20 



My hope in conducting this analysis, Mr. Chairman, is both to 

 identify opportunities for improving how we prepare and offer 

 timber for sale, but also to understand the proper role for timber 

 sales in meeting our management goals and objectives on the na- 

 tional forests. I strongly believe that timbering and the timber sale 

 program should be viewed as a tool of management rather than 

 management's sole objective. 



Timber sales are and will remain an important element of na- 

 tional forest management, generating revenues for the Treasury, 

 counties, and local communities, and providing employment for 

 thousands of people. By the same token, too much of the Forest 

 Service's management activities are currently tied to and depend- 

 ent upon timber sale revenues and the timber sale program. We 

 must clearly understand those linkages and their impact on man- 

 agement practices and policies before we proceed with a policy on 

 below-cost sales. 



As the Forest Service moves toward an ecosystem-based strategy 

 as has been discussed here, the nature and role of the timber sale 

 program will in fact change. We must be cognizant of this evolu- 

 tion in management as we evaluate options for dealing with issues 

 like below-cost timber sales. 



With regard to our strategy for this year, to meet the President's 

 fiscal year 1994 budget proposal for eliminating $46 million in 

 below-cost timber sale program costs, we will attempt to do the fol- 

 lowing. 



First, we will implement the Forest Service's Timber Sale Cost 

 Efficiency Study which was recently completed. The study's action 

 plan contains measures to improve financial accountability, control 

 unit costs, and streamline the organizational structure within the 

 timber sale program, as well as other related costs. The intent is to 

 provide each Forest Service region with the direction and flexibil- 

 ity to promote more imaginative approaches to reducing program 

 costs in the timber sale area overall as a means of achieving our 

 budget goal. 



In addition, we will reduce other program costs, such as timber 

 road construction and reconstruction program costs and, where we 

 can, administrative program costs. Also under consideration is the 

 possibility of developing a minimum bid policy. We are presently 

 evaluating several alternatives for achieving these additional sav- 

 ings- 



In summary, we plan to meet the administration's objective of 



phasing out below-cost timber sales by fiscal year 1997 and to im- 

 prove overall cost efficiencies in the timber sale program. 



We will initiate the phase-out of below-cost timber sales, improv- 

 ing the cost-efficiency of the timber sale program, and reduce other 

 program costs and administrative overhead. 



Our long-term strategy will be, as I said, to have a multidiscipli- 

 nary task force review the Forest Service's timber sale program as 

 a basis for making overall changes in its structure, function and di- 

 rection. We look forward to sharing this information with you, Mr. 

 Chairman, and the members of Congress as we proceed with this 

 effort. 



This concludes my prepared testimony, and I'll be glad to answer 

 any questions I can, or to have George and Dave help out. 



