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B-207165 1 (1982-05-03)

handle is hein.gao/gaobadkgt0001 and id is 1 raw text is: 1I II ai 1 4 ,'aZ t- THE COMPTROLLeA GENERAL I DECISION a'-- T HE UN ITE D ITATES FILE: B-207165 DATE: May 3, 1982 MATTER OF: Department of Agriculture-- Request for Advance Decision DIGEST: Modification of timber sale contracts to permit contractors to defer required monthly payments is permissible where contractors agree to pay interest for deferred payment period, since interest is legal consideration. The Secretary of Agriculture has requested an advance decision of this Office concerning the pro- posed modification of a number of timber sale con- tracts. We have no legal objection to the modifications. On Mby 24, 1980, the United States Forest service extended a number of timber sale contracts entered into prior to April 1, 1980, and due to terminate prior to April 19-92. Due to extremely unfavorable economic conditions in the timber industry, it appeared that the contractors would be unable to perform within the contract term, and would face default terminations if the contracts were not extended. The extensions were made under the authority of 16 USc. 5 472a(c) (1976), whJch authorizes the Secretary of Agriculture to grant extensions when he finds that the substantial overriding ,, public interest justifies the extensions. As a condition of extending the contracts for the benefit of the con- tractors, the Forest service modified the payment provision of the contracts to benefit the Government. Prior to the extension, the contracts contained the 0 standard payment clause, which requires that payment be made shortly before timber is actually cut. After ,.[{ the extension, the contracts contained a clause requir- ing monthly payments to be made during the first operating season so that all timber would be paid for I? by the last day of the season, whether or not timber d was actually cut. I I . . .•..... .. . .- -t.

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