B-127782, MAY 31, 1956

B-127782, MAY 31, 1956

TO GAISER IRON AND METAL COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 16, 1956, REQUESTING RECONSIDERATION OF SETTLEMENT DATED MARCH 12, 1956, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF THE PURCHASE PRICE ON ITEM NO. 16C UNDER CONTRACT NO. 33-167-55-1062S, DATED JUNE 28, 1955.

THE RECORD SHOWS THAT ON MAY 17, 1955, THE SALVAGE BRANCH, COLUMBUS GENERAL DEPOT, DEPARTMENT OF THE ARMY, ISSUED INVITATION NO. 33-167-S 55- 19, FOR BIDS ON VARIOUS ITEMS OF SURPLUS PROPERTY. INCLUDED IN THE SURPLUS PROPERTY OFFERED FOR SALE WAS ITEM NO. 16C, DESCRIBED IN THE INVITATION AS A LOT OF TUBING CONSISTING OF 1,198PIECES AND IDENTIFIED BY CATERPILLAR TRACTOR COMPANY PART NO. 8F9462. IN RESPONSE TO THE INVITATION, YOU BID ON A NUMBER OF ITEMS, INCLUDING A BID OF $531.99 ON ITEM NO. 16C. YOUR BID ON SEVERAL ITEMS, INCLUDING ITEM NO. 16C WAS ACCEPTED AND DELIVERY OF THE MATERIAL WAS MADE TO YOU ON JULY 13, 1955.

YOU ALLEGED THAT YOUR BID ON ITEM NO. 16C WAS BASED ON THE SAMPLES OF COPPER TUBING DISPLAYED IN THE SAMPLE ROOM AND IN THE SALVAGE YARD OF THE DEPOT, AND THAT OF THE 1,198 PIECES OF TUBING INCLUDED IN THE LOT, 1.196 PIECES WERE MADE OF STEEL RATHER THAN COPPER. FOR THIS REASON YOU REQUESTED THAT THE SUBJECT CONTRACT BE RESCINDED WITH RESPECT TO ITEM NO. 16C. YOUR CLAIM FOR RESCISSION OF THE CONTRACT WITH REGARD TO ITEM NO. 16C IS BASED ON THE GROUNDS THAT YOU WERE MISLED BY THE SAMPLES ON DISPLAY INTO BELIEVING THAT ALL THE TUBING INCLUDED IN THAT ITEM WAS MADE OF COPPER AND THAT, SINCE YOU WERE DENIED PERMISSION TO MAKE A COMPLETE INSPECTION OF THE ENTIRE LOT, YOU WERE PREVENTED FROM DETERMINING THE TRUE NATURE OF THE TUBING.

ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS, MADE A PART OF THE CONTRACT, PROVIDED, IN PERTINENT PART, AS FOLLOWS:

"* * * THE DESCRIPTION IS BASED ON THE BEST AVAILABLE INFORMATION, BUT THE GOVERNMENT MAKES NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE, OR DESCRIPTION OF ANY OF THE PROPERTY, OR ITS FITNESS FOR ANY USE OR PURPOSE, AND NO CLAIM WILL BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT OR FOR RESCISSION OF THE SALE BASED UPON THE FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED; THIS IS NOT A SALE BY SAMPLE.'

YOU WERE SPECIFICALLY WARNED THAT THIS WAS NOT A SALE BY SAMPLE. HAD THIS BEEN A SALE BY SAMPLE, THEN, OF COURSE, THERE WOULD HAVE ARISEN AN IMPLIED WARRANTY THAT ALL OF THE ITEMS LISTED IN THE INVITATION WOULD HAVE CONFORMED WITH THE SAMPLES WHICH HAD BEEN ON DISPLAY. MOREOVER, THE BIDDERS EXPRESSLY WERE CAUTIONED THAT THE DESCRIPTION GIVEN IN THE INVITATION WAS BASED MERELY UPON "THE BEST AVAILABLE INFORMATION," AND THAT THE PROPERTY OFFERED FOR SALE WAS BEING OFFERED WITHOUT WARRANTY OR GUARANTY, EXPRESSED OR IMPLIED, AS TO KIND, CHARACTER, DESCRIPTION, OR FITNESS FOR ANY PARTICULAR USE. IT IS APPARENT, THEREFORE, THAT YOU HAD ACTUAL NOTICE OF THE FACT THAT THE VENDOR'S DESCRIPTION OF THE PROPERTY WAS NO MORE THAN A MERE STATEMENT OF ITS OPINION AND UNDERSTANDING AS TO THE CHARACTER AND CONDITION OF THE PROPERTY OF SALE, AND THAT SUCH OPINION WAS NOT TO BE RELIED UPON TO ANY EXTENT GREATER THAN THAT STATED IN THE ADVERTISEMENT. IN THESE AND SIMILAR CIRCUMSTANCES THE COURTS HAVE HELD THAT THE ELEMENT OF GOOD FAITH IS ALL THAT IS REQUIRED OF THE VENDOR. SEE W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31; TRIAD CORPORATION V. UNITED STATES, 63 C.CLS. 151, 156. FURTHERMORE, THE INVITATION DID NOT DESCRIBE THE TUBE AS COPPER BUT MERELY AS TUBING, PART NO. 8F9462, MANUFACTURED BY THE CATERPILLAR TRACTOR COMPANY. IN THE CONTRACTING OFFICER'S FINDINGS, DATED NOVEMBER 9, 1955, IT IS STATED THAT AT THE PRESENT TIME CATERPILLAR TRACTOR COMPANY PART NO. 8F9462 IS IDENTIFIED AS STEEL TUBING, ALTHOUGH IT IS POSSIBLE THAT THE TUBING WAS MADE OF COPPER AT SOME TIME IN THE PAST. ALSO, IT WAS STATED THAT THE TWO SAMPLES DISPLAYED WERE PICKED AT RANDOM WITHOUT ANY ATTEMPT TO MISREPRESENT THE TUBING IN THE LOT OR TO MISLEAD THE BIDDERS. THUS, IT IS APPARENT THAT THE DISPOSAL OFFICER ACTED IN GOOD FAITH.

IN CONNECTION WITH YOUR CONTENTION THAT YOU WERE NOT PERMITTED TO INSPECT THE PROPERTY, THE CONTRACTING OFFICER STATES THAT WHILE INSPECTING PROPERTY ON PREVIOUS SALES, THE BIDDERS HAD BEEN OBSERVED PUNCHING OR DRILLING HOLES IN VARIOUS ITEMS IN ORDER TO DETERMINE THEIR METALLIC CONTENT AND, TO PREVENT FURTHER DAMAGE TO GOVERNMENT PROPERTY, INSTRUCTIONS WERE ISSUED THAT THE BIDDERS WERE NOT TO BE PERMITTED TO MAKE A COMPLETE INSPECTION OF UNIFORM LOTS OF PROPERTY. HENCE, THE REFUSAL TO PERMIT THE BIDDERS TO INSPECT THE TUBING WAS MOTIVATED BY THE DESIRE TO PREVENT DAMAGE TO GOVERNMENT PROPERTY AND NOT BY ANY ATTEMPT TO MISLEAD THE BIDDERS. YOU WERE AWARE OF THE FACT THAT SALVAGE PROPERTY WAS BEING OFFERED FOR SALE AND, IF YOU FELT THAT A MORE DETAILED INSPECTION OF THE GOODS WAS NECESSARY FOR THE PROTECTION OF YOUR INTERESTS, AND YOU WERE NOT WILLING TO ASSUME THE RISKS INVOLVED, YOU SHOULD NOT HAVE SUBMITTED YOUR BID. SINCE YOUR BID WAS SUBMITTED WITHOUT QUALIFICATION AS TO THIS ITEM, AND SINCE THE ACCEPTANCE THEREOF RESULTED IN A VALID AND BINDING CONTRACT UNDER WHICH THE GOVERNMENT ACQUIRED THE VESTED RIGHT TO DEMAND PERFORMANCE STRICTLY IN ACCORDANCE THEREWITH, THERE EXISTS NO AUTHORITY IN ANY OFFICER OR AGENT OF THE UNITED STATES GRATUITOUSLY TO WAIVE OR SURRENDER SUCH RIGHT. SEE BAUSCH AND LOMB OPTICAL CO. V. UNITED STATES, 78 C.CLS. 584, 607 CERTIORARI DENIED, 292 U.S. 645; UNITED STATES V. AMERICAN SALES CORPORATION, 27 F.2D 389.