Terms of Payment to Private Forester for a Harvest

[Larry Bohen]

We will soon be entering into our first contract with our private forester for the harvest of our best sugar bush stand to adhere to our Forest Management Plan and in preparation of pipeline install for the 2015 season.

I have to decide whether I to pay the forester a % of the wood sales or by the hour for marking trees, selecting the logger, negotiating a contract with logger, checking during the harvest to assure the logger is adhering to the contract, confirming the amount of trees harvested and their sale...

I would appreciate thoughts of which method of payment may be best for us.

 

[treeslayer2003]

either way is gonna cost ya. perhaps one our resident foresters could way in with some hour counts for an average sale.

 

[madhatte]

I've never done contract work on an hourly wage, or by percentage. I've always worked on jobs bid per-unit, where the specific contract defines the unit -- plot, acre, or whole job. If you don't know what's in the stand, it'll need cruised before marking. Sale administration is a whole different ball of wax. You are really asking for three different tasks; it would make sense to bid that out as three different jobs, even if they all go to the same contractor. If you do it as a single contract, which I advise against, make sure to clearly define and separate the three different phases, as well as the responsibilities that go with them. Another problem with bidding this as a single contract is that if you're unhappy with any one part, you have to either accept or reject the whole lot. Split up, you can terminate an individual contract as necessary, if the contract's requirements are not met, and find another contractor for just that part. Sure, it's more paperwork, but what's the whole job, once competed, worth to you?

 

[Gologit]

Excellent advice.

 

[madhatte]

Excellent advice.

Thank you! The worst thing is getting stuck with a bad contract and not being able to fix it. Far better to do the homework up front.

 

[PJM]

@ madhatte - all good points but this is likely a small job. I also assume that this will be the same forester that developed the management plan and as such there is likely already a relationship between the owner and forester. Around here it would be uncommon for a small job like this to let out so many contracts (logger, cruising, marking, sale admin). More typical would be a contract with a forester to cruise, mark and administer the sale (job bidding to logger, sale oversight. etc.). Percentage basis of the sale is common and often easiest. Forester's compensation depend on many variables but is often in the 5-10% range (higher % for complicated jobs with low expected revenues and lower % for easier jobs with high expected revenues.)

 

[madhatte]

Your mileage may vary, of course. I'm just speaking of my experience in public and commercial forests in the PNW.