Federal Land Management
Use of Stewardship Contracting Is Increasing, but Agencies Could Benefit from Better Data and Contracting Strategies Gao ID: GAO-09-23 November 13, 2008The Department of Agriculture's Forest Service and the Department of the Interior's Bureau of Land Management (BLM) have stewardship contracting authority, which allows the agencies to trade goods--such as timber--for services (e.g., thinning forests or rangelands) that the agencies would otherwise pay for with appropriated dollars, and to enter into stewardship contracts lasting up to 10 years. The authority is set to expire in 2013. GAO was asked to determine, among other things, (1) the extent to which the agencies are using stewardship contracting and (2) what successes and challenges the agencies have experienced in using it. In doing so, GAO assessed agency data, reviewed project files, and visited projects in numerous locations.
From fiscal years 2003 through 2007, the Forest Service and BLM awarded a combined total of 535 stewardship contracts, with the number increasing each year--from 38 in fiscal year 2003 to 172 in fiscal year 2007. However, for certain aspects of stewardship contracting, such as the acres involved or the value of the services exchanged for goods, reliable data were not available for the full 5-year fiscal period because neither agency has had a comprehensive database of its stewardship contracting activity since 2003. The agencies did not begin to maintain nationwide stewardship data until recently, primarily because of difficulties in adapting their systems to account for all aspects of stewardship contracting. Further, these data are not complete, and reside in myriad systems, not all of which interface with one another. These deficiencies keep the agencies and Congress from accurately assessing the costs and value of stewardship contracting. The agencies credit stewardship contracting with allowing them to accomplish more work--by allowing them to trade goods for services, thereby extending their budgets for thinning and other services--and spurring collaboration with members of the community and environmental groups. But stewardship contracting has its challenges too, including some resistance to its use (e.g., by contractors unfamiliar with it) and a paucity of markets for the small trees typically removed in stewardship projects. Also, although agency officials view long-term multiyear contracts as crucial to market development, these contracts can involve financial challenges. These contracts are attractive because they offer contractors and industry operators some certainty of supply, enabling them to obtain loans for equipment or processing facilities, which can then spur demand for materials resulting from stewardship projects. But such contracts can require a substantial up-front obligation of funds--to protect the contractor's investment if the government later cancels the contract--that may exceed the budget of a field unit (e.g., a national forest). Also, funding the annual work specified in the contract can force a unit to scale back its other programs if the value of the timber removed is not sufficient to pay for that work. Yet neither agency has developed a strategy for using such contracts, a step that could help field units determine which projects are appropriate for these long-term contracts and how they would be funded.
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Director: Team: Phone:GAO-09-23, Federal Land Management: Use of Stewardship Contracting Is Increasing, but Agencies Could Benefit from Better Data and Contracting Strategies
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
November 2008:
Federal Land Management:
Use of Stewardship Contracting Is Increasing, but Agencies Could
Benefit from Better Data and Contracting Strategies:
Use of Stewardship Contracting:
GAO-09-23:
GAO Highlights:
Highlights of GAO-09-23, a report to congressional requesters.
Why GAO Did This Study:
The Department of Agriculture‘s Forest Service and the Department of
the Interior‘s Bureau of Land Management (BLM) have stewardship
contracting authority, which allows the agencies to trade goods”such as
timber”for services (e.g., thinning forests or rangelands) that the
agencies would otherwise pay for with appropriated dollars, and to
enter into stewardship contracts lasting up to 10 years. The authority
is set to expire in 2013. GAO was asked to determine, among other
things, (1) the extent to which the agencies are using stewardship
contracting and (2) what successes and challenges the agencies have
experienced in using it. In doing so, GAO assessed agency data,
reviewed project files, and visited projects in numerous locations.
What GAO Found:
From fiscal years 2003 through 2007, the Forest Service and BLM awarded
a combined total of 535 stewardship contracts, with the number
increasing each year”from 38 in fiscal year 2003 to 172 in fiscal year
2007. However, for certain aspects of stewardship contracting, such as
the acres involved or the value of the services exchanged for goods,
reliable data were not available for the full 5-year fiscal period
because neither agency has had a comprehensive database of its
stewardship contracting activity since 2003. The agencies did not begin
to maintain nationwide stewardship data until recently, primarily
because of difficulties in adapting their systems to account for all
aspects of stewardship contracting. Further, these data are not
complete, and reside in myriad systems, not all of which interface with
one another. These deficiencies keep the agencies and Congress from
accurately assessing the costs and value of stewardship contracting.
The agencies credit stewardship contracting with allowing them to
accomplish more work”by allowing them to trade goods for services,
thereby extending their budgets for thinning and other services”and
spurring collaboration with members of the community and environmental
groups. But stewardship contracting has its challenges too, including
some resistance to its use (e.g., by contractors unfamiliar with it)
and a paucity of markets for the small trees typically removed in
stewardship projects. Also, although agency officials view long-term
multiyear contracts as crucial to market development, these contracts
can involve financial challenges. These contracts are attractive
because they offer contractors and industry operators some certainty of
supply, enabling them to obtain loans for equipment or processing
facilities, which can then spur demand for materials resulting from
stewardship projects. But such contracts can require a substantial up-
front obligation of funds”to protect the contractor‘s investment if the
government later cancels the contract”that may exceed the budget of a
field unit (e.g., a national forest). Also, funding the annual work
specified in the contract can force a unit to scale back its other
programs if the value of the timber removed is not sufficient to pay
for that work. Yet neither agency has developed a strategy for using
such contracts, a step that could help field units determine which
projects are appropriate.
Figure: Goods for services: One project exchanged pine logs for a
tribal ceremonial roundhouse (under construction at left) for service
work that included installing a culvert (right):
This figure is a combination of two photographs describing the above.
Source: Frontier Builders, Inc.
[See PDF for image]
Source: GAO.
[End of figure]
What GAO Recommends:
GAO recommends that the Secretaries of Agriculture and the Interior (1)
develop a strategy for the use of long-term contracts, including
criteria on when such contracts are appropriate and potential options
for funding them, and (2) improve their data collection systems to
ensure that accurate and complete data are maintained. In commenting on
a draft of this report, the Forest Service and BLM generally agreed
with its findings and recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-09-23]. For more
information, contact Robin M. Nazzaro at (202) 512-3841 or
nazzaror@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Use of Stewardship Contracting Is Increasing, but Agency Data Are
Incomplete:
The Agencies Have Similar Processes for Planning and Monitoring
Stewardship Projects but Different Approaches to Implementing Them:
Despite the Benefits of Stewardship Contracting, Challenges Persist,
Especially in the Use of Long-Term Multiyear Contracts, for which the
Agencies Lack a Strategy:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Comments from the Forest Service:
Appendix III: Comments from the Department of the Interior:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Volume of Timber Sold through Stewardship Contracting as a
Percentage of Total Timber Volume, by Agency, Fiscal Years 2005 through
2007:
Table 2: Forest Service Stewardship Projects Included in GAO's Review:
Table 3: BLM Stewardship Projects Included in GAO's Review:
Figures:
Figure 1: Stewardship Contracts Awarded, by Agency and Fiscal Year:
Figure 2: Completion Status of Stewardship Contracts Awarded in Fiscal
Years 2003 through 2007, by Forest Service Region:
Figure 3: Completion Status of Stewardship Contracts Awarded in Fiscal
Years 2003 through 2007, by BLM State Office:
Figure 4: Commercial Thinning on National Forest Land:
Figure 5: An Idaho Stream, Restored to Improve Fish Habitat:
Figure 6: Red-Cockaded Woodpecker Habitat Improvement Area on the
Francis Marion and Sumter National Forests:
Figure 7: Construction of a Ceremonial Roundhouse; Culvert Installed in
Exchange for Timber:
Figure 8: Treatment Costs per Acre, by Task Order, for the White
Mountain Project:
Abbreviations:
BLM: Bureau of Land Management:
ccf: hundred cubic feet:
FAR: Federal Acquisition Regulation:
FPDS-NG: Federal Procurement Data System--Next Generation:
IDIQ: indefinite delivery/indefinite quantity:
IRSC: integrated resource service contract:
IRTC: integrated resource timber contract:
K-V: Knutson-Vandenberg:
MOU: memorandum of understanding:
O&C: Oregon and California:
TSA: Timber Sale Accounting:
WUI: wildland-urban interface:
United States Government Accountability Office:
Washington, DC 20548:
November 13, 2008:
The Honorable Jeff Bingaman:
Chairman:
Committee on Energy and Natural Resources: United States Senate:
The Honorable Ron Wyden:
Chairman:
Subcommittee on Public Lands and Forests: Committee on Energy and
Natural Resources: United States Senate:
Recent severe wildland fire seasons have focused attention on the state
of the nation's forests. Many of these forests have become dense with
small, tightly spaced trees and thick brush, which--combined with
drought, wind, insect damage, and other adverse conditions--have fueled
extensive wildland fires in recent years. In response, both the
Department of Agriculture's Forest Service and the Department of the
Interior's Bureau of Land Management (BLM) have placed substantial
emphasis on thinning forests and rangelands to help reduce the buildup
of potentially hazardous fuels. The Forest Service and BLM, which
together manage a total of about 450 million acres of federal land,
have frequently cited the importance of one tool--stewardship
contracting--in their efforts to reduce hazardous fuels and restore
forest health. This tool was designed to help the agencies conduct land
management projects--such as thinning forests, installing culverts,
harvesting timber, and the like--more efficiently, by allowing them to
use any of several innovative contracting approaches. For example,
through stewardship contracting, the agencies can trade goods--such as
timber--for fuel reduction or forest restoration services that the
agencies would otherwise pay for with appropriated dollars.
In conducting stewardship projects--i.e., projects carried out through
stewardship contracting authorities--the agencies use various types of
stewardship contracts, as well as agreements, in which partner
organizations contribute resources toward project accomplishment. Some
types of contracts are large "umbrella contracts" under which
individual task orders are issued for discrete projects or portions of
a project.[Footnote 1] In some cases, a single large stewardship
contract, task order, or agreement may encompass multiple projects; in
other cases, a single stewardship project may involve multiple
contracts, task orders, or agreements. In this report, references to
stewardship contracts generally include task orders and agreements as
well.
The stewardship contracting authorities were first authorized for use
by the Forest Service on a pilot basis in October 1998, when the
Omnibus Consolidated and Emergency Supplemental Appropriations Act for
1999 established stewardship contracting authority to achieve national
forest land management goals that meet local and rural community
needs.[Footnote 2] Prominent among the stewardship contracting
authorities is the ability to trade goods for contract services--that
is, to use the value of forest products sold to offset the cost of the
contracted services, thereby allowing the accomplishment of more work
within existing appropriations. Under such goods-for-services
contracts, the Forest Service could, for example, pay for some or all
of needed thinning operations by using the proceeds from any commercial
timber sold as part of the project. Other prominent stewardship
contracting authorities include the ability to (1) retain for use in
future stewardship projects any receipts generated through selling
forest products such as timber,[Footnote 3] rather than returning the
receipts to the Department of the Treasury's general fund, as required
with traditional timber sales--thereby providing additional funds for
local land management units to conduct restoration work, and (2)
implement long-term contracts of up to 10 years--thereby providing
contractors some assurance that they can obtain a steady supply of
material, an important consideration when contemplating investment in
equipment or facilities that can use the material removed through
stewardship projects.
The 1998 law stated that the land management objectives of stewardship
projects were to include road and trail maintenance, watershed
restoration, prescribed burning, and noncommercial tree removal to
improve forest health. Although stewardship contracting was initially
established as a demonstration program that involved a limited number
of projects within the Forest Service and was to end in 2002, the
Consolidated Appropriations Resolution of 2003, among other things,
extended the use of stewardship contracting authority to 2013,
eliminated the limit on the number of projects, authorized commercial
tree removal for forest health purposes as a project objective, and
extended the use of stewardship authority to BLM.[Footnote 4] In 2004,
we reported on the projects undertaken by the Forest Service under the
initial stewardship contracting authority.[Footnote 5]
The Forest Service and BLM are now about halfway through the extended
authority period, and stewardship contracting is increasingly seen as a
way for the agencies to implement long-term large projects. In this
context, you asked us to determine (1) the extent to which, and for
what purposes, the agencies are using stewardship contracting; (2) what
processes the agencies use in planning, implementing, and monitoring
stewardship projects to manage resources; and (3) what successes and
challenges the agencies have experienced in using stewardship
contracting.
In conducting our review, we reviewed Forest Service and BLM documents
and guidance related to stewardship contracting; analyzed reports from
systems that track stewardship project information, including
information on the volume and value of goods traded for services; and
met with agency headquarters officials. We also visited one or more
stewardship contracting projects in seven of the nine Forest Service
regions and in most of the western states in which BLM manages
land.[Footnote 6] At the locations visited, we reviewed project
financial and contracting files and met with agency officials (and, at
some sites, with project contractors and local citizens) to obtain
information about project planning, implementation, and monitoring,
including community involvement in the projects. We also obtained
agency officials' views on the successes and challenges they have
experienced in using stewardship contracting. Although the information
derived from our discussions and site visits cannot be generalized
nationwide, the projects we selected represent a mix of stewardship
contracting projects by virtue of their geographic diversity and the
variety of project objectives, activities, and accomplishments.
Appendix I contains details on the objectives, scope, and methodology
of our review, which included an assessment of data reliability and
internal controls. We conducted this performance audit from August 2007
through October 2008 in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
Results in Brief:
Although the Forest Service and BLM have awarded increasing numbers of
stewardship contracts since fiscal year 2003, neither agency maintains
a database that allows a complete and comprehensive picture of its
stewardship contracting projects during this time. The agencies did not
begin maintaining nationwide data until recently, but even these data
are incomplete and inconsistent--some data are not tracked at all,
while other data are available only for recent years or only on a
cumulative basis rather than by fiscal year. Further, in each agency,
stewardship data reside in more than one system, not all of which
interface with one another, thereby preventing the agencies from
efficiently and accurately reporting on their stewardship activities,
although both agencies are taking steps to improve their data systems.
Despite these limitations, reliable data were available to show that
over the 5-year fiscal period 2003 through 2007, the two agencies
awarded a combined total of 535 stewardship contracts, with the number
awarded increasing each year--from 38 in fiscal year 2003 to 172 in
fiscal year 2007. For other aspects of stewardship, however, reliable
data were not available for the entire 5-year fiscal period. Data on
the volume of timber sold (i.e., sold for cash or exchanged for
services) were available for both agencies for only the 3-year fiscal
period 2005 through 2007, during which the Forest Service sold about
130 million cubic feet of timber and BLM sold about 8 million cubic
feet. During that same period, the Forest Service treated (e.g.,
thinned, cleared of brush, or burned) about 172,500 acres through
stewardship projects, but comparable data were not available for BLM,
which maintained only initial estimates of acres to be treated. For the
2-year fiscal period 2006 through 2007, the value of timber sold
through stewardship projects was about $8.2 million for the Forest
Service and about $5.9 million for BLM. For that same 2-year fiscal
period, the value of services procured through stewardship contracts
was about $10.5 million for BLM, but comparable data were not available
for the Forest Service. In both agencies, stewardship projects
typically involved removing timber or other vegetation to reduce
hazardous fuels or to otherwise improve forest health. Other activities
included restoring streams to improve fish habitat and creating and
preserving nesting sites for birds. To enhance the agencies' ability to
track and report on their stewardship projects, we are recommending
that the agencies consider, in their ongoing efforts to improve their
data systems, actions that will ensure the collection of complete,
consistent, and integrated data.
Overall, the agencies use similar processes for planning and monitoring
stewardship projects but have different approaches to implementing
them. Both agencies' planning and monitoring processes focus on working
with stakeholders (e.g., community members and interest groups) to
identify suitable projects and to monitor those projects to ensure that
they achieve the intended restoration goals. In some cases, the
monitoring efforts also assessed other outcomes, such as a project's
effects on the local economy. The level of community involvement in
planning and monitoring varied by project, however, depending in part
on the local community's interest. Regarding project implementation,
the agencies differ in the types of contracts typically used and in the
type of contractor they work with. The Forest Service relies heavily on
timber-type stewardship contracts, in which the value of the timber
sold exceeds the value of the services procured, with the Forest
Service receiving the difference in cash--which it then uses to pay for
service work on other stewardship projects. On the other hand, BLM
relies primarily on service-type contracts, in which the value of the
services procured usually exceeds the value of the timber sold, with
BLM paying the difference in cash. And while the Forest Service awards
most of its stewardship contracts through full and open competition,
BLM generally sets aside its stewardship contracts for competition by
small businesses only. In addition to contracts, both agencies also
have in place some cooperative stewardship agreements, through which
partners (e.g., the National Wild Turkey Federation) contribute
funding, personnel, or equipment with which to carry out restoration
goals.
The Forest Service and BLM credit stewardship contracting with helping
them accomplish more work and build collaborative partnerships, but
they also note that using it poses some challenges. The agencies can
accomplish more work "on the ground" because they can trade forest
products for some of the services received rather than paying for the
services with appropriated funds, thereby freeing those funds for
additional work. Also, the agencies have developed collaborative
partnerships by bringing together individuals who represent diverse
interests from within and outside the agencies to discuss what work
should be done and in what way. Stewardship contracting is not without
challenges, however. First, the Forest Service and BLM have faced some
resistance to using stewardship contracting--in part from agency staff
and contractors unfamiliar with its use. Second, market uncertainties
can pose challenges. In many areas of the country, according to agency
officials, the paucity of markets for small-diameter forest products
prevents contractors from selling the products they remove under
stewardship contracts. Without marketable products, the agencies have
nothing to trade for the services received, and so must use
appropriated funds instead to pay for those services. And third, as
happened with the one long-term (i.e., 10-year) multiyear contract that
had been implemented at the time of our review, the agencies may face
challenges in providing sufficient funds to award and implement long-
term multiyear contracts, particularly while continuing to fund other
agency activities. A contractor entering into a multiyear contract may
want a substantial cancellation ceiling--the amount an agency obligates
at the inception of a multiyear contract to protect the contractor's
investment and the government's interest in case the government later
cancels the contract. Faced with this up-front obligation requirement,
a field unit (e.g., a national forest or district office) might be
reluctant to enter into a multiyear contract that involves a large
cancellation ceiling, thereby forgoing an opportunity to stimulate the
market for small-diameter materials. Another difficulty in using
multiyear contracts is that funding the annual service work included in
a multiyear contract can cost more than anticipated, and thus can
consume a substantial portion of a field unit's annual budget,
requiring the unit to curtail other programs to pay for the ongoing
multiyear contract. Although the agencies have taken steps to address
the first two challenges, such as conducting training courses and
workshops to help overcome resistance to the tool's use and supporting
efforts by entrepreneurs and researchers to find cost-effective uses
for forest products, they have not developed strategies for the
nationwide use of long-term stewardship contracts. In particular,
neither agency has established a strategy defining the role that long-
term multiyear contracts should play in stimulating the market for
small-diameter materials or how the associated cancellation ceilings
will be funded. Accordingly, we are recommending that the agencies
develop strategies to guide their use of long-term multiyear
stewardship contracts in stimulating markets for small-diameter
materials and to inform units' decisions about implementing such
contracts. In commenting on a draft of this report, the Forest Service
and BLM generally agreed with its findings and recommendations.
Background:
In managing federal lands, the Forest Service and BLM often contract
for services such as road maintenance, forest thinning, and other
activities. They also frequently contract to sell forest resources such
as timber or firewood. Traditionally, these contracts have been
executed separately--service contracts have generally been funded with
appropriated funds from the agencies' budgets, while timber has been
sold through contracts with private purchasers. The Omnibus
Consolidated and Emergency Supplemental Appropriations Act for 1999
authorized the Forest Service to combine these contracting mechanisms
by entering into "stewardship end result contracts," under which the
agency could use the value of forest products sold to offset the cost
of the contracted services. Under such goods-for-services contracts,
the Forest Service could, for example, pay for thinning operations by
using the proceeds from any commercial timber sold as part of the
project.
In addition to authorizing contracts, the act authorized the use of
agreements to carry out stewardship projects. According to Forest
Service and BLM guidance, the decision on whether to use contracts or
agreements should be based on the principal purpose of the award,
including its intended primary beneficiary.
* Contracts. The primary beneficiary of a contract is the federal
government. Contracts are used for the purchase of goods and services
for the direct benefit of the government or for the sale of government
property such as timber. A contract is a mutually binding legal
relationship obligating the seller to furnish supplies or services and
the buyer to pay for them. Agency guidance directs that contracts
rather than agreements be used for projects that are highly complex or
financially risky.
* Agreements. Agreements are typically used to transfer a thing of
value to a state or local government, or other recipient, to carry out
a public purpose. According to the agencies, agreements are often used
for projects that are for the mutual interest and benefit of the
government and a cooperating organization--often a nonprofit
organization or a state or local government. Under such agreements,
both the government and the cooperating organization share the costs of
the project, with the cooperator contributing funding, personnel, or
equipment.
A variety of agreements, including those entered into under the Wyden
Amendment, may be used to implement stewardship contracting projects.
Under the Wyden Amendment, the Forest Service and BLM may enter into
cooperative agreements with landowners for the protection, restoration,
and enhancement of fish and wildlife habitat and other resources on
public or private land, as long as the agreement benefits the fish,
wildlife, and other resources on national forest and BLM lands within
the watershed.
Additional contracting authorities were also included in the
legislation; the full list of authorities follows. (Stewardship
contracting authority was initially granted only to the Forest Service;
in 2003 it was extended to BLM.)
* Goods for services allows the agency to use the value of commercial
products, such as timber, to offset the cost of services received, such
as thinning, stream improvement, and other activities.
* Designation by description or prescription allows the agency to
conduct a timber harvest by providing the contractor with a description
of the desired end result of the harvest. For example, the agency might
require that all ponderosa pine less than 10 inches in diameter be
harvested. Ordinarily, cutting any standing tree before an agency
employee has marked or otherwise designated it for cutting is
prohibited.
* Multiyear contracting allows the agency to enter into stewardship
contracts of up to 10 years in length. (Standard service contracts are
limited to 5 years, although timber sale contracts of up to 10 years
were already authorized for the Forest Service.)
* Retention of receipts allows the agency to retain receipts generated
from the sale of commercial products sold through stewardship
contracts, rather than returning the funds to the Department of the
Treasury's general fund. The receipts are available for expenditure,
without further appropriation, on other stewardship contracting
projects.
* Exception to advertising exempts the agency from the requirement
under the National Forest Management Act that all sales of timber
having an appraised value of $10,000 or more be advertised.[Footnote 7]
* Supervision of marking and harvesting of timber sales exempts the
agency from the requirement that only federal agency employees
supervise the harvesting of trees on agency-managed lands. This
authority has allowed the agencies to use certain state agencies to
assist in stewardship contracting.[Footnote 8]
* Best-value contracting requires the agency to consider other factors-
-such as past performance or work quality--in addition to price when
making stewardship contract award decisions.[Footnote 9]
The 1999 law authorized 28 stewardship contracts by the Forest Service;
the authority of the Forest Service to enter into these contracts was
to end on September 30, 2002. Contracts were to "achieve land
management goals for the national forests that meet local and rural
community needs." The goals listed in the legislation included, but
were not limited to, maintaining or obliterating roads and trails to
restore or maintain water quality; noncommercially cutting or removing
trees or other activities to promote healthy forest stands, reduce fire
hazards, or achieve other noncommercial objectives; and restoring and
maintaining wildlife and fish habitat. The law also required that the
Forest Service establish a multiparty monitoring and evaluation process
to assess each stewardship contract.
Subsequent laws modified the requirements of the initial stewardship
contracting authority. For example, the Consolidated Appropriations Act
of 2000 changed the requirement from 28 stewardship contracts to 28
stewardship projects, allowing for the possibility that individual
projects might involve more than one contract.[Footnote 10] Subsequent
legislation in the following 2 years increased the number of authorized
projects and changed the end date of the demonstration period from 2002
to 2004.[Footnote 11] Most recently, the Consolidated Appropriations
Resolution of 2003 extended the authority to enter into stewardship
contracts to 2013, extended stewardship contracting authority to BLM,
removed the restriction on the number of projects that could be
implemented under this authority, removed the emphasis on noncommercial
activities among the land management goals listed, and replaced the
requirement for multiparty monitoring and evaluation of each project
with a requirement to monitor and evaluate the overall use of
stewardship contracting.
Stewardship contracting projects are subject to environmental and
resource management laws--such as the National Environmental Policy
Act, the Endangered Species Act, and others--that also apply to
nonstewardship projects. Responsibility for administering stewardship
contracting authority at the Forest Service lies within two agency
offices: the Forest and Rangeland Management Group and the Acquisition
Management Group. Each of the nine Forest Service regions has
designated a stewardship contracting coordinator to facilitate
stewardship contracting activities. These nine regions oversee 155
national forests; the forests, in turn, oversee more than 600 ranger
districts. Within BLM, authority for administering stewardship
contracts resides within its Division of Forests and Woodlands. Each of
BLM's 12 state offices also has a stewardship contracting coordinator.
The state offices oversee the activities of field-level units,
including 144 district and field offices that carry out the on-the-
ground activities. References to "field units" in this report include
the Forest Service's national forests and ranger districts and BLM's
district and field offices.
Both agencies generally consider stewardship contracting to be a tool,
rather than a program, because it has no associated budget or official
accomplishment targets. Instead, the agencies must use existing
appropriations to plan and administer their stewardship contracting
activities. The Forest Service primarily relies on its fuel reduction
and vegetation and watershed management funds to carry out stewardship
contracting activities; BLM primarily relies on its forestry and fuel
reduction funds. When the agencies use agreements to carry out
stewardship projects, the partner organizations typically contribute
resources such as funding, volunteer labor, or equipment.
Use of Stewardship Contracting Is Increasing, but Agency Data Are
Incomplete:
The agencies awarded increasing numbers of stewardship contracts during
fiscal years 2003 through 2007; however, details about their overall
use of stewardship contracting are incomplete because the agencies did
not begin to collect nationwide data until recently, and even these
data are not complete or consistent across agencies. As a result,
certain data are available only for more recent years or are not
tracked at all, limiting the agencies' ability to evaluate their
implementation of stewardship contracting and provide information on
its use to Congress and other interested parties. From fiscal years
2003 through 2007, the number of stewardship contracts that the
agencies awarded increased each year. For the Forest Service, the
number of contract awards increased from 36 in fiscal year 2003 to 121
in fiscal year 2007, for a total of 352; for BLM, the number increased
from 2 to 51 during the same period, for a total of 183 contracts
awarded through fiscal year 2007.[Footnote 12] For other aspects of
stewardship projects, however, reliable data were available only for
more limited periods of time. For example, complete and comparable data
on the volume of timber sold (i.e., sold for cash or exchanged for
services) were available only for fiscal years 2005 through 2007.
During that period, Forest Service stewardship projects sold about 130
million cubic feet of timber; BLM projects sold about 8 million cubic
feet. During the same 3-year fiscal period, Forest Service projects
treated about 172,500 acres; BLM did not maintain data on acres treated
through stewardship contracts. And during fiscal years 2006 and 2007,
the Forest Service sold at least $8.2 million worth of timber through
stewardship contracts, while BLM sold about $5.9 million. During the
same 2-year fiscal period, BLM procured services valued at about $10.5
million through stewardship contracts; comparable data were not
available for the Forest Service. The agencies' stewardship projects
generally involved removing timber or other vegetation to reduce
hazardous fuels or to otherwise improve forest health; the projects
also encompassed various activities that benefited communities or met
other restoration objectives, such as controlling disease or improving
wildlife habitat.
The Forest Service and BLM Recently Began Collecting Nationwide
Stewardship Data, but Neither Agency Collects Complete or Consistent
Data:
Neither the Forest Service nor BLM maintains data that provide a
complete national view of stewardship projects. The agencies did not
begin maintaining nationwide data on stewardship contracting projects
until recently--primarily because of difficulties in adapting their
systems to account for all aspects of stewardship projects. The
agencies have adopted ways of collecting and reporting data specific to
their respective needs and current capabilities, but the agencies must
assemble data from various automated and manual sources to capture a
complete picture of their stewardship contracting projects and
accomplishments. Further, neither agency has a system that separately
tracks data on stewardship agreements.
The Forest Service has modified its existing Timber Sale Accounting
(TSA) system to incorporate information on stewardship projects,
including the collection and distribution of revenues stemming from
stewardship contracts. But the Forest Service did not begin
consistently distinguishing stewardship contracts (and their associated
service credits) from conventional timber sale contracts in TSA until
the beginning of fiscal year 2007. This approach tracks actual dollar
values within TSA but has been challenging because the barterlike
aspect of stewardship contracting makes it difficult to account for
using traditional accounting systems like TSA. TSA was designed to
account only for the value of timber sold and the cash received for it,
and it was difficult for the Forest Service to adapt the system to
account for the value of services received in exchange for timber.
Additionally, when entering data, regions vary in whether they assign
one number for an entire contract or a number for each task order
within a contract. Other nonmonetary information about stewardship
projects, such as the number of acres treated, is collected by the
national stewardship contracting coordinator through a variety of other
sources, including direct contact with regional and forest staff.
Information on the value of services over $3,000 purchased as part of
certain stewardship projects is maintained in the Federal Procurement
Data System--Next Generation (FPDS-NG). However, the system contains
information on only some stewardship contracts--those in which the
value of services exceeds the value of the timber. Further, these
contracts are not consistently distinguished from other types of
contracts (i.e., standard procurement contracts) in this system, so
complete information specific to stewardship projects cannot be
extracted.
The Forest Service does not maintain national data on stewardship
activities conducted through agreements rather than contracts. The
Forest Service has not yet determined how to modify its systems to
incorporate data from agreements under which, as with contracts, forest
products may be exchanged for services. The expectation is that
stewardship agreements will go through the same accounting measures as
contracts do, but it is unclear how forests are to keep track of the
services performed under stewardship agreements. This is made more
complicated by the fact that partnership agreements are no longer the
simple instruments they have traditionally been. Now, for example,
timber might be harvested under stewardship agreements, whereas it was
traditionally harvested under contracts. In fact, lacking data on
agreements, Forest Service officials were not certain whether timber
has yet been sold under an agreement or by what means it would be
tracked in agency databases if it were.
In contrast to the Forest Service's approach, BLM developed a dedicated
stewardship contracting tracking system that BLM staff began using
during calendar year 2005, but not all data in this system are
validated, and the system does not interface with any other BLM system.
Prior to the availability of this tracking system, staff in the field
offices generated and maintained their own spreadsheets to track the
stewardship project data they found useful. When the agencywide
tracking system was developed, according to the system manager, the
agency did not impose standards to guide the range and format of data
entries or ensure consistency of data elements, such as contract award
dates or the format of numerical values. The system contains data on
the value of timber sold and services purchased; these data are
reconciled manually with BLM's accounting system rather than being
directly tied to the system to allow automated reconciliation. Other
information about stewardship contracts, such as the volume of products
harvested, is collected by BLM's stewardship contracting data manager
through a variety of other sources, including direct contact with field
staff. Also, unlike the Forest Service, which does not track agreements
in its system, BLM includes agreements in its data system but cannot
readily distinguish them from contracts. However, BLM has an effort
under way to upgrade its system to improve data consistency and bring
the system into compliance with accounting standards; the upgrade is
expected to be completed in October 2008. Once completed, this upgraded
system is intended to allow BLM to standardize data definitions, as
well as to aggregate multiple contracts associated with a single
project, in order to better track costs and accomplishments. It is
unclear, however, whether the upgraded system will be able to
accurately account for the values of products and services procured
through stewardship agreements.
The lack of complete data hampers the agencies' ability to evaluate
their use of stewardship contracting and to provide details on its use
to Congress and other interested parties, including the public. Without
such data, for example, the agencies cannot compare the costs and
accomplishments of stewardship contracting projects with those of other
projects that have similar goals, nor can the agencies accurately track
year-to-year trends in the costs and accomplishments associated with
stewardship contracting. Likewise, without a complete picture of the
agencies' use of stewardship contracting, Congress cannot fully assess
the merits of this tool or its role in the agency's larger land
management efforts. The agencies' inability to fully account for the
values of products sold and services procured through agreements
further clouds the picture of stewardship projects and potentially
hampers congressional oversight. As we have previously reported,
barterlike transactions are not reflected in the budget because no
federal government cash flows are involved.[Footnote 13] As a result,
congressional budget decision makers do not have an opportunity to
consider whether the value of the exchanged property should be
reallocated to other competing resource needs.
During Fiscal Years 2003 through 2007, the Agencies Awarded Increasing
Numbers of Stewardship Contracts:
From fiscal years 2003 through 2007, the Forest Service and BLM awarded
a total of 535 stewardship contracts. The Forest Service, the first to
receive the stewardship contracting authority, awarded 352 contracts,
or over 65 percent of the total for the period; BLM awarded 183
contracts. While the Forest Service's contract awards generally
increased each year throughout the 5-year fiscal period, BLM's followed
a more inconsistent pattern, as shown in figure 1.
Figure 1: Stewardship Contracts Awarded, by Agency and Fiscal Year:
This figure is a combination line graph showing stewardship contracts
awarded, by agency and fiscal year. The X axis represents the fiscal
year, and the Y axis represents the number of stewardship contracts
awarded.
Fiscal year: 2003;
Forest Service: 36;
BLM: 2.
Fiscal year: 2004;
Forest Service: 55;
BLM: 22.
Fiscal year: 2005;
Forest Service: 47;
BLM: 59.
Fiscal year: 2006;
Forest Service: 93;
BLM: 49.
Fiscal year: 2007;
Forest Service: 121;
BLM: 51.
[See PDF for image]
Sources: Forest Service and BLM.
[End of figure]
Our count of contracts awarded includes both contracts and task orders
because one stewardship project may encompass multiple contracts, and
one large contract or "contract action" (e.g., a task order), may be
used for several projects. Because the agencies' tracking systems
maintain data by contract or task order, the number of stewardship
contracts may not match up with historical information on the number of
projects. For BLM, our count also includes the four cooperative
agreements that the agency had entered into with nonfederal partners
between fiscal years 2003 and 2007, although these make up only a small
portion of the total.
Although field units in all Forest Service regions and BLM state
offices have used stewardship contracts, the extent of their use varied
widely among regions and state offices. For example, while almost 70
percent (16 of 23) of the national forests in the Forest Service's
Pacific Northwest Region had awarded stewardship contracts at the time
of our review, less than half (17 of 37) of the forests in the Southern
Region had used this tool.[Footnote 14] Data below the state office
level were not available for BLM. Figures 2 and 3 show the distribution
of contract awards by Forest Service regions and BLM state offices
through the end of fiscal year 2007, as well as the extent to which
these have been completed.
Figure 2: Completion Status of Stewardship Contracts Awarded in Fiscal
Years 2003 through 2007, by Forest Service Region:
This figure is a combination bar graph showing completion status of
stewardship contracts awarded in fiscal years 2003 and 2007, by Forest
Service Region. The X axis represents region, and the Y axis represents
number of contracts awarded and completed. One bar represents the
ongoing, and compeleted.
Region: Alaska:
Completed: 0;
Ongoing: 1.
Region: Eastern;
Completed: 15;
Ongoing: 14.
Region: Intermountain;
Completed: 8;
Ongoing: 22.
Region: Northern;
Completed: 32;
Ongoing: 15.
Region: Pacific;
Completed: 45;
Ongoing: 34.
Region: Pacific;
Completed: 14;
Ongoing: 30.
Region: Rocky;
Completed: 31;
Ongoing: 23.
Region: Southern;
Completed: 18;
Ongoing: 23.
Region: Southwestern;
Completed: 8;
Ongoing: 19.
[See PDF for image]
Source: Forest Service.
[End of figure]
Figure 3: Completion Status of Stewardship Contracts Awarded in Fiscal
Years 2003 through 2007, by BLM State Office:
This figure is a combination bar graph showing completion status of
stewardship contracts awarded in fiscal years 2003 through 2007, by BLM
state office. THe X axis represents state office, and the Y axis
represents the number of contracts awarded and completed.
State office: Alaska;
Completed: 3;
Ongoing: 0.
State office: Arizona;
Completed: 0;
Ongoing: 1.
State office: California;
Completed: 12;
Ongoing: 12.
State office: Colorado;
Completed: 8;
Ongoing: 4.
State office: Idaho;
Completed: 5;
Ongoing: 6.
State office: Montana;
Completed: 8;
Ongoing: 10.
State office: Nevada;
Completed: 8;
Ongoing: 2.
State office: New Mexico;
Completed: 10;
Ongoing: 3.
State office: Oregon;
Completed: 48;
Ongoing: 25.
State office: Utah;
Completed: 8;
Ongoing: 3.
State office: Wyoming;
Completed: 4;
Ongoing: 3.
[See PDF for image]
Source: BLM.
[End of figure]
The number of contracts alone is not necessarily an accurate indicator
of stewardship activity; the duration of the contracts must also be
considered. If some locations use multiple-year instead of single-year
contracts, the number of contracts may decrease, even though the
overall use of stewardship contracting is increasing. This also holds
true for completion rates: Locations that use longer-term contracts for
projects, such as BLM's Oregon/Washington State Office, for example,
may show lower completion rates despite making substantial progress on
the projects. Of the total 535 contracts awarded for both agencies, the
Forest Service currently has awarded 2 10-year contracts, in Arizona
and southern Oregon, while BLM has awarded 30 10-year contracts: 25 in
Oregon, 3 in Wyoming, and 2 in California. The types of long-term
contracts used by the two agencies differ, however. Whereas each of the
Forest Service's long-term contracts is with a single contractor, the
BLM contracts are umbrella contracts within which individual task
orders are issued, sometimes to different contractors, to accomplish
specific tasks.[Footnote 15] Under this type of contract, BLM issues
task orders to meet specific needs as they arise.
The Forest Service reported treating or planning to treat, through
stewardship contracts, about 227,000 acres from fiscal years 2003
through 2007. The Pacific Northwest Region reported treating the most
acres, while the Alaska Region reported the fewest (with 0 acres
accomplished during those years). BLM does not maintain data on
stewardship project treatment acreage separately from its other
activities, so overall figures for BLM's acres treated through
stewardship contracts were not available.
Timber Sold through Forest Service Stewardship Projects Increased from
Fiscal Years 2005 through 2007, while BLM Saw a Decrease over the Same
Period:
The Forest Service sold (i.e., sold for cash or exchanged for services)
an increasing amount of timber as part of its stewardship projects from
fiscal years 2005 through 2007. The Forest Service's standard unit of
measure for wood products is 100 cubic feet, or ccf. Thus, 100 cubic
feet of wood would be measured as 1 ccf. In 2005, stewardship projects
sold almost 200,000 ccf of timber; by 2007, that amount had grown to
about 650,000 ccf. The timber sold during this period represented 8.5
percent of the total timber volume the Forest Service sold during those
years. BLM's figures are much smaller, and decline from year to year:
In 2005, BLM stewardship projects sold about 38,000 ccf of timber; by
2007 that amount had shrunk to about 17,000 ccf,[Footnote 16]
altogether representing about 7.4 percent of the agency's total timber
volume sold during those 3 years. Table 1 compares the volume of timber
sold through stewardship contracting as a percentage of the total
timber volume sold under each agency's conventional timber program.
Table 1: Volume of Timber Sold through Stewardship Contracting as a
Percentage of Total Timber Volume, by Agency, Fiscal Years 2005 through
2007:
Agency: Forest Service: Timber volume sold (in ccf);
Fiscal year: 2005: 196,079;
Fiscal year: 2006: 471,996;
Fiscal year: 2007: 655,072.
Agency: Forest Service: Percentage of all Forest Service timber sold;
Fiscal year: 2005: 4;
Fiscal year: 2006: 8;
Fiscal year: 2007: 13.
Agency: BLM: Timber volume sold (in ccf);
Fiscal year: 2005: 37,739;
Fiscal year: 2006: 26,603;
Fiscal year: 2007: 16,680.
Agency: BLM: Percentage of all BLM timber sold;
Fiscal year: 2005: 10;
Fiscal year: 2006: 8;
Fiscal year: 2007: 4.
Source: Forest Service data derived from TSA; BLM data based on
episodic field unit reports to headquarters.
[End of table]
A BLM official said that a number of factors could have influenced the
decline in the percentage of stewardship timber volume relative to
total timber volume over the period. Likely the most important factor
is that during this period, stewardship projects increasingly produced
lower-value forest materials---including small trees, limbs, and brush,
often referred to as woody biomass--rather than commercial timber, a
trend the official attributed to a poor timber market. Additionally, he
said, BLM has stopped assigning specific targets for field units to
achieve on the use of stewardship projects, which may have led to some
field units' reducing their use of the tool. In addition, this official
noted that some states have focused on issuing smaller contracts to try
to build a contractor base.
In Fiscal Years 2006 and 2007, the Agencies Sold about $14 Million in
Timber through Stewardship Contracting and Retained about $5 Million in
Receipts:
The Forest Service reports that through stewardship contracts, products
worth at least $8.2 million were sold (i.e., sold for cash or exchanged
for services) during fiscal years 2006 and 2007--representing about 2
percent of the agency's total timber value sold (including timber sold
through traditional timber sales) during those years. This includes
timber large enough to be milled into lumber as well as other products,
such as firewood and wood for posts and poles. The Forest Service began
collecting these data only in fiscal year 2006, when it developed an
accrual accounting method to report the value of forest products sold
through stewardship contracts. The $8.2 million figure likely
understates the actual value of products sold through stewardship
contracting, according to Forest Service officials, because stewardship
contracts were not always properly distinguished from conventional
timber contracts in the agency's systems. During the same 2 fiscal
years, BLM estimated that the agency sold, through stewardship
contracts, products valued at about $5.9 million dollars, representing
about 7 percent of BLM's overall timber value sold during that period.
As for data on the value of contractor services received under
stewardship contracts, no Forest Service data were available on a
fiscal year basis. Although service values specific to stewardship
contracting have been captured in TSA since the beginning of fiscal
year 2007, the values are cumulative, by contract, and so cannot be
identified by a specific fiscal year. Service values prior to that time
are recorded in FPDS-NG, but only for certain stewardship contracts--
those in which the value of the services exceeds the value of the
timber. Further, the system does not distinguish these contracts from
other contracts (e.g., standard procurement contracts), so the system
cannot generate data specific to stewardship contracts. For BLM, the
value of services purchased under stewardship contracts during fiscal
years 2006 and 2007 totaled about $10.5 million.[Footnote 17]
Both agencies maintain data on the amount of receipts retained from
stewardship contracts once the contracts have been closed. The
stewardship contracting authority allows the agencies to retain for use
on future stewardship projects any money received under a contract or
agreement.[Footnote 18] Although the agencies are not required to
return these receipts to the Department of the Treasury's (Treasury)
general fund, the agencies report their net amounts to the Treasury. In
fiscal year 2005, both agencies reported that they had no net retained
receipts from stewardship contracting. The Forest Service reported
about $3.6 million in retained receipts in fiscal year 2006 and about
$1.2 million in fiscal year 2007, with the Pacific Northwest and
Southern Regions generating the most receipts. BLM reported about
$31,000 in retained receipts in fiscal year 2006 and about $107,000 in
fiscal year 2007, with the California State Office generating the most
receipts.
Although the agencies report their retained receipts, they do not track
how the receipts are subsequently spent. The Forest Service's TSA
system tracks the amount of receipts collected and retained at the
closure of each contract, but it does not track the subsequent
expenditure of the receipts. And as we reported in 2007, the Forest
Service's elimination of project-level tracking makes it impossible to
determine which specific accounting codes (including the one that
designates retained receipts) were used to fund a particular
project.[Footnote 19] BLM tracks the amount of stewardship receipts
collected and retained using its Collections and Billing System and,
like the Forest Service, reports the amounts annually to the Treasury,
but it too does not track the expenditure of retained receipts by
project.
Both Agencies' Stewardship Projects Addressed a Variety of Land
Management Objectives, with Hazardous Fuel Reduction Being the Most
Common:
The most common objective of stewardship projects, according to
information we gathered during our site visits and agency officials'
statements, is to reduce potentially hazardous fuels by removing timber
and other vegetation. Removing timber and vegetation can also promote
forest health, another important objective. The agencies generally
reduce fuel using either mechanical treatments, in which equipment--
such as chain saws, chippers, bulldozers, or mowers--is used to cut
vegetation, or prescribed burning, in which fires are deliberately set
by land managers to restore or maintain desired vegetation conditions.
Figure 4 depicts commercial thinning projects--in which the trees
removed are large enough to have some commercial value--on national
forest land using a delimber (left) and a grapple skidder (right).
Figure 4: Commercial Thinning on National Forest Land:
This figure is a combination of photos of commercial thinning on
national forest land.
[See PDF for image]
Source: GAO.
[End of figure]
Although many projects were designed to protect areas in the wildland-
urban interface (WUI)--that is, the area where structures and other
human development meet or intermingle with undeveloped wildland--other
projects included activities such as improving wildlife or fish
habitat, reducing exotic and invasive plant species, and studying
heritage fruit trees. In fiscal year 2007, for example, the Forest
Service reported treating over 34,000 acres of WUI land, restoring 87
miles of streams, decommissioning 29 miles of road, and improving 35
miles of road for the use of passenger cars. BLM does not gather
equivalent information at the field level, but its projects also
included a variety of activities intended to reduce fuels, create
wildlife habitat, restore streamside habitat, or control invasive
plants--in one case, using goats to curtail the spread of the
blackberry. We visited two stewardship projects in Idaho where both BLM
and the Forest Service worked to improve and protect fish habitat. BLM
installed culverts and improved roads to protect fish habitat, while
the Forest Service restored a stream channel to create habitat for
native fish species, including the endangered bull trout, by placing
timber products generated from the stewardship contract in the stream
to provide protective cover for the fish. This project area is shown in
figure 5.
Figure 5: An Idaho Stream, Restored to Improve Fish Habitat:
This figure is a picture of an Idaho stream, restored to improve fish
habitat.
[See PDF for image]
Source: GAO.
[End of figure]
During our site visits, we encountered other wildlife improvement
projects benefiting, among other species, elk, wild turkeys, and the
red-cockaded woodpecker. For example, we visited a project in South
Carolina in which the Forest Service created and preserved nesting
habitat for the red-cockaded woodpecker, which is a "keystone species"
for longleaf pine forests, according to the Forest Service.[Footnote
20] The birds excavate cavities in longleaf pine trees, typically in
mature trees suffering from a fungus that softens the tree's interior.
At one project we visited, the Forest Service was harvesting less
desirable trees and using the resulting receipts to pay a contractor to
cut the remaining stands into a clustered pattern of longleaf pines
with nesting cavities. This project area is shown in figure 6.
Figure 6: Red-Cockaded Woodpecker Habitat Improvement Area on the
Francis Marion and Sumter National Forests:
This figure is a picture of red-cockaded woodpecker habitat improvement
area on the Francis Marion and Sumter National Forests.
[See PDF for image]
Source: GAO.
[End of figure]
The Agencies Have Similar Processes for Planning and Monitoring
Stewardship Projects but Different Approaches to Implementing Them:
The Forest Service and BLM have similar processes for planning
stewardship projects--including processes for identifying suitable
projects, preparing and approving project proposals, and soliciting and
evaluating bids. Both agencies involved stakeholders in planning and
monitoring stewardship projects, although the extent of this
involvement varied. The agencies differ in their approaches to
implementing the projects, however, both in the contract types they
generally use and in their efforts to involve small, local businesses.
In Planning and Monitoring, Agency Processes Are Similar, although the
Extent of Collaboration with Stakeholders Varies from Project to
Project:
The Forest Service and BLM have similar processes for planning
stewardship projects, including identifying suitable projects,
preparing stewardship contract packages, and soliciting and evaluating
bids for contracts; they also have similar processes for monitoring the
projects. In both agencies, it is generally the field unit staff (e.g.,
foresters) who initiate stewardship projects, often working with
stakeholder groups, and prepare the contract packages. In the Forest
Service, the field unit staff generally work as part of an
interdisciplinary team--made up of specialists from various disciplines
such as engineering, fish biology, and wildlife biology--to identify
stewardship projects that need to be done. In BLM, similarly, field
unit staff work with other specialists to identify projects that align
with the field unit's resource plan.
Projects were typically identified in areas that needed restoration--
such as thinning overgrown stands of trees, installing culverts, or
obliterating roads--and had enough timber value to cover at least a
portion of the cost of the restoration services. For example, one
Forest Service project in Montana was considered a good candidate for a
stewardship project because it would accomplish needed fuel reduction
work in a WUI and was located in an area with sufficient timber value
to cover the cost of the service work. The forest did not have
sufficient funding for the total volume of fuel reduction work needed
in the area. As another example, a BLM project in Oregon was originally
planned as several small, individual service contracts for thinning an
overstocked pine plantation--taking out all but the biggest trees. But
demand had increased for small-diameter wood (for use as posts and
poles) and for wood chips that could be sold as biomass. When BLM
officials realized they could sell material that had previously been
nonmerchantable, they decided to accomplish the thinning through a
stewardship contract.
Officials in both agencies noted that the impetus for planning their
first stewardship projects sometimes came from headquarters or from
regional or state offices, which directed field units to implement a
certain number of projects each year. Headquarters and regional or
state office officials said they had done so because field units might
otherwise be reluctant to experiment with this unfamiliar tool. In
fact, when BLM received the stewardship authority, it provided its
field units with a "budgeting carrot" to encourage use of the
authority, providing units with extra funding for the accomplishment of
stewardship projects.
In some cases, project proposals were not initiated by the agency, but
instead were brought to the agency by community groups or
organizations. For example, the Forest Service's Crooked River project-
-in Idaho County, Idaho--was brought forward by the nearby community of
Elk City, which is surrounded by forest and was concerned about fire
risk. The project included watershed improvement activities in addition
to hazardous fuel reduction and timber harvesting activities. As
another example, in Michigan, a Forest Service stewardship project grew
out of a request from a Native American tribe that wanted to obtain
pine logs with which to construct a traditional ceremonial roundhouse.
When the tribe asked the Forest Service for help acquiring logs for its
roundhouse, the Forest Service agreed to develop a stewardship project
in which two stands of trees were reserved from acreage already being
thinned as part of a larger project. In exchange for about 150 pine
logs from those stands, the tribe performed service work, including
thinning and removing aspen and balsam fir, making road improvements,
and installing a culvert to improve water quality. This project was
done through a contract that the Forest Service negotiated with the
tribe, as allowed under the Tribal Forest Protection Act of
2004.[Footnote 21] Figure 7 shows the roundhouse under construction and
the culvert installed as part of the service work conducted in exchange
for the roundhouse timber.
Figure 7: Construction of a Ceremonial Roundhouse; Culvert Installed in
Exchange for Timber:
This figuew ia a combination of two photographs, one of construction of
a ceremonial roadhouse, and the other a culvert installed in exchange
for timber.
[See PDF for image]
Source: Frontier Builders, Inc.
Source: GAO.
[End of figure]
The agencies' processes for preparing and approving project proposals
are similar as well. In both agencies, field unit staff develop a
written project proposal, which contains information on the project's
purpose, scope, and acreage, and the type, volume, and value of
products and services involved. The proposals also contain information
on the type and extent of outreach and collaboration with stakeholders
such as community members, environmental groups, and industry
representatives. Officials of both agencies said they generally hold
public outreach meetings, which they advertise via newspaper and radio
ads, Web site notices, or other means. At these meetings, agency
personnel discuss project ideas and goals and inform the public about
stewardship contracting's requirements. In the Forest Service, project
proposals are submitted to the forest supervisor and then to the
regional forester for review and approval. In BLM, proposals are
submitted to the state stewardship coordinator for review and then to
the state director for approval.
Both agencies use established methods to estimate the value of the
timber and the value of the services. Agency staff estimate the timber
value using the standard appraisal system that they use as part of
ordinary timber sale contracts. This system employs a transaction
evidence appraisal method, which involves "cruising" the timber to
estimate its volume and then using evidence from recent timber sales in
the area to estimate its value. To determine the value of the services,
both agencies prepare a government estimate, which is developed by
resource specialists (e.g., engineers, silviculturists, and fuel
specialists). As part of this process, the agencies conduct market
surveys by reviewing online contractor information and examining
historical contract award information for the state.
Processes for soliciting bids on stewardship contracts are similar as
well. For contracts that primarily involve the sale of timber, the
agencies issue a prospectus, with bid forms, and have a sample contract
available at the field unit for review by prospective bidders. For
contracts that predominantly feature the acquisition of services, the
agencies advertise the contract in FedBizOpps--the Web-based database
of federal contracting opportunities--and then issue solicitations for
bid. The agencies also hold "show me" trips or preproposal or prebid
meetings to discuss project specifications with potential bidders, and
may amend project requirements based on the comments received at these
meetings.
Once they receive bids, both agencies use the best-value process for
evaluating the technical proposals submitted by potential bidders for
stewardship projects. This process entails having a group--composed of
individuals with the requisite skills--evaluate each technical proposal
and assess its strength in each evaluation category. The categories
typically include factors such as experience, past performance,
strength of the technical approach, type of equipment available,
planned use of local workers, and planned use of forest products by
local mills or companies. In some cases, the evaluation group assigns
numerical scores to the various factors; in other cases, the group uses
adjectival ratings (e.g., exceptional, acceptable, marginal, and
unacceptable). As an illustration of the factors considered during this
process, one Forest Service project in Idaho entailed emplacing more
than 100 in-stream structures (e.g., large boulders and trees) to
improve bull trout habitat over about 4 miles of stream. A "big plus"
in the winning bidder's technical proposal, according to Forest Service
officials, was the plan to have a hydrologist design an on-the-ground
survey before the contract package was put together, an act that
officials believed would eliminate the need for many contract
modifications as the work progressed.
Typically, price is evaluated separately from the other factors.
According to the Forest Service's national stewardship contracting
coordinator, forests have different opinions about whether price is
equal to or of lesser or greater importance than other factors in
determining best value, and forests vary in the weight they assign
price. He believes that price should be 50 percent of the determination
and that all the other factors should make up the other 50 percent.
However, in several locations, agency officials said that over time, as
contractors gained experience in completing technical proposals, the
differences between proposals had become more and more narrow, until
ultimately, price became the de facto deciding factor in contract
award.
The extent to which stakeholders have been involved in planning
stewardship projects varied. For some projects, public interest has
been keen, and the agencies have collaborated with large and diverse
groups, which in some cases predate the stewardship authority. For
BLM's Weaverville community forest project in California, a diverse
group of individuals--representing the community, industry, and
environmental groups--was involved in project planning. Similarly, for
the White Mountain stewardship project on the Apache-Sitgreaves
National Forests in Arizona, a large and diverse group was involved in
planning the project; the group includes representatives of
environmental and wildlife advocacy groups, state and local
governments, industries, a university, and communities. On the Lakeview
Sustained Yield Unit in southern Oregon, the Forest Service and BLM
have worked with a group that dates back to the 1950s, when it was a
community group that oversaw and reported on the unit's
production.[Footnote 22] Today, this group--which includes
representatives of several environmental groups as well as industry--
works with the agencies to sustain and restore a healthy forest
ecosystem that can accommodate human and natural disturbances.
Fear of wildland fire is often the impetus for collaboration.
Communities that have experienced large fires are often interested in
fuel reduction, whether accomplished through stewardship projects or
other means, and increasing numbers of communities around the country
are identifying areas needing fuel reduction to reduce the risk of
fire. In one area in Montana, for example, that had experienced a large
fire in the past, the Forest Service held public meetings about a
proposed stewardship project involving fuel reduction and notified
interested parties about the meetings through newspaper notices and
telephone calls. The Forest Service collaborated with the local rural
fire department as well as with community members and environmental
groups. According to the district ranger, the public was interested in
this project for its fuel reduction benefits, and a prominent
environmental group was also in favor of the project. The White
Mountain project in Arizona likewise benefited from increased
collaboration in the wake of the nearly 500,000-acre Rodeo-Chediski
fire. Not surprisingly, individuals who collaborate on stewardship
projects are often the same ones who have been involved in developing
community wildfire protection plans. In California, for example, BLM
worked with community fire safe councils to plan stewardship projects
in the WUI.
Although public interest in some projects is intense, for other
projects, agency officials said there was little public interest,
despite agency efforts to involve community members. For example, a
Forest Service official in Colorado said that while the region gets a
lot of community interest in some projects, most of the region's
stewardship projects are "standard, run of the mill" projects (e.g.,
small thinning projects) that are not of interest to the community.
With these types of projects, this official said, community members
sometimes come to meetings but typically have little further
involvement.
As for monitoring, both the Forest Service and BLM systematically
involve stakeholders in programmatic monitoring, but stakeholder
involvement in project-level monitoring varies. As noted earlier, the
2003 stewardship authority replaced the requirement for multiparty
monitoring and evaluation of each project with a requirement to monitor
and evaluate the overall use of stewardship contracting. Accordingly,
the Forest Service and BLM jointly contracted with the Pinchot
Institute for Conservation to conduct "multiparty programmatic
monitoring" of stewardship contracting--that is, nationwide monitoring
of the overall use of the stewardship authority.[Footnote 23] The
institute conducts this monitoring primarily through subcontracts with
four regional partnership organizations that survey agency staff and
project stakeholders (e.g., contractors and community members) about
the extent to which local communities were involved in developing
stewardship projects. The institute worked with the Forest Service and
BLM to develop the survey instrument.
In fiscal years 2006 and 2007, the institute's regional partners
conducted telephone surveys with individuals involved in a sample of
Forest Service and BLM stewardship projects. The fiscal year 2007
programmatic monitoring survey included 58 Forest Service stewardship
projects and 38 BLM projects. For each of these projects, three
individuals were identified for interviews: the agency project manager
and two randomly selected external participants, such as community
members or contractors. For the Forest Service projects, more than 70
percent of the 67 external (nonagency) survey respondents believed that
the development of the stewardship project in which they were involved
was "very collaborative" (39 percent) or "somewhat collaborative" (33
percent). Only 6 percent characterized the development as "not at all
collaborative." Similarly, for BLM projects, more than 80 percent of
the 37 external survey respondents believed that the development of the
stewardship project in which they were involved was "very
collaborative" (24 percent) or "somewhat collaborative" (57 percent).
Only 5 percent characterized the development as "not at all
collaborative." (For both agencies, the remainder of the respondents
said they did not know.)
Although both agencies also monitor the effects of individual projects
over time, the extent to which the agencies involve stakeholders in
project-level monitoring activities varies. In some locations the
agencies have undertaken extensive and innovative approaches to
involving stakeholders in project-level monitoring. For example, at one
project in southern Colorado, BLM works with graduate students from the
University of Kansas to establish and monitor treatment plots to
measure the project's effect on soils, vegetation, tree stand diversity
and health, and wildlife use. And at a project in northern California,
the Forest Service included in the stewardship contract, as a service
item, a requirement that the contractor compile and submit data on the
use of machinery--such as harvesting and hauling equipment--on the
project. These data are then used by a nonprofit organization to study
the carbon offsets on projects. As another example, at the Forest
Service's White Mountain stewardship project, a stewardship board
monitors the project's social, ecological, and economic effects.
In other locations, the agencies have not have involved stakeholder
groups substantially in project-level monitoring. In one region,
officials noted that most of the field units manage collaboration as
part of the environmental assessment activities required by the
National Environmental Policy Act; in other areas, officials noted that
there has not been much local interest in engaging in multiparty
monitoring.
Both the Forest Service handbook and BLM guidance state that
stewardship receipts may be used to defray the direct costs of the
local collaborative process--for example, by paying for meeting rooms,
facilitation, and travel for stakeholders involved in the monitoring
process. Also, the Forest Service handbook allows stewardship receipts
to be used to pay for the development of monitoring protocols and items
to be monitored, as agreed on within a collaborative group and
recommended to the line officer. Both agencies also allow the use of
stewardship receipts for project-level monitoring in certain
circumstances, such as where there is interest and support from local
collaborative partners. However, Forest Service guidance specifies that
stewardship receipts may not be used for environmental monitoring--that
is, monitoring of a project's effects on air, soil, or water quality--
at the project level.
Some collaborators see the prohibition on using stewardship receipts
for project-level environmental monitoring as a shortcoming. For
example, in a letter to the Forest Service's Washington Office, one
group of stakeholders expressed its dissatisfaction with the
restriction on the use of receipts for project-level monitoring. The
group was concerned that the lack of funding would hobble its efforts
to collect information demonstrating the effective implementation and
results of projects, thereby preventing the demonstration of ecological
and economic benefits to the watershed. The Forest Service responded
that it is required by its land and resource management plans to
conduct environmental monitoring of its activities and that it will
continue to do so with funds other than stewardship receipts, thereby
allowing stewardship receipts to go toward accomplishing work on the
ground. Other stakeholders we met with noted their concern that without
rigorous project-level monitoring, it will likely be difficult to
assess the effects of individual stewardship projects and of
stewardship contracting authority as a whole.
In Implementing Projects, the Agencies Differ in the Contract Types
They Use and in Their Approaches to Involving Small Businesses:
Both agencies use contracts with a mix of timber sale and acquisition
provisions, although the Forest Service typically uses contracts
emphasizing timber to be sold, while BLM typically uses contracts
emphasizing services to be procured. The Forest Service generally uses
one of two basic types of stewardship contracts: integrated resource
timber contracts (IRTC) and integrated resource service contracts
(IRSC). The selection of the contract type to be used depends on the
type and merchantability of the product to be sold (generally timber).
IRTCs are generally used when the estimated value of the timber to be
sold under the contract exceeds the estimated value of the services to
be performed. IRSCs are generally used when the ratio is inverted--when
the estimated value of the services exceeds that of the timber. In both
cases, the difference in value is balanced with an appropriate cash
payment.
Several field unit staff said they would prefer to have a single
stewardship contract, for ease of use, rather than separate ones (i.e.,
IRTCs and IRSCs), but Forest Service officials in the agency's
acquisition management and forest management programs explained that
the contracts are different because they are governed by different
legal requirements. On the timber side, the Forest Service's authority
to sell timber is governed by, among other laws, the National Forest
Management Act of 1976, as amended.[Footnote 24] Acquisitions of goods
and services are governed primarily by the Federal Acquisition
Regulation (FAR). Administering contracts under these two different
authorities requires different training, experience, and workforces. On
the timber side, for example, contracting officers are familiar with
the requirements for planning and administering timber sales, but
generally lack the certification required to authorize them to obligate
government funds for the acquisition of services. And on the
acquisition side, contracting officers may be familiar with procurement
requirements but generally do not have much experience with timber
sales, and the Forest Service has not had the resources to train them.
Having a single contract form would require staff expertise and
training in both areas. Accordingly, the Forest Service resorted to
having two separate types of contracts, each with its own rules and
provisions. Forest Service officials also told us that the Forest
Service designed the IRTC so as to minimize the differences between
timber sale contracts and stewardship contracts, because purchasers
were familiar with timber sale contracts, and the Forest Service
expected those same purchasers to play a large role in stewardship
contracting.
The Forest Service predominantly uses IRTCs rather than IRSCs.
Particularly in timber-rich parts of the country, such as parts of the
Northeast and the Northwest, most stewardship projects are done under
IRTCs because timber is the main source of revenue to pay for the
service work. When it uses IRTCs, the Forest Service often has receipts
remaining when the contract has been closed. In Montana, for example, a
Forest Service official said that generating retained receipts is a
"key aspect" of stewardship contracting because the Forest Service can
retain these receipts and use them to accomplish subsequent stewardship
work. The Forest Service generally uses retained receipts to pay for
services acquired through another stewardship contract--usually a
service contract--within the same forest, and typically within the same
ranger district, from which the receipts originated. Although retained
receipts could be used in another forest or ranger district, the
community stakeholders that helped plan and monitor a stewardship
project might object to retained receipts being directed elsewhere,
according to a Forest Service official.
The Forest Service tends to use IRSCs in parts of the country that have
low-value timber. In the Rocky Mountain and the Intermountain
regions,[Footnote 25] for example, many of the stewardship contracts
are IRSCs (primarily for fuel reduction), because the timber is
typically low in value. Accordingly, the regions require substantial
appropriated dollars to supplement the value of the timber and pay for
the necessary services such as hazardous fuel reduction.
In contrast to the Forest Service, BLM predominantly uses acquisition
contracts (i.e., service contracts) to carry out its stewardship
projects. BLM officials typically refer to their stewardship contracts
as "service contracts with embedded products." Because the value of the
services acquired typically exceeds the value of the product sold (as
with Forest Service IRSCs), BLM generally uses fuel reduction or forest
management funds to pay for a portion of the service work. In many
cases, these contracts take the form of indefinite delivery/indefinite
quantity (IDIQ) contracts--umbrella contracts under which the agency
can issue numerous task orders.
Although BLM also has a stewardship contract type that can be used for
projects that primarily involve the removal of timber, BLM has
generally avoided using stewardship contracting to carry out timber
sales. According to several BLM field officials, for example, the
general direction from the Washington Office has been that if a project
"looks like a timber sale and feels like a timber sale," then it should
be offered it as a regular timber sale, using standard timber sale
procedures. This is particularly the case for the heavily timbered
lands in western Oregon. In fact, agency guidance allows timber-type
stewardship contracts to be used only when the total volume of timber
to be sold is less than 250,000 board feet. This restriction, according
to a BLM official, effectively prevents the use of timber-type
stewardship contracts on even small stewardship projects; instead, a
project must either be altered to include services with a value in
excess of the timber value or simply offered as a regular timber sale.
Also unlike the Forest Service, BLM has typically not retained receipts
at the end of stewardship projects. Of course, in many areas of the
West, BLM-managed land lacks valuable timber that could generate such
receipts. In Arizona, for example, BLM-managed lands primarily have
piñon pine and juniper, which have little market value and are
typically used for firewood. As one BLM official explained, stewardship
contracting is a restorative activity that may not have a commercial
value. If it does, that value is used to offset part of the cost of the
service work.
When retained receipts are generated by BLM projects, typically through
projects conducted in California, Oregon, and Washington, their
distribution is decided by the BLM state office. Generally, according
to BLM officials, the receipts would be directed first toward the
project that generated them (if needed), then to the same local area,
then to the state, then to other states that need them. In some
locations, where the timber has a high enough value, BLM officials said
they want to begin generating more retained receipts. This would allow
them to use those receipts on stewardship projects in other areas where
the timber values are lower.
Stewardship agreements are another vehicle occasionally used by the
agencies. As discussed earlier, the Forest Service had entered into 12
agreements between fiscal years 2003 and 2007; BLM had entered into 4
agreements. The agreements in place are typically cost-share agreements
or participating agreements, in which both the agency and the partner
derive a mutual benefit. Most of these agreements are for 10 years, and
while some are small, others cover an entire region. The Forest
Service's Pacific Northwest Region, for example, issued two regionwide
agreements--one with the National Wild Turkey Federation and one with
the Rocky Mountain Elk Foundation. These regional agreements are
essentially "umbrella agreements" that are similar to the IDIQ
contracts BLM uses. That is, the regional agreements establish the
framework within which a number of projects can be completed through
supplemental agreements, similar to the task orders issued under an
IDIQ contract.
Agency officials provided several reasons why they sometimes prefer to
use agreements rather than contracts to carry out stewardship
activities. First, they find agreements to be simpler and more flexible
than stewardship contracts. That is, whereas contracts can be a hundred
pages or more in length, agreements are generally much shorter--perhaps
a dozen pages. Also, changes can be made to agreements more quickly and
simply--the partners agree on what changes are needed, write up the
changes, and initial them. Second, agreements need not contain all of
the many clauses required by contracts (e.g., clauses associated with
the calculation of timber rates or the costs of constructing roads).
And third, unlike contracts, agreements sometimes bring in matching
funds from partnership organizations, thereby allowing the agency to
"get more bang for its buck," as one official said. That is, when
partners contribute resources such as volunteer labor, equipment, or
funding, work can be accomplished at less cost to the agency. In one
stewardship agreement, for example, the Forest Service and a partner (a
nonprofit organization) agreed to share the cost (about $114,000) of a
stewardship project designed to reduce hazardous fuels. The Forest
Service's share was 56 percent; the partner's was 44 percent. The
partner's contribution included services and supplies, as well as
$36,000 from a grant it had received from another nonprofit
organization. Agency officials cautioned, though, that agreements do
have drawbacks. For example, in some cases a partner organization may
not have the skills or experience to perform all the work, so agency
staff may need to spend considerable time overseeing the work to ensure
it is done properly. Also, according to agency officials, potentially
interested contractors may feel unfairly excluded if a project is
awarded to a partner organization through an agreement, rather than
being offered for competitive bid. Finally, some agency officials
expressed uncertainty about the options available to them in case a
partner did not comply with the provisions of an agreement.
One type of agreement that has not been widely used in stewardship
projects is the Wyden Amendment agreement, which allows the agency to
conduct restoration work on private lands, as long as the work achieves
public land management goals. According to Forest Service officials,
only one national forest--the Siuslaw, in Oregon--has used a Wyden
Amendment agreement to include the treatment of private lands in a
stewardship project. Headquarters officials did not know why forests
had not made greater use of the Wyden Amendment, but they surmised that
forest officials were either unaware of the Wyden authority or had
placed a higher priority on getting work done on federal land rather
than private land. This is a decision, according to headquarters
officials, that forest supervisors must make in determining the best
use of limited agency resources.
In addition to using different contract types, the agencies differ in
how they approach the objective of involving small local businesses in
stewardship contracts. Whereas the Forest Service invites full and open
competition on most of its stewardship contracts, both IRTCs and IRSCs,
BLM generally sets aside its stewardship contracts for small
businesses. Forest Service officials explained that they invite full
and open competition on all IRTCs because, like traditional timber sale
contracts, IRTCs are exempt from the requirements governing small
business set-asides. However, the large timber companies that typically
bid on IRTCs often subcontract with small local businesses to do the
service work with which the timber contractors are less familiar. In
this way, IRTCs help stimulate the local economy, albeit somewhat
indirectly. The Forest Service's IRSCs, on the other hand, are subject
to the requirements governing small business set-asides. According to
the FAR,[Footnote 26] acquisitions of services within a specified range
of value (generally from $3,000 to $100,000) shall be "reserved
exclusively for small business concerns and shall be set aside for
small business unless the contracting officer determines there is not a
reasonable expectation of obtaining offers from two or more responsible
small business concerns that are competitive in terms of market prices,
quality, and delivery." Nevertheless, Forest Service officials believe
that most of the agency's IRSCs are not set aside for small business,
largely because of the dearth of small logging companies in many parts
of the country. However, the Forest Service does not maintain data on
the number of IRSCs that are set aside for small business, and so
cannot gauge its success in involving small businesses.
BLM, in contrast, generally sets aside all of its stewardship contracts
(which are typically service-oriented contracts) for small businesses,
according to agency officials. A contracting officer from BLM's Oregon
office said that there have consistently been at least two responsible
small business firms that were interested in BLM stewardship projects
and from which BLM could expect to receive reasonable prices.
Accordingly, BLM projects have been set aside for small businesses.
Although BLM's stewardship contracting guidance makes an exception to
the set-aside policy in cases where "non-traditional entities (e.g.,
local governments, nongovernmental entities, and nonprofit
organizations) have expressed an interest" in a project, BLM
contracting officials told us they set aside all stewardship contracts
regardless, because, in their words, "the FAR trumps BLM guidance."
Despite the Benefits of Stewardship Contracting, Challenges Persist,
Especially in the Use of Long-Term Multiyear Contracts, for which the
Agencies Lack a Strategy:
The agencies cited as key benefits of stewardship contracting the
ability to accomplish more work on the ground and to build
collaborative partnerships. The primary challenges cited by the
agencies are (1) overcoming internal and external resistance to using
stewardship contracting, (2) dealing with market uncertainties, and (3)
understanding and dealing with the ramifications of using long-term
multiyear contracts. The agencies have numerous efforts under way to
overcome some of the challenges they face, including conducting
training courses and workshops and supporting innovative efforts by
entrepreneurs and researchers, but they have not developed strategies
to guide the nationwide use of long-term multiyear stewardship
contracts and to inform offices' decisions about the use of such
instruments.
The Agencies Cited an Increased Ability to Accomplish Needed Work,
along with Increased Collaboration, as Key Benefits of Stewardship
Contracting:
Agency officials frequently cited the ability to get more work done on
the ground as a measure of stewardship contracting's success.
"Stewardship contracting is the most valuable tool the Congress has
given us in 30 years," said a Forest Service official in southern
Oregon. In particular, according to agency officials, the ability to
use product value to offset service costs has enabled them to
accomplish work that otherwise would not get done, given current
funding constraints. A Forest Service district ranger in Montana, for
example, said that stewardship contracting enabled the district to
perform nearly $1 million of service work for which the district did
not have appropriated funds--an amount equivalent to about 40 percent
of the district's entire annual budget. This work included removing 49
stream crossings--roads that crossed streams and thus contributed to
stream sedimentation--to help meet state water quality goals.
Similarly, a Forest Service official in Wisconsin noted that through
stewardship contracting, the forest unit could accomplish some work--
including planting large trees and grinding stumps--that it would not
have been able to afford to do otherwise. As another example,
stewardship contracting is expected to play a big part in helping the
Forest Service deal with the problem of trees killed by the mountain
pine beetle in Colorado. The Forest Service plans to use stewardship
contracting for the removal of dead and dying trees, using the value of
the trees to offset a portion of the associated costs. Several
environmental group representatives we spoke with likewise praised
stewardship contracting for helping the agencies accomplish more needed
work.
Forest Service officials also stated that stewardship contracting is
financially advantageous in other ways. First, although the agencies
often use monies from the Knutson-Vandenberg (K-V) fund to conduct
reforestation, using the stewardship authority to conduct these
activities allows field units to avoid the overhead charges that the
Washington Office assesses on the use of K-V (and other)
funds.[Footnote 27] Additionally, retained receipts are subject to
fewer limitations on use than K-V funds. Field officials also stated
that stewardship contracting enhances their productivity because the
revenues stay within the field unit rather than being returned to the
Treasury. As a Forest Service official in Wisconsin said, "Anything we
get under stewardship contracting is better than a traditional timber
sale because the revenues stay here rather than going to the Treasury."
Agency officials also pointed out the savings from implementing one
contract for a particular project rather than two or more. According to
a forester in a BLM field unit in California, for example, the net cost
per acre is reduced because BLM staff spend less time developing,
advertising, and implementing a single stewardship contract than they
would on multiple traditional contracts. Similarly, a Forest Service
official noted that prior to receiving the stewardship contracting
authority, the Forest Service had to go through a two-step process:
first conducting a timber sale to remove merchantable timber and then
issuing a separate service contract to remove the remaining material.
The official stated that by law, the Forest Service could not mix the
two steps. Stewardship contracting has relieved the Forest Service of
that burden by having a single contractor do all the work, thereby
saving the agency the time and associated cost of preparing two
separate contracts.
Agencies also cited the collaborative partnerships they have built
through stewardship contracting. These collaborative partnerships have
resulted in community support for stewardship projects and allowed the
agencies to move forward with projects without the litigation costs and
delays that have often confronted typical timber sales and even some
hazardous fuel reduction projects. A Forest Service official in
Montana, for example, said that the community has become very
supportive of stewardship contracting, as have local environmental
groups. Another official added that this support is in itself a big
success. At first, according to this official, some environmental
groups refused to accept stewardship contracting, saying that it was
just an excuse to cut more timber. But now, she said, she is hearing
less opposition. Similarly, a headquarters Forest Service official said
that when stewardship contracting first started, many--including the
Forest Service and environmental groups--had concerns that stewardship
projects would just be disguised timber sales. But after the Forest
Service reached out to stakeholders, including environmental groups,
these concerns diminished over time, and stakeholders began to see the
value of stewardship contracts in performing needed work.
Several agency officials also credited the collaborative process with
building community support for forest restoration projects and allowing
the projects to go forward without protest. For example, according to
the national stewardship contracting coordinator, comments from
national forest officials across the country indicate that the use of
stewardship contracting and the collaboration associated with its use
have led to fewer appeals and less litigation at the project level.
Several field unit officials reported similar impressions. On one
forest in California, for example, 3 of the forest's 22 stewardship
projects have been appealed, but none has been litigated. Another field
unit, similarly, reported having few or no appeals or litigation
associated with their stewardship projects.
Many stakeholders agreed. For example, one member of a project-
monitoring group told us he had forestalled litigation by his
environmental organization on several occasions because of the trust
that the monitoring group had developed with the agency. In fact, some
community groups have produced guides to help businesses understand the
stewardship contracting process.
Nevertheless, collaboration has its drawbacks, according to agency
officials and others. One drawback is the time it takes to build and
sustain a truly collaborative group. For example, members of the
monitoring board for the Forest Service's White Mountain project, in
Arizona, said they worked together for years to develop mutual trust
and respect and to build consensus. Similarly, members of BLM's
community forest project in Weaverville, California, said they worked
for years before developing a level of trust that allowed the work to
proceed without protest. Ongoing collaboration takes time as well.
Officials of the Forest Service's Southern Region noted that, in one
state, a forest working with community groups was on its third
iteration of an environmental assessment for a stewardship project,
having redone the assessment to accommodate the group's wishes. In
several locations, officials raised the question of how much community
collaboration should be expected, especially when projects or
communities are small.
Another drawback, according to Forest Service officials, is that
collaboration can dilute the effectiveness of a project. Forest Service
officials at several project locations noted that community involvement
ended up watering down the impact of the stewardship projects because
the Forest Service limited the amount of work it did at the request of
stakeholders. On one hand, these officials said, the Forest Service was
being responsive to community desires in altering its projects, but on
the other hand, the projects may not have been as effective as they
could have been because they were not appropriately designed. For
example, on one project in southern Utah, Forest Service officials and
the contractor thought that the compromise reached with an
environmental group prevented the project from accomplishing its
objective. The project was designed to protect the trees between a
wilderness area and a popular campground by thinning them to discourage
damage by pine beetles. After the environmental group appealed the
project, the Forest Service agreed to remove fewer trees. As a result,
according to these officials, the area will remain susceptible to pine
beetles, which officials believe will kill all the trees. Officials
added that although the Forest Service achieved some political goodwill
by compromising with the environmental group, it accomplished little in
terms of resource management. We have previously reported on the
advantages and disadvantages of collaboration.[Footnote 28]
Challenges Associated with Stewardship Contracting Include Resistance
to Its Use, Market Uncertainties, and Potential Consequences of
Multiyear Contracts:
From the outset of stewardship contracting, both agencies encountered
resistance to using stewardship contracting, from both inside and
outside the agencies. Within the agencies, unfamiliarity with
stewardship contracts made some officials reluctant to use them. One
Forest Service official said, for example, that he was familiar with
timber contracts but not with all the nuances of acquisition contracts.
In general, timber staff were not familiar with acquisition procedures
and regulations, while acquisition staff were similarly unfamiliar with
selling timber--making both types of staff reluctant to use this new
tool. As one Forest Service official explained, the challenge is to get
the timber staff and the acquisition staff working together--to bridge
the gap between the two different cultures.
Officials' unfamiliarity with the use of the new tool was compounded by
the lack of a centrally located source of expertise to which agency
staff could turn for assistance or advice. Officials of both agencies
remarked on the importance of sharing lessons learned among their
respective units. Agency officials noted that the sharing of these
lessons need not come in the form of guidance or direction from the
Washington Office, however. For example, since BLM's Oregon State
Office was designated the "center of excellence" for stewardship
contracting, the contracting officers in that office said they have
learned many valuable lessons, and staff in other offices have begun
turning to these contracting officers for advice and assistance on
stewardship contracting issues. Turnover in stewardship coordinator
positions, particularly at the national level, has also hampered
understanding because institutional knowledge is especially important
for helping field staff use new or complex programs or tools. At BLM,
the constant turnover in the stewardship coordinator position at
headquarters--with four different staff successively filling that
position between July 2007 and July 2008--has made that office ill
equipped to deal with questions from the field. Turnover in the Forest
Service's headquarters stewardship coordinator position also
occasionally hampered field officials' attempts to gain insights and
assistance as they used the tool, albeit to a lesser degree.
In other cases, some field units were reluctant to use stewardship
contracts because the units were located in areas with high timber
values and healthy markets and had sufficient K-V funds (which are
generated through timber sales) to carry out needed service work. A
Forest Service official in Wisconsin, for example, said that the timber
economy has been stable in Wisconsin, giving his ranger district little
incentive to use stewardship contracting.
Outside the agencies, resistance has come primarily from contractors
and local community officials. As with the agency officials, the
learning curve for bidders not acquainted with stewardship contracting
was steep. For example, preparing the required technical proposals
describing how the contractor would perform the service work was
intimidating and time consuming; one contractor likened it to preparing
a résumé. Stewardship contracts also called for contractors to do work
that they may not have done before, which made some contractors
uncomfortable. Several officials told us that contractors were
uncertain how to bid on some aspects of service work and, in some
cases, did not have the set of skills or the equipment needed to
perform it. In Wisconsin, for example, the contractor on a stewardship
project to curb the spread of oak wilt said he was leery of bidding on
the project at first, as he had no experience or equipment with which
to pull stumps--a task crucial to the control of the disease. He
ultimately bid on--and won--the contract after agreeing to subcontract
the stump-pulling work to a road contractor with whom he had previously
worked. Although many contractors overcame their reluctance and bid on
projects, bidders' lack of experience with subcontracting led to higher
prices, according to a Forest Service official, because bidders felt
greater risk in bidding on unfamiliar work and priced their bids
accordingly.
In many cases, county commissioners and other local officials were
opposed to stewardship contracting projects because receipts from
stewardship projects were not factored into the calculation of timber
receipts (and other qualifying receipts) from which the counties
received a share. For years, many counties across the country depended
heavily on their share (typically 25 percent) of timber sale and other
qualifying receipts, but these receipts dwindled substantially with the
decline in federal timber sales in the late 1980s. The Secure Rural
Schools and Community Self-Determination Act of 2000 was enacted, in
part, to address the decline in federal payments by stabilizing
payments to counties that depended on revenues from timber sales on
Forest Service and certain BLM lands.[Footnote 29] Under the act, each
county could continue to receive a portion of the revenues generated
from these lands or could choose instead to receive annual payments
equal to the average of the three highest annual revenue payments to
the county from fiscal year 1986 through fiscal year 1999.[Footnote 30]
Payments under the act ceased in December 2007, but the act was
reauthorized in October 2008, with payments to continue through fiscal
year 2011.[Footnote 31]
During our review (before the October 2008 reauthorization), agency
officials told us that, regardless of the option that counties had
chosen under the Secure Rural Schools Act, county commissioners and
other local officials had expressed concerns about stewardship
contracting's effect on county revenues--whether immediate or
potential. That is, counties that had elected to continue receiving 25
percent of timber and other qualifying receipts were concerned because
stewardship receipts were not included in the calculation of timber
receipts and thus were perceived to have an immediate detrimental
effect on county revenues. And counties that had elected to receive an
average of prior-year receipts were also concerned because they thought
that if the Secure Rural Schools Act were reauthorized, the formula for
calculating payments to counties might be changed to include years in
which stewardship projects were conducted in the counties. If so, the
counties' portion of receipts would be diminished, again in part
because stewardship receipts would not be included in the total from
which the counties' share would be calculated. According to a Forest
Service official in Montana, there was not a county commissioner in the
state who was not concerned about the county's share of receipts
diminishing as a result of stewardship contracting. In the Great Lakes
forests, similarly, some counties were in favor of the concept of
stewardship contracting, according to Forest Service officials, but
also wanted to maximize receipts from timber. In Wisconsin, for
example, the Forest Service was planning a stewardship project that the
community favored because of concerns about fire risk, but a Forest
Service official noted that the county has not embraced stewardship
contracting because of its effect on payments to the county. Forest
Service officials were worried about how they were going to get the
county's support.
Although the agencies are not legally required to obtain the approval
of local officials to conduct stewardship projects, these concerns have
made some agency staff more cautious about using the tool more widely.
In Oregon, BLM officials noted that resistance from county officials
has caused BLM to take a conservative approach to developing
stewardship contracting in certain areas. For example, one BLM district
will not approve a project unless the project has the written support
of the county commissioners. Counties' concerns about nine proposed
stewardship projects in the district were conveyed to the district
manager in a letter from the Association of O&C Counties.[Footnote 32]
According to the letter, the association's board of directors had
decided to support the nine projects but expressed deep concern about
stewardship projects in general because they generate no receipts to be
shared with counties.
Market uncertainties posed another set of challenges. Market prices for
timber have been volatile, especially lately, with the slump in the
housing market; this has made it very difficult to get bids on timber
sales in some areas, and this difficulty has spilled over into
stewardship projects as well. One stewardship contract on the Superior
National Forest in Minnesota, for example, was offered three times,
each time at lower timber prices, before it was awarded; another
stewardship contract on the same forest was offered twice before being
awarded. Forest Service officials expressed hope that once the housing
market turns around, the value of timber will increase and make timber
sales--and stewardship projects--more attractive to loggers.
Markets for other materials removed through stewardship contracting--
primarily biomass and small-diameter trees--are uneven as well. In some
areas, particularly near pulp or paper mills, the market for biomass
and small-diameter wood is strong. This was the case in several eastern
forests we visited and, according to agency officials, is also true of
parts of California and Oregon. In other areas, however, facilities
that can accept and process biomass are scarce, and markets for the
material are correspondingly weak. In Montana, for example, officials
said there is little market for the small-diameter wood and biomass
generated from stewardship projects, so these materials are typically
burned. Similarly, on many BLM lands, where the value of the wood is
low and the distance to biomass markets long, BLM may find it more cost-
effective to burn the wood than to use it. In such cases, the paucity
of markets for small-diameter materials keeps the cost of the service
work high, because contractors cannot defray their costs by selling the
resulting materials. We have previously reported that the high costs of
harvesting and transporting woody biomass, combined with uncertainties
about supply, have hindered market development.[Footnote 33]
Finally, although long-term contracts offer certain benefits to the
agencies, field units can find it challenging to provide sufficient
funds to award and implement such contracts, particularly while funding
other agency activities. Agency officials have touted long-term
contracts as providing contractors with some assurance of a long-term
supply of materials, thus encouraging investment in equipment or
facilities that can economically use small-diameter wood and biomass--
products that often have had little or no commercial value. According
to the Forest Service handbook, for example, "The use of multi-year
contracts is encouraged to provide incentives to potential contractors
to invest in long-term landscape improvement projects." BLM, similarly,
stated in a fiscal year 2007 stewardship contracting review that long-
term contracts would encourage business development for biomass
utilization. Without a long-term contract, an investor can find it
difficult to secure the financing necessary to retool or build
facilities that can process small-diameter wood or biomass. A
contractor in Oregon noted, for example, that constant supply (i.e.,
through a long-term contract) is the key to encourage investment in
equipment. He explained that a single machine can cost more than $1
million, and a contractor will not invest--nor will a bank lend--such a
large amount without a reasonable assurance that there will be
sufficient ongoing demand for the machine.
Contractors still face risk when entering into a long-term contract
with the government, however, because unforeseen budget shortfalls
could prevent an agency from funding the contract. Without some
additional protection against risk, contractors may be reluctant to
make sizable investments in equipment or infrastructure for fear that
the government will cancel the contract, thus making the investment
unprofitable. Contractors may thus decline to bid on long-term
contracts unless the contracts include a cancellation ceiling--that is,
an amount the government will pay the contractor if it cancels the
contract.[Footnote 34] The FAR authorizes such ceilings to protect the
contractor's investment, with the amount of the ceiling to be agreed on
by the government and the contractor before the contract is signed. To
ensure that this money is available if needed--and to prevent agencies
from making financial commitments beyond the funding Congress has
provided--the FAR generally requires that, should an agency include a
cancellation ceiling in a contract, the agency must obligate the entire
amount of the ceiling at the inception of the contract.
Depending on the size of the contractor's potential investment,
however, this ceiling could be millions of dollars--far exceeding the
budget of an individual field unit. Rather than develop a contract that
would require a cancellation ceiling beyond its available resources, a
field unit would instead have little recourse but to develop a contract
with a much lower ceiling--one it could afford--thereby forgoing its
hope of attracting significant investment in equipment or
infrastructure.
In fact, two Forest Service units have had to make this choice. For the
only long-term multiyear contract the agencies have had experience with
to date, at the White Mountain stewardship project in Arizona, the
cancellation ceiling had little to do with the contractor's actual
investment; instead, it simply represented an amount the Forest Service
thought it could afford and the contractor agreed was reasonable. In
2004, the Forest Service hired a consulting firm to develop an estimate
of the potential cancellation liability associated with a multiyear
contract for the White Mountain project. The contracting officer for
the project said he was shocked by the resulting estimates, which
ranged from nearly $3 million to more than $7.5 million. Accordingly,
the cancellation ceiling was set at $500,000. The contracting officer
said that this lower amount did not reflect the potential liability
estimate based on one of the three scenarios examined by the consulting
firm because none of those scenarios materialized. Instead, the
contractor used already existing equipment, but the contracting officer
told us that he believed it was appropriate to have a cancellation
ceiling anyway, to compensate the contractor for his risk in case of
cancellation.
Similarly, for a 10-year contract the Forest Service is preparing in
order to address fire risk on the Front Range of Colorado, a Rocky
Mountain Region official told us that an amount in the range of $6
million to $10 million would be needed to attract large infrastructure
such as a wood pellet plant--an amount far beyond the region's funding
capability. Instead, the contract announcement will include a
cancellation ceiling of $500,000--the amount the region thought it
could afford.[Footnote 35] According to this official, the inability to
fund a substantial cancellation ceiling (e.g., $6 million to $10
million for construction of a pellet plant) changed the initial premise
of the contract. That is, while the long-term contract was initially
envisioned as a way to attract investment in industry or infrastructure
to expand the use of material resulting from the project, it is now
intended simply to treat the forests as cost-effectively as possible
within the existing infrastructure.
Other units were also contemplating the use of long-term contracts at
the time of our review but were likewise concerned about the potential
cancellation ceiling. For example, Forest Service officials in
California were considering the use of a long-term multiyear contract
but were concerned about how they would fund the cancellation ceiling.
Some contractors may be willing to bid on contracts without
cancellation ceilings if there is no substantial investment involved.
In July 2008, the Forest Service issued a 10-year contract for the
Lakeview stewardship project in southern Oregon. This contract includes
a minimum dollar guarantee over the 10-year performance period.
According to a Forest Service official, the Forest Service did not
include a cancellation ceiling in the Lakeview contract because it was
not seeking investment in infrastructure; that infrastructure already
is in place. The Lakeview contract was issued in accordance with the
terms of a November 2007 memorandum of understanding (MOU)--signed by
the Forest Service, BLM, the State of Oregon, a county, and several
cities and nongovernmental organizations--that provides a framework
within which the signatory parties agree to work together to accomplish
forest restoration projects, including fuel reduction projects. The MOU
states that the Forest Service and BLM will each offer a minimum number
of acres to be treated each year. BLM also plans to issue a long-term
contract under the terms of the MOU, but the BLM contract will probably
be an IDIQ contract, according to BLM officials.
Other agencies also have the authority, under the FAR and agency-
specific regulations, to use multiyear contracts, although these
contracts typically may not exceed 5 years. Although the FAR requires
all agencies to obligate sufficient funds to cover any potential
cancellation costs of a multiyear contract, additional requirements
apply to certain agencies. For example, according to the Department of
Defense's acquisition regulation,[Footnote 36] if a contract contains a
cancellation ceiling in excess of $100 million but the budget for that
contract does not include proposed funding for the costs of contract
cancellation up to that ceiling, then the head of the agency must
provide written notification to the congressional defense committees
and to the Office of Management and Budget before awarding the
contract. This written notification must include, among other things,
the extent to which cancellation costs are not included in the budget
for the contract and an assessment of the financial risks of not
budgeting for the potential costs of contract cancellation.
Experience to date with the White Mountain project highlights another
potential challenge related to the use of long-term contracts: the
difficulty of balancing the need to devote substantial resources to the
long-term project in order to furnish a sufficient and predictable
supply of materials to the contractor and the need to fund the unit's
other programs and activities--all within a limited budget. With this
project, the forest committed to funding contractor treatments on at
least 5,000 acres annually, in order to ensure the contractor a
sufficient supply of material. Although per acre costs were initially
high, at the time the contract was developed, the forest expected that
within a few years these costs would decrease as growth occurred in the
small-diameter wood and biomass industry--allowing the contractor to
defray a greater portion of his costs as he found markets for the
material. Instead, for the 29 task orders issued between September 2004
and September 2007, these costs have not dropped significantly, as
shown in figure 8.
Figure 8: Treatment Costs per Acre, by Task Order, for the White
Mountain Project:
This figure is a line graph showing treatment costs per acre, by task
order, for the White Mountain project. The X axis represents the task
order and fiscal year, and the Y axis represents the cost per acre (in
dollars).
Fiscal year: 2004;
Task order #1: 361;
Task order #2: 810;
Task order #3: 208;
Task order #4: 203;
Task order #5: 736;
Task order #6: 479;
Task order #7: 498;
Task order #8: 328.
Fiscal year: 2005
Task order #1: 646;
Task order #2: 420;
Task order #3: 508;
Task order #4: 169;
Task order #5: 350;
Task order #6: 474;
Task order #7: 362;
Task order #8: 924.
Fiscal year: 2006
Task order #1: 699;
Task order #2: 401;
Task order #3: 341;
Task order #4: 627;
Task order #5: 529;
Task order #6: 530.
Fiscal year: 2007
Task order #1: 864;
Task order #2: 683;
Task order #3: 418;
Task order #4: 366;
Task order #5: 492;
Task order #6: 434;
Task order #1: 461.
[See PDF for image]
Source: GAO analysis of Forest Service data.
[End of figure]
To live up to its commitment, the Forest Service has continued to fund
5,000 acres of treatment annually--but at a much greater cost than
expected, a cost that has taken a substantial toll on the forest's
other programs. These other programs--such as range management,
wildlife, hazardous fuels, and vegetation and watershed management--
have suffered because the forest has directed considerable funding
toward the White Mountain project, leaving little available to carry
out other projects that need to be done. In fact, in 2005, the forest
received instruction from the region to direct 100 percent of its
hazardous fuels and timber dollars toward the White Mountain project,
along with 50 percent of its vegetation and watershed management
dollars and 40 percent of its wildlife dollars. A forest budget
official was particularly concerned about the effect on the range
management program, for which she estimated funding was half of what it
would have been if it had grown at the same rate as it did for other
forests in the region. Another forest official expressed concern about
the fuel reduction work that was not being completed on the forest
because the funds for that program were being monopolized by the White
Mountain project. In particular, this official noted that the forest's
ranger districts that were not included in the White Mountain project
area were at a particular disadvantage because they experienced no
direct benefit from the project, whereas other districts had at least a
portion of their lands being treated (those that fell within the
project area).
This project has had a similar effect on other forests within the
region, according to forest and regional officials. As the region has
redirected funds toward the White Mountain project, these other forests
have become resentful of the disproportionate amount of funding the
project has received. The Apache-Sitgreaves forest has "reached a
crossroads," one official said, in terms of the White Mountain
project's viability; if the per acre costs remain high, the forest will
have to decide whether to continue funding the project, particularly in
light of the effect it is having on other programs in the forest.
Agencies Are Addressing Stewardship Challenges through Various Means,
Including Training and Technology, but Have Not Developed a Strategy
for the Use of Long-Term Contracts:
The agencies have numerous efforts under way to overcome some of the
challenges they face, including conducting training courses and
workshops to help overcome resistance to the use of an unfamiliar tool
and supporting innovative efforts to find cost-effective uses for small-
diameter materials. However, they do not have a strategy in place for
the use of long-term contracts, in terms of where such contracts should
be used and how they should be funded. As a result, field offices must
make decisions about whether to enter into long-term contracts without
fully understanding the inherent risks and trade- offs, thereby
potentially jeopardizing the stability of their other programs or, on
the other hand, forgoing an opportunity to achieve cost-effective
restoration.
To overcome resistance to stewardship contracting, the agencies have
provided--jointly and individually--training for their staff and for
contractors. For example, the two agencies jointly formed a cadre of
officials that developed a training program that covered both
acquisition and timber contracting and addressed both IRTCs and IRSCs.
According to a Forest Service official, the staff who work on
acquisition contracts and the staff who work on timber sale contracts
usually do not work together, so it was refreshing to have both types
of staff involved in discussions and learning about stewardship
contracting. The Forest Service has posted the training materials on
its Web site.
Also, the Forest Service plans to address difficulties between the
timber and acquisition sides by establishing centers of excellence that
would provide advice and assistance to staff as needed. In the Forest
Service, acquisition staff often have not been actively involved in
stewardship contracts. Although an acquisition official said that the
agency had planned to train some timber staff to act as acquisition
contracting officers, with the requisite certification to obligate
government funds, it has since abandoned that idea because of the
expense and time it would take to provide the initial and recurrent
training. The agency's new plan, according to this official, is to
establish several centers of excellence, staffed with individuals who
can provide advice and assistance on acquisition issues and can act as
contracting officers when necessary.
BLM already has in place such an arrangement: In 2007, the Washington
Office designated the Oregon State Office as the agency's center of
excellence for contracting. In this capacity, the Oregon office handles
contracts for all of BLM's western states, including Alaska, that are
valued at more than $100,000. The Oregon contracting officers put
together stewardship contracting packages and review the final
contracts; they also attend preproposal meetings and provide advice to
contractors and BLM personnel. Nevertheless, the operational side of
stewardship contracting (e.g., outreach, collaboration, design, and
contract administration) is still performed by the field offices.
To help overcome resistance by contractors, agency officials said they
provide training to contractors and work with them one on one to help
them understand stewardship contracting. For example, procurement task
assistance centers are located in several states; these centers work
with contractors (at no charge) to help them understand contract
formats and requirements. The biggest hurdle, according to a BLM
official, is getting contractors to feel comfortable with preparing
technical proposals.
Forest Service officials also said they try to incorporate into
stewardship contracts service work that is familiar to contractors, to
encourage them to gain experience with this new tool. Some officials
noted that "starting small" with stewardship projects can be a strategy
to improve contractors' chances for success. An official of one forest,
for example, said that keeping stewardship projects small--in acres and
in value--has been a good way for both the forest and the contractors
to gain experience. And on another forest, a contracting official said
that bundling similar types of work in a contract has been a successful
strategy. This strategy can benefit smaller companies that lack the
equipment or financial resources to bid on a large project or a project
that includes dissimilar tasks.
As for county commissioners' concerns about the loss of county timber
receipts, agency officials said they try to involve county officials in
stewardship project planning efforts and talk to officials about the
local benefits of stewardship projects. In Wisconsin, for example,
Forest Service officials said they have talked with county officials
about the benefits of stewardship contracting, such as the stable
employment that stewardship contracting would bring to the counties
despite the counties' not receiving any portion of the stewardship
receipts. In some cases, county officials have been willing to support
stewardship contracting. In Minnesota, for example, a Forest Service
official described county officials as "cautious but willing" to
support stewardship contracting because of the potential for an
increase in employment and the associated multiplier effect of people
spending their salaries in the local area.
Also, the agencies are working to find cost-effective uses for small-
diameter materials and biomass. To stimulate the market for small-
diameter wood and biomass, and thereby reduce the amount that
contractors must be paid to remove this material, the agencies are
working with various contractors, entrepreneurs, universities, and
other organizations to develop cost-effective and sometimes innovative
uses for these materials. In some cases, agency officials have worked
with stewardship contractors to find new markets for these materials,
including nearby facilities that use wood chips for heat or power
plants that can burn the materials--alone or mixed with coal. In
another case, one national forest is working with an entrepreneur and a
nearby university on the development of a process known as
torrefaction, in which wood chips are slowly heated until the wood
reaches a near-charcoal state, making it easier to store, transport,
and use in certain applications.
In some cases, the agencies have provided grants to spur investment in
research or development of innovative uses for biomass. The Forest
Products Laboratory, for example, provided a $250,000 biomass grant to
support the construction of a pressure treatment facility that will
treat material processed from the White Mountain stewardship project in
Arizona.[Footnote 37] This facility uses a chemical product to preserve
material for exterior use.
Although numerous agency officials cited the potential of long-term
multiyear stewardship contracts to help stimulate markets for wood
products, neither agency has developed strategies for funding the
associated cancellation ceiling--one of the two primary challenges
associated with multiyear contracts. As noted earlier, the purpose of
obligating the cancellation ceiling at the inception of the contract is
to prevent agencies from making financial commitments beyond the
funding Congress has provided. Yet rather than identifying strategies
for funding these cancellation ceilings, several Forest Service
officials told us they believe their agency should be exempt from
having to obligate these funds at the outset of the contract. One
official said that the cancellation ceiling is unnecessary altogether,
because contracts already contain a standard clause allowing the
contractor to be reimbursed if the government cancels the contract for
its convenience. Other Forest Service officials disagreed that the
standard clause offers sufficient protection, stating that the
contractor needs the protection afforded by the cancellation ceiling--
but added that requiring the agency to obligate the funds at the
inception of the contract needlessly ties up agency funds that could be
used to conduct additional work. These officials believe that the
agency should not have to obligate the funds unless and until it
cancels the contract. The Forest Service has sought legislative relief
from the up-front funding requirement, but none had been enacted as of
October 2008.
In the two instances in which a cancellation ceiling has been
established for a long-term multiyear contract--for the White Mountain
contract in Arizona and the proposed Front Range contract in Colorado-
-agency staff derived cancellation ceilings that reflected not the
amount needed to attract significant investment in infrastructure, but
rather the amount each unit believed it could afford. Without a
national strategy on the use of long-term multiyear contracts,
including a clear agency position on the need for appropriate
cancellation ceilings and guidance on how to fund them, agency units
may continue to establish such "affordable" levels--potentially driving
away interested investors who are concerned that they do not have
sufficient contractual protection--or may forgo the use of long-term
contracts entirely.[Footnote 38]
Forest Service officials also held different opinions about whether an
agency could avoid the cancellation ceiling entirely by using options
contracts, which do not require an up-front cancellation ceiling, while
still stimulating infrastructure investment. A May 2007 opinion from
the Department of Agriculture's Office of General Counsel held that it
is unnecessary to use multiyear contracts at all; the opinion suggested
that the agency use options contracts instead. However, others in the
agency said that options contracts do not afford contractors enough
assurance of a long-term supply and, as such, do not assist them in
obtaining loans for equipment or plant construction--a fundamental
objective of using long-term multiyear contracts. Accordingly, options
contracts may be best suited for areas with existing infrastructure
(e.g., lumber mills or pulp and paper mills).
The other challenge associated with long-term contracts is maintaining
sufficient funding to support an ongoing long-term project at levels
sufficient to provide the contractor with a steady supply of material
while at the same time funding other important activities. The
implications of this challenge are also highlighted by the previously
discussed experience of the White Mountain project. This is not to say
the project has been unsuccessful; to the contrary, numerous agency
officials as well as environmental and other stakeholders praised the
quality of the work and the ecological results. Nevertheless, as a
result of funding its commitment on the White Mountain project, the
forest has struggled to adequately finance its other programs--a
cautionary lesson for other agency units contemplating long-term
stewardship contracts of their own. Certainly, other units may decide
that the need for a particular long-term project is so great that they
are willing to reduce funding for various other programs in order to
pay for it. However, the agencies have not developed strategies for the
use and funding of long-term multiyear contracts. Without such a
strategy--based on a systematic analysis of lessons learned from long-
term projects already undertaken and accompanied by guidance on
selecting and implementing such projects--individual units may make
choices about using long-term contracts without fully understanding
their implications.
Conclusions:
Halfway through its currently authorized 10-year life span, stewardship
contracting has shown promise in helping the Forest Service and BLM
accomplish their land management objectives. The agencies have taken
advantage of the ability to trade goods for services to defray the cost
of needed thinning and other service work, and they have worked closely
with community groups to design projects that meet community needs.
One element of stewardship contracting has not been widely explored,
however: the authority to enter into 10-year contracts. Although we
frequently heard that this authority is essential in helping develop
markets for timber, woody biomass, and other materials (by allowing the
agencies to provide potential contractors and industry operators more
certainty of supply), the suitability of long-term multiyear
stewardship contracts to encourage investment in infrastructure has yet
to be demonstrated. And the experience of the one forest that has
implemented a long-term multiyear contract shows the potential pitfalls
of this tool, as the forest has had to scale back its other programs in
order to adequately fund the long-term project. The stakes are further
raised by the need for a potentially sizable up-front obligation of
funds to protect both the contractor's and the government's interests.
Although two additional long-term multiyear contracts are in process
and officials in several field units said they are contemplating the
use of such contracts, the agencies have not developed national
strategies that describe the role of long-term multiyear contracts and
lay out the agencies' positions on issues such as when such contracts
are appropriate, how many should be in place, where they should be
located, and how they will be funded. Without such a strategy, the
agencies may fail to capitalize fully on the potential of stewardship
contracting. For example, field units may have little choice but to
settle for affordable cancellation ceilings, rather than ceilings
sufficient to encourage substantial investment in industry or
infrastructure to use the products from the stewardship project.
Regardless of the contracting mechanisms used or their duration, the
agencies must maintain complete and reliable data if they are to
effectively evaluate their use of stewardship contracting and provide
details on its use to Congress and the public. Currently, the agencies'
data reside in myriad automated and manual systems that are often not
linked. Further, the agencies do not systematically capture nationwide
information specific to agreements, nor does the Forest Service capture
data on the number of contracts that are set aside for small
businesses. Not only do such data deficiencies keep the agencies from
assessing the true costs and accomplishments associated with
stewardship contracting--especially in comparison with other tools that
might achieve the same goals--but they also prevent Congress and the
public from making informed judgments about the value of this land
management tool, which will become increasingly critical as expiration
of the stewardship authority draws closer and Congress evaluates its
renewal.
Recommendations for Executive Action:
We are making three recommendations to improve the agencies' use of
stewardship contracting.
To ensure that the commitment of federal funds under long-term
contracts is appropriately targeted, especially given the potential
trade-offs involved, we recommend that the Secretaries of Agriculture
and the Interior develop strategies for the use of long-term multiyear
contracts that address, on a nationwide basis, the criteria agency
officials can use to evaluate whether, in any given case, such a
contract would be an appropriate mechanism to assist the agency in
meeting its land management objectives. The strategy should address
options for funding such contracts in a manner that considers trade-
offs with respect to other land management activities and should be
based on a systematic analysis of lessons learned from long-term
projects already undertaken.
Additionally, to ensure ease of reporting and accurate accounting of
activities undertaken through stewardship contracts and agreements, we
recommend that the Secretaries:
* implement, as part of their efforts to improve their stewardship
contracting databases, improvements that will increase data interfaces
among the various systems that contain stewardship data and will ensure
accuracy and completeness in the data maintained and, as part of these
same efforts,
* implement improvements that will accurately account for products sold
and services received under stewardship agreements.
Agency Comments:
We provided the Departments of Agriculture and the Interior with a
draft of this report for review and comment. The Forest Service and the
Department of the Interior generally agreed with the findings and
recommendations in the report. The Forest Service's and Interior's
written comments are reproduced in appendixes II and III, respectively.
We are sending copies of this report to interested congressional
committees, the Secretaries of Agriculture and the Interior, the Chief
of the Forest Service, the Director of the Bureau of Land Management,
and other interested parties. We will also make copies available to
others upon request. In addition, the report will be available at no
charge on the GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-3841 or nazzaror@gao.gov. Contact points for
our Offices of Public Affairs and Congressional Relations may be found
on the last page of this report. GAO staff who made major contributions
to this report are listed in appendix IV.
Robin M. Nazzaro:
Director, Natural Resources and Environment:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
Our objectives were to determine (1) the extent to which, and for what
purposes, federal agencies are using stewardship contracting; (2) what
processes the agencies use in planning, implementing, and monitoring
stewardship projects to manage resources; and (3) what successes and
challenges the agencies have experienced in using stewardship
contracting. Our review was limited to the Forest Service and the
Bureau of Land Management (BLM), the two agencies with stewardship
contracting authority.
To identify the extent and nature of the agencies' use of stewardship
contracting authority, we obtained data from Forest Service and BLM
officials on the number of such projects, as well as other project
information such as project acreage, timber volume and value, and the
value of contracted services. We also obtained data on retained
receipts from the agencies' financial accounting systems. Neither the
Forest Service nor BLM maintains comprehensive national data on all
aspects of stewardship contracting; in some cases, reliable agency data
were available for only certain years, and in other cases the agencies
could provide only estimates. Further, because the agencies have
adopted ways of collecting and reporting data independent of one
another, equivalent data were not always available for both agencies
during the same time period.
We assessed the reliability of the data by conducting interviews with
headquarters, regional, and state office officials who enter data into
the systems, maintain them, and prepare reports using system data. We
also obtained information on the standards, procedures, and internal
controls in place for collecting, reporting, and verifying data, in
order to assess their accuracy and completeness. In some cases, data
are maintained in systems whose reliability GAO has previously
assessed; in such cases, we relied on these earlier assessments in
evaluating system reliability. For example, certain Forest Service data
on acreage treated under stewardship contracts are reported through the
National Fire Plan Operations and Reporting System; we reviewed a 2007
GAO report that assessed this system and determined that it is
sufficiently reliable for our purposes.[Footnote 39] Similarly, both
agencies track some financial data on stewardship contracting through
their departmental accounting systems--the Department of Agriculture's
Foundation Financial Information System and BLM's Federal Financial
System. We reviewed previous work done by GAO and an independent
auditor and determined that the data produced from these systems are
sufficiently reliable for our purposes.[Footnote 40] We did not perform
any electronic testing of data. Ultimately, we determined that the
various sources of agency data provided sufficiently reliable data for
certain years, as well as for broad trends across years, but did not
provide data sufficiently reliable to allow comparisons between the
agencies in all areas, as noted in the body of the report. Finally, we
interviewed Forest Service and BLM officials about their progress in
designing or modifying systems to improve their data and better track
information associated with stewardship contracting projects.
Because neither agency maintains nationwide data that describe the
objectives or characteristics of individual stewardship projects, we
obtained information on project objectives and characteristics by
interviewing headquarters and field officials and conducting site
visits to projects in seven of the nine Forest Service regions and 7 of
the 11 western states in which BLM has state offices. We reviewed
(either by visiting in person or discussing with agency officials) a
nonprobability sample of 26 Forest Service projects and 9 BLM
projects.[Footnote 41] We selected projects to represent variety in
geographic location, type of restoration work, size (in acreage as well
as in value), and stage of implementation, as well as in the
stewardship contracting authorities used. Table 2 shows the locations
of the Forest Service projects we reviewed and the projects'
objectives; table 3 shows similar information for the BLM projects we
reviewed.
Table 2: Forest Service Stewardship Projects Included in GAO's Review:
Location: Northern Region: Bitterroot National Forest (Montana);
Project name: Hayes Creek;
Project objectives: Hazardous fuel reduction.
Location: Northern Region: Lolo National Forest (Montana);
Project name: Knox Brooks;
Project objectives: Hazardous fuel reduction, road reconstruction,
bridge and culvert replacement.
Location: Northern Region: Nez Perce National Forest (Idaho);
Project name: Crooked River;
Project objectives: Stream restoration to benefit fish.
Location: Southwestern Region: Apache-Sitgreaves National Forests
(Arizona);
Project name: White Mountain;
Project objectives: Hazardous fuel reduction, community economic
development.
Location: Southwestern Region: Cibola National Forest (New Mexico);
Project name: South Monighan Grande;
Project objectives: Hazardous fuel reduction.
Location: Southwestern Region: Cibola National Forest (New Mexico);
Project name: South Monighan Pequeño;
Project objectives: Hazardous fuel reduction.
Location: Intermountain Region: Dixie National Forest (Utah);
Project name: Upper Santa Clara;
Project objectives: Hazardous fuel reduction, campground improvement.
Location: Pacific Southwest Region: Eldorado National Forest
(California);
Project name: Grizzly Flats;
Project objectives: Hazardous fuel reduction.
Location: Pacific Southwest Region: Eldorado National Forest
(California);
Project name: Last Chance;
Project objectives: Hazardous fuel reduction.
Location: Pacific Southwest Region: Mendocino National Forest
(California);
Project name: Alder;
Project objectives: Hazardous fuel reduction, carbon sequestration
research.
Location: Pacific Southwest Region: Shasta-Trinity National Forests
(California);
Project name: Post Mountain;
Project objectives: Hazardous fuel reduction.
Location: Pacific Northwest Region: Fremont-Winema National Forests
(Oregon);
Project name: Bull;
Project objectives: Hazardous fuel reduction, road closures.
Location: Pacific Northwest Region: Fremont-Winema National Forests
(Oregon);
Project name: Burnt Willow;
Project objectives: Hazardous fuel reduction, community economic
stability.
Location: Pacific Northwest Region: Fremont-Winema National Forests
(Oregon);
Project name: Kava;
Project objectives: Hazardous fuel reduction, riparian restoration,
prescribed fire.
Location: Pacific Northwest Region: Fremont-Winema National Forests
(Oregon);
Project name: Trail;
Project objectives: Postfire restoration, road closures, stream
rehabilitation.
Location: Pacific Northwest Region: Siuslaw National Forest (Oregon);
Project name: Siuslaw Basin Partnership;
Project objectives: Watershed restoration across federal, state, and
private lands.
Location: Southern Region: Francis Marion and Sumter National Forests
(South Carolina);
Project name: Price's Bottom;
Project objectives: Hazardous fuel reduction, wildlife habitat
improvement, prescribed fire.
Location: Southern Region: Francis Marion and Sumter National Forests
(South Carolina);
Project name: Wando River;
Project objectives: Hazardous fuel reduction, wildlife nesting habitat.
Location: Eastern Region: Chequamegon-Nicolet National Forests
(Wisconsin);
Project name: Argonne Old Growth;
Project objectives: Old growth management, culvert replacement, dam
replacement, noxious weed control.
Location: Eastern Region: Chequamegon-Nicolet National Forests
(Wisconsin);
Project name: Day Lake;
Project objectives: Hazardous fuel reduction near a wildland-urban
interface.
Location: Eastern Region: Chequamegon-Nicolet National Forests
(Wisconsin);
Project name: Oak Wilt;
Project objectives: Disease and noxious weed control.
Location: Eastern Region: Ottawa National Forest (Michigan);
Project name: Cisco Camp/ Redlight Creek;
Project objectives: Vegetation management, construction of traditional
Native American roundhouse, culvert replacement.
Location: Eastern Region: Superior National Forest (Minnesota);
Project name: Karibou;
Project objectives: Hazardous fuel reduction.
Location: Eastern Region: Superior National Forest (Minnesota);
Project name: Nira;
Project objectives: Road decommissioning.
Location: Eastern Region: Superior National Forest (Minnesota);
Project name: Peeler;
Project objectives: Hazardous fuel reduction, road decommissioning,
noxious weed treatment.
Location: Eastern Region: White Mountain National Forest (New
Hampshire);
Project name: Discovery Trail;
Project objectives: Recreation trail construction, educational signage
and materials.
Source: GAO analysis of Forest Service data.
[End of table]
Table 3: BLM Stewardship Projects Included in GAO's Review:
Location: California: Redding Field Office;
Project name: Weaverville;
Project objectives: Trail building, stream improvement, control of
invasive species, study of heritage fruit trees.
Location: Colorado: Royal Gorge Field Office;
Project name: Arkansas Mountain;
Project objectives: Hazardous fuel reduction.
Location: Idaho: Cottonwood Field Office;
Project name: Corridors;
Project objectives: Hazardous fuel reduction.
Location: Montana: Missoula Field Office;
Project name: Hayes Restoration;
Project objectives: Forest health improvement, prescribed burning.
Location: New Mexico: Rio Puerco Field Office;
Project name: Picnic;
Project objectives: Hazardous fuel reduction, habitat restoration.
Location: Oregon: Lakeview District;
Project name: Gerber Stewardship;
Project objectives: Hazardous fuel reduction, road improvements,
habitat restoration.
Location: Oregon: Medford District;
Project name: Camp Stewardship;
Project objectives: Forest health improvement, road decommissioning,
spring protection.
Location: Oregon: Medford District;
Project name: Penny Stewardship;
Project objectives: Hazardous fuel reduction, community development.
Location: Utah: Kanab Field Office;
Project name: Buckskin-Powerline;
Project objectives: Hazardous fuel reduction.
Source: GAO analysis of BLM data.
[End of table]
To assess agency processes for planning, implementing, and monitoring
stewardship projects, we reviewed national guidance issued by each
agency, including guidance for such processes as conducting timber
appraisals, advertising and awarding contracts, and establishing and
maintaining monitoring processes. We also reviewed federal contracting
requirements, including those contained in the Federal Acquisition
Regulation. In addition, we interviewed national program officials with
each agency, as well as officials of the Pinchot Institute for
Conservation, the agencies' contractor for the multiparty monitoring
and evaluation effort, to obtain information and opinions on agency
processes for conducting stewardship projects.
During our site visits, we selectively reviewed projects' contracting
and financial files to obtain information on the planning, contracting,
and monitoring processes each agency uses, and interviewed Forest
Service and BLM project officials at each location, including regional
stewardship coordinators, project managers, timber sale contracting
officers, acquisition contracting officers, and others. At several
sites we also met with the contractors performing the stewardship
activities in order to obtain their perspectives on the projects,
including the agency processes they observed for advertising, awarding,
and overseeing the projects. And finally, at some locations we met with
stakeholders, such as community groups, researchers, local citizens,
and representatives of timber industry and environmental groups, in
order to obtain their perspectives on the use of stewardship
contracting.
To identify the successes and challenges the agencies have experienced
using stewardship contracting, we interviewed agency officials,
contractors, and stakeholders at many projects we visited to obtain
their views on the successes and challenges associated with stewardship
contracting, including the factors they believe contributed to these
successes and challenges, and the measures taken to overcome the
challenges. We also reviewed selected project contracting and financial
files and stakeholder documents to assess the extent to which projects
offered examples of successes or challenges faced by the agency units
in using stewardship contracting. Finally, we reviewed national program
guidance and spoke with national program officials in each agency to
identify actions the agencies had taken to overcome the challenges we
or others had identified.
We conducted this performance audit from August 2007 through October
2008 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Comments from the Forest Service:
USDA:
United States Department of Agriculture:
Forest Service:
Washington Office:
Washington 1400 Independence Avenue, SW:
Washington, DC 20250:
File Code: 2400/1580/6320:
Date: October 10, 2008:
Robin M. Nazzaro:
Director. Natural Resources and Environment:
Government Accountability Office:
441 G. Street, NW:
Washington, DC 20548:
Dear Ms. Nazzaro:
Thank you for the opportunity to review and comment on the draft
Government Accountability Office report GAO-09-23, "Federal Land
Management: Use of Stewardship Contracting Is Increasing, but Agencies
Could Benefit from Better Data and Contracting Strategies". The Forest
Service generally agrees with the GAO findings and recommendations and
has no additional comments on the report. If you have any questions,
please contact Sandy T. Coleman, Assistant Director for GAO/OIG Audit
Liaison Staff, at 703-605-4699.
Sincerely,
Signed by:
Abigail R. Kimbell:
Chief:
cc: Tom Peterson:
Richard Fitzgerald:
Sandy T Coleman:
Jesse L King:
Clarice Wesley:
Ronald Hooper:
[End of section]
Appendix III: Comments from the Department of the Interior:
United States Department of the Interior:
Office Of The Secretary:
Washington, D.C. 20240:
October 24, 2008:
Ms. Robin M. Nazzaro:
Director, Natural Resources and Environment:
Government Accountability Office:
441 G Street, N.W.:
Washington. D.C. 20548-0001:
Dear Ms. Nazzaro:
Thank you for the opportunity to review and comment on the Government
Accountability Office draft report entitled "Federal Land Management:
Use of Stewardship Contracting Is Increasing hut Agencies Could Benefit
from Better Data and Contracting Strategies, " (GAO-09-23).
The Department of the Interior concurs with the findings and
recommendations for executive action and believes these will help us
improve how we administer the stewardship contracting authority.
The enclosure provides technical comments on the draft report.
If you have any questions, please contact Scott Lieurance, Chief,
Division of Forests and Woodlands, at (202) 452-0316 or LaVanna
Stevenson-Harris. BLM Audit Liaison Officer, at (202) 785-6580.
Sincerely,
Signed by:
C. Stephen Allred:
Assistant Secretary:
Land and Minerals Management:
Enclosure:
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Robin M. Nazzaro, (202) 512-3841 or nazzaror@gao.gov:
Staff Acknowledgments:
In addition to the individual named above, Steve Gaty, Assistant
Director; Sandra Davis; and Pam Tumler made key contributions to this
report. Mark Braza, Nancy Crothers, Carol Henn, Rich Johnson, Ty
Mitchell, and Bill Woods also made important contributions to this
report.
[End of section]
Footnotes:
[1] Task order refers to an order for services placed against an
established contract.
[2] Pub. L. No. 105-277, § 347, 112 Stat. 2681-298 (1998).
[3] These retained receipts may be used without further appropriation.
[4] Pub. L. No. 108-7, § 323, 117 Stat. 275 (2003).
[5] GAO, Federal Land Management: Additional Guidance on Community
Involvement Could Enhance Effectiveness of Stewardship Contracting, GAO-
04-652 (Washington, D.C.: June 14, 2004).
[6] Although there are 12 BLM state offices--11 in the West and 1 in
the East--the vast majority of BLM-managed land and stewardship
activity is in the West. Therefore, we did not include the Eastern
States Office in our review.
[7] Under the National Forest Management Act of 1976, the Forest
Service develops land and resource management plans that guide all
natural resource management activities on the national forests. The act
includes provisions governing timber sales from national forest lands.
[8] The Department of the Interior and Related Agencies Appropriations
Act of 2001 authorized the Forest Service to permit the Colorado State
Forest Service to conduct watershed restoration and protection services
on national forest land in Colorado when the state agency is performing
similar services on adjacent state or private land. Subsequently, the
Consolidated Appropriations Act of 2005 provided similar authority to
BLM regarding its lands in Colorado and authorized the Forest Service
to permit the Utah State Forester to perform restoration services on
national forest land in Utah.
[9] In contrast to the other stewardship authorities, best-value
contracting was not newly introduced in the stewardship legislation.
The Forest Service and BLM had been permitted to procure services on a
best-value basis prior to the legislation. Under the stewardship
contracting legislation, however, the agencies are required--rather
than simply permitted--to use best-value contracting when awarding
stewardship contracts.
[10] Pub. L. No. 106-113, 113 Stat. 1501A-201 (1999).
[11] Pub. L. No. 106-291, 114 Stat. 998 (2000); Pub. L. No. 107-63, 115
Stat. 471 (2001).
[12] In addition to contracts, the BLM numbers include the four
agreements BLM had entered into through fiscal year 2007, which are
intermingled with contracts in BLM's tracking system. The Forest
Service numbers do not include agreements because that agency does not
track agreements nationally. Forest Service officials told us that from
fiscal year 2003 through fiscal year 2007, the agency had entered into
12 agreements with partner organizations, but data on these agreements-
-such as timber volume or acreage involved--are not captured in
automated systems.
[13] GAO, Budget Issues: Alternative Approaches to Finance Federal
Capital, GAO-03-1011 (Washington, D.C.: Aug. 21, 2003).
[14] These figures represent individual national forests in each
region. Many of these forests are managed together as part of larger
administrative units composed of two or more forests.
[15] BLM's use of 10-year umbrella-type contracts with multiple task
orders means that the number of contracts is greater than the number of
projects carried out by these contracts. For example, in Oregon, one
stewardship project is being carried out through 19 different task
orders. Each task order is separately funded and has a specified
performance period, commonly a year or less.
[16] BLM reports its timber volume in board feet rather than cubic feet
(1 board foot equals 12 inches by 12 inches by 1 inch). We converted
BLM's reported volumes to ccf for comparability with Forest Service
volumes; 500 board feet is approximately 1 ccf.
[17] Approximately $170,000 of this total consists of estimated service
values rather than actual values, because actual values were
unavailable for a small number of contracts.
[18] The retained receipts are available for expenditure without
further appropriation.
[19] GAO, Federal Timber Sales: Forest Service Could Improve Efficiency
of Field-Level Timber Sales Management by Maintaining More Detailed
Data, GAO-07-764 (Washington, D.C.: June 27, 2007).
[20] According to the Forest Service, a keystone species is an organism
that has a significant influence on the ecosystem it occupies--an
influence disproportionately large compared with its abundance. The red-
cockaded woodpecker is also listed as endangered under the Endangered
Species Act.
[21] Pub. L. No. 108-278, § 2, 118 Stat. 868 (2004).
[22] The Lakeview Sustained Yield Unit was established to promote the
stability of nearby communities through steady supplies of forest
products.
[23] The Pinchot Institute for Conservation, a nonprofit organization,
is a center for research and policy analysis supporting sustainable
management and conservation of forests.
[24] The National Forest Management Act of 1976, which extensively
amended the Forest and Rangeland Renewable Resources Planning Act of
1974, states that the Secretary of Agriculture is authorized to sell
timber--at not less than appraised value--located on National Forest
System lands for the purpose of achieving the policies set forth in the
Multiple-Use Sustained-Yield Act of 1960 and the Forest and Rangeland
Renewable Resources Planning Act of 1974.
[25] The Rocky Mountain Region covers Colorado, Kansas, Nebraska, South
Dakota, and most of Wyoming; the Intermountain Region covers Nevada,
Utah, most of Idaho, and part of Wyoming.
[26] FAR 19.502-2.
[27] The K-V trust fund, established by the Knutson-Vandenberg Act of
1930 (16 U.S.C. §§ 576-576b), was created to collect a portion of
timber sales revenue to pay for the reforestation of areas from which
timber is cut. The Washington Office annually takes a portion of each
field unit's K-V funds and other funds, such as salvage sale and brush
disposal funds, to help pay for headquarters and regional office
overhead expenses (e.g., rent and utilities).
[28] GAO, Natural Resource Management: Opportunities Exist to Enhance
Federal Participation in Collaborative Efforts to Reduce Conflicts and
Improve Natural Resource Conditions, GAO-08-262 (Washington, D.C.: Feb.
12, 2008).
[29] Pub. L. No. 106-393, 114 Stat. 1607 (2000). The act covers all
National Forest System lands as well as certain BLM lands in Oregon.
[30] For fiscal year 2007, the number of counties that opted to
continue to receive a portion of timber revenues was 139, or 17 percent
of the total. Another 679 counties (83 percent of the total) elected
the second option.
[31] Pub. L. No. 110-343, § 601 (2008). The reauthorization provided
for a new calculation methodology based on factors such as the acreage
of certain federally managed lands, previous payments, and per capita
personal income. Payments will decrease each year until they are phased
out completely by the end of fiscal year 2011.
[32] This association is an interest group that represents the counties
in western Oregon within which lie the revested Oregon and California
(O&C) Railroad Grant Lands. Counties receive 75 percent of receipts
from timber sales on O&C lands, as compared with the 25 percent that
other counties typically receive.
[33] GAO, Natural Resources: Federal Agencies Are Engaged in Various
Efforts to Promote the Utilization of Woody Biomass, but Significant
Obstacles to Its Use Remain, GAO-05-373 (Washington, D.C.: May 13,
2005); Natural Resources: Woody Biomass Users' Experiences Offer
Insights for Government Efforts Aimed at Promoting Its Use, GAO-06-336
(Washington, D.C.: Mar. 22, 2006).
[34] The cancellation ceiling applies only to long-term contracts known
as multiyear contracts, which represent an agency commitment over
several years; it does not apply to multiple-year "options" contracts,
which give the agency the option to renew or recompete the contract
after the first year. In general, according to Forest Service and
nonagency officials, contractors prefer multiyear contracts when
seeking assurance of a long-term supply. As of October 2008, the Forest
Service had awarded two long-term multiyear contracts and had
advertised a third; BLM had not awarded any long-term multiyear
contracts.
[35] The cancellation ceiling represents the maximum cancellation
payment the government will include in the contract.
[36] See Defense Federal Acquisition Regulation Supplement § 217.171.
[37] Established in 1910 by the Forest Service, the Forest Products
Laboratory provides grants for research on various aspects of wood use,
such as pulp and paper products, housing and structural uses of wood,
and wood preservation.
[38] Recently proposed legislation would, if enacted, allow the Forest
Service to use a newly authorized source to obligate funds covering a
portion of the cancellation ceiling. Senate Bill 2593 would authorize
the establishment of a fund--the Collaborative Forest Landscape
Restoration Fund--to be used to pay up to half the cost of carrying out
and monitoring ecological restoration treatments proposed on national
forest land; these costs include the obligation of funds to cover
cancellation costs associated with contracts carrying out such
treatments. As of October 2008, the proposed legislation had not been
enacted.
[39] GAO, Wildland Fire Management: Better Information and a Systematic
Process Could Improve Agencies' Approach to Allocating Fuel Reduction
Funds and Selecting Projects, GAO-07-1168 (Washington, D.C.: Sept. 28,
2007).
[40] GAO, Federal Timber Sales: Forest Service Could Improve Efficiency
of Field-Level Timber Sales Management by Maintaining More Detailed
Data, GAO-07-764 (Washington, D.C.: June 27, 2007).
[41] Results from nonprobability samples cannot be used to make
inferences about a population. This is because in a nonprobability
sample, some elements of the population being studied have no chance or
an unknown chance of being selected as part of the sample.
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