Instructions for Bidding Buyers
The Division of Forestry has moved to an online bidding process for timber sales to make the process more convenient. The system can be accessed on Indiana Forestry Exchange website
Requirements to bid
Bidders are required to submit a bond in the form of a surety bond or an irrevocable line of credit to the Division of Forestry, allowing sufficient time to be entered for the given sale. The division will keep this bond on record. Performance deposit amounts will be processed against the bond or the line of credit by the bidding system whenever a bid is submitted and then released after the sale—unless that bid is the winning bid. This use of one bond for online bidding will cover all of your performance deposits from the bidding process to the close of the contracts after completion of harvests.
Performance deposits
Under the previous in-person system, bidders were required to have at least 5% of the bid amount in a check for each state forest timber bid. At the time of the sale, the winning bidder’s check would be kept as a performance deposit, and the other bidders’ checks would be returned.
The online system works in a similar manner. Bidders must submit a performance bond to the state—as described throughout this document—whenever an agent representing a license submits a bid. Five percent of that bid will be held by the system until the time of the bid sale.
- If the agent wins the bid, the system will hold that amount until the contract is released after harvest completion. The system will put that performance deposit amount back into your total performance bond to be used for the next bid.
- If the agent’s bid is not successful, then that performance deposit is put back into the total bond to be used for the next bid.
If a buyer has successfully purchased three timber sales and want to bid on three more, then a total bond that covers the performance deposits of all six timber sales, and maybe more, is required. Calculating the total bond to be submitted by the company is important.
How to submit surety bond or irrevocable line of credit (ILOC)
The first step in switching to this new system is to secure a surety bond or irrevocable line of credit (ILOC), which will be the cumulative total of future performance deposits. The surety bond is different and separate from the one required for a timber buyer’s license.
The surety bond and ILOC forms must be correctly filled out and submitted to the Division of Forestry (DoF) before bidding on any timber sales.
These forms must be delivered to the Division of Forestry Central office in Indianapolis within sufficient time for them to be entered into the bidding system. The forms can be sent directly to the DoF Central Office (CO) or to a state forest property to then be passed on to the CO. Allow at least one week from delivery of these documents to the CO for entry into the system. You should calculate, ideally using your past bidding history, how much total bond you will need to cover expected performance deposits for a given period of time. This amount should be able to cover all of the performance deposits of your company’s open contracts and whatever state forest timber you might bid on. These surety bonds or ILOCs must cover multiple years because timber sale contracts may cover multiple years.
Register and train agents on the system
You will also need to register any agents who might bid on the online bidding system under your license and ensure you and your agents know how to use the system. Registering requires setting up an email address with and password for each person who will log in. Each agent will be a separate user but will be linked to your license and online bidding bond through the Timber Buyer database. Each user will be constantly checked against that database to be sure they are active agents, that you have an active timber buyer’s license, that there is a performance bond in the online bidding site, and that the performance bond has available funds in it.
Entering bids
State forest timber sales are posted on Indiana Forestry Exchange. To view, selected Forestry Exchange on the left menu, then the Bid on Timber Sales option.
Logging in will display current timber sales or those sold recently. This screen shows details of each timber sale. If that sale is within the bid timetable, bids can be entered.
If that sale has already sold, you can view at the bidder and bid amount.
If a sale is up for bid, the bid option displays at the end of the line. Clicking the bid option reveals a screen with the bidder’s available bond amount. A box is provided for entering a bid. This bid is final at bid opening. Before bid opening, the bid can be edited or even withdrawn.
Once a timber sale is open for bidding, bids are accepted on any day of the week, at any time.
Please note:
- If a licensed timber buyer has multiple agents, one agent cannot change or withdraw the bid placed by another agent of that company.
- These agents can bid against one another. For those reasons, make sure your agents know who is bidding on each timber sale.
How bids are awarded
Bidders receive an email with the results. If you win, your total available bond will be reduced by the amount that will cover the performance deposit, as based on your bid. This replaces the checks that previously served as performance deposits.
Bids entered into the system are encrypted and private. No one else, not even the Division of Forestry, knows the bid content until the results are posted.
The system will check the bidder against the licensed timber buyers and their agents and match the bid amount against the amount total of the bond.
If there is not enough in the total bond to cover that specific performance deposit, the system will notify the bidder that the bid cannot be accepted, and that bidder will need to contact the Division of Forestry. The system will select the highest bid from those properly submitted.
If there are multiple sales, the system will reduce the bond amount available to the winning bidder for future sales by the performance deposit needed for the won sale. If two bidders submit the same high winning bid, the system will select the first bid submitted as the winner.
Total bond amounts can be adjusted by timber buyers only when there is sufficient time for the central office to make changes. Buyers can increase or decrease their bond amounts to help match their anticipated needs. Be aware that changing or adding to the total bond will typically take a week or more. Plan accordingly.
Completing the sale
Once the winning bidder is identified, the sale contract and associated paperwork will be processed just as before. The rest of the paperwork and requirements also remain the same as before. Timber sale contract lengths will be tied to the surety bonds or ILOCs that cover the performance deposit for any given sale. If the bond instrument expires before the standard expiration of the contract, and the instrument is not extended or replaced, the contract expiration will be tied to the bond instrument expiration.
One exception for the online bidding process may be salvage sales. Salvage sales may continue bidding and processing as currently done. In some cases, these sales may require a check for a performance deposit. If so, that will done the same way as in the past.
For online bid sales, there will be no return of performance deposit funds when a sale is satisfactorily completed. Instead, when the central office receives the paperwork from the property that the sale contract is approved for release, the “held” deposit amount will be released from the sale and go back to the total bond, increasing the total bond amount available to the buyer for future online sales.
