85 



Appeals decisions in timber contract cases which refused to apply 



the sovereign acts doctrine. 



The Forest Service Chief has interpreted the agency's 



timber sale contract to require compensation for the difference 



between the contract price of the timber and its market value, 



regardless of whether a contract is modified, canceled, or 



partially canceled for environmental reasons. In an April 27, 



1992 memorandum to Regional Foresters, the Chief noted that: 



Recently several Regions have had a need to 

 modify, partially cancel, or cancel sales 

 because of species listed under the 

 Endangered Species Act or because of possible 

 impacts to species considered sensitive 

 within that Region. Questions have arisen 

 concerning procedures in contract 

 modification, cancellation, and the 

 calculation of purchaser compensation. The 

 following provides information and direction 

 in these areas . 



The Chief noted that -. 



In determining compensation, the plain 

 meaning of the WO-C(T)9.5 (10/77) timber sale 

 contract provision must be followed. This 

 provision provides, in part, damages for the 

 difference between the contract value for the 

 deleted/uncut volume of timber and the value 

 of comparable timber sold within the six 

 months preceding cancellation. 



Id. 



This government interpretation is consistent with the 



regulation at 36 C.F.R. § 223.116 governing compensation for 



cancellation of contracts. Although later contract clauses have 



attempted to limit compensation, those clauses are inconsistent 



with the governing regulation. Thus, more recently, the United 



States Department of Agriculture has requested a change to 3 6 



-7- suBV«whkn9s 



