Capturing the Benefits of Restoration: Local Business Utilization and Opportunities for Growth in Northwestern Montana

Restoration and maintenance of forests and watersheds is increasingly a focus of management on public lands and, in addition to traditional forest management activities, has the potential to contribute to the economic vitality of local, forest-dependent communities. However, research has shown that the extent to which local communities benefit from restoration and management activities is highly variable. This study seeks to understand whether local communities in northwestern Montana are capturing the benefits of these activities on public lands by analyzing federal contracting trends. Specifically, this study 1) characterizes the value and type of federal contracts along with the spatial distribution of businesses engaged in restoration and management activities in northwestern Montana; 2) identifies the determinants of local business utilization; and 3) analyzes the use of subcontractors and the impacts this has on the distribution of benefits. The results of this study suggest that factors including Small Business Administration set-asides can negatively affect local business utilization, while certain types of work, such as heavy equipment work, and the location of work can have a positive effect on local business utilization. Businesses awarded contracts by the Forest Service were found to be distributed across 28 states and two countries. However, subcontractors were found to be predominantly located in Montana, suggesting that the analysis of only prime contracts may obscure impacts to rural, forest-dependent communities in the study area. Opportunities to increase the share of benefits captured by forest-dependent communities could include education and training on Small Business Administration set-aside programs to improve participation, targeted outreach to tribal- and other minority-owned businesses, and restructuring of contract opportunities