B-162516, JUN. 12, 1968

B-162516, JUN. 12, 1968

TO MORRISON, FOERSTER, HOLLOWAY, CLINTON AND CLARK:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 25, 1968, REQUESTING RECONSIDERATION OF OUR DECISION OF DECEMBER 20, 1967, B-162516, TO THE SECRETARY OF AGRICULTURE DENYING THE CLAIM OF THE KIMBERLY-CLARK CORPORATION UNDER CONTRACT NO. 14-103, DATED DECEMBER 11, 1963.

BRIEFLY, KIMBERLY-CLARK AGREED TO CUT AND PAY FOR AN ESTIMATED VOLUME OF 25 MILLION FEET OF TIMBER AND TO IMPROVE AN EXISTING FOREST SERVICE ROAD KNOWN AS THE "SOUTH FORK ROAD.' SECTION 5A2 OF THE CONTRACT PROVIDED AS FOLLOWS:

"2. IF THE PURCHASER, WITHIN FIFTEEN (15) DAYS FROM THE TERMINATION OF AN ABNORMAL INTERRUPTION OF TEN (10) OR MORE OPERATING DAYS IN THE PERFORMANCE OF THIS CONTRACT AFTER OPERATIONS HAVE STARTED AND BEFORE OPERATIONS HAVE CLOSED DURING A NORMAL OPERATING SEASON, BEGINNING ON MAY 1, AND ENDING ON NOVEMBER 15 OF ANY YEAR, WHICH WAS DUE TO CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE PURCHASER, INCLUDING BUT NOT LIMITED TO, ACTS OF GOD, OR OF THE PUBLIC ENEMY, ACTS OF THE GOVERNMENT, STRIKES, FIRES, AND FLOODS, GIVES WRITTEN NOTICE OF AN ACCEPTABLE REASON FOR THE INTERRUPTION AND THE NUMBER OF OPERATING DAYS LOST, THE FOREST SERVICE SHALL ADJUST THE TERMINATION DATE OF THIS CONTRACT TO INCLUDE AN EQUIVALENT ADDITIONAL NUMBER OF OPERATING DAYS: PROVIDED, THAT THE RATES FOR STUMPAGE AND FOR REQUIRED DEPOSITS IN EFFECT WHEN THE ADJUSTMENT IS MADE SHALL CONTINUE DURING THE ADJUSTED PERIOD UNLESS SUCH RATES ARE INCREASED OR DECREASED THROUGH REDETERMINATION, IF PROVIDED FOR HEREIN.' THE RECORD SHOWS THAT THE SOUTH FORK ROAD WAS WASHED OUT AND DESTROYED BY FLOOD ON DECEMBER 22, 1964. THE GOVERNMENT, WHOSE DUTY IT WAS TO RESTORE THE ROADBED, COMPLETED THE WORK OF RESTORING THE ROADBED ON AUGUST 19, 1966, OVER 1-1/2 YEARS AFTER THE DATE OF ITS DESTRUCTION.

IN YOUR LETTER OF MARCH 25 YOU STATE THAT SINCE THE SOUTH FORK ROAD WAS NOT RESTORED BY THE FOREST SERVICE UNTIL AUGUST 19, 1966, THE ACTUAL CAUSE OF THE INTERRUPTION OF THE CONTRACT WORK WAS NOT THE FLOOD BUT RATHER WAS DUE TO THE ACTS OF THE GOVERNMENT IN FAILING TO RESTORE THE ROAD. THEREFORE, YOU STATE THAT, SINCE SECTION 5A2 OF THE CONTRACT INCLUDES AMONG THE CAUSES FOR INTERRUPTION WHICH WILL JUSTIFY AN ADJUSTMENT OF THE TERMINATION DATE "ACTS OF THE GOVERNMENT," THE FOREST SERVICE SHOULD HAVE ADJUSTED THE TERMINATION DATE WITHOUT A REDETERMINATION OF THE RATES.

WE CANNOT AGREE WITH YOUR CONSTRUCTION OF SECTION 5A2 OF THE CONTRACT. THAT SECTION SETS OUT THE NORMAL OPERATING SEASON AS MAY 1 THROUGH NOVEMBER 15 OF ANY YEAR AND PROVIDES FOR AN EXTENSION OF THE CONTRACT PERIOD WITHOUT A RATE ADJUSTMENT ONLY WHEN AN INTERRUPTION OF 10 OR MORE OPERATING DAYS OCCURS "AFTER OPERATIONS HAVE STARTED AND BEFORE OPERATIONS HAVE CLOSED DURING A NORMAL OPERATING SEASON.' AS PREVIOUSLY POINTED OUT IN OUR DECISION OF DECEMBER 20, 1967, THE FLOOD OCCURRED OUTSIDE THE OPERATING SEASON SPECIFIED. THEREFORE, THE DELAY ENCOUNTERED WAS NOT WITHIN THE AMBIT OF SECTION 5A2.

WHILE YOU URGE THAT THE GOVERNMENT'S DELAY IN RESTORING THE ROAD FRUSTRATED PERFORMANCE OF THE CONTRACT AND, THEREFORE, THE CONTRACTOR IS ENTITLED TO AN EXTENSION OF THE CONTRACT TERMINATION DATE WITHOUT A RATE REDETERMINATION, WE SEE NO LEGAL BASIS FOR GRANTING SUCH EXTENSION. SECTION 5A1 OF THE CONTRACT PROVIDES THAT THE TERMINATION DATE MAY BE ADJUSTED UNDER SECTION 5A2, THE FORCE MAJEURE CLAUSE, OR THE CONTRACT PERIOD MAY BE EXTENDED BY THE FOREST SERVICE. IF EXTENDED, SECTION 5A3 REQUIRES THE RATES FOR STUMPAGE TO BE REDETERMINED. THE RECORD SHOWS THAT ON AUGUST 16, 1966, KIMBERLY-CLARK WAS INFORMED THAT THE SUBJECT CONTRACT WOULD TERMINATE DECEMBER 1, 1966, AND THAT IF IT DESIRED THAT THE CONTRACT BE EXTENDED A REQUEST FOR THE EXTENSION SHOULD BE SUBMITTED IN WRITING. BY LETTER DATED AUGUST 31, 1966, KIMBERLY-CLARK REQUESTED AN EXTENSION OF THE CONTRACT FOR 1 YEAR. ON NOVEMBER 30, 1966, THE FOREST SERVICE EXTENDED THE CONTRACT PERIOD AND DEFERRED ESTABLISHMENT OF REDETERMINED RATES UNTIL NOT LATER THAN JANUARY 1, 1967. THIS WAS AGAIN EXTENDED UNTIL NOT LATER THAN FEBRUARY 1, 1967. IN BOTH CASES KIMBERLY-CLARK AGREED TO THE MODIFICATION OF THE CONTRACT AND SIGNED THE MODIFICATION.

WHILE KIMBERLY-CLARK WAS DENIED THE USE OF THE ROAD FOR A PROTRACTED PERIOD OF TIME DUE TO CAUSES BEYOND ITS CONTROL THERE IS NO EVIDENCE THAT THE GOVERNMENT DID NOT EXERCISE GOOD FAITH IN RESTORING THE ROADBED. HENCE, IT DOES NOT APPEAR THAT THE DELAY RESULTED FROM ANY BREACH OF THE CONTRACT BY THE GOVERNMENT. FURTHERMORE, IT DOES NOT APPEAR THAT KIMBERLY -CLARK WAS OBLIGATED TO AGREE TO AN EXTENSION OF THE CONTRACT. HAVING DONE SO, WE SEE NO LEGAL BASIS FOR ELIMINATING THE RATES AS SET FORTH IN THE EXTENSION AGREEMENT.