Sale and Disposal of National Forest Service System Timber; Timber Sale Contracts; Market-Related Contract Term Additions

The original Market-Related Contract Term Addition (MRCTA) regulation was adopted in 1990 to provide financial relief to timber sale purchasers during cyclic downturns in forest products markets. However, the current drastic reduction in Forest Product markets, which began in late 2004, revealed several problems with the existing MRCTA regulation. Therefore, this final rule is needed to help ensure that the MRCTA regulation functions as originally intended. This final rule makes four changes to the MRCTA regulation. First, the regulation now allows more than 3 years to be added to a contract's term pursuant to MRCTA when there is a drastic reduction in wood product prices that lasts for more than 10 out of 12 consecutive quarters. Second, the regulation now gives contracting officers the flexibility needed to assign the most appropriate Bureau of Labor Statistics Producer Price Index (PPI) to a timber sale contract. Third, the regulation now prevents any single 3-month MRCTA from extending a contract's term by more than 1 year. Finally, the regulation now explicitly states what types of sales are ineligible for any MRCTA relief.