09-0008_CORP_APPENDIX B SCALED_FS-2400-13_Part_B(9-04).pdf

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B.0—CONTRACT AREA

B.1 Contract Area Map. The boundaries of “Contract Area” and any subdivision thereof, are as shown on the attached “Contract Area Map” that is made a part hereof, and were, before contract advertisement, designated on the ground by Forest Service to meet the anticipated needs of the parties. The location of Contract Area and its approxi-mate acreage are stated in A.1. Subdivisions may be revised and additional ones may be established only by written agreement. Subdivisions or cutting units and stewardship project areas may be eliminated from Contract Area under conditions described in G.3.6. Catastrophically Damaged areas may be removed from Contract Area under I.3.2.

Where applicable, the following are also identified on Contract Area Map:

(a) Identified claims limiting Contractor’s rights under B.2;

(b) Subdivisions defined in C.3 where timber is to be Marked after date of contract advertisement;

(c) Boundaries of Clearcutting Units, Overstory Removal Units, and Understory Removal Units under C.3;

(d) Diameter limits for Overstory Removal Units and Understory Removal Units under C.3.3 and C.3.4;

(e) Areas where leave trees are Marked to be left uncut under C.3.5;

(f) Specified Roads listed in A.7;

(g) Sources of base course, surface rock, and rock riprap listed in the Schedule of Items;

(h) Roads where log hauling or use is prohibited or restricted under F.1.2;

(i) Roads and trails to be kept open under G.2.2;

(j) Improvements to be protected under G.2.2;

(k) Locations of known wildlife or plant habitat and cave resources to be protected under G.2.4;

(l) Locations of areas known to be infested with specific invasive species of concern under G.3.5;

(m) Maximum stump heights when more than one height is listed by areas in A.6 under G.4.1.2;

(n) Skidding or yarding methods specified under G.4.2;

(o) Streamcourses to be protected under G.5;

(p) Locations of meadows requiring protection under G.6.1;

(q) Locations of wetlands requiring protection under G.6.2;

(r) Locations of temporary roads to be kept open under G.6.3.1; and

(s) Other features required by Parts A through K.

B.2 Claims. Valid claims are excluded from Contract Area, except those on which timber cutting is authorized in writing by the claimant and except mining claims on which cutting is authorized by the Act of July 23, 1955 (30 USC 614). Claims that limit Contractor’s rights to operate under this contract and that Forest Service has been able to iden-tify are shown on Contract Area Map. Contractor is not obligated to operate contrary to existing claim limitations. For-est Service shall designate boundaries of claims on the ground to the extent necessary to identify Included Timber.

C.0—TIMBER SPECIFICATIONS

C.1 Included Timber. “Included Timber” consists of:

C.1.1 Standard Timber. Live and dead trees and portions thereof that meet Utilization Standards under C.2 and are designated for cutting under C.3.

C.1.2 Substandard Timber. Live and dead trees that:

(a) Do not meet Utilization Standards and

(b) Are located in Clearcutting Units or construction clearings or are otherwise designated for cutting.

C.1.3 Damaged Timber.

C.1.3.1 Damaged by Contractor. Undesignated live trees meeting Utilization Standards:

(a) Within 200 feet slope distance from centerline of roads constructed hereunder that are damaged by Contrac-tor’s construction to the extent that considerable deterioration or mortality is imminent and are designated by Forest Service for felling before the nearest road segment is Substantially Completed or

(b) That are damaged by Contractor in logging or stewardship project operations and are subsequently Marked before Contractor has completed work in the immediate area.

By agreement, such trees may be left without charge if their removal would cause undue damage or be grossly uneconomic.

C.1.3.2 Negligent or Willful Damage. Undesignated timber meeting Utilization Standards and unneces-sarily damaged or negligently or willfully cut by Contractor, if included by Contracting Officer.

C.1.3.3 Damage by Catastrophe. As provided under I.3.2, undesignated live and dead timber within Contract Area, meeting Utilization Standards, and affected by Catastrophic Damage. “Catastrophic Damage” as used hereunder is major change or damage to Included Timber on Contract Area, to Contract Area, to access to Contract Area, or a combination thereof:

(a) Caused by forces, or a combination of forces, beyond control of Contractor, occurring within a 12-month pe-riod, including, but not limited to, wind, flood, earthquake, landslide, fire, forest pest epidemic, or other major natural phenomenon and

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(b) Affecting the value of any trees or products meeting Utilization Standards, within Contract Area and estimated to total either:

(i) More than half of the estimated timber volume stated in A.2 or

(ii) More than two hundred thousand cubic feet (2,000 CCF) or equivalent.

Catastrophic Damage does not include changes caused by forest pest epidemics or foreseeable deterioration if Included Timber was sold for salvage or pest control.

C.1.3.4 Minor Damage by Natural Causes. Undesignated trees within Contract Area and meeting Utili-zation Standards, in amounts less than specified in C.1.3.3, that become insect infested, windthrown, suffer serious damage, or die, as designated by agreement.

C.1.4 Unintentionally Cut Timber. Trees, within or immediately adjacent to Contract Area or to road con-struction or other authorized clearing outside Contract Area, not designated for cutting under C.3 but that are cut through mistake by Contractor, when included by Contracting Officer.

C.1.5 Construction Timber. Trees to be used for construction under F.1.

C.1.6 Other Material. Species or products not listed in A.2, upon written approval of Contracting Officer under D.4.1.

C.2 Utilization and Removal of Included Timber. “Utilization Standards” for trees and minimum pieces are stated in A.2. To meet minimum tree specifications, trees must equal or exceed tree diameters listed in A.2 and con-tain at least one minimum piece. Except for timber required or authorized to be left, Contractor shall fell and buck such trees and shall remove from Contract Area and present for Scaling all pieces that:

(a) Meet minimum piece standards in A.2 or

(b) Do not meet such standards, but would have qualified as part of minimum pieces if bucking lengths were var-ied to include such material.

C.3 Timber Designations. Timber designated for cutting shall be confined to Contract Area, except as provided in C.1.3.1, C.1.4, C.1.5, C.3.2, and F.1. Contract Area Map indicates subdivisions, if any, where Marking under C.3.5 is to be done after contract advertisement, except for construction clearing under C.3.2, minor changes under C.3.7, and damaged timber.

The boundaries of Clearcutting Units, Overstory Removal Units, and Understory Removal Units were plainly Marked on ground before contract advertisement and are shown on Contract Area Map. Boundary trees shall not be cut. The number of units and approximate acreage of timber designations are stated in A.3.

C.3.1 Clearcutting Units. All trees that meet Utilization Standards within “Clearcutting Units” are designated for cutting.

C.3.2 Construction Clearing. All timber is designated for cutting that is within the clearing limits of roads constructed hereunder or is in other authorized clearings. All dead or unstable live trees are designated for cutting that are sufficiently tall to reach Contractor’s landings, work areas, or the roadbed of Specified and Temporary Roads when Marked in advance of work in the immediate area. Pieces meeting Utilization Standards from such dead or un-stable live trees shall be removed, unless there is agreement that to do so could damage the road. Such designation may be revised as part of agreed changes in road location under F.2.

C.3.3 Overstory Removal Units. All trees within “Overstory Removal Units” are designated for cutting when they meet Utilization Standards and equal or exceed the diameter limits shown on Contract Area Map.

C.3.4 Understory Removal Units. All trees within “Understory Removal Units” are designated for cutting when they meet Utilization Standards and are smaller than the diameter limits shown on Contract Area Map.

C.3.5 Individual Trees. All trees to be cut, other than in the units described in C.3.1, C.3.2, C.3.3, and C.3.4, are Marked or designated by description. Trees are “Marked” when individually designated by Forest Service with paint marks above and below stump height.

Contract Area Map indicates areas plainly identified on the ground where leave trees are Marked to be left uncut.

C.3.6 Incompletely Marked Timber. Live trees within incompletely Marked subdivisions shown on Contract Area Map at time of contract advertisement shall be designated in accordance with K-C.3.6. A representative sample of the timber to be designated has been Marked prior to contract advertisement in accordance with such rules. The approximate locations of the representative sample areas are shown on Contract Area Map.

C.3.7 Minor Changes. Within Contract Area, minor adjustments may be made in boundaries of cutting units or in the timber individually Marked for cutting when acceptable to Contractor and Forest Service.

C.4 Volume Estimate. The estimated volumes of timber by species designated for cutting under C.3 and ex-pected to be cut under Utilization Standards are listed in A.2. If Contract Area Map indicates that there are incom-pletely Marked subdivisions, the objective of Forest Service shall be to designate for cutting in such subdivisions suffi-cient timber so that Contract Area shall yield the approximate estimated volume by species or species groups stated in A.2. However, the estimated volumes stated in A.2 are not to be construed as guarantees or limitations of the tim-ber volumes to be designated for cutting under the terms of this contract.

Volume adjustments shall not be made under this Section after there is modification for Catastrophic Damage under I.3.2.

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C.4.1 Adjustment for Volume Deficit. If Contract Area Map indicates that there are incompletely Marked subdivisions and if Contracting Officer determines that a deficit in the estimated volume will cause the volume cut to be less than 90 percent of the total estimate shown in A.2, Forest Service, upon request by Contractor, shall desig-nate additional timber within Contract Area. Such additional timber shall be limited to that estimated to be necessary to reach approximately the estimated volumes by species listed in A.2. Any such additional designation shall be con-sistent with land and resource management plans.

C.4.2 Adjustment for Excess Volume. If Contract Area Map indicates that there are incompletely Marked subdivisions and if Contracting Officer determines that the volume cut will be more than 120 percent of the total esti-mated volume listed in A.2, Forest Service, upon request by Contractor, shall make an adjustment in Marking or cut-ting unit boundaries with the objective of designating for cutting the approximate estimated volumes by species listed in A.2. Such adjustments in volumes shall be confined to (a) Marking adjustments on Contract Area and (b) reduction in area to be cut over. Such adjustments or reductions shall not conflict with the silvicultural treatment being applied on Contract Area and shall not materially change the average value by species of the timber designated for cutting.

Such adjustments may be made notwithstanding the provisions of B.1 and C.3.

If the timber designated for cutting is not reduced by such adjustments to less than 120 percent of the total esti-mated quantity listed in A.2, Contractor, after cutting 120 percent of the total estimated volume listed in A.2, may elect to have Contract Area reduced to eliminate the remaining Included Timber. However, where felling operations have been started, units of minimum practical size shall be retained in Contract Area.

D.0—RATES OF PAYMENT

D.1 Current Contract Rates. Included Timber that is removed by Contractor and presented for Scaling in the product form stated in A.2 shall be paid for at Current Contract Rates determined under this Section. “Current Con-tract Rates” shall be (a) Flat Rates and (b) Tentative Rates adjusted by the escalation procedures in D.2. Flat Rates and Tentative Rates shall be those listed in A.4, unless superseded by rates redetermined under D.3 or established for Contract Term Extension. In addition, Required Deposits shall be made as listed in A.4, K-F.3.2, and K-G.8.1.6, or established under D.3 or I.2.3.

In the event Termination Date is adjusted under I.2.1 or I.2.1.2, Current Contract Rates shall be continued in the same manner as immediately prior to the adjustment period.

Notwithstanding I.2.3, Current Contract Rates for timber cut and removed from Contract Area that remains un-scaled after Termination Date, as adjusted or extended, shall be Current Contract Rates in effect on Termination Date.

“Current Contract Value” is the sum of the products of Current Contract Rates and estimated remaining unscaled volumes by species of Included Timber meeting Utilization Standards, less the bid rate for mandatory stewardship projects that have not been completed.

D.2 Escalation Procedure. Tentative Rates for those species and products listed in A.4.1 are subject to quarterly escalation in accordance with the following procedures: The calendar quarter index average for each price index de-scribed in A.5 is the arithmetic average of the three such monthly price indices preceding January 1, April 1, July 1, and October 1. The difference between calendar quarter index average and Base Index listed in A.4.1 shall be the basis for quarterly escalation. To arrive at Current Contract Rates for timber Scaled during the preceding calendar quarter, Tentative Rates for each species shall be reduced or increased by such difference, except when the calendar quarter index average is:

(a) Less than the Base Index, the reduction shall not result in a rate below Base Rate or

(b) Greater than the Base Index, the increase shall not exceed the difference between Tentative Rate and Base Rate.

In the event of Contract Term Extension, the escalation procedure will be used during the extension period, ex-cept that adjusted payment rates for any calendar quarter cannot be less than Tentative Rates, for each species and product group, established under I.2.3 for the extension period.

D.2.1 Unavailable Index. If an index described in A.5 is no longer available, Contracting Officer may replace that index. If Contracting Officer determines that a replacement index does not exist, Current Contract Rates for the remainder of the contract shall be a Flat Rate. Flat Rates will be Tentative Rates adjusted by the arithmetic average of the index described in A.5 for a 12-month period prior to its becoming unavailable using the quarterly adjustment pro-cedure outlined in D.2. Contracting Officer will determine availability and a beginning point to average the index for Flat Rates. Such Flat Rates are subject to rate redetermination as provided elsewhere under this contract.

D.3 Rate Redetermination. Rates may be redetermined as set forth in this Section. Bid Premium Rates shall be added to all redetermined rates, except as provided in D.3.1, D.3.2, and D.3.3.

Rate redeterminations shall be made in accordance with the standard Forest Service methods in effect 45 days prior to rate redetermination. Such methods shall take into consideration factors that may affect timber value at rate redetermination date.

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Redetermined rates shall not be less than Base Rates listed in A.4, except for reduction under D.3.1, D.3.2, or D.3.3. Required Deposits shall be redetermined. Redetermined Specified Road construction cost is subject to the limi-tations of F.2.6.

D.3.1 Rate Redetermination for Environmental Modification. In the event of a contract modification under I.3.3 or partial termination under I.3.4, Contracting Officer shall make an appraisal to determine for each species the difference between the appraised unit value of Included Timber remaining immediately prior to the revision and the appraised unit value of Included Timber to be cut under the modification. The appraisal shall consider the estimated cost of any construction work listed in the Schedule of Items that was performed and abandoned.

Tentative Rates and Flat Rates in effect at the time of the revision will be adjusted by said differences to become Current Contract Rates. Accordingly, Base Rates shall be adjusted to correspond to the redetermined rates if rede-termined rates are less than the original Base Rates, subject to a new Base Rate limitation of the cost of essential reforestation or 25 cents per hundred cubic feet or equivalent, whichever is larger. However, existing Base Indices shall not be changed under this Subsection.

Redetermined rates, or differences for rates subject to D.2, and Required Deposits shall be considered estab-lished under D.1 for timber Scaled subsequent to the contract revision.

D.3.2 Rate Redetermination after Catastrophic Damage. In event of Catastrophic Damage and adjustment, if any, of Included Timber, Contracting Officer shall make an appraisal to determine for each species the catastrophe-caused difference between the appraised unit value of Included Timber remaining immediately prior to the catastro-phe and the appraised unit value of existing and potential Included Timber immediately after the catastrophe. Included Timber is any that would not be eliminated under I.3.2. Potential Included Timber is any that would be added under I.3.2.

Tentative Rates and Flat Rates in effect at the time of catastrophe shall be adjusted by said differences to be-come the redetermined rates for the purpose of a contract modification under I.3.2. Accordingly, Base Rates shall be adjusted to correspond to the redetermined rates if redetermined rates are less than the original Base Rates, subject to new Base Rate limitations of 25 cents per hundred cubic feet or equivalent. However, existing Base Indices shall not be changed under this Subsection.

Upon agreement under I.3.2, redetermined rates and Required Deposits shall be considered established under D.1 for timber Scaled subsequent to Catastrophic Damage.

At time of such appraisal, Specified Road construction cost shall include the estimated cost of any construction work listed in the Schedule of Items performed and abandoned.

D.3.3 Rate Redetermination for Market Change. In the event of delay or interruption, exceeding 90 days, under I.3.3, Contracting Officer shall make an appraisal to determine for each species the difference between the ap-praised unit value of Included Timber immediately prior to the delay or interruption and the appraised unit value of Included Timber immediately after the delay or interruption. The appraisal shall be done after any rate redetermination done pursuant to D.3.1, using remaining volumes.

Tentative Rates and Flat Rates in effect at the time of delay or interruption or established pursuant to D.3.1 will be reduced, if appraised rates declined during the delay or interruption, to become Current Contract Rates. Increases in rates will not be considered. Accordingly, Base Rates shall be adjusted to correspond to the redetermined rates if re-determined rates are less than the original Base Rates, subject to a new Base Rate limitation of the cost of essential reforestation or 25 cents per hundred cubic feet or equivalent, whichever is larger. However, existing Base Indices shall not be changed under this Subsection.

Redetermined rates shall be considered established under D.1 for timber Scaled subsequent to the delay or inter-ruption.

D.3.4 Emergency Rate Redetermination. Forest Service shall redetermine rates if, upon Contractor's appli-cation, Forest Service determies that, because of changes in the timber market since the award date or the last rate redetermination under this provision, the Producer Price Index identified in A.20 has declined by 25 percent. Rates shall be redetermined under D.3 and shall be considered established under D.1 for timber Scaled subsequent to Con-tractor’s application. This Subsection shall not apply during Contract Term Extension.

D.4 Other Payment Rates.

D.4.1 Material Not in A.2. Incidental amounts of products or portions of trees of species listed on A.2 that do not meet Utilization Standards may be removed without charge. Such material may be purposely removed in more than incidental amounts without charge upon written approval of Contracting Officer, and subject to agreement on deposits if needed for road maintenance and use.

Other species or products not listed in A.2 may be cut and removed upon written approval of Contracting Officer and subject to agreement on rates of payment and deposits if needed for road maintenance and use.

When any material suitable for use in a product form included in A.2 is removed in another product form, the rates of payment shall be not less than but approximately equivalent to Current Contract Rates and Required Deposits.

D.4.2 Timber Cut Through Mistake. Undesignated timber meeting Utilization Standards, cut by Contractor through mistake and included by Contracting Officer under C.1.4, shall be removed and paid for at Current Contract

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Rates and Required Deposits, unless such material is not listed in A.2. In such event, Contracting Officer, in accord with standard Forest Service methods, shall establish rates to be paid.

D.4.3 Designated Timber Cut But Not Removed. Standard timber shall be removed, as provided in C.2, prior to acceptance of subdivision for completion of logging and stewardship project operations under G.3.6. There shall be no charge when:

(a) The leaving of incidental material is justified under existing conditions, including those under G.4 or

(b) Cut timber is left by option or requirement, as under C.3.1, C.3.2, and G.4.

D.4.4 Undesignated Timber Damaged Without Negligence. Undesignated timber meeting Utilization Stan-dards, damaged without negligence by Contractor and designated by Forest Service under C.1.3.1, shall be cut, re-moved, and paid for at Current Contract Rates and Required Deposits.

D.4.5 Undesignated Timber Unnecessarily Damaged or Negligently or Willfully Cut. Undesignated tim-ber meeting Utilization Standards and unnecessarily damaged or negligently or willfully cut by Contractor, if included by Contracting Officer under C.1.3.2, shall be cut, removed, and paid for at Current Contract Rates and Required De-posits that are in addition to liquidated damages under D.4.6.

If such timber is of a species or size not listed in A.2 or is of a quality different from designated timber, Contracting Officer shall establish payment rates in accord with standard Forest Service methods.

D.4.6 Liquidated Damages. Unnecessary damage to or negligent or willful cutting of undesignated timber, as described in D.4.5, on portions of Contract Area cut over under this contract is likely to cause substantial silvicultural or other damage to the National Forest. It will be difficult, if not impossible, to determine the amount of such damage.

Therefore, Contractor shall pay as fixed, agreed, and liquidated damages an amount equivalent to the amount pay-able at Current Contract Rates. If designated by Contracting Officer, Contractor shall remove such damaged or cut timber and pay for it at Current Contract Rates.

D.4.7 Defect Caused by Abnormal Delay. Scaling deductions made for rot, check, or other defect resulting from abnormal delay in Scaling caused by Contractor shall be recorded separately and charged to Integrated Re-source Account at Current Contract Rates and applicable deposits.

E.0—PAYMENTS

E.1 Amount Payable for Timber. Current Contract Rates and Required Deposits in effect when the timber is Scaled shall be applied to the Scaled volume to determine the amount Contractor shall pay.

E.2 Integrated Resource Account. “Integrated Resource Account” is an account maintained by Forest Service of all Contractor’s deposits, credits, payment guarantees, and the charges for:

(a) Timber at Current Contract Rates;

(b) Slash disposal, road maintenance, and contract scaling at Required Deposit rates;

(c) Cooperative work at rates established by specific agreement under E.2.1.8;

(d) Stewardship Credits established; and

(e) Other charges provided in this contract.

Cash deposits shall be recorded currently in such account.

Charges for timber cut shall be made when Forest Service prepares and furnishes to Contractor periodic state-ments of volume and value of such timber cut and Scaled. Charges subject to escalation under D.2 shall be made initially on the basis stated in E.2.1.4 and shall be adjusted at the end of each calendar quarter, as provided in D.2.

E.2.1 Cash Deposits. Within the limitations of this Subsection, Contractor shall make cash deposits to meet Contractor’s obligations within 15 days of billing by Forest Service. Deposits shall be made to Forest Service, U.S.D.A., by mail or delivery to the address to be furnished by Forest Service. Forest Service shall explain the bill at the time it requests each deposit.

E.2.1.1 Downpayment. The downpayment amount shown in A.18 may not be applied toward any other payment required under the provisions of this contract, except damages determined pursuant to J.4, transferred to other contracts, or refunded until stumpage value representing 25 percent of the total bid value of the contract has been charged and paid for or the estimated value of the unscaled timber is equal to or less than the amount of the downpayment.

E.2.1.2 Advance Deposits. Contractor agrees to make cash deposits in advance of cutting to meet charges under E.2.

Forest Service billings for advance cash deposits shall be in such amounts that Integrated Resource Account will maintain an unobligated balance equal to the applicable charges for timber that Forest Service estimates will be cut in not less than 30 days and not more than 60 days. This advance cash deposit may be reduced to a smaller amount by the terms of E.2.1.1, E.2.1.3, E.2.1.5, and/or E.2.1.7. Except for amounts required pursuant to E.2.1.1, E.2.1.3, and E.2.1.7, Contractor shall not be required to make advance deposits above those required under this Item.

When the credit balance in Integrated Resource Account is less than the amount due for timber estimated to be cut in 10 days, Contracting Officer will suspend all or any part of Contractor’s Operations until payment or acceptable payment guarantee is received.

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E.2.1.3 Periodic Payment Schedule. Contractor shall make periodic payments for stumpage value, as shown in A.19.

In the event Contractor has not paid the amount(s) stated in A.19 as stumpage for volume removed by the peri-odic payment determination date(s), Forest Service shall issue a bill for collection for the difference between the re-quired amount and payments made by Contractor. If payment(s) fall due on a date other than a normal billing date, the payment date shall be extended to coincide with the next Integrated Resource Account billing date.

The amount of the periodic payment(s) will be reduced if the payment(s) would result in Contractor’s credit bal-ance for timber charges exceeding the Current Contract Value.

Only cash may be used for this purpose. No other form of payment is acceptable. Forest Service will apply the payments to subsequent charges on this contract under the terms of E.2.1.2.

Except for Contract Term Extensions under I.2.3, periodic payment determination date(s) that have not been reached shall be adjusted one day for each additional day of contract time granted.

E.2.1.4 Deposits for Charges Subject to Escalation. Deposits requested to cover estimated charges for timber subject to escalation under D.2 shall be based upon Current Contract Rates and related deposits in effect during previous calendar quarter.

E.2.1.5 Deposits When Payment Guaranteed. To the extent payment guarantee is provided under E.3, requirements for advance cash deposits under E.2.1.2 shall be waived for the value of timber on Contract Area that is cut, but not removed, and for the value of products removed from Contract Area for not more than a monthly billing period, subject to the provisions of E.4.

E.2.1.6 Blanket Cash Deposits. Contractor may make cash deposits under a written agreement to cover charges made under this and other contracts within the same National Forest. Forest Service shall allocate such de-posits to such contracts. When there is to be no timber cutting hereunder for 30 days or more and payment of current charges has been made, the allocation to this contract shall be reallocated to other contracts within the same National Forest at Contractor’s request. Contractor shall not start cutting until allocation has again been made to this contract.

E.2.1.7 Extension Deposits. In the event of Contract Term Extension, Forest Service shall divide the difference between Current Contract Value as of the start of any Contract Term Extension and the credit balance of any deposit made pursuant to E.2.1.3 by the number of whole months remaining in Normal Operating Season(s) within the extension period to determine the amount of each “Extension Deposit.”

Contractor shall make the initial Extension Deposit prior to Forest Service executing the contract modification. In response to Forest Service billing under E.2.1, Contractor shall make advance cash deposits. Such deposits shall at least equal each Extension Deposit required for each whole month remaining in Normal Operating Season(s) during the extension period. Extension Deposits shall be due by the last day of each month during Normal Operating Season whether or not the volume that is covered by such deposits has been Scaled.

Due dates for Extension Deposits during the extension period may be delayed when Contractor earns Contract Term Adjustment if Termination Date, as adjusted, results in one or more additional complete months within Normal Operating Season(s).

E.2.1.8 Cooperative Deposits. On a basis of cooperation or assistance (16 USC 572) and by a written agreement, Forest Service shall perform all or portions of the work that Contractor is obligated to perform under this contract, as well as furnish other Services in connection with activities under this contract. When Forest Service is to perform such work, Contractor shall make one or more deposits to cover the estimated cost of the work. On request of Contractor, Forest Service shall render monthly accounts, as may be specified in such agreement.

E.2.2 Stewardship Credits. “Stewardship Credits” are credits that are earned and established when work described in K-G.9 has been performed and accepted. Stewardship Credits shall be earned at the rate as shown in A.4.3. Earned Stewardship Credits may be used to pay for Included Timber value in excess of Base Rates and Re-quired Deposits. Base Rates and Required Deposits must be paid in cash.

E.2.2.1 Progress Estimates. Forest Service shall make timely estimates of Contractor’s progress on stewardship projects. On the basis of such progress estimates, Forest Service shall credit Integrated Resource Ac-count each month as such work proceeds.

E.2.2.2 Excess Stewardship Credits. In the event there are unused established Stewardship Credits when all of the Included Timber has been cut and removed, Forest Service, at its option, shall either add more timber or make cash payment for the unused Stewardship Credits.

E.2.2.3 Excess Timber Value. In the event the value of Included Timber exceeds the total value of all of the mandatory projects shown in A.4.3, plus the optional projects shown in A.4.3 that Contractor has been authorized to perform:

(a) Contracting Officer shall authorize additional optional projects shown in A.4.3 if the excess timber value ex-ceeds 10 percent of the total timber value, or

(b) Contracting Officer shall authorize additional optional projects shown in A.4.3 or require cash payment if the excess timber value is less than 10 percent of the total timber value, or

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(c) Contractor shall make cash payment for the excess timber value if there are no remaining optional projects shown in A.4.3.

E.2.2.4 Cash Payment for Stewardship Projects. In lieu of providing timber for established Stewardship Credits, Forest Service may elect to provide a cash payment to Contractor.

E.2.3 Temporary Reduction of Downpayment. When, under I.3.3, Contracting Officer requests Contractor to delay or interrupt Contractor’s Operations for more than 90 days, the downpayment amount being held on deposit may be temporarily reduced upon the written request of Contractor or at the discretion of Contracting Officer. For the period of the delay or interruption, the downpayment on deposit may be reduced to $1,000 or two (2) percent of the downpayment amount listed in A.18, whichever is larger.

Any downpayment amount temporarily reduced pursuant to this Subsection may be refunded or transferred at the request of Contractor. However, if Contractor has outstanding debt owing the United States, Contracting Officer must apply the amount of downpayment that could be refunded to the debt owed in accordance with the Debt Collection Improvement Act, as amended (31 USC 3701, et seq.).

Upon Contractor’s receipt of bill for collection and written notice from Contracting Officer that the basis for the de-lay or interruption no longer exists, Contractor shall restore the downpayment to the full amount shown in A.18 within 15 days after the date the bill for collection is issued, subject to the provisions of E.4. Contractor shall not resume con-tract operations until the downpayment amount is fully restored.

E.2.4 Refund of Excess Cash. If at any time the credit balance of Integrated Resource Account exceeds the charges for timber that Forest Service estimates will be cut within the next 60 days, any portion of such excess that is due to cash in the account shall be refunded, if requested by Contractor, unless deposited under E.2.1.1, E.2.1.3, or E.2.1.7. If Contractor plans no cutting within the next 60 days, Forest Service may refund the entire unencumbered cash balance, except as provided in this Subsection. After a refund for a shutdown, deposits shall be made to meet the requirements of E.2.1.2 before additional timber may be cut.

E.2.5 Refund after Scaling Completed. Any cash deposit, in excess of that required to meet charges under E.2, shall be refunded or transferred within 15 days of Contractor’s request after Scaling is completed, except for amounts estimated to be required under J.5.

E.3 Payment Guaranteed by Bond or Deposited Securities. To guarantee payment, Contractor may furnish and maintain an acceptable surety bond or deposit in a Federal Depository negotiable securities of the United States.

The securities shall be deposited through the Regional Fiscal Agent accompanied by a power of attorney and agree-ment authorizing the bond-approving officer to sell or collect such securities if payment is not made within 15 days of billing by Forest Service. The penal sum of such surety bond or the market value at time of deposit of such negotiable securities shall be the maximum amount of the payment guaranteed.

For payment purposes, penal sum of the surety bond or market value at time of deposit of negotiable securities shall be in lieu of the performance bond furnished under J.1.

E.3.1 Blanket Bond. If Contractor furnishes an acceptable bond, or deposits securities, in accordance with E.3, to guarantee payment for timber from this and other contracts within the same National Forest, the amount of such bond or deposited securities shall be allocated to such contracts by Forest Service. When there is to be no tim-ber cutting hereunder for 30 days or more and payment of current charges has been made, the allocation to this con-tract shall be reallocated to other contracts at Contractor’s request. Contractor shall not start cutting hereunder until this contract receives an allocation that will meet the obligation for payment guarantee.

E.3.2 Letters of Credit for Payment Bond. Notwithstanding the provisions of E.3, Contractor may use letters of credit in lieu of a surety bond for payment bond purposes when approved by Contracting Officer.

E.4 Payments Not Received. (a) Payments are due and payable on the date of issue indicated on the bill for col-lection. When a payment for timber cut and other charges is not received at the location designated by Forest Service by the date allowed in the bill for collection for receipt of payment, Contracting Officer will suspend all or any part of Contractor’s Operations until payment or acceptable payment guarantee is received. Other charges include, but are not limited to:

(i) Slash disposal, road maintenance, and contract scaling deposits;

(ii) Cooperative work at rates established by specific agreement under E.2.1.8;

(iii) Damages pursuant to J.4;

(iv) Road use fees;

(v) Restoration of downpayment pursuant to E.2.2;

(vi) Periodic payments pursuant to E.2.1.3;

(vii) Extension Deposits pursuant to E.2.1.7; and (viii)Other mandatory deposits.

(b) Failure to pay amounts due by the date allowed in the bill for collection for receipt of payment shall be consid-ered a breach under J.3. The 30-day notice period prescribed therein shall begin to run as of the end of business on the date allowed for receipt of payments. If the performance or payment is guaranteed by surety bond, the surety will

21 Contract 2400-13, (9/04) receive a copy of the written notification of breach. Demand will be made on the surety or other institution providing the guarantee or bond instrument for immediate payment 10 days after issuance of written notification of the breach.

(c) Pursuant to the Debt Collection Improvement Act of 1996, as amended, if payment is not received by Forest Service within 15 days after the date of issue indicated on the bill for collection:

(i) Simple interest shall be assessed at the higher of the Current Value of Funds Rate or the Prompt Pay-ment Rate as established by the Secretary of the Treasury. Interest will begin to accrue as of the date of issue in-dicated on the initial bill for collection.

(ii) Debtors will be assessed administrative charges, in addition to the delinquent amount due. Administrative charges are those additional costs incurred by the Government in processing, handling, and collecting delinquent debts.

(iii) A penalty charge of six (6) percent per annum will be assessed on any portion of a debt delinquent more than 90 days. This penalty charge is in addition to interest and administrative charges under paragraphs (c)(i) and (c)(ii). The penalty charge shall accrue from the date of issue indicated on the bill for collection and shall be as-sessed on all outstanding amounts, including interest and administrative costs assessed under paragraphs (c)(i) and (c)(ii).

(iv) Payments will be credited on the date received by the Federal Depository or Collection Officer designated on the bill for collection.

(d) Forest Service remedies for Contractor’s failure to make payment for timber cut and other charges when due, except for accrual of interest, suspension of all or any part of Contractor’s Operations, and administrative offset, shall be stayed for so long as:

(i) A bona fide dispute exists as to Contractor’s obligation to make such payment and

(ii) Contractor files and prosecutes a timely Claim.

F.0—TRANSPORTATION FACILITIES

F.1 Authorization. Contractor is authorized to construct and maintain roads, bridges, and other transportation facilities, as needed for harvesting Included Timber and completing stewardship projects on National Forest and other lands where Forest Service has such authority. As used in this contract “construct” includes “reconstruct.”

Location and construction of Specified Roads shall be in accordance with F.2. Unless otherwise provided herein, construction may be progressive during this contract. Maintenance shall be governed by F.3. The location and clear-ing widths of all Temporary Roads or facilities shall be agreed to in writing before construction is started. “Temporary Roads” are roads other than Specified Roads that are constructed by Contractor for the purpose of harvesting In-cluded Timber or completing stewardship projects.

Contractor is authorized to cut and use for construction without charge construction timber designated by agree-ment.

F.1.1 Requirements of Rights-of-Way. Contractor’s road construction and use of rights-of-way identified in attached list or K-F.1.1 shall be confined to rights-of-way and limited by the related easements and stipulations, if any, unless Contractor makes other arrangements that will not infringe upon or adversely affect the grantee’s rights.

Easements or right-of-way documents are available in the offices of the Forest Supervisor and District Ranger.

F.1.2 Use of Roads by Contractor. Except as provided herein, Contractor is authorized to use existing Na-tional Forest system roads and Specified Roads listed in A.7, when Forest Service determines that such use will not cause damage to the roads or National Forest resources.

If Contractor’s use of an existing temporary or National Forest system road, not listed in A.7, cannot be satisfacto-rily accommodated without reconstruction, Contractor shall be authorized to use such road upon agreement as to the minimum reconstruction work that Contractor shall perform before hauling. When appropriate, such road shall be in-cluded in A.7 as an alternate facility under F.2.6.

K-F.1.2 lists existing roads shown on Contract Area Map that for such reasons as limitations in structural capacity, safety, and protection of soil, water, and roads:

(a) Cannot be used for log hauling or

(b) May be used only under the restrictive limitations stated therein.

F.2 Specified Roads. “Specified Roads” are roads, including related transportation facilities and appurtenances, shown on Contract Area Map and listed in A.7. Contractor shall construct Specified Roads used under this contract.

Construction initiated by Contractor on any such Specified Road shall be completed to an agreed terminus that meets Contractor’s needs and prevents unnecessary impact on National Forest resources. Construction to such terminus shall be in full accordance with Plans and specifications identified in A.7 or specifications and the Schedule of Items attached hereto, except for agreed adjustments needed to accommodate such terminus. For each pay unit, the "Schedule of Items" itemizes quantity of work and materials and cost, with method of measurement and basis for payment. Forest Service shall revise the Schedule of Items to show the estimated cost for the portion constructed to the revised terminus as a separate segment.

22 Contract 2400-13, (9/04)

A Temporary Road shall not be constructed substantially on the location for a Specified Road, except by agree-ment.

In event of agreed substitution or revision of construction design, specifications, or performance responsibility un-der F.2.1.2, F.2.5, F.2.6, or K-F.2.1.5, A.7 shall be modified. If Contractor does not need a Specified Road or a portion of a Specified Road for harvesting Included Timber or completing stewardship projects and the Specified Road is not constructed, the deletion of the road or road segment will be a mutually agreed Design Change and Integrated Re-source Account will be adjusted for the reduction in cost, as provided in F.2.5.

References in the contract to specifications, standards, or test methods adopted by the American Association of State Highway and Transportation Officials (AASHTO), American Society for Testing and Materials (ASTM), General Services Administration (GSA), or other recognized national technical associations shall mean specifications, stan-dards, or test methods, including interim or tentative issues, that are in effect on the date of contract advertisement.

F.2.1 Engineering. Forest Service completed survey and design for Specified Roads prior to contract adver-tisement, unless otherwise shown in A.8 or Contractor survey and design are specified in A.7. On those roads for which Forest Service completes the design during the contract, the design quantities shall be used as the basis for revising estimated costs stated in the Schedule of Items and adjusting Integrated Resource Account.

Forest Service engineering shall be completed according to the schedule in A.8. Should Forest Service be unable to perform the designated survey and design by the completion date or other agreed to time, upon written agreement, Contractor shall assume responsibility for such work. In such event, Contracting Officer shall revise:

(a) A.7 to show Contractor’s performance responsibility.

(b) The Schedule of Items to include costs of survey and design, as provided under F.2.4, and adjust Integrated Resource Account, as provided in F.2.5. Forest Service shall calculate such costs, using unit rates comparable with those used in the Schedule of Items.

Contractor shall furnish a schedule to Forest Service of specific dates for the start of construction. The schedule of construction shall be submitted to Forest Service for approval within 60 days after contract award and prior to be-ginning work. Contractor’s construction schedule shall reflect Forest Service survey and design completion dates.

Forest Service may agree to Contractor’s request for an alternate date for starting construction.

Contractor shall perform survey, design, and construction staking of Specified Roads to be engineered by Con-tractor in accordance with specifications attached hereto. Based upon the quantities developed by such design, as approved by Forest Service, Contracting Officer shall revise the estimated costs stated in the Schedule of Items and adjust Integrated Resource Account. The methods of computing such revised costs shall be consistent with the meth-ods that would have been used had the engineering been performed prior to contract advertisement.

F.2.1.1 Contract Plans. “Plans” are documents that show location, details, and dimensions of the work to be performed. On any of the contract Plans where a portion of the work is drawn out and the remainder is shown in outline, the parts drawn out shall apply to all other like portions of the work.

“Shop Drawings” include drawings, diagrams, layouts, schematics, descriptive literature, illustrations, lists or ta-bles, performance and test data, and similar materials furnished by Contractor to explain in detail specific portions of the work required by the contract. Contractor shall submit a minimum of five (5) sets of required Shop Drawings to Forest Service, three (3) sets of which will be retained by Forest Service. Shop Drawings shall not exceed 24 inches by 36 inches in size. Approval or rejection and date will be noted or stamped on each set. Unless agreed otherwise, Forest Service shall approve or reject the Shop Drawings within 10 days of submission. Such approval of the Shop Drawings shall not be construed as a complete check, but will indicate only that the general method of construction and detailing is satisfactory. If the Shop Drawings are rejected, Contractor must make the noted revisions and resub-mit the Shop Drawings.

A change in the amount of construction work that exceeds construction tolerances specified in the specifications identified in A.7 caused by a Forest Service error in construction staking shall be treated as a Design Change. When incompatible situations arise between Plans, specifications, and actual conditions on the ground, Contractor shall make corrections pursuant to F.2.5.3.

F.2.1.2 Construction Staking. Contractor shall avoid careless or negligent damage to construction stakes, flags, or marks. If such damage occurs, Contractor shall be required to replace stakes necessary to construc-tion. Contractor’s replacement staking shall be approved by Forest Service. Alternatively, upon Contractor’s request, Contracting Officer may agree to perform such work under E.2.1.8.

When A.7 shows that construction stakes are to be set by Forest Service after clearing, Contractor shall submit to Forest Service a written schedule for clearing, construction staking, and construction that will provide Forest Service a reasonable period for setting construction stakes. Time for setting construction stakes may be modified by written agreement.

If Forest Service performs construction staking for Specified Roads, timing of such staking shall permit Contrac-tor’s clearing and other construction activity to proceed without hindrance or delay, provided Contractor’s construction activity is reasonably consistent with needs identified in Contractor’s Operating Schedule or amendments thereto.

23 Contract 2400-13, (9/04)

Should Forest Service be unable to perform construction staking in such reasonable period, upon written agree-ment, Contractor shall assume the responsibility for construction staking for agreed upon portions of Specified Roads.

In such event, Contracting Officer shall revise:

(a) A.7 to show Contractor’s performance responsibility.

(b) The Schedule of Items to include costs of construction staking, as provided under F.2.4, and adjust Integrated Resource Account, as provided in F.2.5. Forest Service shall calculate such costs, using unit rates comparable with those used in the Schedule of Items.

F.2.2 Material Delivery. Within 60 days after award date, Contractor shall provide Forest Service a written schedule showing the desired delivery dates of any material to be supplied by Forest Service. With reasonable notice, schedule may be amended by agreement.