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FOREST SERVICE HANDBOOK
PORTLAND, OREGON
TITLE 2409.15 - TIMBER SALE ADMINISTRATION HANDBOOK
R-6 Supplement No. 2409.15-92-10
Effective September 4, 1992
POSTING NOTICE. Supplements to this handbook are numbered consecutively.
Check the last transmittal sheet received for this handbook to see that the above
supplement number is in sequence. If not, obtain intervening supplement(s) at once
from the Information Center. Do not post this supplement until the missing one(s)
is received and posted. After posting, place the transmittal at the front of the title
and retain until the first transmittal of the next calendar year is received. The last
R-6 Supplement to this handbook was 2409.15-92-9 (2409.15,33-34).
Document Name
Superseded New
(Number of Sheets)
40.3-42.22
4
42.3-43.2
4
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6
Digest:
This is a Technical Supplement to change Chapter 40 to official electronic format.
CONTENT HAS NOT CHANGED.
JOHN E. LOWE
Regional Forester
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FSH 2409.15 - TIMBER SALE ADMINISTRATION HANDBOOK
R-6 SUPPLEMENT 2409.15-92-10
EFFECTIVE 9/4/92
CHAPTER 40 - PAYMENTS
40.4 - Responsibility.
40.41 - Regional Forester. The staff responsible for fiscal and accounting-related
activities of the Regional Office is responsible for the overall Regional
administration of the Automated Timber Sale Accounting (ATSA) system,
development of methods and procedures for use of the system, and training of
Supervisor's Office personnel.
The Regional Timber Sale Accounting (TSA) Coordinator is delegated this
responsibility and maintains liaison with Timber Management Staff, Management
Systems staff, and other units.
40.42 - Forest Supervisor. Organization structures may require work items to be
done at the Forest level and others at the District level. The Forest Service
Representative (FSR) has the responsibility to assure work is accomplished.
42 - PAYMENT PROCEDURES FOR LOG SCALE AND TREE MEASUREMENT
SALES (Form FS-2400-6 and Form FS-2400-6T, 1970 and 1973 Editions).
42.1 - Amounts Payable for Timber (B/BT4.1). Where road construction is opted,
billing for right-of-way timber shall be included in the award letter with payment
required within the 30 days allowed for returning the signed contract and
performance bond. If the value of the right-of-way timber is covered by acceptable
bond, the billing will be reduced by that amount. No extension of time shall be
permitted for making the required payment.
42.2 - Timber Sale Account (B/BT4.2).
42.21 - Purchaser Credit (B/BT4.21). Purchaser Credit earned on O&C lands may
not be transferred to proclaimed National Forest lands or vice versa.
No effective purchaser credit may be transferred into a sale once the termination
date is past. However, if a period of permission has been granted under B8.2 to
complete contractual obligations, authority exists to allow transfer in of effective
purchaser credit.
The national TSA system shall bill the purchaser automatically for the ineffective
purchaser credit on sales that are inactive. This billing should not be sent until
operations resume, or 2 months prior to the termination date, whichever occurs
first. Ineffective purchaser credit is a deficit in the statement of accounts. This
deficit shall be replaced by cash, or covered by payment guarantee, before
operations resume.
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42.21a - Cash Deposits (B/B4.22).
42.21b - Advance Deposits (B/BT4.221 and C/CT4.221). For cash sales, the
minimum acceptable advanced deposits at the beginning of the monthly billing
period is 40 calender days projected cutting, consisting of 30 calender days and a 10
calender day cut value. As the month progresses, the estimated balance in the
account shall not be less than the 10 calender day cut value. The maximum amount
of advanced deposits that can be required is 60 calender days of projected cutting.
For sales covered with payment guarantee, the minimum acceptable coverage
includes the previous month's billing, as well as 30 calender days projected cutting,
and a 10 calender day cut value. As the month progresses, the unencumbered
coverage shall not be less than the 10 calender day cut value. The maximum
coverage that can be required includes the previous months billing and 60 calender
days of projected cutting.
Billings for advance cash deposits should be issued for any timber value or charges
due but not covered by payment bonds, purchaser credit, negotiable securities on
deposit, letter of credit, or unobligated cash on hand. The due date of such billings
shall be 15 calendar days after billing date, but the minimum acceptable advance
deposits are required before cutting is started or continues.
Sale administrators shall monitor the value of the timber being removed through
the month to assure that, at no time, the balance of cash or unencumbered payment
guarantee is below the value of the 10 calendar day cut value. Form R6-2430-38
may be used for this and computer programs are available to track volumes and
value removed. Documentation of this process is required.
In those cases of small sales where the entire volume will be removed in a monthly
billing period or less, the value of 10 calendar days normal cut of timber shall be
estimated based on history of volume overruns under similar conditions. In no case
should it be less than 10 percent of the volume.
For Tree Measurement sales, advance deposits are required for timber not included
under AT2 of the contract but subsequently included, such as under BT2.13,
BT2.37, BT2.4 or BT5.1. When such material is added, it is required to be paid for
at current contract rates, and required deposits under BT3.41, in addition to the
payment unit. Additional advance deposits may be made by the purchaser to cover
future additional timber to be included from temporary roads, skid trails, and so
forth.
42.21c - Purchaser Credit as Deposits (B/B4.222).
42.21d - Deposits for Charges Subject to Escalation (B/BT4.223). R-6 C/CT4.223
makes the B/BT provision inapplicable.
42.21e - Deposits When Payment Guaranteed (B/BT4.224).
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42.21f - Cooperative Deposits (B/BT4.225). Reference FSM 2456.4 for R-6 policy
regarding Cooperative work.
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42.21g - Use of Deposits (B/BT4.226). Where B/BT4.226 is inapplicable, the Forest
Service may transfer excess deposits to pay for purchaser's other obligations. Some
C/CT4.226 provisions may restrict transfer of deposits without purchaser
authorization.
42.21h - Blanket Cash Deposits (B/BT3.227).
42.22 - Refund of Excess Cash (B/BT4.23, C/CT4.23). Do not reduce the credit
balance, during periods of no planned cutting, below the value of 10 days normal cut
for contracts with C/CT4.23 dated prior to July 1987. However, most purchasers of
these sales will have requested modification to include the July 1987 version. In
which case, the 10 day cut restriction would not apply and the full amount of the
unencumbered balance could be refunded.
1. Refunds. The Forest Service has the obligation to protect the surety, as well
as the United States, by withholding from refund or transfer, a balance adequate to
cover the amount of all known current liabilities of the purchaser.
Withholding refunds applies only to deposits made for the intended purpose. For
example, refusal to refund payment guarantees would not be appropriate where
slash work was remaining to be done. However, performance bond shall be
maintained. A check should be made of the defaulted contract list before funds are
refunded. If there is a question regarding the obligation for a refund, adjacent
Forest and Regional Office Timber Management should be consulted.
In all cases where there is a claim against the purchaser for fire damage or timber
trespass, no refund shall be made. If the purchaser requests such a refund, the
voucher should be sent to the Comptroller with a full explanation of facts.
2. Transfers. The transfer of any deposit balance from one account to another
is subject to the conditions and restrictions that apply to refunds. Transfer of
unobligated deposits from both completed and uncompleted sales shall be made only
upon written application from the purchaser. Form FS-6500-129 is available for
this purpose. Transfer of funds may be made under the Debt Collection Act for
debts due other Federal Agencies. Refer to FSH 6509.11k, Section 70, and
Reference Refund policy FSM 2456.5.
42.3 - Payment Guaranteed by Bond or Deposited Securities (B/BT4.3). Where a
purchaser is unable to obtain a bond in the minimum amount (reference 42.21b), a
bond with a lesser amount may be accepted. In this case, the purchaser shall need
to provide advance cash deposits to make up the difference (B/BT4.224). Reference
FSH 6509.11k, Section 83.3.
Individual payment bonds may be increased and decreased when acceptable to, and
approved by, the CO. Contracts containing C4.23 7/87, or later, do not require an
individual or blanket bond if cutting is not planned for 60 days or more.
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42.31 - Blanket Payment Bond (B/BT4.31). Reference FSH 6509.11k, Section 83.3.
Additional sales shall not be added to blanket payment bonds when the total value
has been allocated.
Decreases in the payment bond allocation during the month will be in accordance
with an updated and accepted operating schedule.
The purchaser shall make the initial allocation, and any subsequent changes in
allocation, in writing.
Letters of credit for blanket payment bond purposes shall follow the policies for
corporate surety bonds. (FSH 6509.11k, Section 80). Care should be given to
assure that letters of credit do not expire, unnoticed, leaving deficits.
42.4 - Payment Not Received (B/BT4.4). All timber sale payments are to be made
using the lockbox system. Bills are considered paid upon receipt of payment by the
lockbox bank in San Francisco. Delivery of payment elsewhere does not constitute
payment received.
Last paragraph of parent text, dealing with the "demand" concept, refers to billing
surety. Specific information concerning interest charges for late timber sale
payments is found in FSM 6534.22.
Interest will not be charged for late payment of bills issued for advance deposits.
Interest will be charged for all late payments issued for timber removed from the
sale, including sales operated on a cash basis, unless waived in accordance with
direction contained in FSM 6533. To avoid deficits, particular care must be taken in
administering advance deposit provisions on cash operated sales.
If a bill issued is incorrect, the following direction shall be followed:
1. Where the amount due is less than the original billing, the billing should be
adjusted, but the billing and due date shall not be changed. An adjusted bill may be
sent with the same billing and due date if there is time. However, the purchaser
should be notified of the adjustment whether or not an adjusted bill is sent. Failure
to pay the correct amount on the due date is a breach of contract and any or all of
the purchaser's operations may be suspended.
2. Where the bill is incorrect and the amount due is more than the original
billing, the original billing shall not be changed. Instead, an additional billing for
the balance due shall be issued with a due date of 15 days after the billing date. If
either of the bills is not paid by the respective due dates, operations should be
suspended as indicated above.
3. If the bill is verified as missent, a new billing shall be issued with a due
date 15 days after the new billing date. The purchaser shall be notified of the new
billing and the status of the account. If the balance in the account falls to, or below,
the value of 10 calendar days normal cut of timber, the operation should be
suspended even though the bill is not due.
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42.5 - Rates of Payment.
42.54b - Timber Cut Through Mistake ( B/BT3.42 ). Timber cut outside the sale
area boundary cannot be handled under this provision of the contract, except for
volume included under B/BT2.14. Reference FSM 2450.3.
42.56 - Undesignated Timber Unnecessarily Damaged or Negligently or Willfully
Cut (B3.45/BT3.44, 1973 Edition). Reference FSM 2450.3.
42.59 - Defect Caused by Abnormal Delay (B3.49, 1970 Edition, B3.47, 1973
Edition). It is the responsibility of the FSR to revise the Scaler Information Form
R6-2400-29, Scaling Authorization, obtain purchaser representative signature, and
forward to the TPSO prior to the hauling of the volume involved.
For opted roads, C6.319 identifies the length of time permitted for removal of R/W
timber after furnishing purchaser with written notice authorizing use of road.
If the time period elapses and the purchaser has not removed the timber, the Forest
Service shall sample the timber as soon as possible to determine the amount of
defect that has occurred.
The amount of net volume the purchaser must pay under C3.47 is the total net
volume estimated not presented for scaling within the time required. Such deposits
are treated as advance deposits needed to cover the cut timber, except, they must be
cash and are not subject to refund until such timber has been removed and
presented for scaling. Purchaser credit can be used to cover the above base value of
the stumpage. Such lost volume will be charged on TSA at current contract rates in
effect at the time of scaling including required deposits.
43 - SPECIAL PAYMENT PROCEDURES FOR TREE MEASUREMENT SALES
(FORM FS-2400-6T, 1970 and 1973 Edition).
43.1 - Volume Determination. When additional volume is to be designated for
cutting, trees must be measured and paid for prior to falling.
43.2 - Payments. If a payment unit has been released and paid for at the current
rates and the next quarterly adjustment shows a deficit account due to escalation,
the purchaser shall be issued a billing to cover this deficit. This circumstance does
not require any action by the sale administrator, provided the bill is paid within 15
days.