Opinion ID: 779646
Heading Depth: 3
Heading Rank: 2

Heading: The Cow Contract

Text: 11 On April 15, 1983, CDC and the Forest Service entered into the Cow contract. The contract required CDC to cut, remove, and pay for all of the timber included in the sale by the contract termination date of March 31, 1985. By early 1985, CDC had removed over 75 percent of the original estimated volume of 4,300 MBF. CDC sought and the Forest Service granted a one-year extension pursuant to Special Provisions C8.23 & C8.231. 2 In July 1985, the contracting officer sent CDC a letter stating that the Cow contract will not qualify for any further extensions. Nevertheless, CDC requested a second one-year extension. The Forest Service denied this request. CDC abandoned the contract on December 26, 1985 after harvesting an amount of timber that was in excess of 100% of the original estimated volume but was not all of the timber in the Cow parcel. 12 The Cow contract, like CDC's other contracts, contained Provision C9.4, which provides, in pertinent part: 13 Damages due the United States for Purchaser's failure to cut and remove Included Timber meeting Utilization Standards shall be the amount by which Current Contract Value, plus costs described below, less any Effective Purchaser Credit remaining at time of termination, exceeds the resale value at new Bid Rates. If there is no resale, damages due shall be determined by subtracting the value established by said appraisal from the difference between the Current Contract Value and unused Effective Purchaser Credit, plus any of the following applicable costs: 14
15 (2) Any increase in Purchaser Credit Limit allowance for unconstructed Specified Road facilities which are needed to harvest the remaining uncut volume....; 16 .... 17 (4) The Government's loss caused by the delay in receipt of stumpage payments. Such loss will be measured by interest at the current rate being paid for borrowing by the United States (as published or calculated by the Treasury Department in TFRM 6-8020-20) on the unpaid contract value at Termination Date. Interest will be charged for the total number of months, or portions thereof from Termination Date until midpoint of the contract resale period, less any time in excess of 1 year needed to make the resale; 18 (5) Any increase in reforestation costs .... 19 In August 1986, the Forest Service resold the Cow contract. The resale contract differed from CDC's original contract in several respects. 20 First, the original contract included an estimated 4,300 MBF of timber, while the resale included less, an estimate of only 792 MBF, due to CDC's partial performance. The resale provided one and one-half operating seasons for logging, while the original contract, as extended to March 31, 1986, provided three operating seasons in which to log. In addition, the resale contract required a 10 percent down payment of $6,300, while the original contract required only a 5 percent down payment of $27,500. Furthermore, the resale contract required a midpoint payment in the amount of $15,874.51, while the original contract did not require a midpoint payment. 21 The resale contract sold for less than the then-current value of the remaining timber volume, plus cost of resale. Pursuant to Provision C9.4, the Forest Service's contracting officer demanded the difference with interest as damages. The amount was $82,916.