EMAIL TRANSMISSION – 11/01/05
Instruction Memorandum No. MT-2006-008
To: Field Managers
From: Deputy State Director, Division of Resources
Subject: Update of Montana/Dakotas Minimum Price List for Forest and Vegetative Products
Program Area: Forestry and Range
Purpose: This minimum forest and vegetative product price list updates the October 22, 2004 list. The list shows both hundred cubic feet (CCF) and thousand board feet (MBF) pricing schemes along with their average conversion factors. Advertised and negotiated sales involving sawtimber or pulpwood should be made using the MBF measurement method. The conversion factors for sawtimber may also change as we accumulate more cruise conversion information.
A minimum pricing schedule is also included for biomass, other forest and vegetative products such as posts, poles, Christmas trees, berries, transplants, hay, etc. These are minimum prices. No attempt is being made to establish a maximum price for any vegetative product. The local forest/vegetative products appraiser may establish a higher price for any product when based on a local market appraisal. The appraiser may determine this value by using 10 percent of the local market selling price for the product, a comparative product sale, or the statewide minimum price, whichever is greater. This appraisal must be documented in the official case file for the project.
Policy/Action: Forest and vegetative product sales, including biomass, where the total value of the sale is $2,499 or less, may be made using the Vegetative or Mineral Material Negotiated Cash Sale Contract (Form 5450-5). (This form may not be used for any stewardship contracting authority projects.) This is a cash sale contract and must be paid in full prior to issuance of the contract. Installments, payments, or bonding are not permitted with this form. The minimum amount for each transaction using the 5450-5 contract is $20.00. The minimum amount for the Joint Forest Service/Bureau of Land Management Fuelwood permit is $10.00. The Authorized Officer may determine when it is appropriate to collect road maintenance fees on sales of forest or vegetative products, including biomass, when using Form 5450-5. When collected, the minimum road maintenance fee will be 10 percent of the total value of the product(s) being sold. This figure will be rounded to the nearest whole dollar. For example: If you sell 50 line posts valued at $25.00, then you would add $3.00 for road maintenance (10 percent of $25.00 = $2.50, rounded to nearest whole dollar = $3.00). The total contract price would be for $28.00 ($25.00 for the product plus $3.00 for road maintenance). Fees collected for road maintenance should be deposited to the 9120 account.
Timeframe: Effective immediately.
Budget Impact: Will reduce the time associated with issuance of small special forest product permits. Authorized Officers may use the minimum price listing schedule as a basis to sell forest products when no better market data exists.
Background: The existing Instruction Memorandum (IM) MT-2005-004 did not provide a minimum pricing schedule for biomass. This memorandum updates the information contained in IM MT-2005-004 to reflect direction from the Washington Office on biomass utilization.
Manual/Handbook Sections Affected: 43 CFR Subpart 5400 – Sales of Forest Products and 43 CFR 8365.1-5 Property and resources. This instruction memorandum provides for establishment of a minimum acceptable price schedule for commonly used forest products from Montana/Dakotas forest and range lands.
Coordination: Butte, Lewistown, and South Dakota Field Offices were contacted to see if there would be any adverse impacts to field operations through the proposed changes to IM MT-2005-004. None were identified. Coordination has occurred with the United States Forrest Service (Region 1) to ensure consistency of pricing of products where possible.
Contact: If you have questions pertaining to the sale of forest products, please contact Bill Hensley at (406) 896-5042.
Signed by: Randy D. Heuscher, Acting
Authenticated by: Merry Prestridge (MT923)
SOMT - 1
Asst. FM Havre - 1
Asst. FM Glasgow - 1