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B-183570 1 (1975-11-11)

handle is hein.gao/gaobadctm0001 and id is 1 raw text is: - THEI CDMvPTROLLE17 GErJERAL DECISION OF THE UNr ITED STATES WASHINGTON, D. C. 20548 FILE: B-183570 DATE: November 11, 1975 MATTER OF: Department of Agriculture (Request for Advance Decision) DIGEST: Proposed settlement of contractor's claim based on out-of- pocket expenses and cost of obtaining replacement timber where timber sale contract was terminated by Government is approved in case where contract performance would result in unacceptable erosion and siltation. The Secretary of Agriculture has requested an advance decision of this Office concerning the proposed settlement of a claim arising from the termination of a timber sale contract. The record shows that the Saxon Creek timber sale was purchased by the Yuba River Lumber Company of Grass Valley, California, on March 16, 1970. The sale included approximately 2.5 million board feet of saw timber located in the Lake Tahoe Basin of the Eldorado National Forest. At the time of award of the timber contract the Tahoe Regional Planning Agency, with input from the Forest Service, was developing environmental standards for the area involved in the timber sale. Being aware that the local government was in the process of promulgating these standards (eventually enacted on April 26, 1973 to take effect in 60 days), the Forest Service met with Yuba River in February 1971 to discuss possible alternatives to the logging of the sale as provided in the contract. The Forest Service was concerned with erosion and siltation to be expected from the logging. As a result, operations under the contract were suspended on May 18, 1972. Subsequent analysis and discussions with Yuba River showed that there was insufficient profit margin available to permit a contract modification for environmental pur- poses which would require helicopter logging of the timber. In addition, the purchaser would not agree to a no-cost cancellation of the contract because of commitments the company had made in reliance upon the timber sale contract. Yuba River indicated that it might trade for comparable timber in another area, but such timber was not available. Accordingly, the Regional Forester has - 1 -

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