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PROVISION Section 1000. Signatures of Contract Parties. This Contract (the “Contract”) is by and between the STATE OF OREGON, acting by and through the State Forester on behalf of the DEPARTMENT OF FORESTRY (“STATE”) and _________________________ (“PURCHASER”). The Contract shall be effective as of the latest date signed below. The parties do hereby agree as follows: (1) Signature of STATE means he/she is a duly Authorized Representative of the STATE and is authorized by STATE to make all representations, attestations, and certifications contained in this Contract and all addenda, if any, issued, and to execute this Contract document on behalf of STATE; (2) Signature of PURCHASER means he/she is a duly Authorized Representative of the PURCHASER, has been authorized by PURCHASER to make all representations, attestations, and certifications contained in this bid/proposal document and all addenda, if any, issued, and to execute this bid/proposal document on behalf of PURCHASER; (3) PURCHASER, acting through its Authorized Representative, has read, understands, and agrees to all Contract instructions, specifications, and terms and conditions contained in this Contract document (including all listed attachments and addenda, if any, issued); (4) PURCHASER is bound by and shall comply with all requirements, specifications, and terms and conditions contained in this Contract document (including all listed attachments and addenda, if any, issued); (5) PURCHASER shall furnish the designated item(s) and/or service(s) in accordance with the bid/proposal specifications and requirements, and shall comply in all respects with the terms of the resulting agreement upon award. IN WITNESS WHEREOF, the State of Oregon hereby awards the Contract to the above Purchaser for the item(s) and/or service(s) contained in the Contract, including all terms, conditions, and specifications. The Parties have affixed their signatures as of the latest date indicated below. STATE: PURCHASER: State of Oregon, acting by and through (Purchaser Name) (SEAL) the DEPARTMENT OF FORESTRY _____________________________________ By: ___________________________________ Assistant State Forester (Signature of Purchaser Authorized Representative) Date: _______________________________ Printed Name: __________________________ As its: _______________________________ Date: ________________________________ INTENT/EXPLANATION Specifies who signs the contract on behalf of Purchaser and State. Establishes that these are the authorized representatives of State and Purchaser, and that they have the authority to execute amendments or modifications to the contract. Establishes that there is no contract between the parties until both have signed the contract, making the effective date of the contract the date of the last signature. POLICY REFERENCES ORS 530.010 – Provides authority for the State Forester to “Enter into and administer contracts for the sale of timber from lands owned or managed by the State Board of Forestry and the State Forestry Department.” http://landru.leg.state.or.us/ors/530.html OARs 629-029-0000 through 629-029-0140 specify authorities, processes and requirements for the sale of forest products from Board of Forestry lands. http://arcweb.sos.state.or.us/rules/OARS_600/OAR_629/629_029.html State Foresters Signature Authority Delegation for Documents/Approval Related to Obligation of Expenditures from Fund 51 (BOF) and Fund 52 (CSL) – This delegation specifies who is authorized to sign timber sale contracts on behalf of State. http://www.odf.state.or.us/DIVISIONS/management/asset_management/Contract_Admin/Signature_Authority_ Delegation-2008.doc GUIDANCE FOR ADMINISTERING THE PROVISION Purchaser signature authority – Salem maintains a list for each Purchaser, which indicates who is authorized to sign on their behalf. This is checked by Asset Management Unit staff. Purchaser must sign the contract first, and then State representative is last to sign, and that signature date is the initial binding, effective date of the contract. There is no contract between the parties until the State signature (last) is on the contract. Contract Administrators cannot take any formal actions, and no operations can occur until the contract contains both the signatures. State signature authority – This is specified in a delegation of authority document from the State Forester. For contract values of $25,000 or greater, the Chief of the State Forests Division (or their designated acting) must sign the contract. The State Forester or Associate State Forester also have signature authority for these contracts. APPROVAL AUTHORITIES Chief of State Forests signs the contract, and must sign any extensions, adjustments or modifications of the contract. WHO TO CALL Questions regarding signature authority, or the status of obtaining the required signatures on a specific timber sale should be referred to the Contracts Team Leader in Salem. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PART I: SALE OF TIMBER GENERAL PROVISION Section 1010. Definitions of Terms. Anchor Stump - a stump used to tie off or wrap a cable or line to firmly secure it. Archaeological or Historical Resource - those sites, buildings, structures, and artifacts, which possess material evidence of human life and culture of the prehistoric and historic past. Areas of Operations - the locations where PURCHASER performs the Operations described in the Contract. Each Area of Operation usually has specific operating requirements. Authorized Representative - a representative of the PURCHASER authorized to receive any notice or instructions from STATE on behalf of PURCHASER and to take any action required in regard to performance of PURCHASER under this Contract. Basal Area - a measure of the cross-sectional area of a Tree Bole, in square feet, measured 4½ feet above the ground on the uphill side of the tree. Contract - the entire written agreement between the parties, including but not limited to the Notice of Timber Sale, Invitation to Bid or Request for Proposal, Instructions to Bidders, specifications, terms, and conditions, Exhibits, Operations Plan, change notices, if any, and the accepted bid. Cultural Resource - an Archaeological or Historical Resource. They may include objects, structures, or sites used by people in the past. DBH (Diameter at Breast Height) - the diameter of a standing tree inclusive of the bark measured 4½ feet above the ground on the uphill side of the tree. Down Timber - timber that is down as of the date of this Contract, as determined by STATE. Down Wood - trees and logs on the ground. Fire Season - when the State Forester has declared that conditions of fire hazard exist in a forest protection district or any part thereof. The State Forester designates for each district or any part thereof the date of the beginning of a Fire Season for that year. The Fire Season continues for each district or part thereof until ended by order of the State Forester when conditions of fire hazard no longer exist in that district or part thereof. Green Tree Retention - the practice of leaving live, growing trees on a site during timber harvest as a future source of Snags, old growth trees, large diameter wood, and native seed. Guy Stump - a stump used to tie off or wrap a cable or line to firmly secure it. Guyline - a cable or rope attached to something to brace, steady, or guide it. Hazardous Substances - any substance or material that is hazardous or toxic to health or otherwise regulated or controlled under any applicable federal, STATE or local statute, regulation, ordinance or law. Improvements - a permanent addition or change to real property, such as a road, structure, or utility, that increases the value of the property. Landing - a collecting point for logs; the place to which logs are yarded for loading and transportation from the woods. Live Crown Ratio - the length of a Tree Bole supporting the growth of live branches compared to total tree height, expressed as a percentage. "Live" Stream - a stream with water flowing through it. Log Load Receipt Book - a book issued by the STATE used for log load accountability. In each book there are sequentially numbered multipart pages (tickets). Each page is a four-part form. Each of the four parts, on each page, has the same identifying number. The four parts are: Woods Receipt Turned in to the ODF District Office that the timber sale is in. Trucker Receipt Retained by the log truck driver. Load Receipt Stapled to the log load on the truck before the truck leaves the Timber Sale Area Landing. Stays with the log load until the load is dispersed and processed at the mill. Scaler Receipt Also stapled to the log load on the truck before the truck leaves the Timber Sale Area Landing. When the load is scaled (measured) the Scaler Receipt is transferred to the Scaling Bureau's printout of the log breakdown of the load. This log breakdown (which shows number of logs, species of logs, grades of logs, and board foot volume), along with the Scaler Receipt is sent to ODF headquarters in Salem. MBF - thousand board feet. Operations - all the activities conducted by PURCHASER under this Contract, including Project Work, logging, or post harvest activities; or the furnishing of all materials, equipment, labor, and incidentals necessary to successfully complete any individual item or the entire Contract. Operations Plan - the document by which PURCHASER notifies STATE of the plans and schedule for completing the Operations described in the Contract. It also contains the names of the subcontractors, PURCHASER's Authorized Representatives, and STATE's Authorized Representatives. PerM - per thousand board feet (MBF). Permit - any Permit required by a federal, STATE, or local government agency before Operations under this Contract may lawfully begin or continue. Permit includes an incidental take Permit under the federal Endangered Species Act. Project Location - the points or areas designated as such on Exhibit A and located on the ground by reference to points, stations, natural land features, Improvements, or area boundary signs. The locations where project activities occur. Project Work - work required of the PURCHASER in addition to normal log removal and hauling activities. The PURCHASER is usually compensated for Project Work with Project Work Credits. Project Work can include, but is not limited to, road building, road improvement, rock quarry development, stream enhancement, site preparation, soil stabilization, and water runoff control measures. Protected Genetic Parent Tree - a seed tree selected for its desirable characteristics that is designated not to be cut or harmed. Purchase Price - for each species sold on a recovery basis, "Purchase Price" is defined as the price per MBF listed in Section 1740, "Log Prices." If species is not listed in Section 1740, "Log Prices," the highest price listed in Section 1740, "Log Prices," shall apply. For bid species sold on a lump sum basis, the Purchase Price for each species shall be determined by using STATE’s unamortized timber appraisal value, multiplied by the bid-up factor. Bid-up factor shall be calculated by STATE using the following calculation: Bid value all species/appraised value all species = bid-up factor. For no-bid species sold on a lump sum basis, the Purchase Price for each species shall be determined by using STATE’s unamortized timber appraisal value. PURCHASER's Authorized Representatives - the representatives authorized by PURCHASER to receive any notice or instructions from STATE on behalf of PURCHASER and to take any action required in regard to performance of PURCHASER under the Contract. PURCHASER's Authorized Representatives are identified in the Operations Plan. PURCHASER's Deposit Account - an account where PURCHASER timber sale payments are deposited. This is an account set up by the State of Oregon to accept regular and advance timber sale payments from the PURCHASER. Advance payments are defined in the Payment Schedule section of the Contract. Relative Density - a measure of the degree of closeness of trees growing side by side in a stand, in relationship with their size. The measure is expressed as a ratio of actual stand density to the maximum stand density attainable in a stand with the same mean tree volume. Relative Density is calculated by dividing the residual Basal Area by the square root of the average residual stand DBH. Residual Tree - green tree left standing on an Area of Operation or Timber Sale Unit. Right-of-Way Timber - trees harvested from a strip of land to enable a road to be constructed. Setting - the area of a logging operation from which logs are yarded to a single Landing. Slash - all woody debris resulting from logging Operations, construction of roads, or other Improvements. Snag - a standing dead tree, or portion of a tree, from which most of the foliage and limbs have fallen. STATE - the Oregon Department of Forestry, State Forester, or a duly Authorized Representative of the State Forester. Stream Buffer - designated areas adjacent to a stream where timber is left uncut, or there are other special management or operational requirements. Stream Buffer may be marked in the field. SUB - Submerchantable materials. SUB, as used by STATE, references that material containing at least 10 board feet (net) but less than the lower merchantable net volume limit or grade requirements for other merchantable material, as defined in Section 2045, “Log Removal.” Subcontract - assign responsibility for work required under the Contract to a party other than the PURCHASER. SUM - lump sum material. Tailblock - a pulley that is attached to an Anchor Stump, Guy Stump, Tailhold Stump, tree, or other sturdy object, through which a cable is passed and used to return the mainline and chokers to the cutting area from the Landing. Tailhold - a stump, tree, or other sturdy object to which a Tailblock, cable, or line is attached. Tailhold Stump - a stump used to tie off or wrap a cable or line to firmly secure it. Timber Harvesting Operations - activities conducted by the PURCHASER on a timber sale to remove logs from the woods. These activities can include, but are not limited to, felling, bucking, Yarding, loading, and hauling. Timber Sale Area - the area or areas designated as such on Exhibit A and located on the ground by reference to legal subdivisions, monuments, natural land features, Improvements, or sale boundary signs. It is the entire area encompassing the material that is required to be harvested. Timber Sale Unit - a sub-area within an Area of Operation. A Timber Sale Unit usually has more operational requirements, in addition to the operational requirements of the Area of Operation. Total Purchase Price - For sales with species sold on a recovery basis or a combination recovery basis and lump sum, Total Purchase Price is the sum of each recovery basis specie’s volume multiplied by the price per MBF listed in Section 1740, “Log Prices,” and each lump sum basis specie’s lump sum price. For sales with all species sold on a lump sum basis, Total Purchase Price is the total bid price. TPSO (Third-Party Scaling Organization) - a scaling organization not affiliated with either the PURCHASER or STATE. Tree Bole - the trunk of a tree. Utilization Scale - scaling of logs to account for merchantable material that has been lost due to logs not removed from the harvest area, or from improper logging practices that resulted in breakage or wastage to otherwise merchantable logs. Written Plan - a plan that describes how an operation will be conducted, including the means to protect resource sites described in ORS 527.710(3)(a) (relating to the collection and analysis of resource site inventories), if applicable. Yarding - the process of conveying logs from the cutting area to the Landing. YUM (Yarding Unmerchantable Material) - to yard logging residue to a Landing or other specified location. Rev. 10/04 INTENT/EXPLANATION This section is self-explanatory and defines terms used in the contract to avoid confusion or conflict later. These terms are capitalized within the text of the contract to show that there is a specific definition for the term in this section. POLICY REFERENCES Department of Justice (DOJ) recommended format for contracts includes a definition section to clarify terms. GUIDANCE FOR ADMINISTERING THE PROVISION These definitions take precedence over all other definitions of these terms for the purpose of administering the contract, whether in Statute, rule or elsewhere. They have been contractually agreed to by the Purchaser. Any changes to a definition provided here must be mutually agreed to in writing via a contract modification. Definitions can only be added unilaterally by State prior to advertising the contract for sale. The only situations where a contract definition may not be applicable are those where citations or instructions are being issued for violations of fire or forest practices statutes or rules. In those situations, care must be taken to be sure that the act being cited constitutes a violation under the language and definitions in the statute or rule, regardless of the timber sale contract language. If a Contract Administrator is unsure, they should consult with their supervisor, and with appropriate Protection Unit personnel in the district, and/or with Program Staff in Salem. APPROVAL AUTHORITIES To add or change a definition in the contract is a modification. Chief of State Forests must sign any modifications, adjustments or extensions of contracts over $25,000 in value. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1020. Sale of Timber. Under the terms and conditions of this Contract, STATE sells to PURCHASER, and PURCHASER buys from STATE, that (*Board of Forestry) (*and) (*Common School Land) timber designated and described in Section 2210, "Designated Timber," which for all purposes of this Contract is hereinafter referred to as "timber." The location of Designated Timber is shown on Exhibit A. PURCHASER shall pay STATE the Total Purchase Price for timber set forth in Section 1710, "Purchase Price," or 1740, "Log Prices." The Total Purchase Price shall be paid to STATE in accordance with the payment schedule in Section 1720 or 1750, "Payment Schedule." This is a sale of "State Timber" as defined in OAR 629-031-0005 and timber harvested or sold under this Contract must not be exported from the United States. PURCHASER must comply with the provisions of the Forest Resources Conservation and Shortage Relief Amendments Act of 1993, which authorizes Oregon and other western states to prohibit the export of unprocessed timber from public lands, and with ORS 526.801 through 526.831 and OAR 629-031-0005 through 629-031-0045, in disposing of timber from this timber sale. Rev. 10/04 INTENT/EXPLANATION Identifies the timber ownership as either Board of Forestry and/or Common School Land. Links the timber being sold to the description in Section 2210, “Designated Timber” and identifies the location of designated timber as that shown on Exhibit A. Links to Section 1710, “Purchase Price” (cash sales), or Section 1740, “Log Prices” (recovery sales), to establish the purchase price, and links to the payment schedule language in Section 1720 or 1750, “Payment Schedule.” Refers to the Log Export Laws, ORS 526.801 to .831, and OAR 629-031-0005 to -0045. Outlines prohibition against export of sale material, and references mandatory compliance with timber disposition requirements in OARs. POLICY REFERENCES ORS 530.050 (2) – Management of Lands Acquired – Sub-section 2 of this statute provides the authority to sell forest products from Board of Forestry lands. ORS 530.500 (2) – Authority of State Forester in Management, Protection, Utilization and Conservation of Lands and Waters – This statute provides the authority to sell forest products from Common School Forest Lands. http://landru.leg.state.or.us/ors/530.html OARs 629-029-0000 through 629-029-0140 specifies authorities, processes and requirements for the sale of forest products from Board of Forestry lands. http://arcweb.sos.state.or.us/rules/OARS_600/OAR_629/629_029.html OAR 629-031-0005 through -0045 and ORS 526.801 through .831 outline prohibitions against export, and the process for reporting and transferring ownership of State-owned timber. http://landru.leg.state.or.us/ors/526.html http://arcweb.sos.state.or.us/rules/OARS_600/OAR_629/629_031.html GUIDANCE FOR ADMINISTERING THE PROVISION Timber ownership (Board of Forestry vs Common School Land) results in different payment provisions in a timber sale contract. Refer to “Payment Schedule” provision (1720 or 1750) for the specific payment provisions. The specific types and prices for different timber species and grades being sold to the Purchaser are detailed in Section 1740, Log Prices. Rarely are any species and/or grades available for removal without compensation to State. If there are, those will be specifically listed in Section 1740. Purchasers must comply with the reporting requirements contained in OAR 629-031-0015 and -030. These laws require Purchasers to report the delivery destination of all timber sold under the contract, as well as requiring the delivery destination to certify their eligibility to receive the timber. The “Notice of Transfer of State Timber” form must be completed for all log delivery destinations that are different from those specified in Exhibit C (Scaling Instructions). Forms for this purpose can be obtained from the Asset Management Unit in Salem. If Contract Administrator receives this form from Purchaser, it needs to be forwarded to Asset Management Unit for review and approval. APPROVAL AUTHORITIES “Notice of Transfer of State Timber” is received and approved by Contracts Team in Salem. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1030. Title to Timber. During the period of this Contract, and any extension, PURCHASER shall have the right to cut and remove the timber. Such right shall be conditioned upon PURCHASER complying with the provisions of this Contract. The ownership of and title to the timber shall pass to PURCHASER as the timber is paid for following removal from the Timber Sale Area. Any right of PURCHASER to cut and remove the timber shall expire and end at the time this Contract, or any extension, terminates. All rights and interests of PURCHASER in and to timber and logs remaining on the Timber Sale Area shall, at that time, automatically revert to and revest in STATE, without compensation to PURCHASER. Rev. 07/04 INTENT/EXPLANATION Establishes that the Purchaser has the right to cut and remove timber during the term of the contract, including extensions, conditioned upon compliance with all the provisions of the contract. This section defines when title to the timber passes to the Purchaser. Title passes when the timber leaves the sale area, regardless of whether the sale is cash or recovery. Establishes that, upon the expiration of the contract, the Purchaser no longer has the right to remove any timber remaining on the sale area (unless approved by State as described in Section 1530, “Extension of Time”). POLICY REFERENCES Directive 3-4-3-050 – Billings and Interest Charges – This directive outlines Program policies regarding authorities, processes and standards for billing and for assessing interest on unpaid bills. \\Salem10a\secure\Policy\Word\3-4-3-050-04-01-1998.doc GUIDANCE FOR ADMINISTERING THE PROVISION Title to timber passes to the Purchaser at different times for other public agencies. 1. BLM - Title passes when timber is paid for and removed. 2. USFS - Title passes when the timber is scaled, paid for and removed. 3. WA DNR - Title passes when the timber is purchased. In working with Purchasers who may not be familiar with State of Oregon contracts and title of timber status, it is important to discuss this with the Purchaser’s representative to make sure they understand any differences from what they may be used to with other agencies. Although the passing of title is the same for cash and recovery sales, there is a difference in how ownership applies in the event logs are stolen. When the theft of logs occurs on a cash sale, the Purchaser bears the loss. For recovery sales, prior to leaving the timber sale area, State sustains the stumpage loss and the Purchaser sustains the loss of logging costs. After logs leave the sale area on a recovery sale, Purchaser bears the total loss. Loss of timber that is due to catastrophes or Acts of God is handled differently, and may be born by the State through adjustment of the contract in accordance with the provisions of Section 1550, “Adjustment of Contract.” If there are logs or timber remaining on the sale area after the contract has expired, the Contract Administrator should inform the Purchaser that they no longer have any rights to the logs or timber. An exception to this is sometimes allowed for cash sales when the Purchaser has yarded and decked logs but has not been able to remove them from the sale area due to adverse weather or road conditions. In this exception, State must either issue a Special Use Permit for loading and hauling the decked logs beyond the termination date of the contract, or issue a “Work to Do” letter authorizing the removal of material by a later date. An exception can also be made for decked logs on recovery sales, if the logs have been scaled and paid for. Purchaser will not be given credit for any production costs involved with logs left on the sale area. Purchasers may be liable for any loss to State in the resale of remaining logs and timber that they were required to remove (see Section 1560, “Violations; Default; Remedies”). APPROVAL AUTHORITIES Special Use Permit or “Work to Do” letter must be issued by the Contracts Team. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1040. Quality and Quantity of Timber. STATE makes no guarantee or warranty to PURCHASER as to the quality or quantity of the Designated Timber. PURCHASER shall be liable to STATE for the Total Purchase Price set forth in Section 1710, "Purchase Price," or 1740, "Log Prices," even if the quantity or quality of Designated Timber actually cut, removed, or designated for taking is more or less than that estimated by STATE to be available for harvesting on the Timber Sale Area. Further, STATE makes no representation, warranty, or guarantee of the accuracy of any information either provided by STATE or made available by STATE under the Public Records Law with respect to this Contract. PURCHASER agrees to bear exclusive responsibility for, and to accept all risks associated with, the actual conditions on the Areas of Operations and PURCHASER's computation of its bid for this Contract. Rev. 12/03 INTENT/EXPLANATION Establishes that the timber sale contract contains no guarantee as to the quantity or quality of timber being sold. An estimate is provided in the Notice of Timber Sale, but is not a guarantee on the part of the State, even though the Notice of Timber Sale is technically part of the timber sale contract via the language in Section 1380. Volumes, grades and values are shown on cruise reports and timber appraisals, but also not guaranteed by State. These documents are "Public Records" which Purchasers may examine in an attempt to compute their bid. POLICY REFERENCES OAR 629-029-0025 specifies that bidders on a state timber sale will have independently: (1) Fully informed themselves as to the quality and quantity of materials and the character of the operations required; and, (2) Have made a careful examination of the location and quantity and quality of the forest products to be sold. http://arcweb.sos.state.or.us/rules/OARS_600/OAR_629/629_029.html GUIDANCE FOR ADMINISTERING THE PROVISION Purchasers have the responsibility for examining the sale area to determine their own estimates of volume and value of timber for bidding purposes. If questions arise as to the quantity or quality of timber, the Purchaser should be informed that no adjustments will be made for differences between volume and value removed and the volume and value estimated by State. Any discrepancies in exhibits that may affect the quantity of timber related to sale boundaries, streams, roads, etc., should be brought to the attention of the Purchaser. When oversights or omissions in the contract are found that affect the quantity or quality of timber, supplemental agreements may be made in accordance with the provisions of Section 1540, “Contract Modifications,” and/or Section 1550, “Adjustment of Contract,” depending upon the cause for the change. Purchaser must make a written request for any such modifications or adjustments, in accordance with the applicable contract section. Refer to guidance for those sections for information on the process for considering and making decisions on Purchaser requests. APPROVAL AUTHORITIES Chief of State Forests must sign any modifications, adjustments or extensions of contracts over $25,000 in value. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1050. Examination of Plans, Exhibits, and Areas of Operations. PURCHASER acknowledges and agrees that, before submitting a bid, PURCHASER: (i) has made a careful examination of the terms and conditions of the Contract; (ii) has become fully informed as to the quality and quantity of materials and the character of the Operations required; and (iii) has made a careful examination of the Areas of Operations and the location and conditions of the Operations, including the sources of supply for materials. STATE will in no case be responsible for any loss or for any unanticipated costs that may be suffered by PURCHASER as a result of PURCHASER's failure to acquire full information in advance in regard to all conditions pertaining to the Operations. Rev. 12/03 INTENT/EXPLANATION Establishes that it is the prospective Purchaser's responsibility to examine both the sale area and the contract requirements, and to ask questions prior to purchasing a sale. This provision makes it clear that the Purchaser has entered into the contract with their “eyes open”. State is not responsible for any oversights or misunderstandings which may arise because the Purchaser did not obtain the necessary information. POLICY REFERENCES OAR 629-029-0031 requires that… “Bidders, before submitting a bid, shall make a careful examination of the contract documents and the site of the sale and any appended project work. Such examination shall be independent of any representations by the STATE concerning the quality and quantity of timber, the allowable method of removal of the timber or of conditions affecting the work at the site.” http://arcweb.sos.state.or.us/rules/OARS_600/OAR_629/629_029.html GUIDANCE FOR ADMINISTERING THE PROVISION The prospective Purchasers have the responsibility for examining the sale areas and reviewing the contract provisions. District personnel may assist the prospective Purchaser by providing information prior to the sale and by drawing attention to unusual or complex requirements in the contract. It is important that the Purchaser understands the objectives of the contract and the reasons for the provisions which have been selected. During the required Pre-Operations meeting (See Section 2445), the Contract Administrator should thoroughly review the contract provisions with the Purchaser and explain the intent of the provisions and the work that will be required. Prior to any operations on a timber sale, the Contract Administrator and the Purchaser should jointly review the contract requirements and if necessary, examine the sale area. State has the authority to require an on-site meeting prior to approval of the Operations Plan. Any questions regarding the work should be answered and resolved prior to commencement of work. It is important that the Contract Administrator understands the objectives of the contract and how the provisions should be administered to accomplish the objectives. One of the best ways to get the proper understanding is to discuss the contract with the person who prepared it. When a Contract Administrator does not understand a contract requirement, they should discuss it with the Unit Forester, District Forester, or Salem staff. When a Purchaser has not examined the sale area or the contract requirements prior to purchasing a sale, the following problems may arise: 1. The Purchaser may try to cut corners in labor and material costs. 2. The Purchaser may request adjustments in the contract to correct for oversights. 3. The Purchaser may pass the problem on to sub-contractors. The Contract Administrator should be alert to problems which may be caused by the Purchaser's failure to examine the sale area and the contract provisions prior to purchasing a sale. The Purchaser should not be allowed to do less work than is required by the contract. Although the Purchaser may pass problems on to the sub-contractors, the Purchaser is still responsible for the performance of the contract requirements. Any problems should be resolved by the Contract Administrator and the Purchaser. APPROVAL AUTHORITIES Chief of State Forests must sign any modifications, adjustments or extensions of contracts over $25,000 in value. WHO TO CALL Questions or disagreements with the Purchaser concerning the elements of this contract provision should be referred to the Unit Forester, Assistant District Forester, or the Contracts Team Leader in Salem. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. COMMENCEMENT AND COMPLETION OF CONTRACT PROVISION Section 1110. Commencement of Work. PURCHASER shall not commence work under the Contract until STATE provides written notification to PURCHASER that STATE has received and accepted the following: (a) The performance bond required under Section 1210, "Performance Bond"; (b) The payment bond required under Section 1230, "Payment Bond"; (c) The certificate of insurance required under Section 1240, "Insurance," subpart (i); (d) The first payment on the Contract specified in Section 1750, "Payment Schedule"; and (e) A fully executed original of the Contract. Rev. 10/04 INTENT/EXPLANATION This provision spells out the key requirements that need to be met by the Purchaser before work can commence on the timber sale. POLICY REFERENCES OAR 629-029-0120 through 629-029-0140 specify the requirements concerning performance bonds, payment bonds, and the conditions that must be met to qualify for sale award. http://arcweb.sos.state.or.us/rules/OARS_600/OAR_629/629_029.html GUIDANCE FOR ADMINISTERING THE PROVISION After the sale bids have been opened and the high bid determined, instructions are sent to the high bidder from the Asset Management Unit as to the requirements to qualify as the Purchaser of the sale. These instructions are contained in the Notice of Intent to Award. Included in the instructions is a request for certificates of bond and insurance in the amounts required by the contract. The Purchaser must submit these certificates within 30 days after receipt of the Intent to Award. Copies of the Intent to Award and instructions are sent to the Area and District offices. After Salem receives and approves all the required submittals, the Chief of State Forests signs the contract for the State, and a Notice of Contract Award is issued to the Purchaser. OAR 629-029-0110 requires a 14-day protest period from the date of the Notice of Intent before State can sign the contract. No timber sale operations can occur until these requirements have been met and the contract has been signed by the Chief. Informal pre-meetings with the Purchaser and contractors can take place, but no formal Pre-Operations meeting should occur, and the Contract Administrator should not accept an Operations Plan prior to a signed contract being in place. Any questions concerning the status of these requirements should be forwarded to the Contracts Team Leader in Salem. In summary, no operations will be permitted until the Purchaser has returned the signed contract, and met all of the requirements listed. The Contract Administrator must have a copy of the Notice of Contract Award before proceeding with pre-operations meetings and allowing any operations. Operations may continue as long as all requirements are met by the Purchaser as the sale progresses. APPROVAL AUTHORITIES Chief of State Forests must sign any modifications, adjustments or extensions of contracts over $25,000 in value. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1120. Completion Date of Contract. Time is of the essence in this Contract. PURCHASER shall complete and fully perform all Operations under this Contract no later than _______________________, unless the term of the Contract is extended in accordance with Section 1530, "Extension of Time." PURCHASER may be required to perform uncompleted Contractual obligations at a time later than stated above or in Section 1530, "Extension of Time." STATE shall notify PURCHASER in writing of these obligations and their required completion date. Upon completion of final Operations, PURCHASER shall notify STATE as required under Section 2465, "Inspection and Acceptance." The Contract will not be complete until STATE has inspected and accepted PURCHASER's performance as specified in Section 2465, "Inspection and Acceptance." Rev. 10/04 INTENT/EXPLANATION This provision requires the Purchaser to complete all contract requirements by the date specified, unless the contract has been extended. POLICY REFERENCES Directive 3-4-3-325 - Contract Duration – This directive provides guidance to personnel preparing timber sales, and includes criteria and considerations for establishing the duration of the contract. It is a useful reference for evaluating whether new circumstances have occurred that were not anticipated in setting the contract expiration date. \\Salem10a\secure\Policy\Word\3-4-3-325-08-01-2007.doc GUIDANCE FOR ADMINISTERING THE PROVISION The completion date is usually set based on the volume of timber to be removed and the number of operating seasons needed to complete the work. Adjustments to normal contract lengths are made to allow for specialized logging, extensive project work, priority salvage sales and access limitations. The overall objective is to provide sufficient time for performance of contract requirements by a prudent Purchaser. If delays were the result of causes beyond the control of Purchaser, an extension of time may be granted in accordance with the provisions of Section 1530. For the definition of "causes beyond control," refer to Section 1510 of the contract. Other sections of the contract may include “interim” completion dates for specific activities or work required. Examples are felling requirements related to T&E surveys and seasonal restrictions, or completion dates for project work. Extending these interim completion dates may meet the definition of a contract modification. Contract Administrators should consult the guidance for Section 1540, “Contract Modifications” before approving any specific extensions to interim dates. Any such “extensions” must be approved in writing, either through a formal contract modification, or a written inspection report if a modification is not required. State may require the Purchaser to perform uncompleted work such as stream clearance, fire line construction, snag felling, road maintenance and other project work after the contract expiration date without formally extending the contract. The Purchaser shall be notified in writing of work to be done and the deadline for completing the work. This is done with a “Work to Do” letter sent to Purchaser by the Asset Management Unit within 30 days of the completion date specified in this section. The Contract Administrator must inform the Asset Management Unit of the work to do and completion dates in a Timber Sale Status Report prior to the contract completion date. If the work is not completed by date specified in the “Work to Do” letter, State may have the work done and bill the Purchaser and/or surety. If this situation occurs, the Contract Administrator must inform the Asset Management Unit in a Timber Sale Status Report, and they will process the billing or surety claim. A sale is not considered complete until all of the work has been done. The Purchaser's bond will be held for a period of 120 days after all work has been completed and accepted (see Section 1210, “Performance Bond”). Final completion and acceptance of work by the Contract Administrator must be documented in a final Timber Sale Status Report sent to the Asset Management Unit. Contracts not qualifying for extension will be closed out by State on the termination date, and no further operations or removal of timber is allowed. Under no circumstances should a Contract Administrator allow operations to continue past the termination date unless the contract has been extended, or a Special Use Permit or a “Work to Do” letter has been issued. If a contract has been active during the last days of the contract period, the administrator should make an inspection on the date following the termination date to make sure that operations have ceased. APPROVAL AUTHORITIES Chief of State Forests must sign any modifications, adjustments or extensions of contracts over $25,000 in value. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION (THE FOLLOWING PROVISION WILL BEGIN APPEARING IN CONTRACTS SOLD IN FY 2010, REPLACING SECTION 2445 IN EARLIER CONTRACTS.) Section 1130. Pre-Operations Meeting. PURCHASER shall meet with STATE prior to STATE approval of the initial Operations Plan required by Section 1140, and prior to commencement of operations, to discuss Contract matters, including Threatened and Endangered Species protection efforts, protection of Timber Sale Area resources, and to identify key issues to be addressed in the Operations Plan. INTENT/EXPLANATION This provision establishes the requirement for a meeting between the Purchaser and State prior to approval of the Operations Plan, and prior to commencement of operations. This initial meeting is intended to assure that there is an opportunity to discuss specific contract requirements with the Purchaser, and to develop a plan for how the operation will be conducted to meet those requirements. POLICY REFERENCES 530.050 Management of lands acquired; powers of forester; rules. (8) Require such undertakings as in the opinion of the board are necessary or convenient to secure performance of any contract entered into under the terms of this section or ORS 273.551. GUIDANCE FOR ADMINISTERING THE PROVISION Once a Notice of Contract Award has been issued by the Asset Management Unit, the Contract Administrator should make contact with the Purchaser, and discuss their anticipated timeline for proceeding with work. At that time, the Contract Administrator should discuss any particular contract requirements that may affect timelines. Examples are any seasonal restrictions that may limit the time available to complete the work, or interim completion dates for things like project work. The Pre-Operations meeting establishes the tone for the relationship between the Contract Administrator and the Purchaser and subcontractors, and its importance cannot be overemphasized. Thorough preparation by the Contract Administrator is essential to have an effective meeting and to address the important issues. The Contract Administrator should have read through all contract provisions and identified those most important to highlight and discuss with the Purchaser. Any questions about requirements or the intended outcomes should be researched and discussed with sale preparation personnel or the applicable resource specialist before meeting with the Purchaser. The following are some common examples of “special” or “unique” requirements that should be identified and discussed: o Easements or road use agreements. o Seasonal restrictions on any timber sale activities. o Location of any resource sites (cultural, T&E, recreation, etc.) requiring specific protection during timber sale operations, or adjacent areas identified for which damage charges are specified in the contract (Section 2455). o Location of any infrastructure (utility lines, etc) requiring specific protection during timber sale operations. o Specifications for the retention of green trees, snags, down wood, or any other structural components. o Any special notifications required, i.e. Section 2330, Controlled Felling Area. o Any interim completion dates, i.e. Projects. A checklist should be used to make sure all initial contract award requirements have been met before conducting a Pre-Operations meeting. Key items include a fully executed contract (by both State and Purchaser), required bonding and proof of insurance documents received and approved by the Asset Management Unit, and the initial payment has been received (See guidance for Section 1110, Commencement of Work). The Pre-Operations meeting provides an opportunity for the Contract Administrator to explain major provisions of the contract and discuss threatened and endangered species issues such as seasonal restrictions. Spotted owl surveying and nesting affects spring and early summer logging, murrelet presence may require winter logging and felling deadlines, and Type F streams may have RMA requirements, as well as in-water work periods specified. Sale exhibits and contract provisions should address these T and E issues. The Purchaser may choose to develop and submit an Operations Plan at this meeting or wait until later if operations are not planned to start immediately. A separate meeting can be done for each type of operation (projects or logging) or one meeting can be done for all of the operations. See the guidance for Section 1140, Operations Plan for more information on that part of the process. For the most effective meeting, the Contract Administrator should prepare a list of key issues and allocate enough time to properly cover all the important issues. Discuss contract provisions that contain specific standards or prescriptive elements, i.e. down wood and snag requirements. Discuss potential problems, especially those that happen repeatedly with contractors, i.e. damage to residual trees, and residual basal area requirements. Discuss fire requirements and how they will be enforced i.e. State sales require more water on site than the minimum Oregon Fire law requirements. The appropriate level of detail for discussion at this initial meeting will depend on when operations are expected to begin. If operations are not planned to start in the near term, and there is no Operations Plan being developed at this meeting, then the discussion should focus on broader contract requirements. Discuss the specifics at a later meeting to develop or review the Operations Plan. Thoroughly document the topics discussed at the Pre-Operations meeting. APPROVAL AUTHORITIES The Chief of State Forests must sign the timber sale contract on behalf of ODF. The Asset Management Unit has authority to receive and approve the necessary documents prior to the Pre-Operations meeting taking place. Contract Administrator and/or the Unit Forester has the authority to schedule and conduct the Pre-Operations meeting with the Purchaser. WHO TO CALL Contracts Team Leader TRAINING METHODS Classroom module with assistance from Asset Management Unit staff. On the job training with Unit Forester or experienced Contract Administrator. Training on how to prepare for, and conduct effective meetings. Participation in several Pre-Operations meetings as an observer is recommended prior to participating as the Contract Administrator. PROVISION (THE FOLLOWING PROVISION WILL BEGIN APPEARING IN CONTRACTS SOLD IN FY 2010, REPLACING SECTION 2450 IN EARLIER CONTRACTS.) Section 1140. Operations Plan. PURCHASER shall prepare an Operations Plan for all Operations to be conducted under this Contract and shall submit the plan to STATE at least fifteen (15) calendar days prior to commencement of any Operations. This plan shall be prepared on a form provided by STATE, and shall be used for all types of Operations, including road maintenance, Project Work, logging, and postharvest requirements. In addition to the Pre- Operations Meeting required by Section 1130, STATE may require an on-site meeting prior to approval of the Plan, to be attended by PURCHASER, subcontractor, and STATE representatives. STATE's approval of the Plan must be obtained prior to commencement of any Operations. Upon approval by STATE, the Operations Plan(s) shall automatically be incorporated into, and made part of, this Contract as Exhibit B. Each Operations Plan shall be dated. PURCHASER shall notify STATE prior to any period of inactivity of Operations for more than three (3) days, and again prior to resumption of Operations. [Optional language that may appear] STATE has prepared the Forest Practices Act (FPA) "Written Plan" for Operations ( ) within 100 feet of Type F or Type D streams. ( ) within 300 feet of critical wildlife habitat. ( ) within 300 feet of nesting or roosting sites of threatened or endangered species. ( ) within 300 feet of significant wetlands. ( ) on high landslide hazard locations. Any changes to the Written Plan must have STATE approval. PURCHASER shall comply with all provisions of the Written Plan. PURCHASER's Operations Plan must comply with STATE's Written Plan. INTENT/EXPLANATION This section establishes the requirement for the Purchaser to submit an Operations Plan at least five days prior to commencement of operations. It specifies that the plan will be submitted on forms provided by State. The Operations Plan required by this provision is the means by which the Purchaser notifies ODF of who will act as the designated representative of the Purchaser for all, or portions of the operations, and to notify ODF of the plan for conducting operations (timber harvest and project work). It requires State approval of the Operations Plan before work can commence, and also specifically states that the approved Operations Plan becomes a binding part of the contract. This provision also establishes a notification requirement on the part of the Purchaser as to when operations will be active or inactive. If applicable, this provision also describes any FPA Written Plans prepared by State that apply to operations. POLICY REFERENCES Forest Practices Act rules on written plans, including OAR 629-605-0100, -0170, -0173, -0180, and -0190. Link to FPA Guidance for applicable rules: http://intranet.odf.state.or.us/privateforests/Library/DraftFPAGuidance/OARDiv605.pdf GUIDANCE FOR ADMINISTERING THE PROVISION The Operations Plan required by this provision is a critical element in assuring a successful timber sale operation, and for meeting the intended outcomes of the timber sale layout and prescriptions. The Operations Plan must be submitted on the form identified as Exhibit B in the timber sale contract materials. As such, the information provided and the operations described become a part of the timber sale contract. It is important that the information is accurate and detailed enough to be able to assess compliance as the operation proceeds. The most effective way to assure a high quality Operations Plan is to prepare well for the Pre-Operations meeting required by Section 1130, and to communicate with the Purchaser and any subcontractors prior to that meeting, so that they can prepare and submit a sufficiently detailed plan. A copy of the form (Exhibit B) and instructions is included as a reference at the end of the guidance for this section. The Operations Plan may be used to provide a complete plan, a partial plan, project plan, supplemental plan, or changes from a previous plan. A thorough plan identifies the logging sequence, logging unit boundaries, landing locations, starting dates for project work and logging, and names of sub-contractors and all authorized representatives. The Purchaser must submit plans, partial plans and supplementary plans at least 5 days prior to commencement of operations in an area. There may be other waiting periods associated with commencement of work. For example, if no Notification of Operations has been submitted under FPA rules, the 15-day waiting period for that may apply. Similarly, if there are written plan requirements under FPA rules, the appropriate waiting period may apply before operations can commence. The Contract Administrator should identify and communicate any of these additional requirements to the Purchaser if they exist. If a Purchaser wants to submit an Operations Plan, and a Pre-Operations meeting has not yet occurred, then one must be scheduled and conducted prior to approving the plan. If a Pre-Operations meeting has occurred, but significant time has passed since the meeting, then the Contract Administrator should arrange another meeting with the Purchaser to review the Operations Plan. This meeting is an opportunity to review specific operational requirements in the contract and assure that the Operations Plan addresses all key elements. This provision also gives the State the authority to require an on-site meeting. The need for an on-site meeting should be evaluated, and if needed, it should be scheduled with the Purchaser and any subcontractors prior to approving the Operations Plan. Questionable plans should be discussed with the Purchaser, and amended if necessary prior to granting approval. Plans that cover only a portion of the operation are acceptable as long as a supplemental plan is submitted and approved prior to work commencing on the next portion of the operation. For example, an Operations Plan approved for falling and yarding on one area of the timber sale is not approval to begin operations on another area of the sale. Similarly, an approved Operations Plan for road construction does not constitute approval to begin yarding operations. If the contract, or the situation on the ground requires a written plan or alternate plan under FPA rules, then that plan should be incorporated into, and made part of the approved Operations Plan for the activities concerned. The Contract Administrator should refer frequently to the Operations Plan to determine if the Purchaser is in compliance. If the Purchaser fails to file a supplemental plan which updates the original plan and work begins that is not covered by the plan, the contract should be suspended until an additional plan is submitted and approved. Any subcontractor authorized by the Purchaser to work on the sale area must be identified by the Purchaser in the Operations Plan. This is specifically required by Section 1310, Authorized Representatives, which refers to the Operations Plan as the method for this designation. Through this notification, the Purchaser informs State of those subcontractors permitted to operate on the sale, and for whom liability is accepted. The Purchaser is required to appoint a representative for each project or timber sale phase (cutting, logging, projects), who will be available at all times on the sale area. The Contract Administrator should remind the Purchaser of the requirement to have the representative on the sale area. When more than one representative is designated by the Purchaser or by State, authority must be clearly defined. If a problem arises, the Purchaser's representative is responsible for correcting it, but if they are not on site, the Contract Administrator has the option to suspend the operation and notify the Purchaser of the problem. The Contract Administrator should check periodically to see that all subcontractors working on a sale area are authorized to do so by the Purchaser in the Operations Plan, and that a designated Purchasers representative is present. The contract requires the Purchaser to notify State if operations will be inactive for more than 3 days and again when operations will be resumed. The Contract Administrator should carefully review the contract for any provisions that require specific inclusion or approval in the Operations Plan. These should be reviewed with the Purchaser at the Pre- Operations meeting, or at a follow-up meeting on the Operations Plan. The Purchaser cannot be required to describe work in the Operations Plan that is not included in the contract. However, if such work is identified and considered to be critical to a successful operation, then it can be described in the Operations Plan and when approved, becomes a contractual obligation on the part of the Purchaser. Such changes or additions can only be made with Purchaser's approval and must be carefully evaluated to assure that they are not affecting timber sale value. Section 1540, Contract Modifications, and Section 1550, Adjustment of Contract, should be reviewed for applicability prior to including any such additional work in an Operations Plan. The State is also required to designate a representative or representatives in the Operations Plan. In addition, this provision provides for State approval of the Operations Plan before operations can commence. The Contract Administrator has full discretion as to when an Operations Plan is deemed suitable to approve, and should not approve the plan until it addresses all the necessary topics, and any required on-site meetings have occurred. However, the district should make every effort to acknowledge receipt of the Operations Plan and to notify Purchaser of its approval, or the need for additional information within a “reasonable period of time”. This has commonly been interpreted to mean within 5 working days. All meetings to review and/or discuss the Operations Plan and any on-site meetings should be documented in an inspection report, including any instructions provided or requests for additional information. APPROVAL AUTHORITIES The Unit Forester or Contract Administrator, and Purchaser Representative are typically the parties that sign the Operations Plan on behalf of State and Purchaser. Written plans and alternate plans under FPA rules can be approved by the Unit Forester, or Contract Administrator if authorized, but consultation with the local Stewardship Forester is recommended to assure consistent practices. WHO TO CALL Contracts Team Leader TRAINING METHODS Classroom modules with assistance from Asset Management Unit staff. On the job training with Unit Forester or an experienced Contract Administrator. Participating in several Operations Plan meetings and on-site meetings as an observer is recommended prior to participating as the Contract Administrator. BONDING AND INSURANCE [BOF AND CSL CASH AND RECOVERY SALES] PROVISION Section 1210. Performance Bond. PURCHASER shall furnish STATE with a performance bond, in an amount of not less than the greater of (a) the value of all Project work to be completed under the Contract, as specified in Section 2630, “Credit for Project Work,” or (b) twenty percent (20%) of the Total Purchase Price, which bond shall guarantee complete compliance by PURCHASER with the terms and conditions of this Contract and the faithful performance of all required obligations, including payments to all suppliers, materialmen, Contractors, and subcontractors of PURCHASER. PURCHASER’s bond may be in the form of one or more of the following: surety bonds, cash, cashier's or certified check, money order, assignment of surety, irrevocable letters of credit, or other securities determined acceptable by the State Forester. Surety bonds must be written by a surety company authorized to do business in the State of Oregon, on a form provided by STATE. Performance Bond Release STATE shall release PURCHASER’s bond upon the later of: (a) 120 days after final acceptance of completed Timber harvesting Operations or (b) 120 days after STATE’s acceptance of all Project work required under Section 2610, “Project Work.” “Acceptance” under (a) or (b) shall not be provided until STATE has inspected and approved the work and PURCHASER has provided satisfactory evidence of PURCHASER’s compliance with all other terms and conditions of the Contract. Performance Bond Reduction STATE shall permit PURCHASER to reduce its performance bond under the following circumstances: 120 days after final acceptance of completed Timber harvesting Operations, upon PURCHASER’s request and provided no claims are then pending, STATE may permit PURCHASER to reduce the amount of their bond to an amount equal to the value of all Project work remaining to be performed or accepted. 120 days after STATE has accepted all Project work required under Section 2610, “Project Work,” upon PURCHASER's request and provided no claims are then pending, STATE may permit PURCHASER to reduce the amount of their bond to an amount equal to twenty percent (20%) of the Total Purchase Price. [The following language may appear in the contract if there are slash disposal activities required of the Purchaser that are likely to take place some time after other work on the timber sale has been completed] 120 days after final inspection and acceptance of timber removal Operations as provided in Section 2465, “Inspection and Acceptance,” STATE may approve reduction of the performance bond to $*__________, provided no claims are pending at the time. The reduced bond amount shall cover Slash disposal requirements. Rev. 10/04 INTENT/EXPLANATION This provision is intended to protect or reduce the State’s risk from non-performance by Purchaser, damage caused by Purchaser or others during the term of the contract, or claims made by sub-contractors against the Purchaser. This section defines the forms of surety or performance bonds that are acceptable to State. It provides for release of the bond when Purchasers have fulfilled their obligations and it provides for State to hold the bond until all obligations have been met. The standard language provides for a reduction in the performance bond to the 20% of the total purchase price when extra bonding was initially required for costly project work. The slash disposal option allows a reduction in the performance bond after acceptance of logging and project work to an amount sufficient to cover slash disposal activities required of the Purchaser. The amount of bond to be retained is specified. POLICY REFERENCES ORS 530.059 (4) - Acceptable Performance Bonds- This statute provides the State Forester with the authority to require a performance bond, and specifies the different types of bonds which may be accepted. http://landru.leg.state.or.us/ors/530.html OAR 629-029-0120 – This administrative rule specifies the minimum amount required in a performance bond and specifies the acceptable forms in which bonds can be provided. http://arcweb.sos.state.or.us/rules/OARS_600/OAR_629/629_029.html Directive 3-4-1-320 - Insurance and Performance Bond Requirements – This directive provides further detail and process information on the standards and procedures for handling performance bonds through the life of a sale. \\Salem10a\secure\Policy\Word\3-4-1-320-09-01-1989.doc GUIDANCE FOR ADMINISTERING THE PROVISION Bonding for timber sale contracts is acceptable in the following forms: 1. Surety bonds that are issued by a surety company authorized to do business in the State of Oregon. 2. Cash, certified checks, cashiers checks, money orders. 3. Bonds certified to State by a bank or federally insured lending institution on State-provided forms. 4. Assignments of surety in the form of certificates of deposit or savings accounts certified to State by a bank or federally insured lending institution on State-provided forms. 5. Irrevocable letters of credit. A bank registered in the State of Oregon must write this letter, indicating they will pay claims against the Purchaser made by the State. The Asset Manager or Contracts Team Leader is responsible for approving and accepting both performance bonds and insurance. The Contracts Team is responsible for notifying Purchasers of acceptance of bonds and insurance, and providing the District with notice through the Notice of Contract Award. Although the State is authorized to use the bond to pay for unfinished work, to cover delinquent payments and to satisfy liens against the Purchaser, this is typically only done as a last resort. Successful use of a performance bond by State requires strong written documentation by the Contract Administrator of work progress, or lack thereof by the Purchaser and/or Subcontractors. This documentation should be kept in a written log and place in the timber sale file in the event that a claim becomes necessary. Specific work completed or not completed should be documented in the Timber Sale Inspection Report or Timber Sale Status Report as appropriate. When it becomes obvious that the Purchaser is unable to fulfill its obligations, or when the State's interests are threatened, the Asset Management Unit should be immediately notified so that they can evaluate whether to initiate a claim against the bond. The following procedure should be used: 1. The Contract Administrator should notify the Unit Forester, Assistant District Forester and/or the District Forester of the problem. 2. The Unit Forester, ADF and/or the District Forester should notify the Asset Management Unit of the problem and indicate the date by which the work must be done or a payment must be made. 3. The Asset Management Unit will notify the Purchaser and the bonding company or surety of the deadline date by which work must be done or payment must be made. This puts the bonding company or surety on notice that the bond or surety will be used if the work is not done or the payment is not made by the deadline date. 4. If use of the bond becomes necessary after the deadline has passed, the District Forester and Asset Manager will jointly determine the course of action to take. Work may either be done by State, by separate contract, or by the bonding company or surety. Claims for delinquent payments will be submitted directly to the bonding company or surety by the Asset Management Unit. Action to recover damages by making a claim against a bond or surety will only be taken after a Purchaser has been given the opportunity to correct problems, complete projects or make payments. Once a sale is placed in a default status, the Purchaser and their surety will be placed on notice as to what the damages are and the payment due State. Defaulted sales are handled in accordance with OAR's (Chapter 629, Division 32, see Section 1560, “Violations; Default; Remedies”). The contract requires that claims against bonds by Contractors or Sub-Contractors be filed within 120 days after the services, labor or materials were provided for the Purchaser. Department policy is to hold bonds for the 120-day period to provide potential lienholders an opportunity to recover losses. This policy exists to provide for the right of action by sub-contractors on the Purchasers performance bond granted by ORS 279C.600 and 279C.605. If a lien or claim is filed against a Purchaser, the bond will be held for 2 years from the date of claim. Claimant must submit judgment for collection of bond amount within that 2 year period. The 120-day period following the completion date of the contract begins when the Asset Management Unit receives the final Timber Sale Status Report, indicating that all work has been completed and accepted by State. Therefore, it is important that the Contract Administrator submit this report promptly to the unit when all of the work has been completed. The standard bond reduction language applies to where project work exceeds 20% of the purchase price. An additional amount up to 100% of the project costs is generally required. The intent is to reduce the bond down to the 20% of purchase price level when the project work is completed. The Purchaser may request a bond reduction after the project work is completed and approved, and the State may grant a reduction in bond to 20% of the purchase price for the timber. Slash Disposal Option This optional language allows for the reduction of the performance bond to the cost allowed for slash burning if slash disposal is required of the Purchaser, but only if all other work is completed and accepted. This reduction will generally only be made if slash burning will be delayed four months or longer after all other work is completed. The procedure for reducing a bond during the contract is the same as the procedure for terminating the bond at the end of the contract. The Contract Administrator notifies the Asset Management Unit through a Timber Sale Status Report when the necessary work has been completed which qualifies the Purchaser for a reduction of bond. The bond will be held for a period of 120 days from the date the work was accepted as complete as noted on the Status Report. APPROVAL AUTHORITIES The Contracts Team Leader has the authority to approve acceptable performance bonds. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1220. Claims Against PURCHASER's Performance Bond. (a) Claims against PURCHASER's performance bond for failure to make payments when due to suppliers, materialmen, Contractors, and subcontractors of PURCHASER shall be processed in the following manner: (1) Upon receiving notice from a supplier, materialman, Contractor, or subcontractor of an unpaid obligation of PURCHASER, STATE shall notify PURCHASER and PURCHASER's surety in writing, describing the claim and specifying a date not later than fifteen (15) days from the date of the notice within which PURCHASER shall be expected to respond to the claim. (2) PURCHASER shall provide, within the time requested by STATE, verification reasonably satisfactory to STATE that the claim has been satisfied or is being addressed in a manner reasonably satisfactory to STATE. If PURCHASER fails to provide such evidence within the time requested, PURCHASER shall be deemed to be in default of the Contract, and STATE shall be entitled to make a claim against PURCHASER's performance bond on behalf of the claimant. (b) Claims against PURCHASER's performance bond for failure to comply with or perform other obligations under the Contract shall be processed in the following manner: (1) STATE shall provide notice in writing to PURCHASER and PURCHASER's surety of the nature of the failure to comply or the unperformed obligation, and shall specify a date by which the failure must be remedied. (2) If PURCHASER fails to remedy the failure or to respond in writing with reasons adequate in STATE's judgement to waive the failure within the time specified in STATE's notice, PURCHASER shall be deemed to be in default and STATE shall be entitled to make a claim against PURCHASER's performance bond on behalf of STATE for an amount deemed reasonably sufficient to cure the failure. (c) STATE reserves the right to invoke any remedy available to it under the Contract or at law or in equity in the event STATE is required to seek redress from PURCHASER's surety for a Contract violation or default by PURCHASER including, without limitation, termination of the Contract. Rev. 12/03 INTENT/EXPLANATION This section complements Section 1210 by describing more specific processes by which claims can be filed against the Performance Bond. It establishes timelines and requirements for a Purchaser to correct situations that may result in a claim against their bond. POLICY REFERENCES Directive 3-4-1-320 - Insurance and Performance Bond Requirements - This directive provides further detail and process information on the standards and procedures for handling performance bonds through the life of a sale. \\Salem10a\secure\Policy\Word\3-4-1-320-09-01-1989.doc GUIDANCE FOR ADMINISTERING THE PROVISION Situations where a claim against a Purchaser’s performance bond becomes necessary are administered by the Asset Management Unit. The specific steps involved and notices required are described in the guidance for Section 1210, Performance Bond. Any questions from Purchasers or requests related to performance bonds should be referred to the appropriate Asset Management Unit personnel. APPROVAL AUTHORITIES The Contracts Team Leader has the authority to approve acceptable performance bonds. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1230. Payment Bond. [The following Payment Bond language appears in timber sales sold on a “Cash” or lump sum basis.] PURCHASER shall furnish a payment bond (or blanket payment bond for multiple Contracts) acceptable to STATE guaranteeing payment for all timber harvested. Payment bonds may be in the form of one or more of the following: surety bonds, cash, cashier's or certified check, money order, assignment of surety, irrevocable letters of credit, or other securities determined acceptable by the State Forester. Surety bonds (including riders) must be written by a surety company authorized to do business in the State of Oregon, on a form provided by STATE. PURCHASER’s bond shall be in an amount at least equal to the value of timber estimated to be removed during a one-month plus 15-day billing period, as determined by STATE. In any event, the amount shall not be less than one installment payment as specified in Section 1720, "Payment Schedule." [The following Payment Bond language appears in timber sales sold on a “Recovery” or scale basis.] PURCHASER shall furnish a payment bond (or blanket payment bond for multiple Contracts) acceptable to STATE guaranteeing payment for all timber harvested. Payment bonds may be in the form of one or more of the following: surety bonds, cash, cashier's or certified check, money order, assignment of surety, irrevocable letters of credit, or other securities determined acceptable by the State Forester. Surety bonds (including riders) must be written by a surety company authorized to do business in the State of Oregon, on a form provided by STATE. PURCHASER’s bond shall be in an amount at least equal to the value of timber estimated to be removed during a one-month plus 15-day billing period, as determined by STATE. In any event, the amount shall not be less than one installment payment as specified in Section 1750, "Payment Schedule." Provision of a satisfactory payment bond will permit PURCHASER to remove timber for a 30-day period, after which time, payment for all such removed timber shall be due and owing. PURCHASER shall make cash payment within fifteen (15) days following the end of the monthly period. Upon payment for timber removed in the monthly period, the payment guarantee may be applied as a guarantee for a subsequent period. [The following language applicable to blanket payment bonds appears in all timber sale contracts.] A blanket payment bond shall be in an amount at least equal to the value of the timber estimated to be removed from all Contracts covered by the blanket payment bond during a one-month plus 15-day billing period as determined by STATE. PURCHASER shall obtain and furnish STATE with a written consent of surety on forms provided by STATE for coverage of any Contracts to which the blanket payment bond may apply. In no event shall PURCHASER remove timber with a value greater than the amount of the payment guarantee. Rev. 06/05 INTENT/EXPLANATION This provision requires that the Purchaser provide a payment bond, to protect the State from Purchaser failing to pay for timber removed from the timber sale. This is a separate bond from the Performance Bond required by Section 1210. It also provides the option for a Purchaser to provide a blanket payment bond, which allows the Purchaser to cover two or more timber sales with one bond. It specifies that a payment bond cannot be in an amount less than a standard installment payment. POLICY REFERENCES OAR 629-029-0125 – This administrative rule allows the State Forester to require a payment bond, and specifies the acceptable forms in which payment bonds can be provided. http://arcweb.sos.state.or.us/rules/OARS_600/OAR_629/629_029.html GUIDANCE FOR ADMINISTERING THE PROVISION There are two types of bonds involved in a timber sale, performance bonds and payment bonds. Performance bonds guarantee the Purchaser's compliance with all of the conditions and requirements of the timber sale contract, including payment. They also cover possible claims and liens against the Purchaser relative to Purchaser's operations on the timber sale. As explained in Section 1210, a performance bond is held for a period of 120 days in the event any liens or claims are filed against the Purchaser. Payment bonds are a guarantee that payments will be made for timber removed. Payment bonds can be cancelled as soon as all timber is removed and paid for, or when a sale is terminated. This Section establishes a requirement for, and the minimum amount for a Payment Bond. The payment bond amount is established by the Asset Management Unit at the time the timber sale is purchased. The Asset Management Unit provides Timber Payment Bond forms to the Purchaser along with the Notice of Contract Award. After completion of the form by the surety company, the form is returned to the Asset Management Unit and copies are forwarded to the appropriate field office. Billings are made monthly for all timber removed and scaled as of the last day of the month. When payments are received, a copy of the payment record will be forwarded to the appropriate field office by the Asset Management Unit. Contract Administrators should monitor this payment information and immediately notify the Contracts Team Leader if the difference between the value of timber removed and the payments received threatens to exceed the payment bond. The Contract Administrator or Contracts Team Leader may find that the payment bond is not adequate to cover the value of timber being removed if operations are proceeding quickly. If it appears that the difference between the value of timber removed and the payments received may exceed the payment bond limit, the Purchaser will be required to make an immediate payment or increase the amount of the payment bond. The Asset Management Unit will notify a Purchaser when they approach the bond limit and require immediate payment or increase in bond amount. A blanket payment bond may be allocated to two or more sales. Purchasers obtain coverage with a blanket payment bond in the same manner as they obtain coverage with a payment bond, except they use a Blanket Payment Bond form. The Purchaser allocates the bond to various contracts "as required." Purchasers may add or remove contracts from a blanket payment bond at any time. However, any sale added to the bond must be approved by the Purchaser's surety. The Asset Management Unit office will be responsible for all billings at the end of each month. Purchasers should provide sufficient bonding to cover all of the volume (value) that they plan to remove each month in all of the contracts covered by the payment bond. However, Purchasers may underestimate the volume to be removed from a specific sale. Generally, this is not a problem since most Purchasers carry bonding in excess of the total amount needed to cover monthly payments. In many cases, when a Purchaser underestimates the volumes to be removed on one sale, the volume on another sale may be overestimated. As long as the total volume (value) removed in a month, plus a 15-day billing period does not exceed the amount of the bond, there is no problem. Although it is the Asset Management Unit office's responsibility to determine when a Purchaser has removed volume (value) equal to the bonding limit, the Contract Administrator should also be alert to situations which may lead to more volume (value) removed than is covered by bonding. The Contract Administrator should inform the Contract Team Leader if there are any such problems or potential problems. APPROVAL AUTHORITIES The Contracts Team Leader has the authority to approve payment bonds. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1240. Insurance. PURCHASER shall secure, at PURCHASER's expense, and keep in effect during the term of this Contract, the following insurance coverages, in a policy or policies issued by an insurance company or companies authorized to do business in the State of Oregon. The issuing company or companies shall indicate on the insurance certificates required below that STATE shall be given not less than thirty (30) days' notice of any cancellation, material change, or intent not to renew such policy. Any failure to comply with the reporting provisions of this insurance, except for the potential exhaustion of aggregate limits, shall not affect the coverage(s) provided to the State of Oregon, STATE, and their divisions, officers, and employees. PURCHASER shall be financially responsible for all deductibles, self-insured retentions, and/or self-insurance included hereunder. The coverage shall be as follows: (a) Comprehensive General Liability insurance (with no exclusions) covering personal injury and property damage in an amount not less than (*$2,000,000) (*$_____________) combined single limit per occurrence and an amount not less than (*$4,000,000) (*$_____________) per aggregate, with Contractual liability coverage to include all Contracts involving the work to be performed under this Contract. (b) Automobile Liability insurance in an amount not less than (*$2,000,000) (*$_____________) combined single limit per occurrence and an amount not less than (*$4,000,000) (*$_____________) per aggregate. This coverage can be provided by combining the Automobile Liability protection with the Commercial General Liability policy. This required insurance coverage shall include an endorsement for auto pollution and shall cover pollutants such as fuel tanks carried in vehicles. (c) Loggers Broad Form coverage in an amount not less than (*$2,000,000) (*$_____________) for costs of fire control, losses or damage from fire, and other causes arising or resulting from activities of PURCHASER, employees, Contractors, and others working or acting for PURCHASER. [STATE minimum for (a) and (b): $2,000,000 combined single limit per occurrence and $4,000,000 per aggregate; revise when higher limits required by access documents. STATE minimum for (c): $2,000,000; revise when higher limits required by access documents.] (d) Worker's Compensation insurance as statutorily required for persons performing work under the Contract. (e) Primary Coverage. Insurance carried by PURCHASER under this Contract shall be the primary coverage, and the STATE's insurance is excess and solely for damages or losses for which the STATE is responsible. (f) "Tail" or "Basis of Occurrence" Coverage. If any of the aforementioned liability insurance is arranged on a "claims made" basis, "tail" coverage will be required at the completion of this Contract for a duration of 24 months or the maximum time period the PURCHASER's insurer will provide such if less than 24 months. PURCHASER shall be responsible for furnishing certification of "tail" coverage as described or continuous "claims made" liability coverage for 24 months following Contract completion. Continuous "claims made" coverage will be acceptable in lieu of "tail" coverage, provided its retroactive date is on or before the effective date of this Contract. (g) The insurance policy or policies required under this section, excluding Loggers Broad Form, shall name the State of Oregon, the Oregon Board of Forestry, the Department of Forestry, the State Forester, (*the State Land Board, the Department of State Lands,) their officers, agents, employees, and members as additional insureds. (h) Required coverage shall be for Operations and completed Operations, independent Contractors, blanket Contractual liability, and explosion, collapse, and underground damage if blasting or excavation is required or performed under the Contract. (i) As evidence of the insurance coverage required by this Contract, PURCHASER shall furnish a certificate or certificates of insurance including all of the foregoing coverages to STATE. (j) All insurance shall be provided by a company with an A or better rating, as determined by A.M. Best Company, unless otherwise approved in writing by STATE. Rev. 10/04 INTENT/EXPLANATION This section spells out the requirements for the Purchaser to have insurance for the reasons specified, and in the amounts stated, for the duration of the contract. It requires that the Purchaser furnish evidence of this insurance to State. The insurance company providing the coverage must be authorized to do business in Oregon and must agree to notify State no less than 30 days prior to cancellation of the insurance. POLICY REFERENCES Directive 3-4-1-320 - Insurance and Performance Bond Requirements – This directive establishes the required types and minimum amounts of insurance required of Purchasers, and the procedures for documenting compliance with the requirements. \\Salem10a\secure\Policy\Word\3-4-1-320-09-01-1989.doc GUIDANCE FOR ADMINISTERING THE PROVISION Insurance requirements are included in timber sale contracts and other contracts for the following purposes: 1. To protect the State and to insure the Purchaser from loss or damage to property, including loss by fire, as a result of Purchaser's activities. 2. To protect the State and to insure the Purchaser from claims for bodily injury or death resulting from activities of the Purchaser. Coverage includes damage or loss caused by automobiles. 3. To protect the State and third parties against loss and claims arising from Purchaser's use of access across lands of third parties. 4. To protect State from claims arising out of an on-the-job injury. The insurance amounts specified in this section are the minimum insurance recommended, plus any additional amounts required by third party agreements. In cases involving access across property of third parties, the insurance coverage required by the third party may be considerably more than the coverage that would be required by State. The coverage required in these cases is established at the level required by the third party. There are three basic types of insurance required in timber sale contracts: (1) commercial general liability; (2) automobile liability; and (3) Loggers Broad Form insurance. 1. General liability insurance covers any injury to individuals and damage done by the Purchaser to property of the State or to property of others, including parties granting use of their property to the Purchaser in conjunction with a timber sale. Damage to property includes losses due to fire, road construction, logging operations, and any other activities of the Purchaser relative to the timber sale. 2. Automobile liability covers injuries caused by automobiles and/or trucks. 3. A special form of insurance is required to cover damage by fire. This insurance is called Loggers' Property Damage (LPD) insurance and is identified as "Broad Form" or "Form 'B'". Generally this type of insurance is underwritten only by the larger insurance companies such as Lloyds of London. The minimum amount of property damage insurance required for various types of contracts is stipulated in Directive 3-4-1-320, and is reflected in the amount specified in this section. In accordance with an Attorney General's opinion, State may accept self-insurance by a Purchaser in the form of a letter of certification that the Purchaser has adequate assets designated as insurance in amounts required by the timber sale contract. Insurance Requirements are sent to the Purchaser with the Notice of Intent to Award if certificates on hand for that Purchaser do not contain adequate coverage. The Purchaser is informed of the need to provide State with evidence (certificates) of insurance required by the contract, and the information that must be included on the certificate. Receipt of this information from the Purchaser is required to issue the Notice of Contract Award. No more than five days prior to commencement of initial operations, the Contract Administrator must check with the Asset Management Unit to ensure the Purchaser has a valid certificate of insurance for workers' compensation coverage. Failure to make this check could make the Department liable for any injuries or damages that result from an on-the-job injury. NOTE: THIS APPLIES ONLY TO THE FIRST OPERATIONS CONDUCTED UNDER THE CONTRACT. THIS CHECK DOES NOT NEED TO BE MADE PRIOR TO SUBSEQUENT START UPS AFTER PERIODS OF INACTIVITY. APPROVAL AUTHORITIES The Contracts Team Leader has the authority to approve insurance documents. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. GENERAL TERMS AND CONDITIONS PROVISION Section 1310. Authorized Representatives. During any period of Operations, PURCHASER shall have a designated representative(s) available to STATE on the Timber Sale Area or Project Location, or both, where such activity is separated. The representative(s) shall be authorized to receive any notice or instructions from STATE on behalf of PURCHASER and to take any action required in regard to performance of PURCHASER under this Contract. STATE shall designate a field representative(s) who shall be authorized to receive notices, inspect progress of the Operations, and issue instructions in regard to performance under the terms of this Contract. Authorized representatives of STATE and PURCHASER shall be designated in the Operations Plan required by Section 1140, "Operations Plan." Rev. 10/04 INTENT/EXPLANATION This section requires both State and Purchaser to appoint a representative designated to act in their behalf and to receive and issue notices. The representatives must be designated in the Operations Plan. POLICY REFERENCES None. GUIDANCE FOR ADMINISTERING THE PROVISION Both State and Purchaser must select a representative who will be readily available to discuss problems and any other matters relating to the timber sale operations. For the State, the Contract Administrator is normally designated as the authorized representative. The Purchaser's representative should be someone who will normally be on the sale area when the sale is active. This may be a subcontractor, or an employee of the Purchaser. The representative must be someone to whom the Contract Administrator can issue instructions and directions. When notices and instructions are given to the representative of the Purchaser, the Contract Administrator should also send a copy to the Purchaser. It is recommended that this be accomplished by providing copies of the Timber Sale Inspection Reports. The Operations Plan requires both the Purchaser and State to list their representatives and their phone numbers. It may be necessary to appoint more than one representative. For example, there may be one representative for project work and another representative for the logging. In this case, it is very important to have the duties of each specifically defined to avoid confusion. When changes in representatives occur, the party making the change should notify the other party of the name and phone number of the new representative, and an updated Operations Plan should be prepared, submitted and approved by State, showing the new authorized representative. APPROVAL AUTHORITIES The District is responsible for reviewing and accepting the Purchasers authorized representative through approval of the Operations Plan. Contract Administrators have delegated authority to sign and approve Operations Plans. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1315. Inspection and Acceptance. STATE and its authorized and designated representative shall at all times be allowed access to all parts of the Operations and Areas of Operations of PURCHASER, as STATE may determine to be necessary or desirable to make a complete and detailed inspection of the Operations and PURCHASER’s compliance with all terms and conditions of this Contract. STATE shall be furnished operation progress status or other information and assistance by PURCHASER, or the Authorized Representative(s), as STATE may determine necessary to permit STATE to verify PURCHASER's compliance with all terms and conditions of this Contract. PURCHASER shall notify STATE in writing upon completion of final Operations. STATE will inspect the Operations completed by PURCHASER within twenty (20) business days after receipt of written notification that final Operations are complete. Following inspection, STATE shall notify PURCHASER in writing of STATE’s acceptance of PURCHASER's performance of the Contract or, if PURCHASER’s Operations are not acceptable to STATE, shall advise PURCHASER in writing of the particular defects to be remedied before final acceptance by STATE can be granted. Rev. 02/10 INTENT/EXPLANATION This section provides the State representative the right to enter an operation area at any time to inspect the work being done and to be given information and assistance from Purchaser which may be necessary to make the inspection. POLICY REFERENCES 3-4-3-410 - Timber Sale Inspection Report – This directive describes the standards for documenting inspections of timber sales. \\Salem10a\secure\Policy\Word\3-4-3-410-02-01-1980.doc 3-4-3-690 - Timber Sale Status Report – This directive describes the standards for informing the Asset Management Unit of the completion of key activities by a Purchaser or subcontractor. \\Salem10a\secure\Policy\Word\3-4-3-690-10-01-1997.doc GUIDANCE FOR ADMINISTERING THE PROVISION The Contract Administrator should attempt to establish a good working relationship with the Purchaser and any designated representatives or subcontractors early in the contract process. The Contract Administrator should make sure that the Purchaser, authorized representatives, and subcontractors fully understand all of the contract requirements, including the need to make inspections of the work being done. Explain the reasons for the requirements and what will be expected of the Purchaser. The Purchaser or representative should be present, if possible, when inspections are made to discuss any problems or to receive instructions. Active operations should be inspected at least weekly and a Timber Sale Inspection Report should be completed for each inspection. A number of factors may lead to a need for more frequent inspections. Examples are a subcontractor that is unfamiliar with State timber sales, or the specific type of operation involved, or subcontractors who have a track record of difficulty meeting contract requirements. If in doubt as to how often inspections should occur, it is best to err on the side of more frequent inspections until it is clear that less frequent inspections will work. For major project work, inspections may also need to be more frequent. For example, on a bridge construction project, it may be necessary to have an inspector on the job every day during the construction of the footings and the fitting of the beams. Regular inspections should be staggered so that the inspection is not made on the same day of the week, or at the same time of day. Inspections outside the normal 8 to 5 workday may be appropriate, if approved by Contract Administrator's supervisor. Allow plenty of time for a thorough inspection of each operation. During inspections of timber sale operations, the Contract Administrator should also make inspections for compliance with Forest Practices Act Rules and Fire Protection Laws and Rules. If the Contract Administrator is not qualified to enforce these laws and rules, assistance should be requested from the local Stewardship Forester or Fire Protection Unit personnel. The first inspection that the Contract Administrator should make, along with the Purchaser or representative, is of the timber sale boundaries. The Contract Administrator should check the boundaries periodically throughout the contract duration to ensure that the boundaries remain adequately marked and that no cutting or logging is done outside the boundaries. A final inspection of the boundaries should be made after the logging is completed. On partial-cut sales, inspect the cutting to verify that only the designated trees are being cut and removed, or that the selection criteria specified in the contract are being met. When issuing instructions, the administrator should document both work that the Purchaser has and is accomplishing and all the work that is being required of the Purchaser. The Timber Sale Inspection Report should be used to document all instructions, current progress, non-compliance, and any time limits for completion of work. This report provides an on-going account of all activities on the sale area and provides a sale history which is used when considering contract extensions or adjustments. Any instructions documented in the inspection report should have been provided to the Purchaser verbally. Contract Administrators should not rely solely on written instructions to communicate requirements. To report completion and acceptance of projects and other contract requirements to the Asset Management Unit, use the Timber Sale Status Report, not the Timber Sale Inspection Report. Inspect log branding and log load receipts on the landings and on trucks as frequently as possible. Periodically stop loaded trucks on State forest roads to determine whether log branding is being done properly and whether log load receipts are being used properly. If improper branding is being done, hold the truck until the branding is corrected. Notify the Purchaser of the problem and if the problem continues, suspend hauling operations until the problem is resolved. If log load receipts are not being used properly, suspend hauling operations until the problem is corrected. Scaling locations are inspected prior to acceptance. This is typically done by the Asset Management Unit Log Accountability Specialists, who maintain a list of approved log delivery locations. The Contract Administrator should verify that the information in Exhibit C – Scaling Exhibit is correct. The Contract Administrator should contact the Log Accountability Specialists if questions arise relative to scaling or approved locations. APPROVAL AUTHORITIES Contract Administrators have the authority to conduct inspections as necessary, and to provide written instructions and direction to the Purchasers authorized representative to correct any problems discovered. Unit Foresters have delegated authority to approve inspection reports. The Asset Management Unit Log Accountability Specialists are responsible for inspecting and approving log delivery locations. WHO TO CALL Questions regarding contract compliance issues other than log accountability should be discussed with the Unit Forest and/or the Contracts Team Leader. Compliance or inspection issues related to scaling locations should be referred to the Log Accountability Specialists TRAINING METHODS Classroom module with assistance from Asset Management Unit staff. PROVISION Section 1320. Assignment of Contract. PURCHASER shall not assign, sell, or transfer rights, or delegate responsibilities under this Contract, in whole or in part, without the prior consent of the STATE. STATE will consent only when assignment is consistent with STATE's fiduciary duties. No such written approval shall relieve PURCHASER of any obligations under this Contract, and any transferee shall be considered the agent of the PURCHASER and bound to perform in accordance with the Contract. PURCHASER shall remain liable as between the original parties to the Contract as if no assignment had occurred. PURCHASER agrees to pay STATE a $250 administrative fee for processing each assignment. Rev. 12/03 INTENT/EXPLANATION This provision stipulates the requirements that a Purchaser must comply with if they want to sell their timber sale contract to another party. The assignment of a contract from a Purchaser to another party can only be done with the approval of State. Original Purchaser's bond must be retained and will be used for any claims within 120 days of assignment, although Purchaser retains no right to the timber for this period. An administrative fee of $250 is charged to Purchasers to cover the costs of processing the assignment. POLICY REFERENCES None GUIDANCE FOR ADMINISTERING THE PROVISION A written request for assignment of contract must be submitted to State by Purchaser. If the district receives such a request directly from the Purchaser, the Asset Management Unit should be notified immediately, and the original request forwarded to them. Upon receipt of the request, the Asset Management Unit is responsible for evaluating the request. This evaluation will take into consideration market conditions and the proposed assignee's eligibility to purchase public timber. If the Asset Management Unit determines the assignment is in State's best interest, they will send instructions and Assignment of Sale Contract forms to the Purchaser. In order to complete an assignment, the Purchaser agrees to assign all rights, title and interest in the timber, and all obligations and duties to perform the contract to another party. In order to qualify, the party acquiring the contract must submit certificates of insurance in the amounts specified in the contract. In addition, the acquiring party must provide a performance bond or surety as required by the contract. The original Purchaser's bond may be transferred to the new Purchaser (upon approval of surety) or the new Purchaser may obtain another bond in the specified amount. The District (Contract Administrator) is responsible for reviewing the status of the sale at the time of the request to determine if there are any conditions that could impact the decision to approve the request, and communicating those conditions to the Asset Management Unit. This review would be similar to when a contract is terminated or defaulted. The Asset Management Unit is responsible for determining what information to provide to a potential new Purchaser in this situation. Upon receipt of acceptable bond and insurance or any required deposits from the party acquiring the contract, the Asset Manager will issue an Approval of Assignment to the acquiring party with copies to the original Purchaser, the District and Area involved, and the surety of the acquiring party. If the acquiring party elects to secure its own performance bond, the bond of the original Purchaser will be held for a period of four months after the date of assignment to cover any claims or liens against the original Purchaser. However, if the original Purchaser did not work on the timber sale, the bond can be released when the assignment is completed. Access documents are reviewed by the Asset Management Unit when an assignment is requested. The new Purchaser may be required to enter into access agreements. From the standpoint of field level contract administration, if a contract is assigned to a new entity, then any Operations Plans entered into by the previous Purchaser are no longer valid. No operations should occur until the required Pre-Operations meeting has occurred with the new Purchaser, and an Operations Plan has been submitted and approved by State as per Section 2450. APPROVAL AUTHORITIES Approval to assign a contract over $25,000 in value requires the approval of the Chief of State Forests. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1325. Subcontracting. PURCHASER acknowledges and agrees that if PURCHASER subcontracts all or any part of the Operations, such subcontracting shall in no way relieve PURCHASER of any responsibility under this Contract. PURCHASER shall notify STATE in writing of the names and addresses of each subcontractor prior to the commencement of any Contract work by the subcontractor. Rev. 10/04 INTENT/EXPLANATION This provision allows subcontracting of work under the contract, but specifies that the Purchaser retains full responsibility for compliance with the contract provisions even though the work may be subcontracted to others. It requires that the Purchaser notify State in writing of any subcontractors employed on the timber sale. POLICY REFERENCES None. GUIDANCE FOR ADMINISTERING THE PROVISION The usual method of notifying State of any subcontractors employed by the Purchaser is through the Operations Plan. Subcontractors include all parties authorized by the Purchaser to work on the sale, including fallers, road construction contractors, loggers, etc. The Contract Administrator should inform the Purchaser at the Pre-Operations meeting that any changes in subcontractors, or the adding of new subcontractors, must occur through submittal and approval of an updated Operations Plan prior to any contract work by that subcontractor. Only through this process can the administrator verify that the parties working on the sale area have been authorized to do so by the Purchaser, and that the subcontractors have been thoroughly informed of the relevant contract requirements and specifications that apply to their work. APPROVAL AUTHORITIES The District has the authority to approve subcontractors through approval of the Operations Plan. Contract Administrators have delegated authority to sign and approve Operations Plans. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1330. Conditions of Areas of Operations. Use of Areas of Operations. PURCHASER shall follow the STATE's Authorized Representative's instructions, if any, regarding use of the Areas of Operations. STATE reserves the right to issue written authorization to others to use the Areas of Operations when, in the determination of STATE, such use will not materially interfere with the Operations of PURCHASER. During the term of this Contract, STATE reserves the right to sell any products or materials from the Areas of Operations, provided that the products or materials are not timber included in this Contract and that removal will not materially interfere with the Operations of PURCHASER. PURCHASER shall not interfere with the use of roads by other authorized users. PURCHASER shall not be held liable for any acts, omissions, or neglect of authorized simultaneous users. In an emergency affecting the safety of life or of the Operations or of adjoining property, PURCHASER, without special instruction or authorization from STATE's Authorized Representative, shall act reasonably to prevent threatened loss or injury, and shall so act, without appeal, if instructed by STATE's Authorized Representative. Any compensation claimed by PURCHASER on account of emergency work shall be equitably determined. Rev. 06/04 INTENT/EXPLANATION This provision allows the State to permit simultaneous use of the area within the timber sale boundaries, provided that the parties involved do not unduly interfere with each other. POLICY REFERENCES None. GUIDANCE FOR ADMINISTERING THE PROVISION Simultaneous use of timber sale areas should only by permitted if it is in the interests of State, and should only be considered in limited circumstances. Occasionally, it may be necessary to allow joint use of an area in order to salvage windthrown timber, firewood cutting, or for the development and use of a quarry site. Problems related to dual or multiple-use include determining responsibility for fires that may occur, and insurance and damage liability. In some cases, the original sale Purchaser may be willing to accept the responsibility of another party jointly working on the sale area, but most frequently the original sale Purchaser will want to be released of any responsibility before another party is allowed to work on the area. Whenever possible, it is preferable to release Purchasers of responsibility for sale areas or portions of sale areas prior to permitting other uses, rather than permitting simultaneous use of the area. In such cases, the Purchaser and State must agree to the release which will relieve the Purchaser of any further obligations on the area, including slash disposal and clean up requirements. This method may be used to provide areas for public or commercial woodcutting, and the harvesting of miscellaneous forest products. Joint or multiple-use of roads occurs more frequently than simultaneous use of sale areas. There are three major problems involved with road use by two or more parties: (1) blockage of roads, (2) safety, and (3) road maintenance: 1. Blockage of Roads - By placing landings and loading locations on a road, as is necessary in many sales, one Purchaser may block traffic for other users of the road. The only control that the Contract Administrator has for limiting interference is in approval of Operations Plans. Whenever possible, operations should be scheduled so as to limit the length of time a road will be blocked at any one time. 2. Safety - Safety problems may arise when there is too much traffic for the class of road being used, when road widths are too narrow, when turnouts are too few and when traffic is too fast. Some of the measures that the Contract Administrator should consider to minimize these problems are: a. posting road signs indicating hazardous conditions. b. posting speed limits. c. suggesting alternate routes to users. d. scheduling joint meetings with users to resolve problems. 3. Road Maintenance - Road maintenance problems occur when maintenance responsibilities are not clearly defined or when users fail to carry out their responsibilities. If a road is to be jointly maintained by two or more parties, the Contract Administrator must make sure that each party is aware of its responsibilities. The administrator need not become involved in making agreements between parties but only needs to make sure that the maintenance is done as required. When problems arise, the only leverage that administrators have is to hold performance bonds or surety until the problems are resolved and the maintenance is satisfactorily performed. In some cases, State may perform the maintenance and bill the appropriate party or parties. The “Road Maintenance” section discusses proportionate maintenance by multiple users. APPROVAL AUTHORITIES The District has the authority to approve simultaneous use of a timber sale area through approval of subsequent permits or contracts. This should be done in full consultation with all the affected parties, and with the Asset Management Unit staff. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1335. Hazardous Substances Discovered by PURCHASER. Unless disposition of Hazardous Substances is specifically made a part of PURCHASER’s Operations under this Contract, PURCHASER shall immediately notify STATE of any Hazardous Substances which PURCHASER discovers or encounters during performance of Operations. PURCHASER shall immediately cease operating in any part of the Area of Operations where Hazardous Substances have been discovered or encountered, if continued Operations in such area would present a bona fide risk or danger to the environment or to the health or well being of PURCHASER's or any subcontractor's work force. Unless disposition of Hazardous Substances is specifically made a part of PURCHASER’s Operations under this Contract, upon being notified by PURCHASER of the presence of Hazardous Substances in the Area of Operations, STATE shall arrange for the proper disposition of such Hazardous Substances. Rev. 04/04 INTENT/EXPLANATION Defines the responsibilities for reporting and disposing of hazardous materials and substances discovered in the sale area that are not caused or aggravated by activities of the Purchaser. POLICY REFERENCES Federal and state law (ORS chapter 466, especially 466.605 to 466.680) make property owners liable for hazardous substances and certain types of environmental pollution, regardless of how the hazardous substances or environmental pollution came about. Federal and state laws also require that spills of certain substances be reported and cleaned up. GUIDANCE FOR ADMINISTERING THE PROVISION Serious consequences (i.e., civil and criminal penalties and clean-up costs) can result from environmental pollution on state property. The contract contains two sections (1335 and 1340) to help the State avoid these consequences. This section requires the Purchaser to report any hazardous materials encountered when working in the sale area. Hazardous substances are frequently dumped in forest areas. The State may not be aware of the presence of hazardous materials that have been dumped in sale areas. The reporting requirement in this section helps the State keep track of hazardous substances found on state forest lands, and initiate cleanup and removal procedures. If a Purchaser reports a hazardous material present in the timber sale area, the Contract Administrator should immediately notify the Unit Forester, Assistant District Forester, and/or District Forester. ODF procedures for hazardous material incident reporting and control can be found in ODF Directive 6-3-0-002. \\Salem10a\secure\Policy\Word\6-3-0-002-10-01-1990.doc DEQ also has information available through the following links to their website, on key actions and notifications that need to occur for specific types and/or quantities of hazardous material spills. http://www.deq.state.or.us/lq/cu/emergency/reportspill.htm http://www.deq.state.or.us/lq/pubs/factsheets/cu/WhatToExpectSpill.pdf APPROVAL AUTHORITIES Consult ODF policies and DEQ references for applicable authorities. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from Private Forests Program staff or local Stewardship Forester. PROVISION Section 1340. Hazardous Substances Generated/Aggravated by PURCHASER. PURCHASER shall be held responsible for any and all releases of Hazardous Substances during performance of the Contract which occur as a result of, or are aggravated by, actions of its agents, personnel, or subcontractors. PURCHASER shall immediately notify STATE of any release of Hazardous Substances and, as directed by STATE, shall promptly dispose of or otherwise remediate such spills or leaks to the satisfaction of STATE and proper regulatory agencies in a manner that complies with applicable federal, STATE, and local laws and regulations. Remediation shall be at no cost to the STATE. PURCHASER, at all times, shall: (a) Properly handle, use, and dispose of all Hazardous Substances brought onto the Areas of Operations, in accordance with all applicable federal, STATE, or local statutes, rules, or ordinances; (b) Be responsible for any spills, releases, discharges, or leaks of (or from) Hazardous Substances which PURCHASER has brought onto the Areas of Operations; and (c) Promptly remediate, without cost to the STATE, such spills, releases, discharges, or leaks to the STATE's satisfaction and in compliance with all applicable federal, STATE, or local statutes, rules or ordinances. PURCHASER shall report all reportable quantity releases of Hazardous Substances and petroleum products to applicable federal, STATE, and local regulatory and emergency response agencies. Reportable quantities are found in 40 CFR, Part 302, Table 302.4 for Hazardous Substances and in OAR 340-108 for petroleum products. Rev. 06/04z INTENT/EXPLANATION This section stipulates requirements of the Purchaser if their activities result in hazardous material spills on the timber sale area. POLICY REFERENCES Federal and state law (ORS chapter 466, especially 466.605 to 466.680) make property owners liable for hazardous substances and certain types of environmental pollution, regardless of how the hazardous substances or environmental pollution came about. Federal and state law also require that spills of certain substances be reported and cleaned up. GUIDANCE FOR ADMINISTERING THE PROVISION This section requires the Purchaser to immediately report any environmental pollution caused by their activities during the course of performing the contract. This assures that federal and state reporting and cleanup requirements are met by both the Purchaser and the State. If a Purchaser reports that they have spilled a hazardous material or aggravated a hazardous material spill present in the timber sale area, the Contract Administrator should follow the standard reporting procedures described in ODF Directive 6-3-0-002. Refer to the more detailed guidance for Section 1335. \\Salem10a\secure\Policy\Word\6-3-0-002-10-01-1990.doc APPROVAL AUTHORITIES Consult ODF policies and DEQ references for applicable authorities. WHO TO CALL Contact local District supervisor and Stewardship Forester if a hazardous materials incident occurs on a timber sale. Notify the Contracts Team Leader. TRAINING METHODS Classroom module with assistance from Private Forests Program staff and local Stewardship Forester. PROVISION Section 1345. Notice of Environmental Compliance. Prior to Contract termination and as a condition of final acceptance of PURCHASER’s performance of the Contract, PURCHASER shall provide written notice to STATE that all Hazardous Substances generated, brought into or used by Purchaser in the Timber Sale Area have been disposed of and all damage remediated in accordance with all applicable rules, regulations, laws, and statutes of all agencies having jurisdictions over such Hazardous Substances. Rev. 12/03 INTENT/EXPLANATION Requires a written notice from Purchaser prior to final acceptance of performance and final closing out of the timber sale contract. POLICY REFERENCES None. GUIDANCE FOR ADMINISTERING THE PROVISION This provision is not being enforced by the State, and will be deleted from future contracts. Contract Administrators should not request Purchasers to provide this notice. If a Purchaser chooses to provide such a notice, it should be forwarded to the Asset Management Unit in Salem for filing. APPROVAL AUTHORITIES Unit Foresters are authorized to waive this notification requirement as a minor operational change, if requested to do so by a Purchaser. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1350. Environmental Indemnification. PURCHASER shall indemnify and hold harmless the STATE from any claims resulting from the use, release or disposal of Hazardous Substances including their removal, encapsulation, transportation, handling, and other disposal, during the performance of this Contract, whether or not such use, release or disposal occurs within or outside the Timber Sale Area. Rev. 12/03 INTENT/EXPLANATION This section makes the Purchaser liable for any claims resulting from hazardous materials associated with their activities. POLICY REFERENCES Directive 0-2-5-600 - Risk Management Claims Processing – This directive contains policy and guidance for situation involving damage to ODF property and third party damage claims against the State. \\Salem10a\secure\Policy\Word\0-2-5-600-03-01-2006.doc GUIDANCE FOR ADMINISTERING THE PROVISION If the Contract Administrator becomes aware of potential claims related to hazardous materials they should immediately notify the Asset Management Unit. Refer to additional guidance for Section 1355, “General Indemnification”. Refer to the guidance for Sections 1335 and 1340 for situations involving hazardous material discoveries or spills on a timber sale. APPROVAL AUTHORITIES ODFs Risk Management Coordinator has the authority to act as a liaison between the agency and DAS to process any claims by third parties. DAS has the authority to accept or reject any claims made by third parties. WHO TO CALL ODFs Risk Management Coordinator should be notified immediately of any claims, or a situation that may result in a claim. The Contracts Team Leader should also be notified of claims related to timber sale activity. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1355. General Indemnification. PURCHASER shall indemnify, defend and hold harmless the State of Oregon, the Oregon Board of Forestry, the State Forester, (*the State Land Board, the Department of State Lands,) their officers, agents, employees, and members (“Indemnified Parties”), from all claims, suits, actions, or liens of any nature resulting from or arising out of the activities of PURCHASER or its subcontractors, agents, or employees under this Contract, including any claim based upon an alleged failure to obtain any necessary Permit, license, or approval, or any claim of liability for premiums, contributions, or taxes payable under any Workers' Compensation, Disability Benefits, Old Age Benefits, including FICA, or tax withholding laws; provided, however, the Oregon Attorney General must give written authorization to any legal counsel purporting to act in the name of, or represent the interests of, any of the Indemnified Parties prior to such action or representation. Further, STATE, acting by and through its Department of Justice, may assume its own defense, including that of its officers, employees and agents, at any time when in STATE's sole discretion it determines that (i) proposed counsel is prohibited from the particular representation contemplated; (ii) counsel is not adequately defending the interests of STATE; (iii) important governmental interests are at stake; or (iv) the best interests of STATE are served thereby. PURCHASER’s obligation to pay for all costs and expenses shall include those incurred by STATE in assuming its own defense. All provisions of this Section shall survive the termination of this Agreement. [NOTE: Board of Forestry and SF in all Contracts; SLB/DSL additionally in Common School Land Timber Sales.] Rev. 12/03 INTENT/EXPLANATION Indemnity refers to legal exemption from penalties or liabilities incurred by one's actions. This section is intended to protect the State of Oregon, the State Forester, the Board of Forestry and in the case of Common School Land timber, the State Land Board, the Division of State Lands, et al., against claims which may arise as a result of any activity performed under the contract. This section also holds State harmless from omission on the part of Purchaser or its subcontractors to obtain any necessary permits, including an Incidental Take Permit required under the Federal Endangered Species Act (see Section 1010, “Definition of Terms”). POLICY REFERENCES Oregon Constitution, Article IV, Section 24 - Suit Against State. ORS 30.140 - Effect of Indemnification Provision in Construction Agreement. Directive 0-2-5-600 - Risk Management Claims Processing – This directive contains policy and guidance for situations involving damage to ODF property and third party damage claims against the State. \\Salem10a\secure\Policy\Word\0-2-5-600-03-01-2006.doc ORS 30.260-30.300 - Tort Actions Against Public Bodies. ORS 656.029 & OAR 436-050-0041(1) - Workers' Compensation Requirements. GUIDANCE FOR ADMINISTERING THE PROVISION Contract Administrators should be familiar with the standards and responsibilities outlined in Directive 0-2-5- 600 - Risk Management Claims Processing. Immediately upon learning of an accident, injury, or damage to property (either State personnel or property or other people or property) caused by the operations of a Purchaser, the Contract Administrator should notify their supervisor and the Asset Management Unit. The district must prepare a Preliminary Report of Bodily Injury-Property Damage. The report is submitted to the Agency Risk Management Coordinator, with a copy to the Asset Management Unit. Although State is indemnified against claims for accidents or damages caused by the Purchaser, claims may be filed against State by other parties. Therefore, it is important to notify the Asset Management Unit and Risk Management Coordinator of any accidents or damage which occur as a result of Purchaser's activities. Contract Administrators should be aware of the Purchaser's liability and State's liability for accidents, injuries or property damage. The Purchaser is responsible only for those accidents, injuries or property damage caused by their activities on a timber sale. The Purchaser is not responsible for accidents, damages or injuries caused by State or its employees. State employees are covered against claims by the tort action statutes as explained below. Contract Administrators and other State employees involved directly or indirectly in the administration of contracts are rarely if ever held liable for any claims, omissions or injuries which may occur in the performance of their work. Any agency or employee of the State may be sued for negligence or damages, but they generally are protected against such claims through tort claims insurance held by the State. (A "tort" is a wrongful act, generally involving negligence on the part of an agency or employee engaged in the performance of work). APPROVAL AUTHORITIES ODFs Risk Management Coordinator has the authority to act as a liaison between the agency and DAS to process any claims by third parties. DAS has the authority to accept or reject any claims made by third parties. WHO TO CALL ODFs Risk Management Coordinator should be notified immediately of any claims, or a situation that may result in a claim. The Contracts Team Leader should also be notified of claims related to timber sale activity. TRAINING METHODS Classroom module with assistance from AG, ODF Risk Coordinator and Asset Management Unit staff. PROVISION Section 1360. Severability. If any provision of this Contract is declared by a court to be illegal or in conflict with any law, the validity of the remaining terms and provisions shall not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Contract did not contain the particular provision held to be invalid. Rev. 12/03 INTENT/EXPLANATION This provision establishes that if any section or provision of the contract is declared illegal by the courts, the remainder of the contract is still valid. The Purchaser is obligated to perform as though the illegal section did not exist. POLICY REFERENCES None. GUIDANCE FOR ADMINISTERING THE PROVISION Any questions or situations related to this provision should be referred to the Asset Management Unit. APPROVAL AUTHORITIES WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1365. Waiver. Failure of STATE to enforce any provision of this Contract shall not constitute a waiver or relinquishment by STATE of the right to such performance in the future, nor of the right to enforce any other provision of this Contract. Rev. 12/03 INTENT/EXPLANATION This provision establishes that State has the right to enforce the contract even though it may have failed to do so in the past. POLICY REFERENCES None. GUIDANCE FOR ADMINISTERING THE PROVISION Any questions or situations related to this provision should be referred to the Asset Management Unit. APPROVAL AUTHORITIES WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1370. Choice of Law and Venue. This Contract shall be governed by and construed in accordance with the laws of the State of Oregon, as interpreted by the Oregon courts. Any litigation arising out of this Contract shall be conducted in Marion County, Oregon. Rev. 12/03 INTENT/EXPLANATION This section makes the laws of Oregon prevailing in case we are involved with a foreign corporation. It also provides that any litigation be heard in Marion County. POLICY REFERENCES None. GUIDANCE FOR ADMINISTERING THE PROVISION Any questions or situations related to this provision should be referred to the Asset Management Unit. APPROVAL AUTHORITIES WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1375. Notices. Any written notice to PURCHASER which may be required under this Contract to be served on PURCHASER by STATE, may be served by personal delivery to PURCHASER or designated representative(s) by mailing the notice to the address of PURCHASER as is given in this Contract, or by leaving the notice at said address. Should PURCHASER be required to notify STATE concerning the progress of the Operations, or concerning any matter or complaint which PURCHASER may have regarding the Contract subject matter, or for any other reason, that notification is to be made in writing and delivered or mailed to the designated representative of STATE. Rev. 12/03 INTENT/EXPLANATION This provision establishes the acceptable methods by which the State can provide the Purchaser with written notices under the contract. It establishes that such notices may be delivered in person or by mail. It establishes that notices from Purchasers to the State must be written and must be sent to the designated representative of State. POLICY REFERENCES None. GUIDANCE FOR ADMINISTERING THE PROVISION Contract Administrators should be familiar with what constitutes notification under the terms of this provision. Notices must be provided to the Purchaser or their designated representative. A designated representative must be identified on an approved Operations Plan, or the notice does not meet the requirements of this provision. It is also important to note that the address for mailing notices to the Purchaser specified in this provision is the address for the Purchaser on the contract itself. If other addresses are provided in the Operations Plan, for either the Purchaser or designated representatives, then any notice sent to those addresses, should be copied and sent to Purchaser at the address provided on the timber sale contract as well. In addition to the written notices required by the contract, the Contract Administrator should send written reminders of project and sale completion dates if there are concerns about the Purchaser completing work by those dates. Contract Administrators should be familiar with the provisions of the contract that require written notification. Some provisions only require that State or Purchaser notify the other party of plans or requirements, while other provisions require that the notices be in writing. As a Contract Administrator, the best way to avoid misunderstandings and miscommunications is to provide all notices and instructions in writing, even if they are also provided verbally. Doing so provides thorough documentation of all instructions given and problems identified for resolution. Special notices from State to Purchaser should be sent by certified or registered mail to insure that they are received by the proper party. APPROVAL AUTHORITIES The District is responsible for reviewing and accepting the Purchasers authorized representative through approval of the Operations Plan. Contract Administrators have delegated authority to sign and approve Operations Plans. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1380. Entire Agreement; No Modification. This Contract consists of the entire written agreement between the parties, including but not limited to the Notice of Timber Sale, Invitation to Bid or Request for Proposal, Instructions to Bidders, specifications, terms, and conditions, Exhibits, Operations Plan, change notices, if any, and the accepted bid. No waiver, consent, modification, or change of terms of this Contract shall bind either party, unless in writing and signed by both parties. Such waiver, consent, modification, or change, if made, shall be effective only for the specific purpose given. There are no understandings, agreements, or representations, oral or written, not specified herein regarding this Contract. PURCHASER, by the signature of its Authorized Representative in Section 1000, “Signatures of Contract Parties,” hereby acknowledges that she/he has read this Contract, understands it, and agrees to be bound by its terms and conditions. Rev. 06/04 INTENT/EXPLANATION Incorporates additional elements (Notice of Timber sale, etc.) as binding requirements on the Purchaser. Specifically excludes any verbal agreements from being binding under the contract. POLICY REFERENCES OAR 629-020-0005 defines the contract as… “The entire written agreement between the parties, including but not limited to the Notice of Timber Sale; Invitation to Bid or Request for Proposal; Instructions to Bidders, specifications, terms, and conditions contained in the prospectus; Exhibits; Operations Plan; change notices; if any; and the accepted Form of Proposal. http://arcweb.sos.state.or.us/rules/OARS_600/OAR_629/629_029.html GUIDANCE FOR ADMINISTERING THE PROVISION The Contract Administrator should be familiar with the additional documents listed that are not part of the timber sale contract document itself. They should review these other documents for any additional information provided or requirements placed on the Purchaser. The text of this provision reinforces the point that there are no binding verbal agreements between Purchaser and State. Thus, any instructions or directions provided to Purchaser must be provided in writing for them to be enforceable at a later time if compliance is in question. Questions about this provision should be referred to the Asset Management Unit. APPROVAL AUTHORITIES WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. OWNERSHIP OF MATERIALS AND IMPROVEMENTS PROVISION Section 1410. Materials from State Property. PURCHASER shall not take, sell, use, remove, or otherwise dispose of any sand, gravel, rock, earth, or other material obtained or produced from within the limits of rights-of-way, gravel pits, rock quarries, or other property owned by or held by any agency of the State of Oregon, unless authorized by this Contract or separate written consent of STATE. Rev. 12/03 INTENT/EXPLANATION Establishes that Purchasers have no rights to property or materials on the sale areas which are not granted by the contract or by approval from State. POLICY REFERENCES None. GUIDANCE FOR ADMINISTERING THE PROVISION Any unauthorized use by the Purchaser of stockpiled rock, quarry rock, culvert material or any other material shall be considered as theft and treated as such by the Contract Administrator. Theft by Purchasers or subcontractors should be reported to the Unit Forester or District Forester and the Asset Management Unit, describing the theft and identifying any witnesses and evidence involved. Follow-up action will be determined by the District and Asset Management Unit, and may include involving local law enforcement in investigating. Any unauthorized use or removal of material should be stopped immediately. A determination as to whether a contract suspension is warranted should be made in consultation with the Asset Management Unit. APPROVAL AUTHORITIES Use or removal of any materials not specifically permitted by the contract language requires issuance of a permit or special sale, with the approval authorities specified in the Signature Authority document referred to in the guidance for Section 1000. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1420. Materials and Improvements. Title to materials, Improvements, and other property the Contract requires PURCHASER to provide shall vest in and become the property of STATE at the time such are furnished by PURCHASER and accepted by STATE. All materials, Improvements, and property furnished by PURCHASER shall be free and clear of liens, claims, and encumbrances. PURCHASER shall keep in good repair all Improvements located on State land and existing at the time of execution of the Contract and any Improvements placed on State land by PURCHASER which become the property of STATE under this Contract. PURCHASER shall promptly repair or replace, without cost to STATE, any Improvement injured, damaged, or removed from the Areas of Operations by PURCHASER or by Contractors of PURCHASER. Rev. 12/03 INTENT/EXPLANATION This provision establishes that materials and improvements such as roads, culverts, bridges, cattleguards, gates, fences, rock, etc., which the Purchaser is required to construct or furnish become the property of the State, except for materials or improvements required by third-party grantors of easements or permits. No materials or improvements can be furnished by a Purchaser on which liens or claims are outstanding. This section also provides for the protection from damage of any improvements on the sale area, both pre- existing and those installed by the Purchaser or the State during the term of the contract. POLICY REFERENCES None. GUIDANCE FOR ADMINISTERING THE PROVISION An "improvement" is any change made in a condition which enhances the condition or adds value to it. "Improvements" include buildings, roads, bridges, culverts, rock stockpiles, fences, cattle guards, road signs, hiking trails, camp sites, etc. The title to materials, improvements, etc., does not pass to State until such time as they are accepted by State. Thus, until the construction of a road or bridge or the installation of culverts, etc., has been accepted by State, the title to, and the responsibility for the materials and improvements, remain with the Purchaser. Contract Administrator should not indicate acceptance of improvements until they meet contract specifications. Once State has accepted improvements, subsequent loss or damage to those improvements is a loss to the State. Refer to the guidance for Section 2610, “Project Work” and Section 2620, “Completion of Projects”. The part of this provision which reads "Purchaser shall promptly repair or replace..." allows the administrator to use judgment as to how soon a damaged improvement needs to be repaired. For example, if a major culvert is damaged during a peak run-off period but it is still functional, the administrator may allow the Purchaser to wait until a less critical time to make the repairs. The Contract Administrator should adhere to the following procedures for getting damages repaired or paid for by the Purchaser: 1. Any damage should be documented with as much information as possible, including: (a) time when the damage occurred, (b) the circumstances under which the damage was done, (c) witnesses to the damage, (d) an estimate of amount of damage and, (e) any other pertinent information. 2. The Purchaser should be instructed as to the damage to be repaired and the date by which the repairs are to be completed. For damage that represents significant value, a copy of the instructions may be submitted to the Purchaser's bonding company or surety by the Asset Management Unit. If the repair work is not done by the specified date, it may be necessary for State to do the work and charge it to the Purchaser or collect costs from Purchaser's bond. This determination is made by the Asset Management Unit in consultation with the District. Any requirements in the contract for protection of specific features or improvements should be reviewed with the Purchaser during the Pre-Operations meetings and should be documented in the Operations Plan. APPROVAL AUTHORITIES Contract Administrators have delegated authority to sign and approve Operations Plans. WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff. PROVISION Section 1430. Removal of Equipment and Materials. Within thirty (30) days after completion, and as a condition of final acceptance of PURCHASER’s Operations, PURCHASER shall remove from the Areas of Operations and other property owned or controlled by STATE, all equipment, materials, and other property PURCHASER has placed or caused to be placed thereon that is not to become the property of STATE. PURCHASER acknowledges and agrees that any such equipment, materials, and other property that is not removed within thirty (30) days shall become the property of STATE and may be used or otherwise disposed of by STATE without notice or obligation to PURCHASER or to any party to whom PURCHASER may transfer title. Nothing in this section shall be construed as relieving PURCHASER from an obligation to clean up and to burn, remove, or dispose of debris, waste materials, and such, in accordance with the provisions of this Contract and applicable law. PURCHASER shall indemnify STATE for any cost or expense incurred by STATE as a result of PURCHASER’s failure to satisfy this obligation. Rev. 12/03 INTENT/EXPLANATION This provision requires the Purchaser to remove equipment and materials in a timely manner. It also provides for equipment or materials not removed to become property of the State, unless State and the Purchaser agree in writing to leave equipment or materials on the area for a longer period of time. POLICY REFERENCES Directive 3-4-3-420 - Removal of Abandoned Vehicles, Equipment and Scrap Metals from State Forest Lands. \\Salem10a\secure\Policy\Word\3-4-3-420-03-01-1992.doc GUIDANCE FOR ADMINISTERING THE PROVISION A contract should not be terminated until all equipment and materials have been removed as required by this provision. Terminating the contract constitutes acceptance of Purchasers work and the conditions on the timber sale area by State. When equipment or materials are found on a contract area after the expiration date of a contract, the Purchaser and/or the owner of the equipment and materials should be notified in writing that the equipment and materials must be removed or they will become the property of State. The Contract Administrator should notify the Asset Management Unit using a Timber Sale Status Report. The Asset Management Unit will send the Purchaser a “Work to Do” letter that details the work required to remove the equipment or materials. The termination date of the contract is interpreted to mean the date on which the Purchaser is released from any further obligations under the contract, including slash disposal. If equipment and materials are not removed, State has two options: (1) continue to hold the Purchaser of the timber sale responsible for removal or, (2) assume title to the equipment and materials and dispose of them as State sees fit. Under option (2), if the equipment is a motor vehicle which has been licensed, State acquires title by submitting a true and accurate copy of the timber sale contract to the Motor Vehicles Division verifying the authority under which State acquired title to the vehicle. Refer to Directive 3-4-3- 420 for further details. If equipment or materials become property of the State under this provision, the District and Asset Management Unit will determine how best to dispose of the equipment or material. APPROVAL AUTHORITIES Contract Administrators are responsible for making a determination on Purchaser compliance with this provision. The Asset Management Unit is responsible for issuance of a “Work to Do” letter, WHO TO CALL Contracts Team Leader. TRAINING METHODS Classroom module with assistance from AG and Asset Management Unit staff.
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