contracting Officer extends a previously extended sale under the multisale extension program, delete the extension deposit provisions and C(T)4.251#, Deferral of Extension Deposits. 32.22 - Multisale Extension Plan. Regional Foresters can approve and modify multisale extension plans. They may delegate this authority to Forest Supervisors for plans that include only one National Forest. Forest Supervisors may delegate multisale extension plan approval and modification authority to District Rangers for those plans that only include sales made under District Ranger authority on one district. Purchasers desiring extensions must have submitted a multisale extension plan by February 15, 1984, unless litigation had established other deadlines. To obtain Forest Service approval, the plan must have included all Federal and other public timber with contractual commitments in the purchaser's manufacturing area. Where the purchaser has more than one plan, timber included in one manufacturing area cannot be in another manufacturing area. Sales that more than one purchaser has bought may be in one multisale extension plan if the same person has authority to sign timber sale contracts for all of the purchasers. All of the National Forest timber sales of these purchasers in that manufacturing area must be in the multisale extension plan. Once the line officer approves such a multisale extension plan, all of the direction in this chapter applies as though a single purchaser held the sales in the plan. The plan period is from January 1, 1984, to the last extended termination date of sales proposed for extension. The plan for the manufacturing area must show the harvest schedule of all national forest sales proposed for extension and the proposed removal of volume by year for all other National Forest timber sales, Federal timber sales and public timber with contractual commitments in the manufacturing area. See the sample format in exhibit 01. In addition, the plan must show the completion of all National Forest timber sales before their planned or current termination dates. For multisale extension plan approval, the harvest scheduled in the plan must, as a minimum, show planned harvest levels that meet the criteria of one of the two plan alternatives. Under alternative 1, pro rata harvest, the volume included in the harvest schedule is assumed to be harvested at a uniform rate during the plan period (exhibit 02). Under alternative 2, average extension harvest, the volume of each sale in the harvest schedule is assumed to be harvested at a uniform rate during the extension period of the sale. This assumption is only for the purpose of calculating the minimum harvest schedule level. For instance, if a sale is extended for 5 years, alternative 2 would be based on the assumption that 20 percent of the extended volume is harvested each year of the extension (exhibit 03). If the harvest schedule includes a sale that is not planned for extension, it is assumed under alternative 2 that the volume of the sale will be harvested at a uniform rate from January 1, 1984, until the termination date. This assumption is only for the purpose of calculating the minimum harvest schedule. Each year the cumulative planned level for sales in the harvest schedule must equal or exceed the cumulative minimum harvest schedule level for the alternative used. The purchaser may distribute the planned harvest among the sales in the harvest schedule in any manner that meets the purchaser's needs and the contract requirements. The planned harvest shall be reflected in each contract by the removal schedule (C/CT6.31). If the purchaser qualifies for more than 30 calendar days of contract term adjustment in any calendar year of scheduled operations on a sale in the harvest schedule, upon the the purchaser's request the removal schedule in C/CT6.31 for that year shall be adjusted. The volume required to be removed that year must be adjusted by the percent of the normal operating Season lost for circumstances qualifying for such contract term adjustment. The contract term adjustment-related modification of the removal schedule shall be reflected as a change in the harvest schedule. The harvest schedule must also be changed, if necessary, to show complete harvest of the sale during the adjusted contract period. This change does not require a recomputation of the minimum harvest schedule level. However, upon the purchaser's request, harvest schedule modification based on a contract term adjustment may be the basis for recalculation of the minimum harvest schedule level. Control of the harvest levels is by administration of the timber sale contracts. The multisale extension plan is not part of the timber sale contract. 32.22 - Exhibit 01 SEE THE PAPER COPY OF THE MASTER SET FOR SECTION 32.22 - EXHIBIT 01. 32.22 - Exhibit 02 SEE THE PAPER COPY OF THE MASTER SET FOR SECTION 32.22 - EXHIBIT 02. 32.22 - Exhibit 02--Continued SEE THE PAPER COPY OF THE MASTER SET FOR SECTION 32.22 - EXHIBIT 02. 32.22 - Exhibit 02--Continued SEE THE PAPER COPY OF THE MASTER SET FOR SECTION 32.22 - EXHIBIT 02. 32.22 - Exhibit 02--Continued SEE THE PAPER COPY OF THE MASTER SET FOR SECTION 32.22 - EXHIBIT 02. 32.22 - Exhibit 02--Continued SEE THE PAPER COPY OF THE MASTER SET FOR SECTION 32.22 - EXHIBIT 02. 32.22 - Exhibit 02--Continued SEE THE PAPER COPY OF THE MASTER SET FOR SECTION 32.22 - EXHIBIT 02. 32.22 - Exhibit 02--Continued SEE THE PAPER COPY OF THE MASTER SET FOR SECTION 32.22 - EXHIBIT 02. 32.22 - Exhibit 03 SEE THE PAPER COPY OF THE MASTER SET FOR SECTION 32.22 - EXHIBIT 03. 32.22 - Exhibit 03--Continued SEE THE PAPER COPY OF THE MASTER SET FOR SECTION 32.22 - EXHIBIT 03. 32.22 - Exhibit 03--Continued SEE THE PAPER COPY OF THE MASTER SET FOR SECTION 32.22 - EXHIBIT 03. 32.22 - Exhibit 03--Continued SEE THE PAPER COPY OF THE MASTER SET FOR SECTION 32.22 - EXHIBIT 03.