Good Earth Power AZ and its former restoration contractor, Campbell Global, have filed lawsuits against each other for alleged breach of contracts concerning work on the 4FRI (Four Forest Restoration Initiative).
4FRI is the Forest Service project to restore/thin 300,000 acres in 10 years on the Coconino, Kaibab, Apache-Sitgreaves and Tonto national forests, following years of devastating wildfires. Good Earth Power AZ, based in Flagstaff, was created to take over the 4FRI contracts as part of its acquisition of the assets of Pioneer Forest Products, which had been awarded the contract in 2012 but failed to find financing for it.
Campbell Global, which initially contracted with GEPAZ in May 2014 for forest restoration services, and which left the project in June, has sued GEPAZ for breach of contract and failure to pay nearly $3 million for services. GEPAZ has since counter-sued Campbell Global for $1 million for failure to perform services.
Campbell Global claims GEPAZ did not pay monthly and annual management fees and other incentive and sourcing fees as stipulated in the agreement. In June 2015 Campbell Global withdrew from the deal and gave GEPAZ seven days in which to make full payment of more than $3 million.
Campbell Global says that GEPAZ offered to make monthly payments but tendered only $18,000 to Campbell Global, which in September filed suit in U.S. District Court, District of Oregon, Portland Div.
GEPAZ claims Campbell Global was entitled to compensation only if Campbell performed its obligations, which GEPAZ says Campbell failed to do.
GEPAZ says it and Campbell failed to complete and approve business plans and an operating budget as directed by their agreement and this automatically terminated the agreement. GEPAZ also says Campbell failed to monitor prevailing wage payments to subcontractors, resulting in the Dept. of Labor fining Good Earth for violating certain provisions of Good Earth’s contract with the U.S. Forest Service
GEPAZ also claims Campbell Global was negligent in its performance by failing to solicit a satisfactory pool of bids from local logging companies, for hiring an inexperienced logging company against Good Earth’s advice, for failing to register Good Earth for the Biomass Crop Assistance Program federal subsidy by the deadline and for failing to attract log and chip sales for Good Earth.
GEPAZ also claims Campbell Global induced Good Earth to share its operating information and to spend its last capital on projects Campbell Global so designated, with a promise to secure financing for Good Earth, but that instead of coming through with the financing, Campbell Global notified Good Earth it was canceling the agreement.
Because of these and other alleged breaches, GEPAZ filed a counter-suit in the same court in October, seeking damages of at least $1 million.
Good Earth Power reports that in the two years since GEPAZ took over the 4FRI contract in Arizona, it now employs 150, owns and operates two lumber mills, has two pole peeling facilities, operates an in-house trucking fleet, has developed forest infrastructure capable of operating simultaneously on six individual Forest Service task orders. GEPAZ also reports it has customer orders for more than 100 loads of biomass per day.
As of October, 5,000 acres had been restored, and GEPAZ was working with 19 Forest Service Task Orders in various stages of activity or inactivity. Addressing some questions that restoration is proceeding slowly, GEPAZ points to biomass removal as a key difference between a 4FRI restoration task order and a routine timber sale. Biomass is “what makes 4FRI a model and a test case for landscape scale restoration—not forest thinning or logging,” GEPAZ states.