[Decision Concerning Forest Service Modification of Timber Contracts]

The Forest Service requested a decision regarding whether it could modify two timber sales contracts to allow it to reimburse the contractors for excess road construction costs they incurred. The Federal Timber Contract Payment Modification Act allowed the Service to redetermine the contractors' timber prices but, with the reduction in rates, the contractors did not have enough purchase credit left for it to assist them with necessary road construction. GAO held that, since the original contracts allowed the Service to reimburse the contractors for road construction costs based on their original bid prices, it could modify the contracts to allow for additional road construction purchase credits. Accordingly, the Service may modify its timber sales contracts.