In response to a congressional request, GAO evaluated the Forest Service's and Bureau of Land Management's (BLM): (1) administration of the Timber Contract Payment Modification Act; and (2) implementation of their deferred payment policies. GAO found that: (1) the Forest Service and BLM effectively determined timber sales purchasers' eligibility requirements and generally calculated accurate contract buy-out charges in accordance with the act; (2) 436 purchasers bought out 11 billion board feet of timber priced at about $2.9 billion and paid buy-out charges of about $184 million; (3) both agencies implemented interim policies to allow purchasers still holding high-priced contracts to defer certain portions of their payments for harvested timber; (4) as of October 1988, there were 68 eligible purchasers holding 346 contracts for 1.8 billion board feet of timber at costs totalling $585 million and with deferred payments totalling about $234 million; (5) as of December 1988, the agencies had received applications from 6 purchasers to defer payments on 25 contracts priced at $38 million and estimated deferred payments totalling about $18 million; and (6) the Forest Service modified one contract to allow a payment deferral of $645,000.