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Timber Sale Contract Defaults: Forest Service Needs to Strengthen Its Performance Bond and Contract Provisions

RCED-94-5 Published: Oct 28, 1993. Publicly Released: Nov 09, 1993.
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Highlights

Pursuant to a congressional request, GAO reviewed the Forest Service's timber sales contracts, focusing on the Forest Service's: (1) collection of damages owed to the government for defaults on timber sale contracts that occurred between January 1, 1982, and March 31, 1993, and the reasons for any delays in collection; and (2) measures to protect the government from future losses as a result of contract defaults.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Agriculture The Secretary of Agriculture should direct the Chief of the Forest Service to continue to develop and implement, as soon as possible, a performance bond that clearly states that the surety company is liable for damages at the time of default and for interest, penalties, and administrative costs on delinquent debts from the time the default occurs.
Closed – Not Implemented
This recommendation is closed because the nature of the Forest Service's timber sales program has changed significantly since the early 1990s, and that the Forest Service believes that past changes to the timber sales contract sufficiently addressed the intent of the recommendation without needing to revise the bond form.

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Topics

BankruptcyContract performanceContract terminationDamages (legal)Debt collectionGovernment collectionsLitigationNational forestsPerformance bondsTimber sales