The Set-Aside Program for Federal Timber Sales

A review was conducted involving the set-aside program for Federal timber sales. Five areas were reviewed: the Small Business Administration's (SBA) size standard for determining eligibility to participate in the set-aside program; procedures for calculating the small business share of Federal timber sales which are reserved for eligible bidders; revenues received from set-aside sales compared with those received from open sales; the set-aside program's economic impact on communities where ineligible mills are dependent on Federal timber sales; and deviations from normal and expected business practices which may be caused by the set-aside program. In most instances there was a significant difference between the quality of set-aside and open sales; the set-aside sales were generally of higher quality. The fact that set-aside sales are generally of a higher quality than open sales also helps explain why SBA found that set-aside sales returned more dollars per thousand board-feet than did open sales.