B-180621, APR 18, 1974

B-180621, APR 18, 1974

TIMBER SALES CONTRACT MODIFICATION INCREASING RATES TO BE PAID BY PURCHASER EFFECTIVE JUNE 1 CAN BE CORRECTED BY CHANGING REDETERMINATION DATE TO SEPTEMBER 12, WHEN PURCHASER IS PRECLUDED FROM PERFORMING BEFORE AUGUST 12 BECAUSE OF SLIDE WHICH OCCURRED AFTER MODIFICATION WAS EXECUTED, SINCE IT WAS INTENT OF PARTIES THAT PURCHASER HAVE OPPORTUNITY TO HARVEST TIMBER AT ORIGINAL CONTRACT RATES FOR 31 DAYS PRIOR TO ANY RATE REVISION IN VIEW OF TIME LOST IN PREVIOUS OPERATING SEASONS DUE TO FIRE CLOSURES.

TO ANDERSON AND MIDDLETON LOGGING CO.:

NORTH SAMS RIVER TIMBER CONTRACT NO. 00422-7 WAS AWARDED BY THE FOREST SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE, TO THE ANDERSON AND MIDDLETON LOGGING COMPANY (A&M) OF ABERDEEN, WASHINGTON, ON MAY 16, 1967. THE CONTRACT PROVIDED FOR A NORMAL OPERATING SEASON FROM MAY 1 THROUGH OCTOBER 31 OF EACH YEAR AND A TERMINATION DATE OF MARCH 31, 1972.

DURING THE TERM OF THE CONTRACT, A TOTAL OF 31 DAYS OUT OF THE NORMAL OPERATING SEASONS WERE LOST BY A&M DUE TO FIRE CLOSURES. CONSEQUENTLY, THE TERMINATION DATE OF THE CONTRACT WAS ADJUSTED TO MAY 31, 1972, PURSUANT TO SECTION B8.22 OF THE CONTRACT. IT WAS SUBSEQUENTLY DETERMINED THAT THE CONTRACT TERM SHOULD BE EXTENDED AT A&M'S REQUEST TO JUNE 30, 1973, PURSUANT TO SECTION B8.24 OF THE CONTRACT, INASMUCH AS THERE WAS SOME DOUBT THAT A&M COULD COMPLETE LOGGING THE SALE DURING THE 31 DAY ADJUSTMENT PERIOD ALLOWED FOR THE FIRE CLOSURES. ON APRIL 5, 1972, IN ORDER THAT THESE DETERMINATIONS COULD BE TAKEN INTO ACCOUNT, A&M AND THE GOVERNMENT ENTERED INTO AN AGREEMENT TO EXTEND AND MODIFY THE CONTRACT. INASMUCH AS SECTION B3.15 OF THE CONTRACT REQUIRED A RATE REDETERMINATION OF TIMBER SALE PRICES IF A CONTRACT TERM WAS EXTENDED, THE AGREEMENT PROVIDED THAT THESE INCREASED TIMBER RATES WOULD BE EFFECTIVE JUNE 1, 1972. THIS WAS TO ALLOW FOR THE 31 DAY ADJUSTMENT PERIOD AT THE BEGINNING OF THE 1972 NORMAL OPERATING SEASON AT THE ORIGINAL CONTRACT'S TIMBER RATES.

HOWEVER, IN MID-APRIL IT WAS DISCOVERED THAT DURING THE WINTER A SLIDE HAD OCCURRED WHICH BLOCKED ROAD ACCESS TO THE TIMBER SALE CONTRACT AREA. UNDER THE TERMS OF THE CONTRACT, THE GOVERNMENT WAS RESPONSIBLE FOR CLEARING THE SLIDE. THE ROAD WAS CLEARED ON AUGUST 11, 1972, AND A&M COMMENCED LOGGING ON AUGUST 12, 1972. PURSUANT TO THE TERMS OF THE AGREEMENT TO EXTEND AND MODIFY, A&M WAS CHARGED AT THE HIGHER REDETERMINED RATES FOR THE TIMBER CUT AFTER THAT DATE.

A&M STATED THAT THE READJUSTMENT DATE SHOULD BE CHANGED TO SEPTEMBER 12, 1972, SO THAT IT MAY BE ALLOWED THE 31 DAYS IT WAS PREVIOUSLY GRANTED AS ADJUSTED CONTRACT TIME AT THE ORIGINAL CONTRACT RATES. CONSEQUENTLY, A&M HAS SUBMITTED A VOUCHER FOR $13,649.85 REPRESENTING THE DIFFERENCE BETWEEN THE AMOUNT PAID FOR TIMBER AT THE REDETERMINED RATES DURING THE PERIOD EXTENDING FROM AUGUST 12 THROUGH SEPTEMBER 12, 1972, AND THE AMOUNT WHICH WOULD HAVE BEEN DUE FOR THIS SAME PERIOD APPLYING THE ORIGINAL CONTRACT RATES. AN AUTHORIZED CERTIFYING OFFICER OF THE FOREST SERVICE HAS REQUESTED OUR DECISION AS TO WHETHER THIS VOUCHER MAY BE PAID.

WE BELIEVE THE RECORD BEFORE US CLEARLY SHOWS THAT THE PARTIES TO THE AGREEMENT TO EXTEND AND MODIFY ERRONEOUSLY ASSUMED, WHEN THEY AGREED TO THE JUNE 1 REDETERMINATION DATE, THAT A&M WOULD BE ABLE TO COMMENCE LOGGING OPERATIONS AT THE BEGINNING OF THE NORMAL OPERATING SEASON ON MAY 1, 1972. INDEED, THE FOREST SERVICE CONCEDES THAT IT ASSURED A&M AT THE TIME OF THE EXECUTION OF THE AGREEMENT THAT A&M WOULD GET CREDIT UNDER THE AGREEMENT'S PROVISIONS FOR THE 31 DAYS IT WAS PREVIOUSLY GRANTED FOR THE FIRE CLOSURES.

SINCE IT APPEARS THAT THE WRITTEN MODIFICATION AGREEMENT ESTABLISHING JUNE 1, 1972, AS THE REDETERMINATION DATE HAD A RESULT NOT INTENDED BY EITHER OF THE PARTIES, WE WOULD HAVE NO OBJECTION TO THE FOREST SERVICE CORRECTING THE AGREEMENT BY CHANGING THE REDETERMINATION DATE FROM JUNE 1, 1972, TO SEPTEMBER 12, 1972. ACCORDINGLY, THE VOUCHER SUBMITTED BY A&M, MAY BE PROCESSED FOR PAYMENT IF OTHERWISE CORRECT.