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GAO-01-184R 1 (2000-11-29)

handle is hein.gao/gaobaalni0001 and id is 1 raw text is: I Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 November 29, 2000 The Honorable Larry E. Craig Chairman, Subcommittee on Forests and Public Lands Management Committee on Energy and Natural Resources United States Senate Subject: Timber Management: Forest Service Has Considerable Liability for Suspended or Canceled Timber Sales Contracts Dear Mr. Chairman: This letter responds to your request for information concerning the contractual liability of the U.S. Department of Agriculture's (USDA) Forest Service under timber sales contracts that it suspended or canceled to protect threatened or endangered species. From October 1992 through June 1996, the Forest Service paid $6.5 million to settle claims on 48 suspended or canceled timber sales contracts. In 1996, we reported that timber purchasers had filed 73 pending claims, totaling about $61 million, against the Forest Service for suspended or canceled contracts.' We also estimated that timber companies could file claims for at least an additional $198 million, depending on the outcome of numerous court cases. At that time, we recommended that the Forest Service finalize new regulations for canceling timber sales contracts and a new standard timber sales contract that it had been developing since the late 1980s. The regulations and contract would have limited the government's liability on canceled or suspended timber sales contracts and redistributed the risk between the government and the purchaser. This report addresses the Forest Service's (1) current potential liability for timber sales contracts that it suspended or canceled to protect threatened or endangered species, (2) progress in finalizing its timber sales cancellation regulations and standard timber sales contract, and (3) efforts to substitute timber (replacement timber) in lieu of paying to settle suspended or canceled timber sales contracts. In summary, we found the following: 'See Timber Management. Opportunities to Limit Future Liability for Suspended or Canceled Timber Sales Contracts (GAO/RCED-97-14, Oct. 31, 1996). In that report, as well as in this one, we limited our work to reviewing environmental claims related to protecting threatened or endangered species. Other claims can arise when conditions, such as natural resource damage, cause contracts to be modified, suspended, or canceled. These claims were outside the scope of our work. GAO-01-184R Timber Sale Liability

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