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Of the five respectable bids, all the companies involved are capable of performing the tasks. Through customary bidding practices and policies all bids should be considered and the cheapest bidder awarded the contract assuming he has adequate qualifications to perform the job. For the purposes of bond calculations, it would be reasonable to assume that the lowest bid in the survey may not be available and the second highest bidder was accepted. Tillaee DMG links tillage to the planting of a stubble mulch crop. Stubble mulch may be used between the time when the topsoil is replaced and the permanent seed mixture can be seeded. Assuming that the stubble mulch is planted following soil placement no additional tillage is necessary considering that the seed is drill seeded. The main purpose for tillage is to kill weeds and to loosen the soil. Since the topsoil would be recently placed, neither loosening the soil nor weed eradication would be necessary eliminating the need for the tillage beyond that achieved by the drill. The unit costs for tillage are also too high. First, a shallower disking depth is required for seedbed prepazation. See the attached contractor survey for data specifically addressing the Deserado Mine acreages. Seeding Costs DMG uses costs for seeding that are reportedly from contract data. These values appear much too high to include only the seeding portion of the operation and not other tasks or materials. Of obvious concern is the cost reported for broadcast seeding. At a unit rate of nearly $180 per acre, excluding escalators such as profit, insurance, mob./demob., etc., this is way out of line with realistic costs. See the attached contractor survey for data specifically addressing the Deserado Mine acreages. Mulching While mulching is discussed within the permit it is not required except in large steep areas. The contractor survey conducted by BME showed that DMG's unit costs for stubble mulching was too high. The supporting data is attached. Please make appropriate adjustments to the unit costs. a. Seed Prices DMG apparently is using seed prices off of published price lists from several vendors. This data reportedly dates back to 1999. Price lists are not representative of competitively bid prices. Substantial discounts are given off the list prices from the vendors listed. 7anuary 15, 2003 9 Permit Revision #4 Comments Blue Mountain Energy, Inc.