Title 43—Public Lands: Interior--Volume 1
PART 5450—AWARD OF CONTRACT
§ 5450.1   Pre-award qualifications of high bidder.
(a) The authorized officer may require the high bidder to furnish such information as is necessary to determine the ability of the bidder to perform the obligations of the contract. The contract shall be awarded to the high bidder, unless he is not qualified or responsible, or unless all bids are rejected. If the high bidder is not qualified or responsible or fails to sign and return the contract together with the required performance bond and any required payment; the contract may be offered and awarded for the amount of the high bid to the highest of the bidders who is qualified, responsible, and willing to accept the contract.
(b) A purchaser who has defaulted on a timber sale contract under this title by failing to complete payment of its total purchase price by the expiration date of the contract is considered a risk for purposes of being awarded future timber sale contracts. If a purchaser deemed a risk is the high bidder on a new timber sale, the authorized officer shall send a notice by registered mail requiring such purchaser to establish bidder responsibility by paying or bonding, or a combination of payment and bonding, for any one of the following: The total unpaid balance of the purchase price of all defaulted sales, the unsettled damages on all defaults, or 50 percent of the purchase price of contracts bid after the most recent default. Any payment applied toward 50 percent of a contract's bid price after the default(s) will be held as final payment for timber cut and/or removed under terms of the contracts. Acceptable bonding options are listed at § 5451.1 of this title. Payment and bonding are due within time limits stated in § 5450.1(c). Should the purchaser fail to demonstrate responsibility within 30 days of receipt of the notice, the authorized officer shall offer the contract for the amount of the high bid to the highest of the bidders who is qualified, responsible, and willing to accept the contract. Failure to demonstrate responsibility within 30 days of receipt of the notice indicates that the purchaser is not responsible, and debarment proceedings shall be considered under § 5441.1 of this title.
(c) Within 30 days after receipt of the contract the successful bidder shall sign and return the contract, together with any required performance bond and any required payment: Provided, That the authorized officer may, in his discretion, extend such period an additional 30 days if the extension is applied for in writing and granted in writing within the first 30-day period. If the successful bidder fails to comply within the stipulated time, his bid deposit shall be retained as liquidated damages.
(d) Award of contracts or permits on negotiated sales occurs upon the execution of the contract or permit. Terms and conditions shall reflect the contractor's ability to perform, and shall require prevention or mitigation of environmental degradation associated with the removal of the timber or other vegetative resource.
§ 5451.1   Minimum performance bond requirements; types.
(a) A minimum performance bond of not less than 20 percent of the total contract price shall be required for all contracts of $10,000 or more, but the amount of the bond shall not be in excess of $500,000, except when the purchaser opts to increase the minimum bond as provided in §  5451.2. A minimum performance bond of not less than $500 or 20% of the contract price, whichever is greater, will be required for all installment contracts less than $10,000. For cash sales less than $10,000, bond requirements, if any, will be at the discretion of the authorized officer. The performance bond may be:
(1) Bond of a corporate surety shown on the approved list issued by the United States Treasury Department and executed on an approved standard form; or
(2) Personal surety bond, executed on an approved standard form if the authorized officer determines the principals and bondsmen are capable of carrying out the terms of the contract; or
(3) Cash bond; or
(4) Negotiable securities of the United States.
(5) Any guaranteed remittance approved by the authorized officer.
§ 5451.2   Performance bonds in excess of minimum.
(a) The purchaser may cut timber before payment of the second or subsequent installments required by § 5461.2(a) of this part by increasing the minimum bond required by § 5451.1(a) of this part by an amount equal to one or more installment payments; Provided, however, That the authorized officer may grant permission to cut timber only when the value of the timber to be cut does not exceed the amount by which the minimum bond has been increased. The purchaser shall secure approval in writing of the adjusted bond by the authorized officer prior to cutting any timber under the adjusted bond.
(b) If payment and bonding for 50 percent of the purchase price of a contract is provided in accordance with § 5450.1(b) of this title, the amount of performance bond in excess of the minimum performance bond required by § 5451.1(a) of this title may be used as an increased performance bond as specified in § 5451.2(a) of this title.
§ 5451.3   Performance bond reduction.
(a) As contract provisions are satisfactorily completed, the authorized officer may, in his discretion, reduce the amount of the required performance bond: Provided, however, That the amount of the performance bond shall not be reduced below the minimum required by § 5451.1 until
(1) Payment of no less than 60 percent of the total purchase price has been made, or
(2) Road construction required under the contract has been completed, the value of which when combined with contract payments is equal to no less than 60 percent of the total purchase price.
(b) At the request of the purchaser, when the requirements set forth in the proviso to paragraph (a) of this section have been met, the amount of the performance bond may be reduced to 10 percent of the total purchase price or the entire cost of the uncompleted post-harvest contract requirements, whichever is greater. The amount of the performance bond shall not be reduced below 10 percent of the total purchase price until payment for all the timber sold under the terms of the contract is complete.
(c) For the purpose of this section, the value of completed road construction shall be based on the Bureau's appraisal allowance.
§ 5451.4   Payment bond.
To obtain permission to (a) cut and remove timber, or (b) remove timber already cut, which has been secured by an increased performance bond as provided for in § 5451.2, before payment of the first or subsequent installments, the purchaser must obtain a payment bond in an amount equal to one or more installment payments as determined by the authorized officer. The payment bond may be a bond of a corporate surety shown on the approved list issued by the U.S. Treasury Department and executed on an approved form or negotiable securities of the United States. The payment bond may be a bond of a corporate surety shown on the approved list issued by the United States Treasury Department and executed on an approved form, negotiable securities of the United States, or any guaranteed remittance approved by the authorized officer. If a bond of a corporate surety is used, the payment bond shall provide that if the purchaser fails to make payment as required by § 5461.2(c) of this chapter, the surety will make such payment including any required interest to the Bureau within 60 days after demand therefor by the Bureau. With the written approval of the authorized officer a single blanket payment bond may be allocated to two or more contracts with the same purchaser in the same Bureau of Land Management administrative district. When operations cease for 60 days or more, the amount of a payment bond may be adjusted downward to an amount equal to the value of the timber cut. Before operations resume, a reduced bond shall be increased to the amount of a full installment.
§ 5452.1   Cash sales.
For sales under $500 the full amount shall be paid prior to or at the time the authorized officer signs the contract.
§ 5452.2   Installment payments.
For sales of $500 or more the authorized officer may allow payment by installments as provided by § 5461.2 of this chapter.