Journal Published Online: 02 September 2016
Volume 45, Issue 4

Bond Requirements on State-Owned Forest Land in the Western United States

CODEN: JTEVAB

Abstract

State forestry agencies typically require forestry contractors to furnish several types of bonds before beginning work on state land. Required bonds often include: performance bonds that help ensure contract provisions are followed satisfactorily, bid bonds that guarantee follow-through by the winning contractor, and payment bonds that guarantee payment for timber before cutting. Much variety exists both in the types of bonds that are required and the form of payment that state forestry agencies will accept. However, no single source for this information exists in the literature. Such a resource can help assist state foresters when determining bond requirements for their own state, as well as providing a comparison with other state policies. To meet this need, a literature review and telephone survey of state forestry agencies was conducted. The literature review revealed varying statutory requirements and an absence of research on bonding practices in the forestry industry. Survey respondents reported performance bond requirements, when in effect, ranging from 5 % to 100 % of the contract price in service contracts, and from 5 % to 20 % in timber sale contracts. Bid guarantees, if required by state agencies, range from 2 % to 10 % of the contract price. The unique conditions involved in forest management require flexibility when it comes to bonding policies to avoid burdening agencies and contractors with unnecessary constraints.

Author Information

Vaughan, D.
Dept. of Forest and Rangeland Stewardship, Colorado State Univ., Fort Collins, CO, US
Mackes, K.
Dept. of Forest and Rangeland Stewardship, Colorado State Univ., Fort Collins, CO, US
Eckhoff, M.
Dept. of Forest and Rangeland Stewardship, Colorado State Univ., Fort Collins, CO, US
Pages: 9
Price: $25.00
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Details
Stock #: JTE20150425
ISSN: 0090-3973
DOI: 10.1520/JTE20150425