24 



We all know what the market is. In the bid process, the market- 

 place wins out in the end. Is that a relevant idea, or might we look 

 at some of those preparational costs as a factor of below-cost analy- 

 sis? 



Mr. Lyons. Well, now you're making me nervous, Senator Craig, 

 because when I worked for the Forest Service, I was timber cruiser 

 in Idaho, and you'd probably put me out of business. 



Senator Craig. Well, that would save us money. 



Mr. Lyons. Well, thanks a lot. [Laughter.] 



Mr. Lyons. Our policies are shifting, as you know, and I was just 

 discussing that with Associate Chief Leonard. The difficulty is that 

 in a large number of areas, unfortunately, our timber sales are not 

 competitively priced; the prices are not bid up. We need to have a 

 clear understanding of what it is we are selling so we have a better 

 handle on what it is we ought to expect in return, and that makes 

 it a little bit more difficult to implement that kind of policy. 



I might yield to Dave, who has taken a look at this recently. 



Senator Craig. Dave, for the record, will you state your full 

 name? 



Mr. Hessel. David L. Hessel, Director of Timber Management. 



In the last few years, we have been moving to change our ap- 

 praisal system from one of what we term residual value to one of 

 transaction evidence. It is transactions that will set the base for 

 our appraisal system. It is a much more streamlined appraisal 

 system. It is, I think, much less complicated, and much less costly 

 than the collection of cost that goes into the residual value. 



So I think the system that we are putting in place, the transac- 

 tion evidence, will be the system that will set that base level to 

 start the competitive bidding. It also will set a fair market value in 

 those areas where we do not have competition. It is based on past 

 transactions, so I think we are moving in that way to a more 

 streamlined process and a much less costly process. 



Senator Craig. Thank you very much. 



Jim and gentlemen, thank you very much for your testimony 

 and the response to questions. We appreciate your coming before 

 the committee — and I think we've still got you on time, Mr. Lyons. 



Mr. Lyons. Yes. Thank you very much, Senator. 



Senator Craig. Great. Thank you. 



Senator Craig. Let me now call before the committee Michael 

 Francis, Director of the National Forests Program for The Wilder- 

 ness Society, based here in Washington. Michael, your entire state- 

 ment will become a part of the record. You may deliver directly 

 from that, or from your briefs. 



STATEMENT OF MICHAEL A. FRANCIS, DIRECTOR, NATIONAL 

 FORESTS PROGRAM OF THE WILDERNESS SOCIETY, WASHING- 

 TON, DC 



Mr. Francis. Thank you, Senator Craig. I appreciate it very 

 much. 



Senator Craig, I am Michael Francis. I am Director of the Na- 

 tional Forests Program for The Wilderness Society. I am pleased to 

 have this opportunity to appear before you today on behalf of the 

 Society's 300,000 members to discuss the issue of below-cost timber 



