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Judge sides with Forest Service in dispute with Indian Valley logger

Dan McDonald
Staff Writer


An Indian Valley logger lost another appeal last week in his quest to get financial help from the government.

A binding-arbitration ruling from a judge in Washington, D.C., sided with the U.S. Forest Service in a contract dispute with Pew Forest Products.

The ruling was made Monday, March 12.

Owner Randy Pew has been asking the Forest Service to cover some of the losses he said his company sustained while trying to salvage timber after the 2007 Moonlight Fire.

Pew said there was much less harvestable timber — particularly valuable incense cedar — on the site than the Forest Service estimated.

He said his company lost more than a million dollars as a result and is on the brink of bankruptcy.

In siding with the Forest Service, the arbitrator — Judge Joseph A. Vergilio — said the government agency wasn’t responsible for Pew’s losses. Vergilio said Pew’s bid to log the timber “indicates an acceptance of the terms and conditions of the solicitation and contract.”

The Forest Service said it was Pew’s responsibility to do his own cruise (estimate) of the timber and not rely on the Forest Service’s cruise.

The judge agreed.

Pew said he didn’t do an independent cruise because there wasn’t enough time (seven days). He added the Forest Service had a long history of accurately estimating, even underestimating, timber in its fire sales.

So Pew bid for the job based on the Forest Service’s cruise.

The judge ruled that despite the short window of time, Pew was not obligated to bid on the timber, and that doing so was “a specific business decision.”

The judge said Pew’s claim that he lost more money by purchasing additional units was also a business decision.

“A purchaser dissatisfied with the volume of timber harvested under the original contract areas, or at any time, was not compelled to purchase additional units.”

Vergilio said the Forest Service contract clearly places the cruise responsibility on the bidder.

In summarizing the ruling, Vergilio stated Pew “bought included lumber without a guarantee of obtaining the estimated volume of incense cedar or any other, or all, species.”

He added that Pew “has identified no viable basis for relief related to the alleged shortfalls in volume under the terms and conditions of the contract.”

Vergilio’s decision is expected to go before the Civilian Board of Contract Appeals this week. But Pew said he didn’t hold out much hope. “I’m assuming they will accept the judge’s decision,” he said.

However, Pew said, “we’re not done.” He said his company has another claim against the Forest Service for losses incurred during the helicopter portion of the salvage operation.

Plumas National Forest Deputy Supervisor Laurence Crabtree, who has been openly sympathetic to Pew’s predicament, declined to comment about the arbitration ruling.

In an email to Forest Service staff members, Crabtree said “(Supervisor Earl Ford) and I again want you to know that we appreciate all the work that was done on this difficult situation. These are trying times for many in our communities.”

Pew said if his company goes bankrupt it would have a devastating effect on the Greenville community. He said it would amount to a loss of 30 jobs and more than $1 million in revenue for local businesses.

Pew and his son Jared Pew, along with consultant Bill Wickman, presented their case to the arbitrator March 7.

The testimony was presented via a video conference with Vergilio in Washington.

The Forest Service was represented by attorney James Rosen, and also received testimony from its contracting officer, Elaine Gee.

Gee rejected Pew’s original claim Oct. 13, 2011.

At the request of Crabtree, the Forest Service conducted another cruise, using one of its inspectors from Oregon.

The results of that cruise, which were released Dec. 16, 2011, found the Forest Service’s original 2008 cruise estimates were within its established margin of error, although the inspector reported, “Incense cedar defect was most likely underestimated by 10 to 15 percent.”

The inspector also reported, “The incense cedar appears to be more variable across the sale area than the major species. The sampling error, just for incense cedar, is estimated at 34 to 37 percent, compared to 13 to 18 percent for the rest of the species.”

Pew said the cedar estimates were closer to 75 percent short. He said the absence of that valuable timber accounted for much of his losses.

Pew said in January 2012 that his biggest regret was trusting that the Forest Service’s cruise was accurate.

“I had no reason to question their cruise, because they have always done such a good job,” Pew said at the time.

“But I’ve never been involved in a timber sale that had 8 million feet of cedar in it,” he said. “I will say that is one thing we didn’t have a lot of experience in. If we had an 8 million foot cedar sale in the past, we would have probably known that the Forest Service’s way of cruising it is wrong.”


Pew critical of the process

Pew said he was “misled by the Forest Service.”

He said he was encouraged to enter the alternative dispute resolution (ADR) process after meeting with Regional Forester Randy Moore in December.

Pew said he believed Moore and the Forest Service’s attorney James Rosen were “sincerely trying to help” him. He said that was the reason he agreed to the ADR process.

“I came out of that meeting with Randy Moore feeling really good,” Pew said. “He said they (Forest Service) would try to find some timber for us to log to help offset our losses.

“He said we needed to do the ADR. He said that was the best answer to solving this, and that he would do everything he could to expedite the process.”

Pew said based on Moore’s recommendation, he agreed to the process, which ultimately resulted in the arbitration ruling against Pew Forest Products.

Pew said he “knew he was in trouble” when he traveled to San Francisco to meet Forest Service attorney Rosen.

“(Rosen) was totally different than he was on the phone (during the meeting with Moore),” Pew said. “That guy was as cold as cold could possibly be.

“Rosen said, ‘I don’t care about you, I don’t care about your family, the people who work for you or your county,’” Pew said. “He said, ‘I don’t care if the Forest Service estimates were 100 percent off.’ He said it was his case now and he was going to win it.”

Rosen disputed Pew’s recollection of their meeting.

“(Rosen) confirmed for me that he did not say that,” Forest Service spokesman John Heil said. “He said, ‘We do care. However, there is a body of law that deals with how contracts are carried out.’”

Pew said he left the meeting with Rosen “shell-shocked.”

“Trying to go against (Rosen) at that point was probably foolish,” Pew said. “I felt like I had been set up. But I didn’t think there was any way to get out of it.

“If (Rosen) came up here and tried to be a logger, he wouldn’t be very good at it,” Pew said. “And me trying to go against him before a judge was pretty much the same thing. I wasn’t very good at it.”

Pew said he didn’t hire an attorney because he couldn’t afford one.


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