B-173738, AUG 26, 1971

B-173738: Aug 26, 1971

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THERE IS CONSIDERATION FOR THE GOVERNMENT'S WAIVER OF THE RIGHT TO PAYMENT GUARANTEES. SECRETARY: REFERENCE IS MADE TO THE LETTER OF JULY 27. TWO RELATED QUESTIONS ARE PRESENTED FOR OUR CONSIDERATION. THE SECRETARY OF AGRICULTURE IS VESTED WITH THE AUTHORITY TO SELL TIMBER OF THE NATIONAL FORESTS. WE HAVE FOUND NO REQUIREMENT THAT THERE BE LEGISLATIVE ACTION BEFORE THE SECRETARY MAY CHANGE OR REVISE HIS PAYMENT REGULATIONS. THE ASSISTANT SECRETARY'S SECOND QUESTION IS PRESUMABLY CONCERNED WITH THE WELL-ESTABLISHED RULE THAT NO OFFICER OR AGENT OF THE GOVERNMENT HAS AUTHORITY TO RELEASE VESTED CONTRACTUAL RIGHTS WITHOUT RECEIVING ADEQUATE LEGAL CONSIDERATION THEREFOR. IS ENTITLED TO ADVANCE PAYMENT OR PAYMENT GUARANTEES FOR TIMBER SALES.

B-173738, AUG 26, 1971

NATIONAL FOREST TIMBER SALES - PAYMENT PROCEDURES ADVISING THAT UNDER 16 U.S.C. 476, VESTING IN THE SECRETARY OF AGRICULTURE THE RIGHT TO SELL TIMBER IN THE NATIONAL FORESTS, THE SECRETARY HAS THE RIGHT TO CHANGE REGULATIONS (PREVIOUSLY ESTABLISHED BY HIM) TO ELIMINATE THE REQUIREMENT FOR PAYMENT GUARANTEES IN ADVANCE OF TIMBER CUTTING, AND TO SUBSTITUTE A PROCEDURE WHERE PURCHASERS WOULD BE BILLED ON A MONTHLY BASIS. THIS CHANGE MAY BE EXTENDED TO EXISTING CONTRACTS SINCE IN EXCHANGE FOR THE GOVERNMENT'S FOREGOING VESTED CONTRACTUAL RIGHTS, THE PERIOD OF CREDIT GRANTED THE PURCHASER WOULD BE SUBSTANTIALLY REDUCED. THUS, THERE IS CONSIDERATION FOR THE GOVERNMENT'S WAIVER OF THE RIGHT TO PAYMENT GUARANTEES.

TO MR. SECRETARY:

REFERENCE IS MADE TO THE LETTER OF JULY 27, 1971, FROM THE ASSISTANT SECRETARY OF AGRICULTURE, REGARDING CERTAIN PROPOSED CHANGES BY YOUR DEPARTMENT IN PAYMENT PROCEDURES ON NATIONAL FOREST TIMBER SALES. BASICALLY, THE SUBJECT PROPOSALS WOULD ELIMINATE THE PRESENT REQUIREMENT FOR PAYMENT OR PAYMENT GUARANTEES IN ADVANCE OF TIMBER CUTTING, AND SUBSTITUTE A NEW PROCEDURE WHEREBY PURCHASERS WOULD BE BILLED ON A MONTHLY BASIS FOR TIMBER REMOVED FROM TIMBER SALE AREAS.

TWO RELATED QUESTIONS ARE PRESENTED FOR OUR CONSIDERATION. THE ASSISTANT SECRETARY ASKS, FIRST, WHETHER THE SECRETARY OF AGRICULTURE HAS THE LEGAL AUTHORITY TO INSTITUTE THE PROPOSED NEW PAYMENT PROCEDURES, AND, SECOND, WHETHER EXISTING CONTRACTS MAY BE MODIFIED TO INCORPORATE THE NEW PROCEDURES, SHOULD THEY BE ADOPTED.

BY TITLE 16, U.S.C. SECTION 476, THE SECRETARY OF AGRICULTURE IS VESTED WITH THE AUTHORITY TO SELL TIMBER OF THE NATIONAL FORESTS. THE STATUTE SPECIFICALLY PROVIDES THAT PAYMENT THEREFOR SHALL BE MADE "UNDER SUCH RULES AND REGULATIONS AS THE SECRETARY OF AGRICULTURE MAY PRESCRIBE." SUCH PAYMENT HAS, IN THE PAST, BEEN MADE ACCORDING TO PROCEDURES ESTABLISHED BY THE SECRETARY UNDER THE ABOVE-CITED STATUTORY AUTHORITY. WE HAVE FOUND NO REQUIREMENT THAT THERE BE LEGISLATIVE ACTION BEFORE THE SECRETARY MAY CHANGE OR REVISE HIS PAYMENT REGULATIONS. THUS, WHILE WE DID NOT CONSIDER THE RELATIVE MERITS OF THE PROPOSED CHANGE, WE PERCEIVE NO IMPEDIMENT UNDER EXISTING LAW WHICH WOULD PREVENT THE SECRETARY FROM CHANGING HIS OWN REGULATIONS SO AS TO INSTITUTE NEW PAYMENT POLICIES FOR THE SALE OF NATIONAL FOREST TIMBER.

THE ASSISTANT SECRETARY'S SECOND QUESTION IS PRESUMABLY CONCERNED WITH THE WELL-ESTABLISHED RULE THAT NO OFFICER OR AGENT OF THE GOVERNMENT HAS AUTHORITY TO RELEASE VESTED CONTRACTUAL RIGHTS WITHOUT RECEIVING ADEQUATE LEGAL CONSIDERATION THEREFOR. AS THE FOREST SERVICE, UNDER EXISTING CONTRACTS, IS ENTITLED TO ADVANCE PAYMENT OR PAYMENT GUARANTEES FOR TIMBER SALES, THE MODIFICATION OF THESE CONTRACTS TO PROVIDE FOR MONTHLY BILLING PROCEDURES WOULD RESULT IN THE RELEASE OF THE GOVERNMENT'S VESTED RIGHT TO ADVANCE PAYMENT OR PAYMENT GUARANTEES.

A "CONSIDERATION" IN THE LEGAL SENSE OF THE WORD IS SOME RIGHT, INTEREST, BENEFIT, OR ADVANTAGE CONFERRED UPON THE PROMISOR TO WHICH HE IS OTHERWISE NOT LAWFULLY ENTITLED, OR ANY DETRIMENT, PREJUDICE, LOSS OR DISADVANTAGE SUFFERED OR UNDERTAKEN BY THE PROMISEE OTHER THAN SUCH AS HE IS AT THE TIME OF CONSENT LAWFULLY BOUND TO SUFFER. SEE 40 COMP. GEN. 309, 312 (1960). THE ASSISTANT SECRETARY STATES THAT, UNDER THE PROPOSED MODIFICATION, THE PERIOD OF CREDIT GRANTED TO THE PURCHASER WOULD BE REDUCED FROM A MAXIMUM OF APPROXIMATELY EIGHT MONTHS TO A MAXIMUM OF APPROXIMATELY 45 DAYS. IT IS CLEARLY YOUR DEPARTMENT'S VIEW THAT SUCH A CHANGE WOULD CONSTITUTE A SUBSTANTIAL BENEFIT TO THE GOVERNMENT, AND A DETRIMENT TO AFFECTED PURCHASERS, THUS RESULTING IN "CONSIDERATION" FOR THE GOVERNMENT'S WAIVER OF THE RIGHT TO ADVANCE PAYMENT OR PAYMENT GUARANTEES. IT WOULD APPEAR, THEREFORE, THAT THE SUBJECT MODIFICATION, IF CONSENTED TO BY THE PURCHASER, WOULD BE LEGALLY PERMISSIBLE. SEE B- 114820, JUNE 22, 1970.

THE QUESTIONS PRESENTED ARE ANSWERED ACCORDINGLY.