Timber Management: Forest Service Has Considerable Liability for Suspended or Canceled Timber Sales Contracts

Correspondence issued by the General Accounting Office with an abstract that begins "The Forest Service canceled or suspended several timber sales contracts to protect endangered or threatened species. From October 1992 through June 1996, the Forest Service paid $6.5 million to settle claims on 48 canceled or suspended contracts. Currently, there are pending claims of about $51 million for canceled or suspended contracts. To minimize its financial liability in the future, the Forest Service is developing cancellation regulations and a new standard timber sales contract. Progress in finalizing these new regulations has been slow because of the Forest Service's need to conduct a more detailed economic analysis. The proposed rules have also undergone several changes since the Forest Service began working on them in the late 1980s to settle some of the timber companies' claims. The Forest Service has sometimes used replacement timber; however, the timber replacement program has had limited success because the timber was either unavailable within the sale area or was in such poor condition that many companies would not accept it.