Federal Land Management: Additional Guidance on Community	 
Involvement Could Enhance Effectiveness of Stewardship		 
Contracting (14-JUN-04, GAO-04-652).				 
                                                                 
In their efforts to reduce hazardous fuels and the risk of	 
wildfire on the nation's public lands, the Forest Service and the
Bureau of Land Management (BLM) expect that stewardship 	 
contracting will play a major role. Stewardship contracting	 
involves the use of contracting authorities--such as the exchange
of goods for services--first authorized in 1998 and intended to  
help the agencies achieve land management goals that meet	 
community needs. GAO was asked, among other things, to determine 
(1) the contracting and financial controls the agencies use to	 
ensure accountability in managing stewardship contracting	 
projects and (2) the steps the agencies have taken to involve	 
communities in the projects.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-652 					        
    ACCNO:   A10485						        
  TITLE:     Federal Land Management: Additional Guidance on Community
Involvement Could Enhance Effectiveness of Stewardship		 
Contracting							 
     DATE:   06/14/2004 
  SUBJECT:   Land management					 
	     Wildlife						 
	     Wildlife conservation				 
	     Wildlife management				 

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GAO-04-652

United States General Accounting Office

                     GAO Report to Congressional Requesters

June 2004

                                  FEDERAL LAND
                                   MANAGEMENT

  Additional Guidance on Community Involvement Could Enhance Effectiveness of
                            Stewardship Contracting

                                       a

GAO-04-652

Highlights of GAO-04-652, a report to congressional requesters

In their efforts to reduce hazardous fuels and the risk of wildfire on the
nation's public lands, the Forest Service and the Bureau of Land
Management (BLM) expect that stewardship contracting will play a major
role. Stewardship contracting involves the use of contracting
authorities-such as the exchange of goods for services-first authorized in
1998 and intended to help the agencies achieve land management goals that
meet community needs. GAO was asked, among other things, to determine (1)
the contracting and financial controls the agencies use to ensure
accountability in managing stewardship contracting projects and (2) the
steps the agencies have taken to involve communities in the projects.

To enhance the effectiveness of stewardship contracting and improve public
trust in the agencies, GAO recommends that the Secretaries of Agriculture
and the Interior direct the agencies to issue additional guidance on
community involvement identifying best practices in seeking and
incorporating community input, and establish minimum requirements for
seeking involvement on each project.

In commenting on a draft of this report, the Forest Service generally
agreed with its contents. The Department of the Interior did not provide
comments.

www.gao.gov/cgi-bin/getrpt?GAO-04-652.

To view the full product, including the scope and methodology, click on
the link above. For more information, contact Barry Hill at (202) 512-3841
or [email protected].

June 2004

FEDERAL LAND MANAGEMENT

Additional Guidance on Community Involvement Could Enhance Effectiveness of
Stewardship Contracting

Although the Forest Service provided limited initial guidance on
establishing contracting and financial controls, the eight stewardship
projects GAO visited had incorporated such controls. (BLM was first
granted stewardship authority in 2003 and had no projects under way at the
time of GAO's review.) The projects generally used pre-and post-award
controls, such as reviews of contractor bids using preestablished
criteria, and performance and payment bonds to ensure completion of
required activities. GAO's review of selected financial controls at the
projects we visited showed that they appeared to have procedures in place
to account for retained receipts, including tracking funds received and
expended, and had incorporated procedures designed to ensure the
completion of specific work tasks before contractors were paid. Both the
Forest Service and BLM issued guidance in January 2004 containing such
controls for future projects.

The Forest Service initially provided minimal guidance on soliciting and
incorporating public involvement in stewardship contracting projects and,
as a result, the type and extent of efforts to involve communities varied
considerably among the projects GAO reviewed. However, managers who did
not incorporate public input may have missed valuable opportunities to
strengthen their projects. For example, one project manager said that
public involvement led to more stringent criteria for protecting water
quality, and another reported that public involvement improved agency
access to public lands needing fuel reduction. Although most managers GAO
spoke with said they wanted additional guidance on public involvement, the
Forest Service's recently issued stewardship contracting handbook does not
contain specific guidance for obtaining community input-and BLM's recent
guidance is similarly lacking. Without such guidance, each project manager
must independently determine the type and extent of community involvement
to solicit and then develop and implement community involvement
procedures-an inefficient process that could lead to variation in
community involvement across stewardship contracting projects in both
agencies.

Forest Thinning and Prescribed Burning Undertaken Using Stewardship
Contracting Authority

Contents

  Letter

Results in Brief
Background
Most Pilot Projects Are Ongoing and Include Removal of Timber or

Other Vegetation to Improve Forest Health

Despite Limited Initial Guidance, Forest Service Has Incorporated
Contracting and Financial Controls in Eight of Its Projects, and Both
Forest Service and BLM Have Included Such Controls in Their Recent
Guidance

The Agencies Have Not Provided Substantial Guidance on Community
Involvement, and Efforts to Involve Communities Varied among Projects

Both Agencies Have Additional Projects Planned and Intend to

Assess the Effectiveness of Stewardship Contracting Conclusions
Recommendation for Executive Action Agency Comments and Our Evaluation

1 3 5

8

24

35

41 43 43 43

Appendixes

Appendix I:

Appendix II: Appendix III:

Appendix IV: Appendix V:

Forest Service's Responses to Environmentalists' Concerns about Projects
Identified as Problematic

Objectives, Scope, and Methodology

Pilot Project Names, Locations, Acres Treated, and End Dates

Comments from the Department of Agriculture

GAO Contacts and Staff Acknowledgments

GAO Contacts
Staff Acknowledgments

                                     46 55

62

65

66 66 66

Tables   Table 1: Selection Criteria Met by Each Pilot Project at Which 
                                                                        We 
                                Conducted Site Visits                      58 
           Table 2: Pilot Project Names, Locations, Acres Treated, and End 
                                        Dates                              62 
Figures   Figure 1: Number of Stewardship Contracting Pilot Projects in    
                                                Each Forest Service Region 10

Contents

Figure 2:	Number of Stewardship Contracting Pilot Projects
Expected to Be Completed Each Calendar Year through
2014 11

Figure 3:	Helicopter Logging to Reduce Fuels at the Baker City
Watershed Rehabilitation Pilot Project,
Wallowa-Whitman National Forest 12

Figure 4:	Limestone to Be Added to a Creek to Reduce Acidity at
the Burns Creek Pilot Project, George
Washington-Jefferson National Forest 13

Figure 5: Mechanical Thinning at the Antelope Pilot Project,
Fremont-Winema National Forests 14
Figure 6: Prescribed Burning at the Antelope Pilot Project,
Fremont-Winema National Forests 15
Figure 7: Installation of Public Toilet at the Treasure Interface Pilot
Project, Kootenai National Forest 16

Figure 8:	Number of Stewardship Contracting Pilot Projects
Addressing Each Land Management Goal to a Great or
Very Great Extent 17

Figure 9:	Number of Stewardship Contracting Pilot Projects
Reporting the Use of Each Stewardship Contracting
Authority 18

Figure 10: Number of Stewardship Contracting Pilot Projects, by
Project Size 19
Figure 11: Sawlogs at the Fernow Experimental Forest Pilot Project,
Monongahela National Forest 22
Figure 12: Firewood at the Seven Mile Pilot Project,
Arapaho-Roosevelt National Forest 23
Figure 13: Slash Pile at the Winiger Ridge Pilot Project,
Arapaho-Roosevelt National Forest 24
Figure 14: Locations of Stewardship Contracting Pilot Projects
Visited during Our Review 25
Figure 15: Multiparty Monitoring Team Reviewing Project Site at the
Clearwater Pilot Project, Lolo National Forest 38

Contents

Abbreviations

BLM Bureau of Land Management
ccf hundred cubic feet
CERT Clearwater Elk Recovery Team
CSFS Colorado State Forest Service
FACA Federal Advisory Committee Act
FFIS Foundation Financial Information System
HCPC Hell's Canyon Preservation Council
NEPA National Environmental Policy Act
TSA Timber Sale Accounting
USDA U.S. Department of Agriculture

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

A

United States General Accounting Office Washington, D.C. 20548

June 14, 2004

Congressional Requesters

Recent severe wildfire seasons have focused attention on the state of our
nation's forests. Many of these forests have become dense with small,
tightly spaced trees and thick brush, which-combined with drought, wind,
and other adverse weather conditions-have fueled extensive wildland fires
in recent years. Both the Forest Service in the Department of Agriculture
(USDA) and the Bureau of Land Management (BLM) in the Department of the
Interior are placing greater emphasis on thinning forests and rangelands
to help reduce the buildup of potentially hazardous fuels, partly in
response to the Healthy Forests Restoration Act of 2003.1 Among other
things, the act directs the Secretaries of Agriculture and the Interior to
give priority to hazardous fuel reduction projects that provide for the
protection of at-risk communities or watersheds, or that implement
community wildfire protection plans. The Forest Service and BLM, which
together manage a total of about 450 million acres of federal land, are
focusing on a new tool they consider essential to their efforts to reduce
fuels: stewardship contracting.

Stewardship contracting involves the use of any of several contracting
authorities that were first authorized for use by the Forest Service on a
pilot basis in October 1998. The Omnibus Consolidated and Emergency
Supplemental Appropriations Act for 1999 established stewardship
contracting authority to achieve national forest land management goals
that meet local and rural community needs.2 Prominent among the
stewardship contracting authorities is the ability to (1) trade goods-
timber, for example-for contract services, such as thinning of small trees
and brush; and (2) retain for use in future stewardship projects any
receipts generated through selling forest products such as timber, rather
than returning the receipts to the Department of the Treasury, which is
required under traditional timber sales. The law stated that the land
management goals of stewardship contracts include road and trail
maintenance, watershed restoration, and prescribed burning and
noncommercial tree removal to improve forest health. Although stewardship
contracting was initially established as a demonstration project that
involved a limited

1Pub. L. No. 108-148, 117 Stat. 1887 (2003). 2Pub. L. No. 105-277, S: 347,
112 Stat. 2681-298 (1998).

number of individual projects within the Forest Service and was to end in
2002, the Consolidated Appropriations Resolution of 2003, among other
things, extended the use of stewardship contracting authority to 2013,
eliminated the limit on the number of projects, authorized commercial tree
removal for forest health purposes as a project purpose, and extended the
authority to BLM.3

Because of your interest in the status of the Forest Service's and BLM's
implementation of stewardship contracting authority, you asked us to
determine (1) the status of stewardship contracting projects and the land
management goals they address; (2) the extent to which the agencies have
contracting and financial controls in place that ensure accountability in
managing stewardship contracting projects; (3) the steps the agencies have
taken to involve communities in designing, implementing, and evaluating
stewardship contracting projects; and (4) each agency's plans for future
stewardship contracting activities. In addition, you asked us to determine
the Forest Service's response to concerns raised by environmental groups
about six specific stewardship contracting projects; the results of this
work are contained in appendix I.

In conducting our review, we met with Forest Service and BLM headquarters
officials and reviewed agency documents and guidance related to
stewardship contracting; conducted a Web-based survey on the status of all
ongoing and completed stewardship contracting projects as of September 30,
2003; visited 8 stewardship contracting project sites, where we reviewed
project financial and contracting files for evidence of selected
management controls and met with Forest Service officials, project
contractors, and local citizens to obtain information about project
implementation, including community involvement in the projects; conducted
telephone interviews of officials at 25 project sites regarding community
involvement efforts; conducted telephone interviews of representatives of
six environmental organizations and Forest Service officials regarding the
6 project sites of concern; and spoke with representatives of several
conservation and forestry organizations to obtain their perspectives on
stewardship contracting. While the results of our telephone discussions
and site visits cannot be projected nationwide, they represent a mix of
stewardship contracting projects by virtue of their geographic diversity;
the stewardship contracting authorities being used; and project status,
objectives, and activities. Appendix II provides further

3Pub. L. No. 108-7, S: 323, 117 Stat. 275 (2003).

details on the scope and methodology of our review. We conducted our work
between April 2003 and April 2004 in accordance with generally accepted
government auditing standards.

Results in Brief	As of September 30, 2003, the Forest Service had
completed 9 pilot projects, and another 68 were ongoing, with scheduled
project completion dates through 2014. BLM did not have any projects under
way at the time of our survey. The Forest Service pilot projects generally
focused on removing timber and other vegetation to reduce fuels or improve
forest health; some projects pursued other activities on national forest
lands to benefit local communities, such as improving trails or installing
new public toilets intended to protect water quality. The projects had
treated-that is, conducted stewardship activities on-about 13,800 acres
and were expected to treat about 158,000 additional acres.

The Forest Service provided limited initial guidance on how to establish
contracting and financial controls to provide accountability in managing
projects, in part to allow project managers to experiment with different
implementation approaches. Nevertheless, the 8 projects we visited had
incorporated such controls. The projects generally included preaward
activities, such as reviews of contractor bids using preestablished
criteria to ensure thoroughness and objectivity in evaluating bids and
awarding contracts, and meetings with potential contractors to clarify
project objectives and contract terms and schedules. Similarly, awarded
contracts generally included elements such as performance and payment
bonds designed to ensure proper completion of required activities, and
on-theground inspections of contracted work intended to ensure that the
work was conducted appropriately. Regarding financial controls, the
projects we visited appeared to have established procedures to account for
retained receipts from the sale of forest products, including tracking
funds received and expended. Moreover, these projects had incorporated
procedures designed to ensure that contractors were paid only upon
completion of specific work tasks. Both the Forest Service and BLM issued
guidance in January 2004 containing such controls for future projects.

The Forest Service initially provided minimal guidance on soliciting and
incorporating public involvement in stewardship contracting projects and,
as a result, the type and extent of efforts to involve communities varied
considerably among the Forest Service projects we reviewed. While some
Forest Service project managers actively solicited public input in
designing projects or formed monitoring teams to evaluate their
implementation,

others did relatively little to solicit or incorporate public input.
Unfortunately, managers who did not incorporate public input may have
missed valuable opportunities to strengthen their projects. For example,
one manager told us that public involvement in her project led to more
stringent criteria for protecting water quality during project activities,
and another manager told us that public involvement in his project helped
improve agency access to public lands needing fuel reduction. Although
many managers we spoke with told us they wanted additional guidance on how
to involve the public, the Forest Service's recently issued stewardship
contracting handbook does not contain specific guidance for obtaining
community input, and BLM's recent guidance is similarly lacking. Without
such guidance, Forest Service and BLM project managers must independently
determine the type and extent of community involvement to solicit and then
independently develop and implement community involvement procedures.
Undertaking these activities individually is inefficient and could lead to
variation in community involvement across stewardship contracting projects
in both agencies.

The Forest Service and BLM plan to implement several additional
stewardship projects in fiscal year 2004 and beyond. While the Forest
Service did not specify the number of additional projects it expects to
undertake in 2004, BLM officials told us the agency has recently initiated
2 projects and plans about 34 more projects in fiscal year 2004, and
officials from both agencies reported that they expect additional
stewardship contracting projects in the years ahead. Both agencies are
planning to collect information on ongoing and future projects to help
them analyze the effectiveness of stewardship contracting relative to
other contracting tools.

To more fully realize the potential of stewardship contracting and ensure
that community involvement is incorporated into stewardship contracting
projects, we are recommending that the Secretaries of Agriculture and the
Interior direct the agencies to provide additional guidance to field staff
clarifying the types of community involvement expected in stewardship
contracting projects and identifying best practices for soliciting such
involvement. We provided a draft of this report to the Secretaries of
Agriculture and the Interior for review and comment. The Forest Service
generally agreed with our report. The Forest Service's comment letter is
presented in appendix IV. The Department of the Interior did not provide
comments.

Background	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 of 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 contracted services.4 Under such
goodsfor-services contracts, the Forest Service could, for example, pay
for thinning operations by using the proceeds from any commercial timber
removed as part of the project. 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.)

o 	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.

o 	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 Forest Service might
require that all ponderosa pine less than 10 inches in diameter be
harvested. Ordinarily, cutting any standing tree before a Forest Service
employee has marked or otherwise designated it for cutting is prohibited.

o 	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.)

o 	Retention of receipts allows the agency to retain receipts generated
from the sale of commercial products removed through stewardship

4The Forest Service is authorized to use either contracts or agreements in
implementing stewardship projects. In this report we refer to all such
arrangements as contracts.

contracts, rather than returning the funds to the Treasury. Receipts are
to be applied only to stewardship contracting projects.

o 	Less than full and open competition 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.5 This
allows the Forest Service to favor local contractors when soliciting
contract bids.

o 	Supervision of marking and harvesting of timber sales exempts the
agency from the requirement that USDA employees supervise the harvesting
of trees on Forest Service lands. This has allowed the Forest Service to
use one state agency to assist in stewardship contracting.6

o 	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.7

The law authorized 28 stewardship contracts by the Forest Service, of
which 9 were to be in the Forest Service's Northern Region.8 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,

5Under the National Forest Management Act of 1976, the Forest Service
develops land and resource management plans that guide all natural
resource management activities on the national forests. The act includes
provisions governing timber sales from national forest lands.

6The Department of the Interior and Related Agencies Appropriations Act of
2001 authorized the Forest Service to permit the Colorado State Forest
Service (CSFS) to conduct watershed restoration and protection services on
national forest land in Colorado when the CSFS is performing similar
services on adjacent state or private land.

7In contrast to the other stewardship authorities, best-value contracting
was not newly introduced in the stewardship legislation. The Forest
Service and BLM had been permitted to procure services on a best-value
basis prior to the legislation. Under the stewardship contracting
legislation, however, the agencies are required-rather than simply
permitted- to use best-value contracting when awarding stewardship
contracts.

8The Forest Service is divided into nine geographic regions. See figure 1.

o 	maintaining or obliterating roads and trails to restore or maintain
water quality;

o 	maintaining soil productivity, habitat for wildlife and fisheries, or
other resource values;

o 	setting prescribed fires to improve the composition, structure,
condition, and health of stands or to improve wildlife habitat;

o 	noncommercially cutting or removing trees or other activities to
promote healthy forest stands, reduce fire hazards, or achieve other
noncommercial objectives;

o  restoring and maintaining watersheds;

o  restoring and maintaining wildlife and fish habitat; and

o 	controlling noxious and exotic weeds and reestablishing native plant
species.

The law also required that the Forest Service establish a multiparty
monitoring and evaluation process to assess each stewardship contract.

Several subsequent laws modified the requirements of the initial
stewardship contracting authority. The Consolidated Appropriations Act of
2000 changed the requirement from 28 stewardship contracts to 28
stewardship projects, allowing for the possibility that individual
projects may involve more than one contract.9 The following year, the
Department of the Interior and Related Agencies Appropriations Act of 2001
doubled the number of authorized projects for a total of 56, requiring
that at least 9 of the newly authorized projects be in the Forest
Service's Northern Region and at least 3 in the agency's Pacific Northwest
Region.10 Similarly, a year later, the Department of the Interior and
Related Agencies Appropriations Act of 2002 authorized an additional 28
projects (for a total of 84), again requiring that at least 9 of the newly
authorized projects be in the Northern Region and at least 3 in the
Pacific Northwest Region.11 This law also

9Pub. L. No. 106-113, 113 Stat. 1501A-201 (1999). 10Pub. L. No. 106-291,
114 Stat. 998 (2000). 11Pub. L. No. 107-63, 115 Stat. 471 (2001).

changed the end date of the demonstration project 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 (NEPA), 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 established a stewardship
contracting coordinator to facilitate stewardship contracting activities
within each region. Within BLM, authority for administering stewardship
contracting authority resides with its Forest and Woodland Management
Group. Each of BLM's 12 state offices also has a stewardship contracting
coordinator.

Most Pilot Projects Are Ongoing and Include Removal of Timber or Other
Vegetation to Improve Forest Health

As of September 30, 2003, the Forest Service had completed 9 pilot
projects, and another 68 were ongoing, with project completion dates
scheduled through 2014.12 Most projects included the removal of timber and
other vegetation to reduce fuels or promote forest health, while other
activities included trail construction, wildlife pond restoration, and
public toilet installation. The projects had treated about 13,800 acres
and were expected to treat about 158,000 additional acres. Expected
project costs and forest product values varied widely: Projects were
expected to cost from $1,000 to $5.7 million, and the estimated value of
forest products to be removed as part of the projects varied from $124 to
$6.3 million.

12Although 84 pilot projects were authorized, only 77 were ongoing or
completed at the time of our review. Additional pilot projects had been
initiated, but were terminated prior to our review.

Sixty-eight of 77 Forest Service Pilot Projects Are Still Ongoing;
Projects Commonly Have Focused on Removing Vegetation

Forest Service staff reported that as of September 30, 2003, 9 pilot
projects had been completed-i.e., all contracts associated with these
projects were completed and closed-and an additional 68 projects were
ongoing.13 Pilot projects were distributed throughout the Forest Service
regions, except for the Alaska Region, which had none. As expected, given
the requirements of the initial legislation, the Northern Region had the
most pilot projects. Figure 1 shows the distribution of pilot projects by
Forest Service region. (Appendix III provides a list of all 77 projects
and related project details, including project acres and expected
completion date.)

13The 68 ongoing pilot projects include one, the Granite Watershed
Protection and Enhancement project, that was authorized by the Granite
Watershed Enhancement and Protection Act of 1998 (Pub. L. No. 105-281, 112
Stat. 2695) rather than the stewardship contracting legislation. A project
official told us, however, that the project is being conducted under both
authorities-the stewardship contracting legislation and the Granite
Watershed Enhancement and Protection Act of 1998.

Figure 2: Number of Stewardship Contracting Pilot Projects Expected to Be
Completed Each Calendar Year through 2014

Number of projects

12

11

10

8

6

4

2

0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Calendar year

Source: GAO.

Notes: Of the 68 ongoing pilot projects, 52 provided an estimated
completion date.

Data do not include two projects that were ongoing at the time of our
survey but were expected to be completed in late 2003.

The pilot projects encompassed a variety of activities. For example, one
project we visited-the Baker City Watershed Rehabilitation project-
involved thinning trees on Forest Service land that served as the
watershed for an Oregon town. The water provided by the watershed was so
pure that the town did not need a filtration facility, according to
project and town officials. However, the watershed was at high risk for
fire, which officials told us would degrade the watershed to the extent
that a multimilliondollar treatment facility would be required. The
watershed was thinned to reduce the density of fuels and thus the risk of
fire, with the cost of logging partially offset by the value of timber
removed. Logging was done by helicopter to avoid degrading the watershed
by building roads. Figure 3 shows a helicopter using a cable to lift and
transport trees that were cut by workers on the ground.

Figure 3: Helicopter Logging to Reduce Fuels at the Baker City Watershed
Rehabilitation Pilot Project, Wallowa-Whitman National Forest

Source: Forest Service.

Another project we visited-the Burns Creek project in southwestern
Virginia-involved cutting timber on Forest Service land and using an
elevated cable harvesting system to transport the cut logs across a steep
ravine to a sorting area, where they were stacked and sold. Forest Service
officials decided against using a traditional logging approach because of
the risk of environmental damage to the stream and drainage system in the
ravine. After the timber was removed, the cable system was used to
transport limestone to the creek at the bottom of the ravine to reduce the
creek's acidity. Project officials told us that without the cable system,
the Forest Service would have had to spend considerably more money to
transport the limestone to the creek by helicopter. Figure 4 shows the
cable system used to transport timber and limestone on this project.

Figure 4: Limestone to Be Added to a Creek to Reduce Acidity at the Burns
Creek Pilot Project, George Washington-Jefferson National Forest

Source: Forest Service.

Across all stewardship contracting pilot projects, the most common
activities were removing timber to improve forest health or reduce fuels
and cutting slash, while other frequently cited activities included road
maintenance and prescribed burning. Less commonly cited activities varied
considerably and included culvert removal or installation; trail
construction, maintenance, or obliteration; tree planting; wildlife pond
restoration; and public toilet installation on national forest lands to
protect water quality. Figures 5, 6, and 7 show additional examples of the
types of activities undertaken as part of stewardship contracting
projects.

Figure 5: Mechanical Thinning at the Antelope Pilot Project,
Fremont-Winema National Forests

Source: Forest Service.

Figure 6: Prescribed Burning at the Antelope Pilot Project, Fremont-Winema
National Forests

Source: Forest Service.

Figure 7: Installation of Public Toilet at the Treasure Interface Pilot
Project, Kootenai National Forest

Source: Forest Service.

In addition to these activities, several projects cited road construction,
maintenance, or obliteration among their activities. In all, about 19
miles of permanent road are expected to be constructed as part of the
pilot projects and another 292 miles reconstructed;14 conversely, 320
miles of permanent road are expected to be decommissioned (that is, closed
and stabilized) and another 89 obliterated.

The stewardship contracting legislation enumerated seven land management
goals. The goal most commonly cited by Forest Service project managers was
removing vegetation or other activities to promote healthy forest stands,
reduce fire hazards, or achieve other land management objectives; 59
projects reported addressing this goal to a great

14Permanent roads are those that are expected to remain part of the
National Forest road system after their construction. In contrast,
temporary roads are those built for a specific project and closed at the
end of the project.

or very great extent.15 Figure 8 shows the number of respondents reporting
that their projects addressed the land management goals to a great or very
great extent.

Figure 8: Number of Stewardship Contracting Pilot Projects Addressing Each
Land Management Goal to a Great or Very Great Extent

Land management goals

    Removing vegetation or other activities to promote healthy forest stands,
             reduce fire hazards, or achieve other land management objectives

Maintaining soil productivity, habitat for wildlife and fisheries, or
other resource values

Restoring and maintaining wildlife and fish habitat

Restoring and maintaining watersheds

Setting prescribed fires to improve the composition, structure, condition,
                          and health of stands or to improve wildlife habitat

Maintaining or obliterating roads and trails to restore or maintain water
quality

Controlling noxious and exotic weeds and reestablishing native plant
species 0 10203040506070 Number of projects

Very great extent

Great extent

Source: GAO.

Note: Sixty-five pilot projects reported their land management goals. Some
projects reported more than one goal.

The stewardship contracting authority most commonly used to address these
land management goals was goods for services, reported by 54 projects.
Least commonly used was supervision of marking and harvesting of timber
sales, reported by only one project in Colorado, where the Colorado State
Forest Service is administering the project contract. Figure 9 shows the
number of projects reporting the use of each authority.

15We asked respondents to indicate whether their project addressed each
land management goal to a very great extent, great extent, moderate
extent, some extent, or little or no extent.

Figure 9: Number of Stewardship Contracting Pilot Projects Reporting the
Use of Each Stewardship Contracting Authority

Number of projects

54

ro

vicesser

                                       y

                                description ear

etention ofreceiptsR

                                   Best-value

ar

Supervision of mLess than full andopen competition and hartim

kingber sales

ultiyMcontracting

                                  contracting

oods fGD

Source: GAO.

Note: Sixty-six pilot projects reported their use of the authorities.
Several projects used more than one authority.

Pilot Projects Have Treated The sizes of the pilot projects (measured by
the number of acres expected about 13,800 Acres and Are to be treated as
part of each project) varied considerably, with the smallest Expected to
Treat about project reported at 3.6 acres and the largest at 20,000 acres.
The total

reported acreage was about 172,000, with a mean project size of about

172,000 Acres in Total 	2,600 acres. As figure 10 shows, slightly more
than half of the projects involved less than 1,000 acres, while about 10
percent of the projects exceeded 10,000 acres.

Figure 10: Number of Stewardship Contracting Pilot Projects, by Project
Size

Less than 100 acres

100-499 acres

500-999 acres

1,000-4,999 acres 5,000-9,999 acres 10,000 acres or more

Source: GAO.

Note: Sixty-six pilot projects reported their size.

But not all pilot projects had begun activities on the ground. Of the 77
ongoing and completed pilot projects, 31 reported that some treatments had
taken place. Only about 13,800 of the 172,000 acres expected to be treated
under the pilot projects had been treated by the time of our survey. Among
projects reporting some activity, the number of acres treated ranged from
8 to 3,224, with a mean of about 445 acres treated per project.

Reported Project Costs, Revenues, and Products Varied Widely

The expected costs of the projects differed markedly. The lowest reported
total project cost was estimated at $1,000, while the highest was about
$5.7 million. The mean reported pilot project cost estimate was about
$850,000. The portion of these costs attributed to contracts (that is, the
amount paid to a contractor to perform services) also varied-from about
$1,000 to $4 million.16

Similar variation was evident in the expected value of products removed as
part of the projects-primarily timber, but also firewood, wood chips,
Christmas trees, and other products. The lowest estimate was $124, while
the highest was about $6.3 million. These figures reflect the estimated
value of material to be removed, without considering the contract costs
required for its removal. The mean estimate of product value was about
$480,000 per pilot project.

Slightly more than half of the projects reporting both value and costs
expected that contract costs would exceed product value-in other words,
that the cost to pay a contractor to perform services would exceed the
value of the materials to be removed. Of the 45 projects reporting both
expected product values and expected contract costs, 24 (about 53 percent)
reported that expected contract costs would exceed expected product
values. (The Forest Service may use appropriated dollars to pay contract
costs not covered by product values.) The remaining 21 projects reported
that expected revenues would equal or exceed expected contract costs.
Overall, net revenue estimates (estimated product values minus estimated
contract costs) ranged from a negative $3.27 million to $2.47 million.

16Contract costs are those paid by the Forest Service to a contractor and
would not include other Forest Service costs, such as salaries or
overhead, associated with planning and implementing projects.

Similarly, the amount of products to be removed varied among projects. The
Forest Service's standard unit of measure for wood products is 100 cubic
feet, or ccf. Thus, 100 cubic feet of wood would be measured as 1 ccf.
Estimates of the volume of sawlogs (timber large enough to be milled into
lumber) to be removed as part of stewardship contracting projects ranged
from 0.7 ccf to 49,000 ccf. 17 About 70 percent of the reporting projects
are expected to remove less than 5,000 ccf, and about one fourth are
expected to remove less than 500 ccf. Estimates of other products (such as
firewood and wood for posts and poles) varied from 4.2 ccf to about 67,000
ccf. Many projects also anticipated removing material of no commercial
value, such as brush or small-diameter trees. Estimates of such
noncommercial material ranged from 50 ccf to 144,000 ccf. Figures 11, 12,
and 13 show examples of the material removed as part of stewardship
projects.

17Not all survey respondents measured volume in ccf. Some used board feet,
while others used tons. To facilitate conversion from board feet or tons
to ccf, the Forest Service provided conversion factors for each
measurement. However, a Forest Service official cautioned that these
conversion factors are approximate, and that individual conversion factors
are applied depending on product, species, and other factors.

Source: GAO.

Source: Forest Service.

Source: GAO.

Despite Limited Initial Guidance, Forest Service Has Incorporated
Contracting and Financial Controls in Eight of Its Projects, and Both
Forest Service and BLM Have Included Such Controls in Their Recent
Guidance

The Forest Service limited the amount of initial contracting and financial
guidance it provided to stewardship contracting pilot project officials to
allow them to experiment with different approaches to managing the
projects. Despite the limited guidance, the eight projects we visited had
contracting and financial controls in place, including both preaward and
postaward activities and controls to provide accountability in managing
the projects (see fig. 14 for the projects' names and locations). Since
the enactment of the 2003 legislation expanding stewardship contracting
authority, the Forest Service and BLM have developed more specific
guidance on designing and implementing future projects and on accounting
for project costs and revenues.

Initial Forest Service Contracting and Financial Guidance Was Limited,
Slowing Implementation of Some Projects

The Forest Service provided limited initial contracting and financial
guidance on stewardship contracting to allow project managers to
experiment with different implementation approaches, according to an
official with the Forest Service's Forest and Rangeland Management Group.
The Forest Service provided a "Desk Guide for Contracting under Existing
Authorities for Service Contracts with Product Removal," intended to
provide guidance to field staff on conducting pilot projects, although the
desk guide focused primarily on contracting authorities other than those
in the stewardship legislation. Other guidance was provided by the Pinchot
Institute for Conservation18-with which the Forest Service had contracted
to review stewardship contracting implementation, including the design and
management of monitoring, evaluation, and reporting processes. For
example, the Pinchot Institute facilitated stewardship contracting
workshops at Forest Service headquarters and several field locations to
explain the nature of the stewardship contracting authority. The Pinchot
Institute also provided technical assistance and general program guidance
through its three subcontracted partners.19 Because of the limited
guidance available to them, some project managers also sought project
design assistance from staff in the Forest Service's Northern Region,
which had the greatest number of pilot projects and which had experience
in and knowledge of stewardship contracting techniques.

Because of the lack of specific centrally issued guidance, some projects
were slow to begin. Project managers attributed this delay to the need to
independently determine how to design and implement their projects using
their understanding of stewardship contracting and the need to coordinate
the efforts of timber sale and acquisition contracting officers in
developing a single contract. Under traditional contracts, timber sales
are handled by timber sale contracting officers, while service
acquisitions are handled by acquisition contracting officers. With the
exchange of goods for services under stewardship contracting, only one
contracting officer is needed for both activities; but close cooperation
and coordination between the timber sale and acquisition offices are
needed, which can be difficult and time

18The Pinchot Institute for Conservation, located in Washington, D.C., is
a nonprofit organization specializing in natural resource policy,
research, and education.

19As part of its contract to assist the Forest Service in implementing and
monitoring stewardship contracting, the Pinchot Institute hired three
subcontractors to provide technical assistance and general program
guidance regarding projects within their regions.

consuming. For example, one contracting officer at the Antelope
stewardship project said developing a contract combining a timber sale
with various services took approximately 6 months, in contrast to the
approximately 2 to 3 months that this official said were required for a
standard timber sale or service contract. This official told us the delay
occurred primarily because of the lack of direction on how to achieve the
necessary coordination between the timber sale and acquisition contracting
offices.

Projects We Visited Incorporated Both Preaward and Postaward Contracting
Controls

Projects Used Various Preaward Controls

The eight projects we visited generally included the preaward and
postaward contracting activities and safeguards we believe are necessary
for effectively awarding and administering stewardship contracts. Preaward
controls we looked for included widely distributed contract solicitations,
the use of pre-established criteria for evaluating bids, and meetings with
potential contractors to clarify project activities and Forest Service
expectations. Postaward controls we looked for included the use of payment
or performance bonds, appropriate techniques for valuing forest products,
and provisions for on-the-ground inspections of contractor work. See
appendix II for more information about our selection of these criteria.

The project managers for the projects we reviewed undertook preaward
solicitation and advertisement activities to seek contract bids and
proposals. These efforts included solicitations in the form of mailings to
potential contractors, advertisements in local newspapers, and national
announcements in the Commerce Business Daily and on the Federal Business
Opportunities Web site.20 Such solicitations are intended to maximize the
number of potential contractors aware of the project, and thus the pool of
potential bidders. When solicitations did not result in any bidders, the
solicitations were sometimes expanded to include a broader geographic
area. The project managers also held conferences with potential
contractors before they submitted bids or proposals, and sometimes
potential contractors made trips to the proposed project sites. These
"scoping" sessions served to clarify project objectives and contract

20The Commerce Business Daily and the Federal Business Opportunities Web
site (http://www.FedBizOpps.gov) list notices of proposed government
procurement actions, contract awards, sales of government property, and
other procurement information. As of October 1, 2001, all federal
procurement offices are required to use FedBizOpps to announce proposed
procurement actions and contract awards if they are over $25,000 and are
likely to result in the award of a contract to a subcontractor.

Awarded Contracts Generally Included Bond, Valuation, and Inspection
Requirements to Provide Accountability in Project Management

terms and schedules, as well as to solicit ideas from contractors and to
increase local awareness of projects. Project managers and other agency
staff also conducted bid reviews using predefined criteria to ensure
thoroughness and objectivity in evaluating each bid and awarding the
contracts. The evaluation criteria included such factors as bidders' past
performance and experience, proposed work schedules and technical
approaches, and cost or price factors. The Forest Service evaluation teams
generally were composed of experienced contracting officers, project
managers, and other key Forest Service staff.

Contracts for the eight projects we visited generally incorporated
safeguards such as bond, valuation, inspection, and default requirements.
The contracts we reviewed contained clear definitions of contract
requirements, including work-site locations, access points, and the size
of work units. The contracts also generally defined the roles of the
various Forest Service staff, including those responsible for oversight
activities, such as the contracting officers and the contracting officers'
representatives. Before commencing work under the contract, Forest Service
project managers generally held orientations with the contractors to
clarify contract terms, work performance requirements, and work progress
schedules. These meetings sometimes resulted in amendments to the
solicitations and clearer contract language.

Nearly all of the stewardship contracts we reviewed included payment and
performance bond clauses to ensure the satisfactory performance of
contract requirements. These bonds are written instruments executed by the
contractor to ensure fulfillment of its obligations. If the obligations
are not met, the bonds ensure payment, to the extent stipulated, of any
loss sustained. In particular, payment bonds, also known as advance
deposits or cash deposits, ensure that the government receives payment for
timber harvested. In the event that a contractor harvests timber but then
defaults on the contract or goes out of business before paying for it, the
agency can keep the cash value of the bond as payment for the timber.
Similarly, performance bonds ensure that, in the event the government is
required to conduct work to remediate damage done by the contractor, the
agency can use the value of the performance bond to finance remediation
activities. Although most contracts included bonds, some did not. The
Winiger Ridge Restoration project, for example, did not include payment or
performance bonds. The project manager told us that she believed such
bonds were too onerous for small contractors, and agency officials wanted
to make the project as attractive as possible to small local contractors.
Additionally, according to the project manager, there was little incentive
for the

contractor to cut commercially valuable timber and then default on the
remainder of the services because there was very little valuable timber
included in the project. This manager characterized the contract as
"$190,000 worth of services and $500 worth of timber." Another project-
Antelope-did not require a performance bond because of the expense and
burden it would place on the contractor, according to the project manager.

The stewardship contracts also included valuation clauses to establish the
volume and value of the forest materials to be removed and the services to
be provided. Volume is determined by a "cruise" of the project area, which
involves staff examining the area in different locations to estimate the
timber that is to be removed. Forest Service managers at the projects we
examined established the value of timber through government cost estimates
or appraisals. Government cost estimates are simply indications of what
the timber will bring on the market based on previous sales, according to
Forest Service staff. Appraisals, on the other hand, involve calculations
of not only what the timber will bring on the market but also the cost of
cutting and hauling the timber, constructing or improving roads, and so
forth, and are thus more detailed, time consuming, and expensive.
According to staff, government cost estimates are appropriate when the
value of the material is known to be low, because in such cases the cost
of a full appraisal can exceed the value of the material. Of the eight
projects we reviewed, five conducted full appraisals while three used
government cost estimates.21

The stewardship contracts we examined also included provisions for
onthe-ground inspections of contracted work to ensure that the work was
conducted in accordance with contract requirements and Forest Service
expectations. At the projects we reviewed, the contracting officers and
the designated contracting officers' representatives who served as
on-theground administrators documented their observations on inspection
forms and contract daily logs, which we examined. These logs included
information on whether the work was performed in an acceptable manner, and
the measures necessary to correct any deficiencies.

Additional effort was sometimes required to ensure that contractors
performed according to Forest Service expectations. For example, the
Winiger Ridge Restoration stewardship project contracting officer told us

21Although we determined that appraisals or estimates were conducted, we
did not review these appraisals or estimates for accuracy.

that the project's initial contract had to be revised to make the
designation by description specifications clearer to the contractor, after
it became evident that the specifications as written did not lead to the
expected results. (Designation by description allows the agency to conduct
a timber harvest by providing the contractor with a description of the
trees to be cut or the desired end result of the harvest, rather than by
marking individual trees.) At this project, the initial description
directed the contractor to, among other things, cut all trees with a
certain level of dwarf mistletoe infestation.22 However, project officials
realized that it was impossible to verify that the contractor had cut only
infected trees, and contract provisions regarding mistletoe infestation
were eliminated. Similarly, contracting officers and contractors at other
locations also told us that the contractors sometimes had difficulty
interpreting the language in designation by description contracts, or that
the language was not specific enough to ensure that Forest Service
expectations were met. This unclear language sometimes required additional
project oversight to ensure that contractors were meeting contract
requirements. At the Clearwater stewardship project, for example, the
project manager told us that although they had planned periodic project
inspections, the use of designation by description authority required them
to have inspectors on site virtually every day for several weeks.

Finally, the stewardship contracts we reviewed also included breach or
default and dispute resolution clauses. These mechanisms allow the Forest
Service to address any issues or problems by issuing default notices and
stop work orders. However, aside from work delays, which generally
resulted from uncontrollable events such as excessive snow or fire
seasons, there were no significant problems with the contracts we
examined. In fact, several Forest Service contracting officers we
interviewed praised the relative ease of administering the contracts once
they were developed and awarded. Similarly, the contractors conducting the
work told us that, although the stewardship contracts and the contracting
process were somewhat new and time consuming to them, implementation of
the contracts themselves was relatively straightforward.

22Dwarf mistletoe is a small, seed-bearing parasitic plant that infects
several tree species. According to USDA, the infection causes increased
mortality, reduced growth rates, loss of vigor, lowered timber quality,
and reduced seed production.

We Observed Established Financial Procedures at the Projects We Visited

During our project site visits, we observed evidence of established
procedures in place for accounting for project funds, including procedures
for receiving and tracking timber payments and tracking retained receipts
and expenditures, as well as other steps taken to provide financial
accountability. Our review of selected items included an examination of
payment vouchers, receipts, and other expenditure-related documentation to
assess whether retained receipts and other project funds had been spent on
stewardship-related activities. We did not review all financial controls
for stewardship contracting.

The Forest Service uses two data collection systems-the Timber Sale
Accounting (TSA) system and the Foundation Financial Information System
(FFIS)-to track project financial activities. The TSA tracks data such as
the name of the purchaser and the quantity and species of timber to be
harvested, and is the principal system for recording revenues related to
timber sales. However, the TSA reflects only a portion of stewardship
contracting activity. While the TSA includes timber-specific information
such as species, it does not reflect the services contracted for as part
of stewardship contracting projects; instead, these services are recorded
and tracked at the local forest or regional office. The FFIS, which
incorporates some TSA data, is the system of record supporting Forest
Service billing and collection functions. As with traditional timber sale
contracts, actual payments are received and processed through an
independent "lockbox" system in San Francisco.23 The payment receipts are
recorded by job code in a specified distribution account within the FFIS.

At each location, we observed adequate separation of duties and
supervisory review responsibilities being handled by officials in the
timber and financial groups. For example, a project official at each
location was responsible for verifying the accuracy of all the charges to
the project account, and the financial group manager was responsible for
monitoring the project account balances. At the end of each month, timber
and accounting clerks completed reconciliations between the timber and
financial system data and their detailed local records. When discrepancies
were identified, the problems were researched and corrected in a timely
manner. For those projects we looked at, several monthly reports were
generated by the TSA and FFIS systems, which managers in each group

23Lockbox banks establish post office boxes or electronic accounts to
receive payments made to federal agencies. The banks then transfer the
funds to the Treasury and submit collection reports to the agencies.

used to track project activities and to review and verify the accuracy of
the charges against project funds.

Two projects we visited, the Clearwater and Fernow Experimental Forest
projects, had expended retained receipts on additional stewardship
contracting activities. At these projects, we examined payment vouchers,
receipts, and other expenditure-related documentation to ensure that
retained funds had been spent on stewardship-related activities, as
required, and the funds appeared to have been spent appropriately. Another
project we visited, the Burns Creek project, passed all retained receipts
on to another stewardship project, the Wayah Contract Logging project, in
the same region; however, the Wayah Contract Logging project (which we
also visited) did not need to use the funds because receipts and
appropriated funds associated with that project were sufficient to cover
project expenditures. As a result, the retained receipts were being passed
on yet again to a third stewardship project, the Sand Mountain project,
also in the same region. At the time of our review, a portion of these
funds had been obligated to cover the cost of a contract for work on this
project, but had not yet been expended.

Forest Service staff at the locations we visited took additional steps to
provide financial accountability. For example, we noted procedures in
place to prevent timber harvesting activities from significantly exceeding
service activities under goods for services contracts. To this end, two
projects (the Clearwater and Warm Ridge/Glide projects) established "land
management credits" to record service activities completed. Once the
contractor earned such credits, they were then applied to the value of the
timber being harvested. At these projects, contractors were not permitted
to harvest timber until they had earned the required credits through
service work-thus preventing contractors from harvesting commercially
valuable timber and then failing to perform needed restoration activities.

Forest Service and BLM Recently Developed Stewardship Contracting Guidance
That Includes Contracting and Financial Controls

The Forest Service and BLM issued jointly developed guidance in January
2004 to provide direction in implementing stewardship contracts. The
Forest Service's new handbook and BLM's new guidance address the use of
contracting controls, such as appraisals, and the use of two authorities-
designation by description and less than full and open competition;
include contract templates for field staff; provide guidance on financial
accountability; and outline the responsibilities of agency staff.
According to an official with the Forest Service's Forest and Rangeland
Management Group, their handbook is intended to be a working document that
will

change as necessary. For example, if the results of ongoing monitoring of
stewardship contracting show a need for changes, the handbook will be
revised accordingly.

The agencies' guidance includes some of the same elements we examined
during our site visits to provide project accountability. For example,
both agencies' guidance includes provisions requiring appropriate
valuation of service work to be performed and timber to be harvested. To
this end, the Forest Service handbook states, "The appraisal for timber
and other forest products shall be conducted using appraisal methods as
specified in the Timber Sale Preparation Handbook . . . and Regional
guidelines." Both agencies also provide guidance on required bonding. For
example, the BLM guidance states that "payment protection in the form of
payment bonds should be used to protect the value of the byproduct to be
removed when the product will be removed prior to cash payment or the
contractor's earning of conservation credits." BLM's guidance further
states that "contracting officers are encouraged to strive toward the
concept of a single bond to cover `performance,' which would include the
product value (payment) and the service work rolled into one bond."

The agencies' guidance also provides expanded discussions on the use of
two additional authorities-designation by description and less than full
and open competition. Regarding designation by description, the guidance
specifies that the amount of material removed from the forest must be
verifiable and accountable. For example, the Forest Service handbook
generally requires that for commercial material (such as sawtimber), trees
to be removed must be identified based on characteristics that can be
verified after removal-for example, the contractor might be required to
remove all lodgepole pine less than a specified stump diameter. Agency
personnel could subsequently measure remaining stumps to verify that
contract provisions were met. For noncommercial material, the handbook
allows less specific designations setting forth the desired end result of
treatment (sometimes referred to as designation by prescription)-for
example, the contractor might simply be required to leave a certain number
of trees on each acre, with an average spacing between them.

Regarding less than full and open competition, which exempts the agency
from the requirement that all sales of timber having an appraised value of
$10,000 or more be advertised, the Forest Service handbook specifies that
forest supervisors must document and submit to regional foresters the
reasons for the selection process used. Documentation must include the
level of competition to be used in the contracting process.

As part of their guidance, the agencies also are developing contract
templates that field staff can use as examples when developing their own
contracts-potentially improving the efficiency and applicability of
stewardship contracts. These are standard contract formats that
incorporate timber sale and service components. The Forest Service has
also conducted additional training sessions, and staff from both agencies
told us they plan to expand their intranet sites to provide more ongoing
stewardship contracting project information, including details about
successful stewardship contracting projects that can serve as models for
staff who are developing projects.

The agencies' guidance also contains direction on financial
accountability. According to the Forest Service handbook, the proper use
and management of stewardship contracting receipts must be assessed as a
normal part of regional-and forest-level renewable resource program and
activity reviews. Through the guidance, both agencies have assigned
responsibility for various financial activities, including providing
technical advice, reviewing and approving retention of project receipts,
and ensuring that associated financial data are accurate and reconciled to
the financial statements. In addition to specifying responsibility for
various activities, the agencies' guidance notes the approved funding
source for projectrelated activities. For example, stewardship contracting
preparation, overhead, and project-level monitoring costs normally are to
be funded through appropriated funds. According to the guidance,
stewardship contracting retained receipts shall not be used for overhead,
administrative, or indirect costs or for the completion of environmental
studies. The guidance indicates these retained receipts can be used for
another stewardship project or to fund national programmatic multiparty
monitoring. Although both agencies' guidance states that multiparty
monitoring of individual projects is encouraged, the Forest Service
handbook states that it is inappropriate to conduct project monitoring
with revenues received from a stewardship contract.

Finally, both agencies' guidance outlines the responsibilities of the
various headquarters, regional, and state office officials in the
implementation, monitoring, and evaluation of stewardship contracting
projects. The agencies also have appointed stewardship contracting
coordinators at each Forest Service regional office and at each BLM state
office. These staff serve as resources for all projects under the
respective Forest Service regional offices and BLM state offices and are
expected to enhance communication between the agencies' headquarters and
the field. Their specific responsibilities include clarifying stewardship
contracting

guidance, monitoring project status and soliciting feedback, and making
recommendations on how to improve the effectiveness of stewardship
contracting.

The Agencies Have Not Provided Substantial Guidance on Community
Involvement, and Efforts to Involve Communities Varied among Projects

Despite the stewardship contracting legislation's emphasis on meeting
community needs, the Forest Service initially provided little guidance on
incorporating community involvement in stewardship contracting pilot
projects; as a result, the type and extent of field staffs' efforts to
involve communities in projects varied considerably among the projects we
reviewed. Some project managers actively sought community involvement in
planning or implementing their projects, while other managers took a less
active approach-potentially leading to missed opportunities for meeting
local community needs. Although the majority of the project managers we
spoke with touted the potential benefits of community involvement in
stewardship contracting projects and expressed their desire for additional
guidance in this area, neither the Forest Service nor BLM included such
guidance in their January 2004 stewardship contracting guidance documents.

Because the Forest Service Initially Provided Little Guidance on Community
Involvement, the Type and Extent of Community Involvement Varied
Significantly among Projects

Although the stewardship contracting legislation explicitly stated that
stewardship projects are "to achieve land management goals for the
national forests that meet local and rural community needs," the Forest
Service initially provided only minimal guidance on soliciting and
incorporating community involvement in stewardship contracting projects,
and most managers we spoke with articulated their frustration with the
overall lack of guidance on community involvement. Managers told us that
little or no formal training on involving the community had been provided,
and in some cases reported that the only guidance they had received was in
the form of a brief discussion of the topic during a meeting. The most
frequently identified source of community involvement guidance was in the
form of advice from the Pinchot Institute for Conservation's regional
subcontractors, which reportedly provided some consultation on community
involvement efforts. The managers' desire for guidance or training
resulted primarily from two concerns: first, that they were wasting time
"reinventing the wheel" because they were unaware of effective or
innovative community involvement strategies developed by managers of other
projects, and second, that they were potentially violating the Federal
Advisory Committee Act (FACA) by incorporating community involvement into
their projects.24

Because of the lack of guidance, the steps taken by Forest Service
managers to involve communities varied widely. Most of the community
involvement we learned about was incorporated through multiparty
monitoring teams, which were required by the stewardship contracting
legislation. However, the legislation did not specify, and the Forest
Service provided little guidance on, the teams' roles and
responsibilities, leading to uncertainty among field staff about what was
expected and how to proceed. Some projects simply did not have monitoring
teams, and some managers told us they did not realize such teams were
required. The project managers who assembled monitoring teams did so using
very different approaches. For example, some managers formed teams of
primarily Forest Service employees, while others sought to involve a cross
section of the community. The Yaak project manager in Montana even
transferred the responsibility for assembling the project monitoring team
and completing an annual report on the project to the contractor, by

24The Federal Advisory Committee Act was enacted in 1972. (See Pub. Law
No. 92-463, 86 Stat. 770, 5 U.S.C. app 2.) Among other things, the act
requires advisory committee meetings to be open to the public and requires
detailed minutes of each meeting to be kept and made publicly available.
(See 5 U.S.C. app 2, S: 10.)

making these efforts a requirement in the contract. Some managers formed
small teams composed of a few interested local individuals, while the
manager at the Priest-Pend Orielle project in Idaho formed a large
monitoring team consisting of about 30 members organized into several
specialized subcommittees focusing on specific issues such as roads,
watershed, wildlife, and noxious weeds. This project manager also
coordinated with the team to ensure that a Forest Service specialist was
available to consult with each of the subcommittees as needed.

The project monitoring teams also played varying roles and undertook
varying activities. Team members included university professors, local
government officials, environmental advocates, industry representatives,
and other interested citizens, and the composition of the team often
helped to determine the level and type of work the team undertook. For
example, several project managers noted that their teams focused on
assessing the effectiveness of specific ecological work or evaluating the
project's impact on the local economy, while other teams focused on
assessing the stewardship contracting process, believing that their
assessment of the tool would help the Congress evaluate the pilot program.
The monitoring teams conducted such activities as inspecting project
sites, testing soils and water, establishing photo points,25 and gathering
and analyzing economic information. Figure 15 shows a multiparty
monitoring team meeting at a project site.

25Photo points are vantage points from which before and after pictures are
taken in order to document visual changes to a project site.

                            Source: Forest Service.

In a few instances we noted other forms of community involvement. Some
managers took steps such as meeting with local contractors and
environmentalists to hear their concerns and answer questions, or setting
up demonstration areas that would show local residents how the project
site would look once the work was done. However, such steps were not
common, and in fact some managers told us that the NEPA process alone
allows for sufficient public participation in their projects.26 They said
that as a result-and without guidance to the contrary-they did not feel
that additional efforts to involve communities were necessary or
justified. In fact, one Forest Service official at the Burns Creek project
site in Virginia told us that management of the forest might be better
left to forestry

26For major federal actions that may significantly affect the quality of
the human environment, the National Environmental Policy Act requires all
federal agencies, including the Forest Service and BLM, to analyze the
potential environmental effects of the proposed action. (See 42 U.S.C.
4332(2)(C).) Regulations implementing NEPA require agencies to involve the
public in environmental decision making by, among other things, making
draft environmental reviews available to the public for comment. (See 40
C.F.R. 1506.6(b).)

professionals than to a collaborative group of well-meaning-but
untrained-community members.

Many Agency Officials Believe Collaboration Enhances Project Effectiveness
and Provides Other Benefits

Some project managers may be missing opportunities to improve their
projects, as the majority of the project managers we spoke with touted the
benefits of involving the community in stewardship contracting projects.
Although some project managers noted that community involvement activities
require an additional investment of time and effort upfront, several
believe that this effort will pay off in the end.

Project managers cited a variety of benefits from community involvement,
including improved project design and implementation, better lines of
communication with the public, and enhanced public trust in the agencies.
Several project managers indicated that they valued the project monitoring
teams' expertise and input, and some noted improvements to their projects
as a result of team and other community input. For example, the manager of
the Upper Blue project in Colorado told us that public involvement in her
project led to the development of more stringent criteria for protecting
water quality during project activities. The Main Boulder project manager
in Montana told us that public involvement in his fuels reduction project
led to improved relations with the public, which in turn persuaded a
neighboring landowner to offer the agency access across his land to an
isolated parcel of public land needing fuel reduction. This allowed the
manager to add an additional 40 acres to the project's planned fuel
reduction activities.

Some managers viewed their interaction with the project monitoring team as
an opportunity to get back in touch with the community and improve the
agency's credibility, and some sought to involve a cross section of the
community-including environmentalists and loggers-on their monitoring
teams to improve the agency's relationship with the community. The manager
of the Sheafman Restoration project in Montana said she wanted a cross
section of the community on her project's team because she believes "any
time you can get people from different sides of an issue together to talk,
good things happen." The Priest-Pend Orielle project manager observed that
in his community-as in so many others-the Forest Service had lost touch
with the local community. He sees tremendous benefits in the agency's new
collaboration process with the community, and suggested the agency will
have greater opportunities to build credibility with the community on
future projects because local individuals have seen the agency responding
to their input. The manager of the Red-Cockaded

Woodpecker Habitat project in Georgia told us that by attending the
meetings of other community organizations and taking an active interest in
what those groups are doing, she has improved communications with the
community-leading to increased public input on Forest Service projects,
which in turn helps the agency better focus its projects to meet community
needs.

However, benefits were often limited because most of the monitoring teams
were formed after the projects completed NEPA requirements, meaning that
these teams generally participated only during the implementation phase of
the projects rather than during project design. Several project managers
suggested that stewardship contracting projects could be more effective if
the community were brought to the table during the earliest project
discussions to assist in drafting proposals of needed work.

Neither Agency's 2004 Guidance Clarifies How Community Involvement Should
Be Incorporated

Despite the many project managers who told us they wanted additional
guidance on obtaining and incorporating community involvement, the Forest
Service's recent stewardship contracting handbook does not contain
specific guidance in this area, and BLM's guidance document is similarly
lacking. In commenting on a draft of this report, Forest Service officials
noted that the agency's intent was to allow local agency officials the
flexibility to determine the appropriate level of collaboration for their
communities. Although the agencies' 2004 guidance documents repeatedly
mention "community involvement" and "collaboration," they do not specify
what these terms mean or how agency staff are to accomplish them. For
example, the Forest Service handbook indicates that forest supervisors
should ensure that all stewardship contracting projects are developed
"using collaboration with Tribal governments, local governments,
nongovernment organizations, individuals, and other groups, as
appropriate." However, the handbook neither provides guidance on how to
effectively involve these various groups and individuals nor defines
"appropriate" collaboration. (In contrast, the handbook's guidance on
contracting and financial activities includes defined lists of appropriate
and inappropriate activities.) In fact, the closest either guidance
document comes to saying what form this collaboration should take is a
statement about what collaboration is not. According to the Forest Service
handbook, "The use of scoping letters alone does not meet the intent of
collaborative

efforts for stewardship contracting projects."27 Moreover, while the
Consolidated Appropriations Resolution of 2003 eliminated the requirement
for multiparty monitoring teams to assess each project, it did not specify
what form of community involvement should take its place.

Project managers are concerned that without guidance on best practices
from other projects, they may be inefficiently developing community
involvement mechanisms independently. Guidance on the minimum requirements
for community involvement in each stewardship project, including examples
of best practices, could increase both the efficiency of managers' efforts
and the extent of community involvement in the projects. By providing more
definitive guidance, the Forest Service and BLM could reasonably expect to
enhance the effectiveness of stewardship contracting and more fully
realize its potential.

Both Agencies Have Additional Projects Planned and Intend to Assess the
Effectiveness of Stewardship Contracting

Both the Forest Service and BLM plan to use stewardship contracting in the
future. The Forest Service expects to award at least 67 stewardship
contracts in fiscal year 2004. BLM, which was granted stewardship
authority only in 2003, has begun 2 projects and plans about 34 more in
fiscal year 2004. The agencies did not provide specific data for years
beyond 2004, but agency officials said they intend to continue expanding
the use of stewardship authority in the future. According to Forest
Service and BLM officials, both agencies plan to collect information on
stewardship contracting projects to assess the utility of stewardship
contracting relative to other contracting mechanisms.

Both Agencies Plan Additional Use of Stewardship Authority in Fiscal Year
2004

According to an official with the Forest Service's Forest and Rangeland
Management Group, the agency awarded 49 stewardship contracts in fiscal
year 2003 and 7 more as of March 2004, and expects that an additional 60
or more contracts may be awarded during the remainder of fiscal year 2004.
However, the Forest Service does not track the authority under which it
awards stewardship contracts, and as a result the agency could not
determine how many of these contracts pertain to new projects and how many
pertain to the 77 pilot projects we analyzed.

27Scoping letters, an element of the NEPA process, request comments,
questions, and suggestions from interested parties on the scope of issues
to be addressed in the NEPA analysis. (See 40 C.F.R. 1501.)

BLM has begun two stewardship contracting projects, both in Oregon. One
project, in Applegate, is expected to be completed in 2004; the other,
near Baker City, does not yet have an estimated completion date. Two
additional projects-one in Idaho and one in Utah-are being developed, and
two more (one in California and one in Oregon) have been approved. BLM
plans to begin about 30 additional projects in fiscal year 2004.

Both Agencies Plan to Assess the Use of Stewardship Contracting

Each agency's recent guidance contains provisions for monitoring and
assessing the use of stewardship contracting, and agency officials told us
that monitoring and assessment serve two purposes-they enable the agencies
to provide information both to the Congress on stewardship contracting and
to field staff responsible for stewardship contracting projects. BLM's
guidance states that "one objective of this monitoring effort is to
analyze the effectiveness of stewardship contracting relative to other
management tools." The Forest Service's handbook states that "results from
the longer term programmatic monitoring generate information about the
utility of stewardship contracting authority."

Officials with both agencies told us that the results of the monitoring
will be used to construct the agencies' required annual reports to the
Congress on stewardship contracting. The agencies are required to report
on the status of development, execution, and administration of stewardship
contracts; the specific accomplishments that have resulted; and the role
of local communities in development of contract plans. Officials also told
us that the results of the monitoring will be provided to agency field
staff to assist staff in designing and implementing projects. For example,
a Forest Service official told us that information on both successful and
problematic projects would be shared with field staff to help them
determine whether certain types of projects are more suitable for
stewardship contracting than others, or whether certain stewardship
contracting procedures are more effective than others in certain
situations.

To carry out their monitoring efforts, the agencies are jointly developing
a request for proposal for a contractor to develop and implement a
mechanism for monitoring and evaluating stewardship contracting projects.
Agency officials estimated that the request would be issued in spring 2004
and expect to issue a single monitoring contract covering stewardship
contracting projects in both agencies.

Conclusions	As the Forest Service and BLM undertake projects to achieve
land management objectives-particularly their efforts to reduce fuels
under the Healthy Forests Restoration Act-they are likely to rely
increasingly on stewardship contracting. This tool has the potential to
help the agencies achieve their objectives while meeting community needs.
Community involvement is a critical component of stewardship contracting:
It enables the agencies not only to construct projects that are targeted
toward community needs but also to develop community relationships,
thereby enhancing future efforts to collaborate with communities.

However, while we observed contracting and financial controls in place
that we believe will provide accountability in managing projects, we
believe that the agencies could do more to assist individual project
managers as they seek to incorporate public involvement in their projects.
Community involvement in the pilot projects most often took the form of
multiparty monitoring teams, but these teams are no longer required for
each stewardship project, and neither agency provides substantive guidance
on incorporating community involvement. Many Forest Service project
managers said they wanted more guidance in this area, but managers looking
to the agencies' 2004 stewardship contracting guidance for direction on
community involvement will likely find little of use. Unless the agencies
establish a minimum requirement for community involvement in stewardship
projects (to replace the expired requirement for monitoring teams) and
provide project managers with examples of successful community involvement
practices other projects have used, the agencies may fail to capitalize
fully on the potential of stewardship contracting.

Recommendation for 	To enhance the ability of stewardship contracting
projects to meet local needs and improve public trust in the agencies, we
recommend that the

Executive Action	Secretaries of Agriculture and the Interior direct the
agencies to issue additional guidance on community involvement. Such
guidance should identify, and encourage the use of, best practices in
seeking and incorporating community input, and establish minimum
requirements for seeking community involvement on each stewardship
contracting project.

Agency Comments and 	We provided a draft of this report to the Secretaries
of Agriculture and the Interior for review and comment. The Forest Service
generally agreed with

Our Evaluation our report and provided technical suggestions that we
incorporated, as

appropriate. The Forest Service's comment letter is presented in appendix

IV. The Department of the Interior did not provide comments.

We are sending copies of this report to the Secretary of Agriculture, the
Secretary of the Interior, the Chief of the Forest Service, the Director
of BLM, and other interested parties. We will also make copies available
to others upon request. In addition, this report will be available at no
charge on GAO's Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact
me at (202) 512-3841. Key contributors to this report are listed in
appendix V.

Barry T. Hill Director, Natural Resources and Environment

List of Requesters

The Honorable Tom Harkin
Ranking Democratic Member
Committee on Agriculture, Nutrition, and Forestry
United States Senate

The Honorable Nick J. Rahall II
Ranking Minority Member
Committee on Resources
House of Representatives

The Honorable Jay Inslee
Ranking Minority Member
Subcommittee on Forests and Forest Health
Committee on Resources
House of Representatives

The Honorable Jeff Bingaman
United States Senate

The Honorable Maria Cantwell
United States Senate

The Honorable Patrick J. Leahy
United States Senate

Appendix I

Forest Service's Responses to Environmentalists' Concerns about Projects
Identified as Problematic

As requested, we reviewed six stewardship contracting pilot projects
identified as problematic by members of various environmental groups: the
Buck, Hungry Hunter Ecosystem Restoration, and Sprinkle Restoration
projects in the Forest Service's Pacific Northwest Region; the Meadow Face
and North Fork Big Game Habitat Restoration projects in the Northern
Region; and the Granite Watershed Protection and Enhancement project in
the Pacific Southwest Region. According to the environmental group
members, these projects either did not allow for sufficient public
involvement or adversely affected the environment in some way.

Four of the six projects were cited for insufficient public involvement,
which took the form of limited public input or lack of Forest Service
commitment and support, according to environmental group members we spoke
with. Ecological concerns were raised about several projects and included
impacts on wildlife habitat and water quality, high road densities, and
soil compaction, as well as the perceived failure of the Forest Service to
consider all costs and benefits in its project analyses, including impacts
on local communities and big-game habitat. The Forest Service project
managers we interviewed generally agreed that public involvement was
lacking at the four projects where this was cited as a concern. However,
their responses to environmental concerns varied.

In this appendix, we provide, for each of the six projects, a description
of the project, a discussion of the concerns expressed by
environmentalists, and the Forest Service's responses to those concerns.
We do not take a position on the validity of the concerns or responses.

Buck Pilot Project	The Buck project is located in Oregon's Wallowa-Whitman
National Forest in the Forest Service's Pacific Northwest Region. It was
designed as a timber sale in 1998 before the initial stewardship
contracting legislation was enacted. The project was subsequently altered
to incorporate activities to reduce wildfire risk and was completed in
2004.

Environmental Group Concerns	According to a member of the Hell's Canyon
Preservation Council (HCPC), a local environmental group, HCPC was
generally concerned about the lack of public input in the project's design
and implementation and about the lack of restoration activities.
Specifically, this HCPC member told us the project was simply a repackaged
timber sale that was not planned or designed with up-front community
involvement beyond that required as part of the National Environmental
Policy Act (NEPA) process, which the member did not consider a substitute
for true local collaboration. Further,

Appendix I Forest Service's Responses to Environmentalists' Concerns about
                       Projects Identified as Problematic

although the Forest Service created a monitoring team for the project, the
team was formed after the NEPA process was completed and the contract
awarded, minimizing the opportunity for public input. The HCPC member
added that the project was too narrowly focused on the sale of timber and
involved only limited restoration activities, such as culvert and road
replacement.

Forest Service Response	The Forest Service's Buck project manager agreed
that community involvement was lacking on the project, noting that public
involvement was particularly limited during the project's planning and
design stages. He emphasized that future projects will likely involve more
public input, especially during planning and design.

With respect to concerns that the project's focus was too narrow and
involved limited restoration activities, the project manager noted that
once the NEPA process was completed, the Forest Service was limited in the
changes it could make to the project because significant alterations would
have required going through the NEPA process again. Given the project's
initial focus as a timber sale, the amount of restoration activity that
could be added after NEPA was limited.

Hungry Hunter Ecosystem The Hungry Hunter Ecosystem Restoration project is
in Washington's

Restoration Pilot Project	Okanogan and Wenatchee National Forests in the
Forest Service's Pacific Northwest Region. The project was designed to
remove small-diameter trees, conduct prescribed burning, rehabilitate
roads to improve habitat, and reduce erosion. The Forest Service project
manager told us he expected the project to get under way in early 2004,
following completion of the NEPA process.

Environmental Group Concerns	A board member of the Methow Forest Watch, a
local grass roots environmental group, expressed concerns about the Forest
Service's lack of commitment to and support for the project, which has
delayed project implementation, as well as limited public involvement.
Regarding the lack of commitment and support, she said the Forest Service
has paid more attention to timber sale projects than to the Hungry Hunter
project, citing a local timber sale as an example of a project that is
already under way while the Hungry Hunter project is moving forward
slowly. She stated that although she understands that forest fires have
contributed to project delays, the Forest Service has not made the Hungry
Hunter project a high priority. Concerning limited public involvement, the
board member noted

Appendix I Forest Service's Responses to Environmentalists' Concerns about
                       Projects Identified as Problematic

that although the Forest Service initially incorporated public involvement
on the project, this involvement was reduced after the Consolidated
Appropriations Resolution of 2003 eliminated the requirement for local
monitoring teams. She also noted that although the Forest Service
initially proposed 1.3 miles of road as part of the project, the agency
currently proposes constructing seven miles of new road, some of it in
areas that are currently roadless.

Forest Service Response	The Hungry Hunter project manager disagreed with
the contention that there was a lack of commitment to the project. The
manager noted that the comparison to the local timber sale does not
demonstrate lack of commitment because the two projects did not start at
the same time and, further, that the timber sale will be about 3 years
late when it is finally completed. However, the project manager
acknowledged the project's delays and stated that he understands public
frustration over these delays. He noted that in addition to severe fires
that have directed Forest Service resources elsewhere, lack of clear
agency guidance on how to implement the project has also contributed to
delays. For example, he said the permissible use of retained receipts was
initially unclear, but the new legislation and guidance clearly specifies
what they can be used for. In addition, he noted that time-consuming soils
analyses required as part of the project's environmental assessment also
caused delays.

The manager agreed that public involvement on the project has been reduced
in recent months. He attributed this reduction to several factors. First,
there was confusion over the requirements of the Consolidated
Appropriations Resolution of 2003, including the extent of public
involvement. Additionally, he was concerned about violating the Federal
Advisory Committee Act (FACA) by working too closely with the project's
monitoring team; partly as a result, he reduced the team's involvement.
Finally, a potential conflict of interest arising from monitoring team
members who were potential bidders on the project contract also
contributed to the project manager's decision to curtail monitoring team
involvement. The manager emphasized, however, that once the environmental
assessment is finalized and the project is under way, more direct and
extensive public involvement will be resumed.

Regarding the concern about high road densities in the Hungry Hunter
project area, the project manager stated that no decision has yet been
made regarding the number of miles of road in the project. He noted that
four alternatives are outlined in the project's environmental assessment,
one of which would involve no new road construction. Once the public
comment

Appendix I Forest Service's Responses to Environmentalists' Concerns about
                       Projects Identified as Problematic

period is completed, he said, a decision will be made on which alternative
to select.

Sprinkle Restoration Pilot The Sprinkle Restoration project, like the Buck
project, is in Oregon's

Project	Wallowa-Whitman National Forest in the Forest Service's Pacific
Northwest Region. The project's specific objectives are to provide
longterm forest health, reduce the severity of future insect infestations,
restore the forest to historical conditions, and provide for wildlife
habitat. A contract for the project was awarded in July 2003, and the
contractor began working on the project in the spring of 2004.

Environmental Group Concerns	A member of the Hell's Canyon Preservation
Council (the same member we spoke with regarding the Buck project) told us
the group is mainly concerned about the lack of collaboration on the
Sprinkle Restoration Project, but also has concerns about the project's
narrow focus on timber harvest activities to the detriment of restoration
activities and the limited use of receipts retained.

Regarding collaboration, the HCPC member told us that the local monitoring
team was formed only after the project had been through the NEPA process
and the contract had been signed and that community input on the project
through NEPA is insufficient. However, he noted that the Forest Service is
addressing some of the monitoring team's concerns. For example, the team
had noticed that a road that was to be decommissioned as part of the
project required no action because the road area had adequately restored
and regenerated itself. When the team pointed out that decommissioning the
road would be unnecessary and would add sediment to a nearby creek, the
Forest Service accepted the team's suggestion and withdrew the plan to
decommission the road. The HCPC member pointed out that if the Forest
Service had involved the community up front, this oversight would not have
occurred.

The HCPC member also told us that the project focused on timber harvest
activities and did not address the issue of high road density, which
jeopardizes wildlife security. More broadly, he told us that the project
did not contain sufficient restoration activities and noted that
additional activities (such as replacing culverts or decommissioning
roads) could have been added to the project to fully use the expected
$300,000 in retained receipts, which had not been used.

Appendix I Forest Service's Responses to Environmentalists' Concerns about
                       Projects Identified as Problematic

Forest Service Response	The Sprinkle project manager told us he agrees
that collaboration on the project has been lacking and that NEPA had been
completed and the project designed before the monitoring team was formed.
He stated that the Forest Service is trying to improve collaboration on
planning various forest projects.

Concerning high road density, the project manager said that although road
removals were planned as part of the project, road density remains high,
contributing to reduced elk habitat. He noted, however, that the area is
flat, making vehicle use difficult to manage. If the Forest Service closes
a road, forest users are likely to simply take their vehicles off road to
get where they want to go. Because it may be more ecologically sound to
leave the roads in place and keep forest traffic on established roadways,
there is some reluctance on the part of the Forest Service to close roads.

Finally, regarding retained receipts, the project manager informed us that
the agency has consulted with the monitoring team on the use of the
receipts. He said the Forest Service plans to use the funds on nearby
stewardship projects as well as on the Sprinkle and adjacent watersheds.
For example, the agency plans to use the funds to replace culverts within
the Sprinkle area.

Meadow Face Pilot Project 	The Meadow Face project is located in Idaho's
Nez Perce National Forest in the Forest Service's Northern Region. The
project objectives are to return vegetation to its historical range;
reduce fire risk, invasive plant species, and sediment; and improve stream
channel conditions and recreational opportunities. No contract has been
awarded on the project, and the project manager did not provide an
estimate of its completion date.

Environmental Group Concerns	Members of Friends of the Clearwater and the
Idaho Conservation League, two local environmental groups, expressed
concerns about insufficient public involvement in the project,
insufficient restoration activities, overstatement of the results of
project activities, and site-specific amendments made to the 1987 forest
plan that allow environmental degradation.1 Regarding public involvement,
the Idaho Conservation League member said that the Stewards of the Nez
Perce, an advisory group

1The Forest Service is required by law to develop a comprehensive,
long-range management plan for each national forest. These plans, commonly
called forest plans, must provide for multiple public uses in each forest,
such as fishing, mining, and preserving wildlife.

Appendix I Forest Service's Responses to Environmentalists' Concerns about
                       Projects Identified as Problematic

composed of representatives of the timber industry, the Idaho Department
of Fish and Game, the Nez Perce tribe, environmentalists, and others,
presented the Forest Service with a project proposal that was unanimously
agreed upon by the group. However, the Forest Service ultimately ignored
the group's recommendation and came up with its own project, and the
environmental group members do not believe the project will result in the
completion of all restoration elements that were proposed.

The Friends of the Clearwater member also commented on one element of the
service work-an attempt to reduce sedimentation into area
waterways-involving the stabilization of a slide area resulting from past
timber harvesting. The member argues that the Forest Service is double
counting the sediment savings resulting from this activity-that is,
representing the savings as the effect of mitigating the prior timber
harvest as well as the effect of the current Meadow Face project.

Finally, the environmental group member expressed concern over three
amendments that were made to the forest plan in order to allow project
activities. He told us his group is concerned over forest plan amendments
that will allow (1) higher levels of sedimentation in area waterways, (2)
increased soil compaction in the area, and (3) logging activities within
oldgrowth timber stands.

Forest Service Response	Regarding the concern about ignoring the
recommendations of the Stewards of the Nez Perce, local Forest Service
officials noted that about 90 percent of what was contained in the
Stewards' recommendations is included among the activities the Forest
Service intends to undertake and that, in any case, the group was told
repeatedly that its recommendations would not necessarily be implemented
without further adjustment or review. Further, the Stewards'
recommendations were vague in certain respects, making it difficult to
determine exactly what activities the group expected.

Project officials also noted that the stewardship project itself will
encompass only a portion of the activities the Forest Service intends to
undertake and that other contracting mechanisms-such as timber or service
contracts-may also be implemented. Thus, the omission of certain
activities from the stewardship project does not mean the restoration work
will not be completed; rather, it simply means the Forest Service will
complete the work using other means.

Appendix I Forest Service's Responses to Environmentalists' Concerns about
Projects Identified as Problematic

With respect to the Meadow Creek slide area, the project manager said that
the area is the result of ponds created by a homesteader, not the result
of past timber harvesting. The area was included in a timber sale in order
to remediate the slide area; the sediment savings resulting from this
remediation were to offset the increased sediment that would result from
logging activities. The timber sale is currently being implemented, but
the slide area has not yet been treated, so it was included in the Meadow
Face project. However, the official added that the Forest Service will not
count the slide area remediation toward any "sediment savings" in the
Meadow Face project.

Regarding the amendments to the 1987 forest plan, the project officials
told us that the water quality amendment actually tightens the water
quality requirements for two watersheds in the project area, meaning that
less sediment will be permitted to flow into those streams. In the case of
a third waterway, sediment restrictions were eased after forest staff
determined that the streambed can handle more sediment than was initially
believed when the forest plan was developed.

The soil compaction amendment allows greater flexibility in conducting
projects, according to project officials. The forest plan originally
stated that upon completion of any forest activity, the soil in the area
must be less than 20 percent compacted, displaced, or puddled. However,
many areas in the forest had undergone significant logging or other
activities in the past and were already affected well beyond the 20
percent standard. Consequently, those areas were, in effect, off limits to
any additional activities-whether timber harvesting or restoration
activities-because remediating the soils to below the 20 percent standard
would be difficult when they were substantially above the standard to
begin with. The amendment to the 1987 forest plan states generally that
the level of compaction, displacement, or puddling after a project is
completed must be lower than the level before the project-which in turn
would allow activities, as long as the soils are left in better condition
after the project than they were before it.

Finally, the officials told us that the old-growth logging amendment
applies to about 710 acres of old-growth forest and allows treatment of
the stands in order to maintain old-growth characteristics. The stands are
becoming dense with small trees and underbrush that could serve as ladder
fuels and possibly contribute to a stand-destroying fire. As a result of
the amendment, the Forest Service can thin the stands, benefiting
old-growth trees by reducing both ladder fuels and competition for water
and nutrients.

Appendix I Forest Service's Responses to Environmentalists' Concerns about
                       Projects Identified as Problematic

North Fork Big Game Habitat Restoration Pilot Project

The North Fork Big Game Habitat Restoration project (also known as the
Middle Black project) is located in Idaho's Clearwater National Forest in
the Forest Service's Northern Region. The project will involve thinning on
about 640 acres, and the project manager expects it to be completed in
2009.

Environmental Group Concerns	A member of Friends of the Clearwater (the
same member we spoke with regarding the Meadow Face project) told us that
his organization is concerned that the project focuses more on increasing
the elk population than on other environmental issues and will involve
thinning trees and brush in roadless areas.

Forest Service Response	The project manager told us that, while the Forest
Service is seeking to restore the elk population, it is also engaged in
restoration activities. He acknowledged that the project began as a study
undertaken at the request of a local group called the Clearwater Elk
Recovery Team (CERT), which was concerned about declining elk numbers.
However, he emphasized that despite its origin, the project is being
conducted as an ecosystem restoration effort that will restore the forest
to a more typical historical condition and reduce the likelihood of fire.
As evidence that the project has not paid undue attention to the elk
recovery issue, the project manager told us that CERT members "complained
vigorously" about the proposed plan for the project, even filing an
appeal, because the project did not adequately address their concerns
about elk habitat. The manager stated that although thinning will take
place in roadless areas, no new roads will be built. Thinning will be
conducted manually using chainsaws.

Granite Watershed The Granite Watershed Protection and Enhancement project
is located in Protection and California's Stanislaus National Forest in
the Forest Service's Pacific Enhancement Pilot Project Southwest Region.
The project is designed to achieve several objectives,

including watershed and enhancement, spotted owl habitat improvement and
protection, noxious weed control, and reforestation. The project is
ongoing, and the project manager expects it to be completed in 2010.

Environmental Group Concerns	Members of the Sierra Club and the Forest
Conservation Council told us that their overall concern about the project
is the Forest Service's failure to account for all costs and benefits when
designing the project. The members told us that while the project will
open or reconstruct 63 miles of road to remove forest products, the Forest
Service did not consider the project's

Appendix I Forest Service's Responses to Environmentalists' Concerns about
                       Projects Identified as Problematic

impacts on other issues, such as sedimentation and big-game habitat, and
the financial and nonfinancial costs and benefits of these potential
impacts.

Forest Service Response	The Granite project manager agreed that there are
many costs and benefits associated with timber sales and other forest
projects beyond those assessed for the Granite project, but he stated that
quantifying all costs and benefits would be impossible. For example, he
noted that timber harvests might deter people from using forest lands for
recreational purposes. Although forest visitors may provide financial
benefits such as gasoline purchases from nearby communities, visitors also
leave trash behind, creating a nonmonetary cost by degrading the
recreational experience of others and potentially creating a monetary cost
for cleanup expenses. In addition, visitors' vehicle use may also
contribute to watershed damage by increasing sedimentation. Given that
project effects are so mixed and involve so many elements that are
impossible to quantify, according to the project manager, it would be
impossible to account for all costs and benefits in a project analysis.

With respect to the specific impact on big-game habitat, the project
manager noted that the project, as designed, would add less than one mile
of road to existing roads in the forest. He added that if roads do, in
fact, reduce habitat, the one additional mile of road will have little
impact on this reduction. He said that the area is not known for big game;
the only such game are deer and bears, and neither population has been
thriving under existing conditions.

Appendix II

                       Objectives, Scope, and Methodology

Based on the congressional request letters of July 2002 and March 2003,
and subsequent discussions with your staffs, we agreed to determine (1)
the status of each stewardship project and the land management goals they
address; (2) the extent to which the agencies have contracting and
financial controls in place that ensure accountability in managing
stewardship projects; (3) the steps the agencies have taken to involve
communities in designing, implementing, and evaluating stewardship
projects; (4) each agency's plans for future use of stewardship
contracting; and (5) the Forest Service's response to concerns raised
about 6 specific stewardship projects.

Stewardship Project Status and Land Management Goals

To identify ongoing and completed stewardship pilot projects, we contacted
officials at the Forest Service and BLM to obtain a list of such projects.
The Forest Service provided a list of 81 pilot projects;1 an official with
BLM's Forest and Woodland Management Group stated that no projects were
ongoing.

To determine the status of these stewardship projects and their land
management goals, we conducted a Web-based survey of all ongoing and
completed stewardship projects. The survey asked respondents to provide
data on project activities, costs, time frames, size, and other
information, as well as the land management goals addressed by each
project.

Because we surveyed all stewardship projects, no sampling error and
confidence intervals are associated with our work. However, the practical
difficulties of conducting any survey may introduce other types of errors,
commonly referred to as nonsampling errors. For example, differences in
how a particular question is interpreted, the sources of information
available to respondents, or the types of people who do not respond can
introduce unwanted variability into the survey results. We included steps
in both the data collection and data analysis stages for the purpose of
minimizing such nonsampling errors. We pretested the survey at three
project sites and conducted a fourth pretest by telephone. In addition, we
provided a draft version of the survey to Forest Service headquarters
officials familiar with the stewardship contracting program in order to
obtain their comments on the draft. We modified the survey as appropriate

1Although 84 pilot projects were authorized, several pilot projects had
been terminated at the time of our review.

Appendix II
Objectives, Scope, and Methodology

to reflect the questions and comments we received during the pretests and
Forest Service headquarters review.

Project managers at 4 of the 81 projects identified by the Forest Service
told us that their projects had been terminated by the time of our survey
or were no longer being conducted under stewardship authority, leaving 77
projects. Of these 77 projects, 7 did not provide information in our
survey. The managers for 3 projects-Butte South, Midstory Removal in
Red-Cockaded Woodpecker Habitat, and Red River-told us that their projects
were too preliminary to reasonably provide information. The manager of the
Grassy Flats project told us that she was required to serve on
firefighting duty and did not have time to complete our survey. The
manager of the West Glacier project told us that because of demands on his
time resulting from the 2003 wildfires in his state, he was faced with a
substantial backlog of work and would not be able to complete our survey.
Finally, the managers of the Grand Canyon and Yaak projects did not
respond to our requests to provide data.

We attempted to corroborate survey responses in two ways. First, to the
extent possible, we compared survey responses from the projects we visited
with information (such as contracts or other documents) we collected
during those visits. The survey data generally concurred with the site
visit documentation we gathered. When we encountered substantial
differences we could not reconcile, we used the more conservative figure.
Such discrepancies occurred in four instances, two involving the estimated
value of products removed, one involving the estimated volume of products
removed, and one involving estimated contract costs. We also identified
one source of data-the Forest Service's Timber Sale Accounting (TSA)
system-that contains data about the volume of timber removed as part of
Forest Service timber sales. Because in our survey we asked about timber
volumes removed during stewardship projects, we attempted to corroborate
survey responses regarding timber volumes by comparing them to TSA data.
The comparison was not meaningful, however, because of differences in the
way the two sets of data (ours and TSA's) were collected, and because the
preliminary nature of many of the stewardship projects meant that, while
they provided us with estimates of their timber harvest volumes, such data
were not yet entered into TSA.

However, based on our comparison of survey responses to project
documentation, we believe the data are sufficiently reliable to be used in
providing descriptive information on project size, activities, land
management goals, and the like.

                                  Appendix II
                       Objectives, Scope, and Methodology

Contracting and Financial Controls

To assess the contracting and financial controls in place at stewardship
projects, we conducted site visits to a nonprobability sample of 8 ongoing
or completed project locations-about 10 percent of the 81 projects
initially reported to us.2, 3 We used numerous criteria to select project
locations to visit. First, to respond to your interest in the Forest
Service's use of retained funds and its controls over contractor
activities, we narrowed our scope to include only projects using receipt
retention or designation by description authorities. From such projects we
selected all of those that had been completed-a total of 4 projects. (One
additional project had been completed but did not use either receipt
retention or designation by description authority.)

To select the remaining 4 projects to visit, we first eliminated from our
consideration any remaining projects in the Forest Service regions where
the 4 completed projects were located, in order to obtain geographic
spread in our nonprobability sample and obtain information from various
Forest Service regions. We then focused on projects that were well under
way, in order to ensure that sufficient contracting and financial
activities had taken place for us to evaluate. Our application of these
site selection criteria yielded the site visit locations shown in table 1.

2Results from nonprobability samples cannot be used to make inferences
about a population. This is because in a nonprobability sample, some
elements of the population being studied have no chance or an unknown
chance of being selected as part of the sample.

3We also visited stewardship projects near Flagstaff, Arizona, and Fort
Collins, Colorado. However, at these locations, we simply toured the
project sites and did not apply our site visit methodology.

                                  Appendix II
                       Objectives, Scope, and Methodology

Table 1: Selection Criteria Met by Each Pilot Project at Which We Conducted Site
                  Visits Criteria met Project location Region

  Using receipt retention authority Using designation by description authority

Completed project

Geographically separate from completed projects Project activity under way

           Clearwater            1      o       o               o          o  
         Winiger Ridge           2              o               o          o  
          Restoration                                                 
        Warm Ridge/Glide         4      o                       o          o  
            Antelope             6              o       o             
      Baker City Watershed       6              o       o             
         Rehabilitation                                               
         Wayah Contract          8      o       o       o             
            Logging                                                   
          Burns Creek            8      o               o             
      Fernow Experimental        9      o                       o          o  
             Forest                                                   

Source: GAO.

At each site visit location, we reviewed the project's contracting and
financial files and interviewed Forest Service officials associated with
the project, including project managers, timber sale contracting officers,
procurement contracting officers, contracting officers' representatives,
supervisory accountants, and others, to determine whether appropriate
controls were in place to provide accountability in managing the projects.
We reviewed preaward and postaward contracting elements we identified as
important for providing management accountability in awarding and
administering stewardship contracts. Regarding preaward activities, we
looked for evidence of solicitations and advertisements for the projects
to provide public notice of work to be performed and to maximize the
number of potential bidders on project contracts. We also looked for
documentation of preestablished bid evaluation criteria to show that the
Forest Service selected contractors fairly and equitably. In addition,
given that stewardship projects may involve new ways of contracting to
achieve land management objectives, we looked for evidence of meetings
with prospective bidders to clarify project activities and Forest Service
expectations.

Regarding postaward controls, we reviewed contracts to determine whether
they contained clear definitions of contract requirements as well as
valuation, bond, oversight, and breach, default, and dispute resolution

                                  Appendix II
                       Objectives, Scope, and Methodology

clauses to provide accountability in managing the projects. Clear
definitions of contract requirements, accompanied by postaward conferences
with contractors, ensure that contractors fully understand the Forest
Service's requirements and expectations. Appropriate valuation techniques,
such as appraisals and government estimates, ensure that the government is
fairly compensated for the timber or other products it is selling. Payment
and performance bonds ensure that the government receives payment for
timber harvested and that government funds are not required to remediate
damage caused by contractor activities. Oversight activities assure the
government that contractor activities are being conducted appropriately
and according to schedule. Finally, breach, default, and dispute
resolution clauses allow the Forest Service to address problems by issuing
default notices or stop work orders to prohibit further activity on a
project until the problems are resolved.

In addition, at 6 of the 8 sites we visited, we met with the contractor
performing the stewardship activities, in order to obtain the contractor's
perspective on the project. Finally, we spoke with officials of the Forest
Service's Forest and Rangeland Management Group, BLM's Forest and Woodland
Management Group, and various agency field staff regarding the contracting
and financial guidance provided to staff implementing stewardship
projects.

Based on our reviews of agency files, discussions with agency staff, and
interviews of contractors outside the agency, we believe the data are
sufficiently reliable to be used in reporting on the contracting and
financial mechanisms employed by the Forest Service in implementing
stewardship projects.

Community Involvement	To determine the measures taken by the agencies to
involve communities in designing, implementing, and evaluating stewardship
projects, we reviewed project contracting files and interviewed agency
officials at each of our 8 site visit locations. At 5 of the 8 locations,
we also spoke with a member of the local monitoring team to obtain
additional information on the monitoring team's role in the project. The
remaining 3 locations did not have monitoring teams.

In addition to these 8 projects, we conducted structured telephone
interviews with officials at a nonprobability sample of an additional 25
randomly selected projects. In order to select these projects, we first
eliminated from consideration those projects that (1) indicated through
our

                                  Appendix II
                       Objectives, Scope, and Methodology

survey they were no longer viable stewardship projects, (2) were included
among our 8 site visits, and (3) were among the 6 included in our
assessment of projects about which concerns had been raised. Of the
remaining 63 projects, 40 had completed NEPA, according to Forest Service
data, and 23 had not. From these 63 projects we randomly selected a total
of 25 projects to contact-15 that had completed NEPA and 10 that had not.
Our nonprobability sample of 25 projects was similar to our universe of 63
projects in the percentage of projects that had and had not completed
NEPA. We then contacted officials at these 25 projects to ask a set of
questions regarding community involvement in the projects. Again, we
included steps to minimize nonsampling errors. In lieu of pretesting the
questions, we used the results of our site visits to ensure that the
questions we asked were understandable, balanced, and appropriate.

We also spoke with staff from the Pinchot Institute for Conservation (the
Forest Service contractor overseeing multiparty monitoring and evaluation)
regarding community involvement, and attended the spring 2003 meeting of
the Pinchot Institute's national stewardship monitoring team.

Because we gathered complementary data from multiple sources, including
Forest Service project managers, Pinchot Institute staff, and local and
national monitoring team members, we believe the data we gathered are
sufficiently reliable to be used in reporting on the measures taken by the
agencies to involve communities in stewardship projects.

Future Agency Activities	To obtain information on future agency
stewardship activities, we reviewed both the Forest Service's and BLM's
January 2004 guidance on stewardship contracting. We also obtained from
Forest Service and BLM headquarters officials the number of projects they
currently had under way or had planned in addition to the 77 pilot
projects undertaken by the Forest Service. Finally, we spoke with
headquarters officials at both agencies to obtain their views on future
use of stewardship contracting authority and their plans for future
monitoring and assessment activities.

Projects of Concern	To determine the Forest Service's response to specific
concerns raised about 6 ongoing stewardship projects by environmental
group representatives, we first obtained the concerns of environmental
group representatives for each of the 6 projects. To do so, we telephoned
the environmental contacts listed by your staff to obtain information on
their

Appendix II
Objectives, Scope, and Methodology

concerns. We also requested documentation such as appeal documents filed,
correspondence with Forest Service officials, or other documentation that
could provide information on concerns regarding the projects.
Subsequently, we telephoned the Forest Service managers for each of these
6 projects to obtain their responses to the concerns that had been raised.
Based on our discussions with individuals concerned about specific
stewardship projects and Forest Service staff associated with the
projects, as well as our review of documentation regarding the projects,
we believe the data are sufficiently reliable to be used in reporting on
concerns about specific stewardship projects and the Forest Service's
response to those concerns.

We conducted our work between April 2003 and April 2004 in accordance with
generally accepted government auditing standards.

Appendix III

Pilot Project Names, Locations, Acres Treated, and End Dates

Table 2 provides pilot project information as of September 30, 2003, as
reported by project officials.

     Table 2: Pilot Project Names, Locations, Acres Treated, and End Dates

                                                           Project    Project 
          Project name               National forest        acresa  end dateb 
    Region 1: Northern Region                                      
     Bitterroot Burned Area            Bitterroot            7,284  9/30/2005 
           Restoration                                             
           Butte South            Beaverhead-Deerlodge           c 
        Clancy-Unionville                Helena                  -          - 
           Clearwater                     Lolo               1,280 11/30/2004 
Condon Administrative Site           Flathead                17  9/30/2003 
         Fuels Reduction                                           
            Dry Fork                 Lewis and Clark           300  9/30/2005 
            Dry Wolf                 Lewis and Clark           149  9/30/2004 
         Frenchtown Face                  Lolo                   -          - 
           Game Range                     Lolo               2,221 12/31/2007 
           Iron Honey                Idaho Panhandle         7,200          - 
Judith Vegetation and Range       Lewis and Clark           218  9/30/2006 
           Restoration                                             
           Knox-Brooks                    Lolo                 802 11/30/2007 
          Main Boulder                  Gallatin             2,505  4/30/2010 
           Meadow Face                  Nez Perce               59          - 
         North Elkhorns                  Helena                  -          - 
North Fork Big Game Habitat                                                
Restoration (also referred          Clearwater                  
              to as                                         11,000  9/30/2009
     Middle Black Ecosystem                                        
          Restoration)                                             
           Paint Emery                  Flathead               231 11/30/2004 
       Priest-Pend Oreille           Idaho Panhandle         2,017   2/5/2009 
            Red River                   Nez Perce                c 
    Sheafman Fuels Reduction           Bitterroot              104 10/31/2004 
       Treasure Interface               Kootenai               765  9/30/2004 
Westface Forest Management     Beaverhead-Deerlodge         407 10/31/2007 
          West Glacier                  Flathead                 d          d 
              Yaak                      Kootenai                 e          e 
    Region 2: Rocky Mountain                                       
             Region                                                
Beaver Meadows Restoration           San Juan               902  9/30/2008 
                               Medicine Bow-Routt National     879            
       Ryan Park/Ten Mile              Forests and                 12/31/2008
                                 Thunder Basin National            
                                       Grasslands                  
           Seven Mile               Arapaho-Roosevelt        1,375  6/30/2005 
       Southwest Ecosystem              San Juan                38  9/30/2003 

Appendix III
Pilot Project Names, Locations, Acres
Treated, and End Dates

                         (Continued From Previous Page)

                                                           Project    Project 
               Project name              National forest    acresa  end dateb 
                Upper Blue                 White River       1,834  12/1/2013 
       Upper South Platte Watershed      Pike-San Isabel         -          - 
        Winiger Ridge Restoration       Arapaho-Roosevelt    1,066  10/5/2005 
      Region 3: Southwestern Region                                
            Cottonwood/Sundown          Apache-Sitgreaves      210  9/30/2002 
               Grand Canyon                  Coconino            e          e 
      Montlure/Benne Thin and Fuels     Apache-Sitgreaves      358 12/31/2004 
                Reduction                                          
Ranch/Iris Winter Range Restoration  Apache-Sitgreaves    2,000 12/31/2004 
            Zuni-Four Corners                 Cibola            33  9/24/2003 
      Region 4: Intermountain Region                               
      Atlanta South Fuels Reduction           Boise            582 12/31/2005 
            Duck Creek Village                Dixie         12,000 12/31/2008 
             Warm Ridge/Glide                 Boise          3,500  9/30/2007 
        Monroe Mountain Ecosystem            Fishlake        4,971 11/30/2009 
               Restoration                                         
         North Kennedy-Cottonwood             Boise          3,248 12/31/2009 
         Recap Density Management             Dixie            155 12/31/2003 
          Small Wood Utilization              Boise         20,000  9/30/2008 
    Region 5: Pacific Southwest Region                             
     Granite Watershed Protection and       Stanislaus       7,075  12/1/2010 
               Enhancementf                                        
               Grassy Flats               Shasta-Trinity         g          g 
                  Maidu                       Plumas         1,300 11/30/2013 
               Pilot Creek                  Six Rivers         164 11/15/2007 
    Region 6: Pacific Northwest Region                             
                 Antelope                 Fremont-Winema     1,644  9/23/2002 
Baker City Watershed Rehabilitation   Wallowa-Whitman       628  5/15/2001 
                   Buck                  Wallowa-Whitman       880  3/31/2004 
                Foggy/Eden                   Siskiyou        4,614  9/30/2010 
Hungry Hunter Ecosystem Restoration  Okanogan-Wenatchee  17,906       2011 
      Littlehorn Wild Sheep Habitat          Colville          350 11/30/2004 
               Restoration                                         
                 McKenzie                   Willamette         250 12/31/2006 
     Metolius Basin Forest Management       Deschutes       12,600 12/31/2011 
                 Oh Deer                Okanogan-Wenatchee     215  3/31/2005 
       Siuslaw Basin Rehabilitation          Siuslaw         2,960  9/30/2008 
           Sprinkle Restoration          Wallowa-Whitman     2,642 10/31/2007 
               Upper Glade                 Rogue River         396 12/31/2006 

                                  Appendix III
                     Pilot Project Names, Locations, Acres
                             Treated, and End Dates

                         (Continued From Previous Page)

                                                           Project    Project 
          Project name              National forest         acresa  end dateb 
Region 8: Southern Region                                       
          Burns Creek         George Washington-Jefferson       32  3/15/2002 
     Comp 113 Red-Cockaded        Chattahoochee-Oconee       7,000            
       Woodpecker Habitat                                           9/30/2010
          Improvement                                              
     Elk and Bison Prairie    Land between the Lakes            50            
      Habitat Restoration     National Recreation                   9/30/2005
                                          Area                     
      First Loblolly Pine        Francis Marion-Sumter      10,734 10/20/2006 
            Thinning                                               
         Fugate Branch                Daniel Boone           1,376          - 
       Longleaf Ecosystem                                                     
        Restoration and       National Forests in Florida                   -
          Red-Cockaded                                       2,389 
       Woodpecker Habitat                                          
          Improvement                                              
      Longleaf Restoration    National Forests in Alabama    4,222  9/30/2010 
      Midstory Removal in         National Forests in              
    Red-Cockaded Woodpecker           Mississippi                c 
            Habitat                                                
     Wayah Contract Logging    National Forests in North                      
      (also referred to as              Carolina                14 
             Morgan                                                  7/1/2003
              Cut)                                                 
     Sand Mountain Contract    National Forests in North        55  4/30/2004 
        Logging Services                Carolina                   
      Southern Pine Beetle       Francis Marion-Sumter          58 11/30/2003 
          Suppression                                              
           Wolf Creek                   Cherokee               250          - 
    Region 9: Eastern Region                                       
Fernow Experimental Forest         Monongahela              792  9/30/2005 
     Forest Discovery Trail          White Mountain             10    11/2001 

     Kirtland's Warbler                    Huron-Manistee     1,749 7/15/2007 
          Recovery                                                  
       North Montowibo                         Ottawa           100  6/1/2008 
    Vegetation Management                                           
     Snowmobile Trail 13                       Ottawa             4  6/1/2004 
           Reroute                                                  
    White River Riparian                Green Mountain-Finger    16      2014 
           Buffer                               Lakes               
                           Source: GAO.                             

Note: A dash indicates that project officials did not respond to this
question in our survey.

aProject acres include acres treated at the time of our survey and acres
expected to be treated in the future.

bProject end date reflects the date on which the pilot project's final
contract was, or is expected to be, closed.

cProject officials told us these projects were too preliminary to provide
meaningful survey responses.

dThe West Glacier project manager told us that because of his heavy
workload resulting from 2003 wildfires in his forest, he did not have time
to complete our survey.

eGrand Canyon and Yaak project officials did not respond to our survey.

fThe Granite Watershed Protection and Enhancement project was authorized
by the Granite Watershed Enhancement and Protection Act of 1998 (Pub. L.
No. 105-281, 112 Stat. 2695) rather than by the stewardship contracting
legislation. A project official told us, however, that the project is
being conducted under both authorities-the stewardship contracting
legislation and the Granite Watershed Enhancement and Protection Act of
1998.

gThe Grassy Flats project manager told us she did not complete our survey
because she was serving on firefighting duty in another location.

Appendix IV

Comments from the Department of Agriculture

Appendix V

                     GAO Contacts and Staff Acknowledgments

GAO Contacts	Barry T. Hill, (202) 512-3841 David P. Bixler, (202) 512-7201

Staff 	In addition to those named above, Paul Caban, Nancy Crothers,
Timothy DiNapoli, James Espinoza, Steve Gaty, Kevin Jackson, Richard
Johnson,

Acknowledgments	Diane Lund, Mary Mohiyuddin, Judy Pagano, and Alana
Stanfield made key contributions to this report.

GAO's Mission	The General Accounting Office, the audit, evaluation and
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