Policy 14.1 - SBFEP Bid Proposal Program, Timber Sale Licences, Forest Act, s. 21

Effective Date: 15-Feb-97
Updated: 14-Jul-98
Responsible Branch: Forest Enterprises Branch

Resource Management Volume Table of Contents | Amendment Log

Scope

This policy applies to all timber sale licences advertised under Section 21 of the Forest Act unless specifically exempted by the Minister of Forests (the Minister).

Policy

It is the policy of the Minister of Forests that the Minister, and Ministry of Forests staff, will be guided by the following principles in administering timber sale licences under Section 21 of the Forest Act. All timber sale licences advertised under Section 21 will conform with this policy unless specifically exempted by the Minister. The Minister on the Minister's own initiative or on the advice of Ministry of Forests staff may exempt individual or groups of timber sale licences from this policy.

Program Objectives

Government's objectives in providing access to standing timber, through timber sale licences advertised under Section 21 of the Forest Act, otherwise known as the bid proposal sales program, are:

1. To provide opportunities for innovation and entrepreneurs in independent and smaller firms;
2. To encourage and promote greater employment and community stability through economically sound and viable remanufacturing and the production of specialty wood products by independent remanufacturers in British Columbia; and,
3. To award sales competitively.

Types of Timber Sale Licences

Three types of timber sales will be offered under Section 21 for the purposes of promoting and encouraging lumber remanufacturing and the production of specialty products in the forest industry. The three sale types are:

• Regular Bid Proposal Sales, which require remanufacturing or specialty wood product manufacturing by the licensee
• Special Bid Proposal Sales, which require primary manufacturing and either the sale of primary products to, or the processing of the primary products through, a remanufacturing or specialty wood product plant in British Columbia, and
• Enhanced Eligibility Bid Proposal Sales, which are Bid Proposal sales for which, in addition to applications from persons eligible for bid proposal sales, applications from western redcedar shake and shingle operators will be accepted

Unless otherwise approved by the Minister, the volume advertised in the region in special bid proposals shall not exceed 15 % of the total volume apportioned to Section 21 timber sale licences each year, for the region.

The maximum volume available from the Section 21 apportionment to be sold in the form enhanced eligibility bid proposal sales under which western redcedar shake and shingle operators may apply is limited to 1 250 000 cubic metres in each five year period starting in 1998. This will be divided as close as practical to 250 000 cubic metres per year.

Advertisement

It is Minister's policy that the advertisements and/or the associated tender package will clearly state how the Regional Manager and the Minister will evaluate and approve applications received in response to the advertisement. As described below the advertisement may, at the Minister's discretion, include an interpretation of government development objectives specific to the timber sale licence.

In consultation with the District Manager, the Regional Manager will prepare advertisements for the Minister's approval. All advertisements for all bid proposal sales will be approved by the Minister. To streamline administration of advertisement approvals, these advertisements may be submitted as part of a regional value-added sales plan, as described in detailed procedures.

The Regional Manager shall propose enhanced eligibility bid proposals to be located in management units designated by the Minister. Enhanced eligibility bid proposal sales will resemble as closely as practical the average profile of size and quality as other bid proposal sales.

The Minister has authorized District Managers to produce and manage advertisements and tender packages for all bid proposal timber sale licences advertised in their forest districts providing the advertisement has been approved by the Minister and these activities are done in accordance with procedures approved by the Minister.

Regular and Enhanced Bid Proposal Sales

Regular and enhanced eligibility bid proposal sales will be advertised using approved generic templates, unless the Regional Manager believes there is a need to modify the advertisement to better address specific government objectives. In those cases the Regional Manager will present the modified advertisement to the Minister for approval.

The generic provincial template and weighting of evaluation criteria for regular and enhanced eligibility bid proposal sales are shown in table 1.

Table 1

Special Bid Proposal Sales

Special Bid Proposals will be advertised using approved generic templates for special bid proposals, unless the Regional Manager believes there is a need to modify the advertisement to better address specific government objectives. In those cases the Regional Manager will present the modified advertisement to the Minister for approval.

It is Minister's policy that the advertisements and/or the associated tender package will clearly state how the Regional Manager will evaluate and approve applications received in response to the advertisement.

The approved provincial evaluation method for Special Bid Proposal Sales is five step process.

1. Determine the minimum volume of lumber required to be supplied by applicants to remanufacturing or specialty product plants in British Columbia and express that volume as a percent total advertised timber volume. The suggested provincial minimum is 50 percent, although that may be modified upwards by District Managers.
2. Determine the volume of lumber proposed by the applicant to be supplied to remanufacturers and specialty plants in British Columbia, and express that volume as a percentage of the total advertised timber volume.
3. Subtract the minimum required percent volume of lumber from the proposed percent volume of lumber products which the applicant proposes to supply and multiply the difference by 100.
4. One point is given for each one per cent above the minimum volume required to be made available to remanufacturing or specialty product plants. This is the remanufacturing score. The remanufacturing score may not exceed the difference between 100% and the minimum set by the District Manager.
5. The remanufacturing score is added to the bonus bid amount. One point is given for each $ of bonus bid.

The application with the highest evaluation score is to be approved by the Regional Manager. In the event of a tie the Regional Manager, through the District Manager, will ask each of the tied applicants to submit an additional sealed tender bid (for bonus only) which will be added to the existing tied bonus bid. The applicant with the highest score will then be approved by the Regional Manager.

Form of the Application

Pursuant to Section 21 (2) (a) and (c) applications shall be in a form, including a proposal, as specified in procedures approved by the Minister.

Pursuant to Section 21 (2) (b) the Minister has authorized District Managers to receive applications for bid proposal timber sale licences advertised in their Forest Districts providing the timber sale licence is advertised in accordance with procedures approved by the Minister.

Evaluation

Pursuant to Section 21 (3) the Minister has authorized Regional Managers to evaluate all applications providing the Regional Manager evaluates these applications in accordance with procedures approved by the Minister. As described in the procedures the Regional Manager will present the results of the regular and enhanced bid proposal sales evaluations to the Minister for approval. The Regional Manager's presentation of evaluation results should include terms and conditions the Minister may wish to apply in approving the application.

Pursuant to Section 21 (3) and (4) the Minister has authorized Regional Managers to evaluate and approve applications for special bid proposal sales providing the Regional Manager follows the procedures approved by the Minister. Therefore the Regional Manager does not report the results of special bid proposal evaluations to the Minister.

Approval of Applications

Regular and Enhanced Bid Proposal Licences

The Minister may:

1. Approve one or more applications following an evaluation by the Regional Manager; or,
2. Decline to approve all applications.

In approving one or more applications the Minister may apply terms and conditions. As a rule the Minister will, as a minimum, require that the applicant's proposal pass a verification review. In addition the Minister may require that the bid proposal data sheet information, submitted as part of the application, be refined to incorporate the findings of the verification review.

Failed Verification Review

In the event the application approved by the Minister fails the verification review the Regional Manager shall:

1. Promptly notify the Minister;
2. Promptly supply the Minister with results of the revised evaluation for approval;
3. Review the need for further remedies (for example, those available under Section 78 of the Forest Act) to encourage the submission of verifiable proposals in the future.

Special Bid Proposals

Pursuant to Section 21(4) the Minister has authorized Regional Managers to approve applications for special bid proposals providing the Regional Manager evaluates and approves these applications in accordance with procedures approved by the Minister.

Enter Into Timber Sale Licence

As soon as the applicant approved by the Minister has met all the terms and conditions of the Minister's approval, including passing the verification review, pursuant to Section 21 (5), the District Manager shall enter into a timber sale licence with the applicant approved by the Minister. The licence will incorporate, where necessary, the terms and conditions of the Minister's approval.

Failure to Enter

If the approved applicant fails or refuses to enter into the licence pursuant to Section 21 (5), the District Manager shall take action in accordance with Section 8 (2) of the Advertising, Deposits and Disposition Regulation.

Announcement of Successful Applicants

Successful applicants will be announced by government news releases. As a rule these news releases will be issued every few months and will announce applications for timber sale licences the Minister has approved and the Regional Manager has verified. Individual timber sale licences may be announced independently at the request of the Minister of Forests.

Inspection, Compliance and Enforcement

For the purposes of this policy, inspection, compliance, and enforcement refers to licence requirements and commitments in the proposal submitted as part of the application for the licence, related to manufacturing.

District Managers are responsible for inspections, compliance, and enforcement related to Forest Practices.

The amount and type of inspections of bid proposal sale licensees performance should be based on the District or Regional Manager's assessment of the risks of non-compliance. The initial risk assessment should be based on the assessment of risk determined at the time of the verification review, in accordance with the procedures.

In order to ensure the government receives the benefits promised by the applicant, and fairness to unsuccessful applicants in the competition for timber sale licences, District and/or Regional Managers will inspect licensee performance against proposal and subsequent licence terms and conditions. Where the licensee fails to comply with terms and conditions of the licence the District or Regional Manager should undertake appropriate and progressive enforcement actions for failure to comply with terms and conditions of a licence agreement.

Examples of progressive enforcement tools available to District and Regional Managers is provided in the procedures.

Deposits

For the purposes of Section 6 (1.1) of the Advertising, Deposits and Disposition Regulation, it is recommended that the District Managers require an initial deposit of $5000 for timber sale licences under Section 21 of the Forest Act. The final deposit for these timber sale licences will be calculated in accordance with Section 7 (1) (c) of the Advertising, Deposits and Disposition Regulation.

References

• Forest Act, s. 21
• Advertising Deposits and Disposition Regulation (BC Reg. 552/78)
• Small Business Forest Enterprise Regulation (BC Reg. 265/88)