Spalding & Son, Inc. v. United States

38 Cont. Cas. Fed. 76,514, 28 Fed. Cl. 242, 1993 U.S. Claims LEXIS 39, 1993 WL 147922
CourtUnited States Court of Federal Claims
DecidedMay 10, 1993
DocketCong. Ref. No. 2-86
StatusPublished
Cited by23 cases

This text of 38 Cont. Cas. Fed. 76,514 (Spalding & Son, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Spalding & Son, Inc. v. United States, 38 Cont. Cas. Fed. 76,514, 28 Fed. Cl. 242, 1993 U.S. Claims LEXIS 39, 1993 WL 147922 (uscfc 1993).

Opinions

REPORT OF REVIEW PANEL

WIESE, Presiding Officer.

Senate Resolution No. 458 referred to this court a pending bill, S. 294, 99th Cong., 1st Sess. (a bill “For the relief of Spalding and Son, Incorporated”) for consideration in accordance with the procedures called for by 28 U.S.C. §§ 1492 and 2509 (1988). As contemplated by these provisions, the matter was assigned to a judge of this court (sitting as a hearing officer) who, after trial of the issues, filed a lengthy report setting forth findings of fact and legal conclusions favoring monetary relief for Spalding through enactment of the pending bill. 24 Cl.Ct. 112.

The hearing officer’s report is now before this Review Panel on defendant’s appeal. The essence of the appeal is that the hearing officer erred as a matter of law in finding grounds for relief. Extensive briefs have been filed on the issues raised and oral argument was heard by the Review Panel on February 5, 1993. For the reasons stated below, we conclude that the facts do not demonstrate a basis for relief, either as a matter of law or as a matter of equity, and accordingly recommend against enactment of S. 294.

FACTS1

Spalding & Son, Inc. (Spalding) is a family-owned corporation that runs a logging and sawmill operation in Grants Pass, Oregon. The company, which has been in business since the 1950’s, relies primarily on [244]*244federal timber sale contracts to supply its logging and milling needs!

In 1976, the Department of the Interior, acting through the Bureau of Land Management (BLM), solicited bids for the harvesting of timber on a tract known as the Jamison-Harris parcel. This sale, identified by that same name — the Jamison-Har-ris sale — was undertaken as part of the agency’s statutory responsibilities to provide for the sale of federally-owned timber on a competitive award basis. The Jami-son-Harris sale involved a partial-cut contract, meaning that only specifically designated trees were to be harvested, i.e., those marked with blue paint both above and below the stump line; unmarked trees were reserved from cutting.

The solicitation for the Jamison-Harris sale indicated that approximately 13,208 trees, representing an estimated volume of 11,206 merchantable thousand board-feet (MBF), had been marked for cutting.2 The sale was divided into four subsales, designated respectively A, B, C, and D. The estimated volume for each subsale was set forth in the solicitation.3 The solicitation intended that subsale D be clear-cut so as to permit that area’s use for construction of a right-of-way.

Spalding was the high bidder at the Jami-son-Harris auction and thus was awarded the contract.4 The award date was January 11, 1977. Operations began in the spring of that year and by late summer of 1977 Spalding had completed the clear-cutting of subsale D and the required construction of the right-of-way. Under Spald-ing’s harvesting plan, timber removal from the remaining areas was to begin the following year.

In August of 1978 an arsonist set fire to the timber lands adjacent to the Jamison-Harris sale area. The ensuing blaze, which came to be known as the Grave Creek Fire, burned for three days before being extinguished. Parts of the Jamison-Harris tract were damaged by this fire. Although subsale A was the area within the Jami-son-Harris tract most heavily burned, nevertheless, only one to two percent of that unit’s trees were completely destroyed. The rest, though in fact killed, were still standing after the fire and remained merchantable. The fire did, however, blacken the trunks of roughly half of the trees in subsale A thereby obscuring their blue paint markings and consequently making identification of the trees originally marked for cutting impossible. This obliteration of markings was confined principally to the western reaches of the subsale.

In addition to the loss of tree markings, the much larger problem confronting BLM officials was the rehabilitation of the forest. To begin that process, all damaged trees would have to be removed from the burned-over areas. Moreover, this removal operation needed to be accomplished within the time constraints of the upcoming cutting season (spring-fall 1979) lest rot, staining and bug infestation destroy the market [245]*245value of the damaged trees.5 The urgency of the situation is highlighted in an environmental assessment report that was prepared by BLM some weeks after the fire. On the question whether removal of the trees from the severely burned areas was the appropriate course of action for BLM to pursue, this report noted that “delay of action would result in significant losses in soil productivity due to erosion and also a probable epidemic insect infestation destroying millions of board feet of timber. Thus, it was clear to all that the harvesting plan originally conceived for subsale A— selective cutting only — would have to be changed to allow for clear-cutting, i.e., the removal from subsale A of all fire-affected trees. The more fundamental concern, however, was how to accommodate Spald-ing’s contract interest in subsale A with the Government’s new requirement for a clear-cutting operation — an operation that of necessity would extend well beyond the geographical boundaries of subsale A.

Upon initial consideration, local BLM officials identified three possible solutions to the difficulties facing them. The first was a proposal to re-mark the trees in the fire-affected portion of subsale A so as to recreate, by approximation, the contract’s original volume estimate. The difficulty with this approach, and the reason it was not pursued by BLM, was that it would delay the harvesting of the remaining fire-affected timber on subsale A. That is to say, safety considerations precluded the conduct of two separate logging operations at the same site at the same time; hence, recovery of the non-contract timber from subsale A would have had to await the completion of Spalding’s efforts on that unit. And, as we have indicated, the value of the fire-affected timber was largely dependent upon the timeliness of its removal.

The second proposal put forward was to modify the Jamison-Harris contract to permit Spalding to harvest all of the timber in subsale A with payment for the added volume to be based on actual board-foot measurements (in lieu of an estimated volume) at prevailing market prices. This proposal, while favored by Spalding, was rejected by BLM’s regional staff for two reasons. First, BLM’s timber sales had always been conducted on an estimated volume basis (i.e., pre-award estimates established through timber cruises verified by sample cuttings) rather than through so-called “scale” sales in which timber volumes are determined on the basis of log measurements made after cutting. Consequently, BLM had neither the experience, the personnel, nor, indeed, even the contract structure necessary to adopt the partial scaled sale approach contemplated by the proposal.

Second, under BLM’s regulations, dispositions of timber in excess of 250,000 MBF (the case here), may be carried out on a non-competitive basis only if “[t]he contract is for the disposal of timber or other vegetative resources, for which it is impracticable to obtain competition.” 43 C.F.R.

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Bluebook (online)
38 Cont. Cas. Fed. 76,514, 28 Fed. Cl. 242, 1993 U.S. Claims LEXIS 39, 1993 WL 147922, Counsel Stack Legal Research, https://law.counselstack.com/opinion/spalding-son-inc-v-united-states-uscfc-1993.