Jul 262013

By Linda Kor
Lack of funding for the nation’s largest forest restoration effort may delay plans to clear 300,000 acres across four northern Arizona forests.
Last Friday, the U.S. Forest Service announced that it may approve the transfer of the contract to another company to conduct thinning on almost two million acres in northern Arizona due to failure of the current contractor, Pioneer Forest Products, to acquire funding for its operation.
In May 2012, the Forest Service awarded the Four Forests Restoration Initiative (4FRI) contract to Pioneer Forest Products to thin 30,000 acres per year over 10 years in unnaturally dense, fire-prone forests in northern Arizona and to construct a wood-processing plant that could use the small trees and brush to create furniture and as bio-fuel.
The first task order of the contract, the Ranch task order located on the Apache-Sitgreaves National Forests, was issued to Pioneer in April 2013 and work started in May. According to the Forest Service, work under this task order is progressing satisfactorily and is expected to be completed ahead of schedule.
The Forest Service intends to issue nine additional task orders this fiscal year, which will bring the total acreage for task orders issued in fiscal year 2013 to a little over 16,000 acres. In fiscal year 2014, the Forest Service intends to issue 12 task orders totaling about 23,000 acres. These additional task orders are on all four national forests including the Kaibab, Coconino, Tonto and Apache-Sitgreaves. As the Forest Service considers transferring the contract, it is uncertain if task orders can be filled in the time prescribed by a new company or by Pioneer if the Forest Service does not approve the new company.
The Center for Biological Diversity, concerned regarding the issuance of the contract to Pioneer, has asked the Inspector General of the Department of Agriculture to investigate the irregularities in the 4FRI contract awarded to the company.
“Many of us saw this one coming right from the start. Pioneer’s business plan read like a fantasy novel,” said Todd Schulke with the Center for Biological Diversity, a stakeholder group in 4FRI. “But the Forest Service chose Pioneer despite having more realistic options. Either Pioneer misled the agency about its financial viability or the Forest Service chose to look the other way when there were serious questions.”
The Center for Biological Diversity had concerns that Pioneer’s business plan was based on unproven technology and sought to compete in highly competitive foreign markets.
As part of the project, Pioneer had intended to build a $230 million mill on 500 acres near the Winslow Airport, a mill that could provide hundreds of jobs for local residents. To date, the company has not begun construction of a mill and it is not known if a new company taking over the contract would build a mill on the same site.
According to Pamela M. Baltimore, public affairs officer with the Apache-Sitgreaves National Forests, the name of the potential new owner has not been released, as the information is confidential until the sale is finalized.
“The Forest Service recently received a proposed novation agreement from Pioneer, and we are in the process of reviewing the application,” Baltimore wrote in an email to The Tribune-News. A novation agreement is the vehicle that allows the Forest Service to determine whether the recognition of the transfer of assets is in the best interest of the government.
“If we determine it is not, the contract would stay with Pioneer. If it is determined to be in the best interest of the government, then the contract liability would transfer to the new owner,” added Baltimore.
In regards to a potential new owner for the 4FRI contract, District IV Navajo County Supervisor David Tenney is optimistic. “The announcement that Pioneer intends to divest itself of the 4FRI contract has the potential to be a step in the right direction, if the Forest Service can make sure their homework is done correctly this time.
“We want to see industry in the forest, and manageable fires that clean the forest instead of destroying it. A solid business plan is the only thing that is going to save our forests. We saw a lot of big promises with Pioneer, but it was mostly fiction. There were too many gaps in their proposals to satisfy simple business questions. This time we need something that will work. I really hope this new entity will have it where it counts, but regardless, we need the Forest Service to get it right this time,” said Tenney.
Regarding the investigation being called by the Center for Biological Diversity, Tenney believes that the Forest Service followed the proper procedures in issuing the contract, but made a poor decision in selecting Pioneer.
“We are here to see this thing through, and nobody wants 4FRI to be a success more than we do. We have a responsibility to our constituents, and I still count the Forest Service as our partners in this effort. We have simply tried to hold the Forest Service and the contractor accountable, and we are basing everything on accomplishments and milestones. In my experience, you can’t run an organization any other way and expect it to be successful,” said Tenney.