USFS Contracting 101: Types, Scale, and the Rise of Service Contracts in California
We’re excited to share our Overview of USFS Contracting. This post intends to provide an overview of contracting options with the United States Forest Service (USFS), with a specific focus on California, Region 5. To connect with Kodama, you can contact us here.
Forests are complex ecosystems that impact our ecological, societal and economic livelihoods. When carefully managed, forests provide a myriad of benefits from commercial timber products and carbon storage to wildlife biodiversity and clean water. It is essential for land owners to execute on management objectives to ensure our resources are sustained for the long-term.
Public agencies that manage forests have special contracting pipelines with service providers of all specialties like ecological thinning, geographic information system mapping, wildlife re-stocking, harvesting commercial timber, and more.
In our last blog post, we highlighted the momentum behind the forest tech landscape. But how do these new players fit into the USFS contracting world and successfully integrate into existing forestry and wildfire mitigation activities?
USFS Forestry Contracting Types
The USFS divides management of its land into seven broad categories. Keep in mind that each of the following agreement and award types might also involve subcontracting or partnership agreements between various contractors.
Service Contracts: A service contract is designated for a non-commercial activity, where the cost of the service is greater than the commercial output. Service contracts include thinning, fuels reduction, trail maintenance, habitat improvement, and prescribed burns. These services don’t produce significant amounts of commercial wood products, and thus are a cost to the USFS. When service work is needed, the USFS will release a request for bids. Contractors will bid on the work and the best-value bid will be awarded the contract.
Timber Sale: Timber harvesting and sales are often integrated into larger fuels reduction plans. The timber sale contracting mechanism is used when a portion of forest contains high-value timber that can be used for commercial wood products. Via a bid process, the USFS will award the sale to the highest bidder who meets all the terms and requirements of the sale. The harvester is purchasing the timber (or the right to the timber) from the USFS. This means the harvester supplies payment to the USFS either in the form of a lump sum or a down payment plus periodic payments. Here is an example of a USFS timber contract. After the harvester sells the commercial timber in the markets, the harvester submits the receipts of sale to the US Treasury for reporting, and any excess funds are required to be returned to the US Treasury. The timber sale mechanism is used when the value of the timber is greater than the cost to harvest. However, often times these sales still generate less revenue than the cost to administer.
Stewardship Agreements: Stewardship agreements take a holistic ecosystem approach to forest management by combining both forest product removal and service work items. They exemplify a long-term commitment to the health and vitality of forests and usually cover a larger land area (10,000+ acres). In a stewardship agreement, the USFS often awards the contracted entity the power to evaluate the best services needed for the area. Awardees are often larger organizations such as environmental non-profits that assess the forest and decide how to subcontract the activities. A great example of a stewardship project is the 14,545 acre Yuba project managed by National Forest Foundation (NFF).
Stewardship Contracts: Similar to Stewardship Agreements, Stewardship Contracts are long term (up to 10 year) forest management agreements with both forest product removal and service work items. A Stewardship Contract is usually a smaller project and requires involvement from the USFS. These contracts are put out to bid for a best-value bidding process by either the USFS or the owner of a Master Stewardship Agreement.
Integrated Resource Service Contracts (IRSC): IRSCs are used when the cost of the services exceeds the value of the timber. This is similar to a service contract.
Integrated Resource Timber Contracts (IRTC): IRTCs are used when value of the timber will exceed the cost of the services. This is similar to a timber contract.
Good Neighbor Authority (GNA) Agreements: GNA agreements allow specific local entities such as tribes or conservation agencies to perform restoration-oriented work on USFS land and to retain the revenues from commercial activities (i.e. timber sales). These revenues are used to fund the work of non-commercial activities (thinning, restoration, monitoring, etc.). GNA agreements can last up to 10 years.
Indefinite Delivery / Indefinite Quantity (IDIQ): An IDIQ is a flexible contract that allows the USFS to order an indefinite amount of goods or services over a specified period of time. The quantity and scope of the work is not fully defined at the time the contract is awarded. An example award is the Region One/Region Four Mechanical Thinning IDIQ .
Blanket Purchase Agreements (BPA): A BPA allows the USFS to establish a simplified method for purchasing goods and services on an as-needed basis from pre-approved suppliers. BPAs are often used for repetitive, low-dollar value purchases that occur frequently over a specific period of time.
Here is a recap to help show the similarities and differences:
Types of Bidders on Forestry Contracts
Forest Contractors and Businesses: Companies and contractors with expertise in forestry, logging, land management, and related fields primarily bid on and execute timber and service contracts. In order to submit a bid and harvest timber, contractors will work with the USFS to hire a registered professional forester (RPF) to prepare the permit. Depending on the state, contractors need special permits. In California, contractors performing the harvesting must be a licensed timber operator (LTO). There are contractors of all specialties and sizes. Some operate multi-crew and/or multi-state operations while others focus their operations to a single region with local connections.
Environmental Non-Profits: Organizations like the National Forest Foundation, Mule Deer Foundation, Stewardship West, Great Basin Institute, and National Wild Turkey Federation work alongside the USFS to champion conservation efforts and community engagement. These groups are often involved in the stewardship agreements.
Scale of USFS Contracting and the Rise of Service Contracts in California
Due to the wildfire crisis across the American west, the scale and types of USFS contracting is evolving. Historically, the volume of timber contracts have outweighed the number of service contracts. For example, the pie chart below highlights the distribution of agreements from 2014-2019 in USFS Region 5 (the California region), which shows a historic favor toward the number of timber sale contracts.
However, due to the threat of megafires, the USFS is pursuing a 10-year Wildfire Crisis Strategy Implementation Plan to reduce wildfire risk to people, communities, and natural resources while sustaining and restoring healthy, resilient fire-adapted forests. Together with funding from the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA), Congress has appropriated $1.4 billion and $1.8 billion, respectively, for wildfire crisis strategy implementation. You can view progress on this implementation using the National Wildfire Crisis Strategy Investments Dashboard.
What does treating 1M acres per year look like?
It's the equivalent acreage of Marin County, San Francisco County, San Mateo Country, and Santa Cruz County every year, or the equivalent of San Francisco's land area every week!
In addition to the national work, the state of California has been working towards its joint commitment with the USFS to treat 1 million acres of fire-prone forests annually by 2025, with an associated MOU that commits the state of CA and the USDA Forest Service to each sustainably treating 500,000 acres annually. In this plan, forest treatment includes forest thinning for ecosystem health, hazardous fuels reduction around communities and other services that reduce the dry, small-diameter understory. You can view annual progress on this initiative on the CA Wildfire & Forest Interagency Treatment Dashboard. The graph below is a visual depiction of the accomplished treatments on federal land and the USDA Forest Service’s commitment target of 500,000 annual treated acres (half of the 1M commitment). It is anticipated that these acre commitments will be implemented through service contracts and stewardship agreements.
Looking Ahead
Federal lands and USFS contracting are a vital component to managing our nation's forests for wildfire mitigation, sustainable timber products and overall ecosystem resilience. State and federal forest treatment commitments, backed by substantial funding from the Bipartisan Infrastructure Law and the Inflation Reduction Act, signal a renewed commitment to land management that will not only restore forests but protect the ecosystems and the communities among them. We anticipate the rise in service and stewardship contracts to meet these management and treatment goals.
Technology integration is a key driver to shaping the future of efficient, productive forest management at scale. Private and public partnerships can learn from each other while innovating to accomplish forest management goals faster, and ensuring new players are educated on how to contract with the USFS is a necessary starting point.
Looking for USFS projects? Find them on SAM.gov
Want to speak with Kodama? Contact us here
References used:
“Forest Service Contracting: A Basic Guide for Restoration Practitioners” Ecological Restoration Institute at Northern Arizona University, the Ecosystem Workforce Program at University of Oregon, the Flathead Economic Policy Center, and Sustainable Northwest. 2006. https://www.fs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb5190646.pdfJackson, David and James Finley Ph.D. “Timber Sales: A Guide to Selling Timber.” PennState Extension. March 26, 2021. https://extension.psu.edu/timber-sales-a-guide-to-selling-timber"Confronting the Wildfire Crisis: A 10-Year Implementation Plan.” USDA Forest Service Department of Agriculture. January 2022. < https://www.fs.usda.gov/sites/default/files/Wildfire-Crisis-Implementation-Plan.pdf>Blumenfeld, Jared, Wade Crowfoot, Stacy Corless et al. “California’s Strategic Plan for Expanding the Use of Beneficial Fire.” California Wildfire & Forest Resilience Task Force. March 2022. < https://wildfiretaskforce.org/wp-content/uploads/2022/05/californias-strategic-plan-for-expanding-the-use-of-beneficial-fire.pdf“Governor’s Task Force Launches Strategic Plan to Ramp Up Wildfire Mitigation with Prescribed Fire Efforts.” Office of Governor Gavin Newsom. March 30, 2022. https://www.gov.ca.gov/2022/03/30/governors-task-force-launches-strategic-plan-to-ramp-up-wildfire-mitigation-with-prescribed-fire-efforts/Frisch, Steve and Sam Uden. “How forest thinning waste could fund California wildfire prevention.” Cal Matters. November 30, 2022. https://calmatters.org/commentary/2022/11/wildfire-prevention-biomass-climate-forestCabiyo, Bodie, Jeremy S. Fried, Brandon M. Collins et al. “Innovative wood use can enable carbon-beneficial forest management in California.” US Department of Agriculture Forest Service, UC Berkeley and Yale University. November 21, 2021. https://www.pnas.org/doi/10.1073/pnas.2019073118