In managing federal lands, the Forest Service and BLM often contract for services such as road maintenance, forest thinning, and other activities. They also frequently contract to sell forest resources such as timber or firewood. Traditionally, these contracts have been executed separately— service contracts have generally been funded with appropriated funds from the agencies’ budgets, while timber has been sold through contracts with private purchasers. The Omnibus Consolidated and Emergency Supplemental Appropriations Act for 1999 authorized the Forest Service to combine these contracting mechanisms by entering into “stewardship end result contracts,” under which the agency could use the value of forest products sold to offset the cost of the contracted services. Under such goods-for-services contracts, the Forest Service could, for example, pay for thinning operations by using the proceeds from any commercial timber sold as part of the project. In addition to authorizing contracts, the act authorized the use of agreements to carry out stewardship projects. According to Forest Service and BLM guidance, the decision on whether to use contracts or agreements should be based on the principal purpose of the award, including its intended primary beneficiary. Contracts. The primary beneficiary of a contract is the federal government. Contracts are used for the purchase of goods and services for the direct benefit of the government or for the sale of government property such as timber. A contract is a mutually binding legal relationship obligating the seller to furnish supplies or services and the buyer to pay for them. Agency guidance directs that contracts rather than agreements be used for projects that are highly complex or financially risky. Agreements. Agreements are typically used to transfer a thing of value to a state or local government, or other recipient, to carry out a public purpose. According to the agencies, agreements are often used for projects that are for the mutual interest and benefit of the government and a cooperating organization—often a nonprofit organization or a state or local government. Under such agreements, both the government and the cooperating organization share the costs of the project, with the cooperator contributing funding, personnel, or equipment. A variety of agreements, including those entered into under the Wyden Amendment, may be used to implement stewardship contracting projects. Under the Wyden Amendment, the Forest Service and BLM may enter into cooperative agreements with landowners for the protection, restoration, and enhancement of fish and wildlife habitat and other resources on public or private land, as long as the agreement benefits the fish, wildlife, and other resources on national forest and BLM lands within the watershed. Additional contracting authorities were also included in the legislation; the full list of authorities follows. (Stewardship contracting authority was initially granted only to the Forest Service; in 2003 it was extended to BLM.) Goods for services allows the agency to use the value of commercial products, such as timber, to offset the cost of services received, such as thinning, stream improvement, and other activities. Designation by description or prescription allows the agency to conduct a timber harvest by providing the contractor with a description of the desired end result of the harvest. For example, the agency might require that all ponderosa pine less than 10 inches in diameter be harvested. Ordinarily, cutting any standing tree before an agency employee has marked or otherwise designated it for cutting is prohibited. Multiyear contracting allows the agency to enter into stewardship contracts of up to 10 years in length. (Standard service contracts are limited to 5 years, although timber sale contracts of up to 10 years were already authorized for the Forest Service.) Retention of receipts allows the agency to retain receipts generated from the sale of commercial products sold through stewardship contracts, rather than returning the funds to the Department of the Treasury’s general fund. The receipts are available for expenditure, without further appropriation, on other stewardship contracting projects. Exception to advertising exempts the agency from the requirement under the National Forest Management Act that all sales of timber having an appraised value of $10,000 or more be advertised. Supervision of marking and harvesting of timber sales exempts the agency from the requirement that only federal agency employees supervise the harvesting of trees on agency-managed lands. This authority has allowed the agencies to use certain state agencies to assist in stewardship contracting. Best-value contracting requires the agency to consider other factors— such as past performance or work quality—in addition to price when making stewardship contract award decisions. The 1999 law authorized 28 stewardship contracts by the Forest Service; the authority of the Forest Service to enter into these contracts was to end on September 30, 2002. Contracts were to “achieve land management goals for the national forests that meet local and rural community needs.” The goals listed in the legislation included, but were not limited to, maintaining or obliterating roads and trails to restore or maintain water quality; noncommercially cutting or removing trees or other activities to promote healthy forest stands, reduce fire hazards, or achieve other noncommercial objectives; and restoring and maintaining wildlife and fish habitat. The law also required that the Forest Service establish a multiparty monitoring and evaluation process to assess each stewardship contract. Subsequent laws modified the requirements of the initial stewardship contracting authority. For example, the Consolidated Appropriations Act of 2000 changed the requirement from 28 stewardship contracts to 28 stewardship projects, allowing for the possibility that individual projects might involve more than one contract. Subsequent legislation in the following 2 years increased the number of authorized projects and changed the end date of the demonstration period from 2002 to 2004. Most recently, the Consolidated Appropriations Resolution of 2003 extended the authority to enter into stewardship contracts to 2013, extended stewardship contracting authority to BLM, removed the restriction on the number of projects that could be implemented under this authority, removed the emphasis on noncommercial activities among the land management goals listed, and replaced the requirement for multiparty monitoring and evaluation of each project with a requirement to monitor and evaluate the overall use of stewardship contracting. Stewardship contracting projects are subject to environmental and resource management laws—such as the National Environmental Policy Act, the Endangered Species Act, and others—that also apply to nonstewardship projects. Responsibility for administering stewardship contracting authority at the Forest Service lies within two agency offices: the Forest and Rangeland Management Group and the Acquisition Management Group. Each of the nine Forest Service regions has designated a stewardship contracting coordinator to facilitate stewardship contracting activities. These nine regions oversee 155 national forests; the forests, in turn, oversee more than 600 ranger districts. Within BLM, authority for administering stewardship contracts resides within its Division of Forests and Woodlands. Each of BLM’s 12 state offices also has a stewardship contracting coordinator. The state offices oversee the activities of field-level units, including 144 district and field offices that carry out the on-the-ground activities. References to “field units” in this report include the Forest Service’s national forests and ranger districts and BLM’s district and field offices. Both agencies generally consider stewardship contracting to be a tool, rather than a program, because it has no associated budget or official accomplishment targets. Instead, the agencies must use existing appropriations to plan and administer their stewardship contracting activities. The Forest Service primarily relies on its fuel reduction and vegetation and watershed management funds to carry out stewardship contracting activities; BLM primarily relies on its forestry and fuel reduction funds. When the agencies use agreements to carry out stewardship projects, the partner organizations typically contribute resources such as funding, volunteer labor, or equipment. The agencies awarded increasing numbers of stewardship contracts during fiscal years 2003 through 2007; however, details about their overall use of stewardship contracting are incomplete because the agencies did not begin to collect nationwide data until recently, and even these data are not complete or consistent across agencies. As a result, certain data are available only for more recent years or are not tracked at all, limiting the agencies’ ability to evaluate their implementation of stewardship contracting and provide information on its use to Congress and other interested parties. From fiscal years 2003 through 2007, the number of stewardship contracts that the agencies awarded increased each year. For the Forest Service, the number of contract awards increased from 36 in fiscal year 2003 to 121 in fiscal year 2007, for a total of 352; for BLM, the number increased from 2 to 51 during the same period, for a total of 183 contracts awarded through fiscal year 2007. For other aspects of stewardship projects, however, reliable data were available only for more limited periods of time. For example, complete and comparable data on the volume of timber sold (i.e., sold for cash or exchanged for services) were available only for fiscal years 2005 through 2007. During that period, Forest Service stewardship projects sold about 130 million cubic feet of timber; BLM projects sold about 8 million cubic feet. During the same 3- year fiscal period, Forest Service projects treated about 172,500 acres; BLM did not maintain data on acres treated through stewardship contracts. And during fiscal years 2006 and 2007, the Forest Service sold at least $8.2 million worth of timber through stewardship contracts, while BLM sold about $5.9 million. During the same 2-year fiscal period, BLM procured services valued at about $10.5 million through stewardship contracts; comparable data were not available for the Forest Service. The agencies’ stewardship projects generally involved removing timber or other vegetation to reduce hazardous fuels or to otherwise improve forest health; the projects also encompassed various activities that benefited communities or met other restoration objectives, such as controlling disease or improving wildlife habitat. Neither the Forest Service nor BLM maintains data that provide a complete national view of stewardship projects. The agencies did not begin maintaining nationwide data on stewardship contracting projects until recently—primarily because of difficulties in adapting their systems to account for all aspects of stewardship projects.