Free Motion for Partial Summary Judgment - District Court of Federal Claims - federal

Case 1:87-cv-00435-EGB

Document 17-5

Filed 12/23/2005

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1N THE UNITED STATES COURTOF FEDERALCLAIMS GATEWAY LUMBER CO., et al. (Gateway LumberCo.), Plaintiffs, Consolidated under lead case No. 87-435C ~o. 87-435C) (Judge Bruggi1~)

THE UNITED STATES, Defendant.

DECLARATION OF CHRISTINE ANDERSON IN GATEWAY LUMBER CO. v. UNITEDSTATES. NO. 87-435C I, Christine Anderson,ama contract AdministrationForester in the Forest Service RegionalHeadquartersOffice for the Pacific North~vestRegion. I amalso a contracting officer on the OlsqnpicNational Forest and have beensince I985, as well as a contracting officer on the Mt. Baker-Snoqualmie National Forest since 1993. I havereviewedthe official Forest Service contract files and records pertaining to the Eldred CreekTimberSale whichis the subject of this case. In making this declaration, I have relied uponthe infol~nation contained in the Forest Service's records concerningthe Eldred CreekSale, as ~vell as mykno~vledge morethan thirty years of experience as a Forest Service and contracting officer, appraiser, and pre-sale administrator. 1. OnFebruary 12, 1979, the Forest Service, United States Department Agricnlture of ("Forest Service"), advertised for sale certain timber located ill the Mt. Baker-Snoqualmie National Forest in Washington State. The sale was namedthe "Eldred Creek Sale." D. App. 1 ]

~ "D. App.__"refers to the cited page(s) in the appendix accompanying motion. our

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2. Onthe samedate, the Forest Service issued a "TimberSale Prospectus" for the Eldred CreekSale, containing information for prospective bidders concerningthe timber and the terms and conditions of its sale. D. App.2-9. According the volumeestimate set forth in the to 2 prospectus (and in the timber sale contract), the Sale included an estimated 5,200 MBFof merchantabletimber located in t~vo clearcutting units. Thetotal estimated volumeincluded the folloxving species and estimated volumes: 3,700 MBF Western Hemlock of and Other Coniferous Species ("H&O");1,300 MBF Cedar ("C"); and 200 MBF Douglas Fir ("DF'). of of TheSale also included an additional volume utility pulp and special cull material located of throughout109 acres of the sale area that wassubject to per-acre pricing ("PAM'). App. D. As further indicated in the prospectus, the Sale called for the construction and reconstruction of approximately2.2 miles of specified roads. D. App.6. Theprospectus stated that the coutract te~anination date xvas to be March 1983. D. App.4. 31, 3. Thetotal advertised value of the EldredCreekSale, established by a Forest Sen, ice appraisal, was $853,940. D. App. 10. 4. The Forest Service conducted bidding for the Sale on March14, 1979. Gateway Lumber Company ("Gateway")~vas the high bidder, among eight, with a total bid value $1,434,216. D. App. ll. 5. OnNovember 1979, the Forest Service a~varded Gatewaythe Eldred Creek Timber 19, Sale Contract. Underthe temas of the contract, Gateway obligated to cut, remove,and pay was for all of the timber included in the Sale by the contract temfination date, March 1983. 31,

2 "MBF" a unit of measurementmeaning"thousand board feet." Thus, 1 MBF is equals one thousandboard feet of timber. -2-

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However, contract did not require Gateway complete the specified roads because Gateway, the to as a qualified small businessenterprise, elected to havethe Forest Se~-,,ice (througha contractor) perfomathat task. D. App. 12-14. 6. Thereafter, by letter dated May 1982, the Forest Service, pursuant to Standard 3, Provision B8.21, ~anted Gateway contract term adjustment that adjusted the termination date a to June I2, I983. D. App. 15-16. 7. Oneyear later, on May 1983, the Forest Sea-vice, pursumatto StandardProvision 20, B8.21, gmatedGateway second contract term adjustment that adjusted the temaination date to a August 17, 1983. D. App. 17. 8. OnAugustI6, 1983, the parties executed an agreementto extend the contract termination date by thirty days, to September17, 1983, to allow Gateway time to decide whether 3 accept a further extension available under a then-recent Forest Service policy. D. App.18. to 9. Gateway decided to accept the extension. OnSeptember20, 1983, the parties executed an ageementto extend madmodify Gateway's contract. The agreement, amongother things, extended the contract temaination date by twenty-three months, to August17, 1985. D. App. 19-22.

3 Applicableregulation in effect duriug the relevant period attthorized the Forest Service to grant extra-contractual extensionsof timber sale contracts upona finding that tbe substantial overriding public interest justified the extension. Se_~e36 C.F.R.§ 223.8(f)(2) (1983). Under authority, the Chief of the Forest Service, during tbe early I980s, adopted the SOFT and SOFT I II policies allowingcontract extensions due to tbe then-depressedmarketsfor forest products. TheSOFT policy authorized extensions of up to t~vo years for sales sold before January 1, 1I 1981, with termination dates prior to April I, 1985. Gate~vay'sEldred CreekSale qualified for an extension under this policy. -3-

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I 0. Theparties later a~eed to conditionally extend the termination date beyondAugust 17, 1985,until a date thirty days after dissolution of a district court injunction issued in North Side Lumber v. Bloclt, No. 83-490 (D. Or.). D. App. 23. Co. 11. Gateway'sEldred Creek contract ultimately expired on December 1985, thirty 29, days after dissolution of the NorthSide injunction. Byletter of April 18, 1986, the contracting officer notified Gate~vay that the contract had expired uncompleted that the Forest Service and had decided not to resell the sale. D. App.24. Thecontracting officer's notice to Gateway that the Forest Service had decided against a resale was based upon an April 9, 1986 memorandum to the Forest Supervisor, Mt. Baker-Snoquahnie National Forest, from the Forest Service Regional Office. D. App. 25. 12. At the time the contract terminated, Gateway removedno timber from the had two clearcutting units included in the sale. During October and November 1983, Gateway removeda total of 147 MBF right-of-way volume. This included 33.21 MBF Cedar; 3.28 of of MBF Douglas fir; and 111.15 MBF Hemlock of of and other coniferous species. 13. The Eldred Creek TimberSale contract contains Standard Provision B9.4 which providesin pertinent part: B9.4 Failure to Cut. In the event of(a) termination for breach or (b) Purchaser'sfailure to cut designated timber on portions the Sale Area by Terminationdate, Forest Service shall appraise remaining Included Timber, unless tem~ination is under B8.22. Such appraisal shall be madewith the standard Forest Service methodin use at time of termination. Damages the United States for Purchaser's failure to cut due and removesuch timber meeting Utilization Standards shall be the amountby whichthe Cun'entContract Value[,] plus the cost of resale, less any effective PurchaserCredit remainingat time of -4-

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term/nation, e×ceedsthe resale value at newBid Rates. Lf there is no resale, d~.mages shall be determinedby subtracting the due value established by said appraisal fi:om the difference between Current Contract Valueand Effective Purchaser Credit. D, App. 26. 14. After Oateway'scontract temainated, the Forest Service appraised the remaining timber included in the Sale. D. App.27-29. 15. OnAugust13, 1986, the contracting officer issued a final decision assessing damages against Gatewayin the amountof$896,907.01~ D. App. 30-32. ] 6. Thereafter, Gateway commenced action pursuant to the Contract Disputes Act, this 41 U.S.C. § 601 et se~, challenging the contracting officer's final decision. Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true ¯ . , t3"~ day of December and correct. Executed at Olympia, Washington, on this .~ 2005.

CHRIST~BRSON

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