Timber Management: Forest Service Has Considerable Liability for Suspended or Canceled Timber Sales Contracts Page: 3 of 7
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reasons, including the need to protect threatened or endangered species and their
Each timber sales contract contains provisions describing the liability that the Forest
Service will incur if it cancels a sale or cannot successfully negotiate a contract
modification with the purchaser following a suspension. The contract limits the
Forest Service's liability to out-of-pocket expenses incurred as a direct result of a
suspension. If the Forest Service cancels a contract to (1) be consistent with a forest
plan; (2) comply with a court order; or (3) respond to a determination that continued
timber harvesting would seriously degrade the environment; cause resource or
cultural damage, and/or jeopardize sensitive, threatened, or endangered species,
contract provisions provide that the purchaser is entitled to out-of-pocket expenses
and to reasonable compensation for the cost of acquiring comparable timber to
replace that lo st through the cancellation.
Since the early 1990s, the Forest Service has suspended or canceled timber sales
contracts for a number of reasons. In the early 1990s, various groups brought legal
actions to suspend or cancel timber sales contracts. For example, in May 1991, the
U.S. District Court for the Western District of Washington (State) ordered the Forest
Service to stop selling timber in much of the area inhabited by the Northern spotted
owl until the agency had prepared a management plan and environmental impact
statement for the species.2 The court found that the Forest Service had failed to
produce plans that satisfied the requirements of such laws as the National Forest
Management Act of 1976, the Endangered Species Act of 1973, or the National
Environmental Policy Act of 1969.
Considerable Liability for Suspended or Canceled Timber Sales Contracts
As of October 31, 2000, information from the Forest Service shows, pending claims of
about $51 million for timber sales contracts that were suspended or canceled to
protect threatened or endangered species. This does not include future claims that
could arise from purchasers as a result of favorable rulings on other claims on similar
issues. Since all estimates of future liability are inherently speculative, the outcome
of ongoing and future litigation is unpredictable and could result in the award of less
damages than the timber sale purchaser's claim. For example, the Forest Service
paid one purchaser $15,000 for a $6.2 million claim and paid another purchaser $2,544
for a $71,692 claim. According to Forest Service officials, the large difference can be
attributable to various reasons, including disagreements over the value of
replacement timber that the Forest Service offered to settle the claims. On the other
hand, the Forest Service has sometimes paid purchasers the total amount of the
damages claimed after the contracting officer validates the claim.
In total, since June 1996, the Forest Service, Department of Justice, USDA's Board of
Contract Appeals, and/or Court of Federal Claims have settled 80 claims totaling over
$27 million on timber sales contracts suspended or canceled to protect threatened or
endangered species. Although forest funds have been used to settle some of these
2Seattle Audubon Society v. Evans, 771 F.Supp. 1081 (W. D. Wash. 1991), affd, 952 F.2d 297 (9th Cir.
GAO-01-184R Timber Sale Liability
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United States. General Accounting Office. Timber Management: Forest Service Has Considerable Liability for Suspended or Canceled Timber Sales Contracts, text, November 29, 2000; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc301887/m1/3/: accessed November 12, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.