B-123555, JUN. 16, 1955

B-123555, JUN. 16, 1955

TO THE MODERN AGE CORPORATION:

REFERENCE IS MADE TO LETTER DATED FEBRUARY 21, 1955, FROM YOUR ATTORNEY, REQUESTING REVIEW OF SETTLEMENT DATED FEBRUARY 18, 1955, WHICH DISALLOWED YOUR CLAIM FOR $400, ALLEGED TO BE DUE BECAUSE OF A SHORTAGE IN DELIVERY OF CERTAIN USED CLOTHING PURCHASED BY YOU FROM THE DEPARTMENT OF THE ARMY UNDER CONTRACT DESIGNATED CASE NO. S-207.

THE CLOTHING WAS DESCRIBED IN THE INVITATION, BID, AND ACCEPTANCE FORM, ON WHICH YOU SET FORTH THE TOTAL AMOUNT OF YOUR BID, AS "ONE LOT" OF "MISCELLANEOUS USED CLOTHING CONSISTING OF: SEE ATTACHED SHEET.' ENUMERATED ON THE "ATTACHED SHEET" WERE 23 ITEMS OF CLOTHING OF VARIOUS KINDS, THE QUANTITIES OF WHICH WERE STATED ON A PER-ITEM BASIS. ON THIS SHEET WERE SET FORTH THE UNIT PRICES BID BY YOU FOR THE VARIOUS ARTICLES OF CLOTHING, THE TOTAL AMOUNTS ACCORDING TO ITEM, AND THE GRAND TOTAL, WHICH AMOUNTED TO $1,064.84.

THE CLOTHING WAS LOCATED AT AMERICAN STEEL FOUNDRIES, CAST ARMOR DIVISION, EAST CHICAGO, INDIANA, AND WAS SOLD ON AN "AS IS, WHERE IS" BASIS, WITH DISCLAIMER OF WARRANTY OF ANY KIND. BY THE TERMS OF THE INVITATION, YOU WERE REQUIRED TO REMOVE THE CLOTHING WITHIN 15 CALENDAR DAYS AFTER NOTICE OF AWARD, OR BY JULY 29, 1953. THE GENERAL SALE TERMS AND CONDITIONS INCORPORATED IN THE CONTRACT PROVIDED THAT TITLE TO THE PROPERTY WOULD VEST IN THE PURCHASER UPON PAYMENT OF THE PURCHASE PRICE, WHICH WAS REQUIRED TO BE COMPLETED PRIOR TO THE DATE SPECIFIED FOR REMOVAL AND PRIOR TO DELIVERY OF ANY PROPERTY. PARAGRAPH 8 OF THE CONDITIONS PROVIDED THAT ANY VARIATION BETWEEN THE QUANTITY LISTED FOR ANY ITEM AND THE QUANTITY OF SUCH ITEM TENDERED OR DELIVERED TO THE PURCHASER WOULD BE ADJUSTED ON THE BASIS OF THE UNIT PRICE QUOTED FOR SUCH ITEM, BUT THAT NO ADJUSTMENT FOR SUCH VARIATION WOULD BE MADE WHERE AWARD HAD BEEN MADE ON A "PRICE FOR THE LOT" BASIS. PARAGRAPH 10 PROVIDED THAT, AFTER THE DATE SPECIFIED FOR REMOVAL OF THE PROPERTY, ALL RISK OF LOSS, DAMAGE, OR DESTRUCTION FROM ANY CAUSE WHATSOEVER WAS TO BE BORNE BY THE PURCHASER.

THE RECORD SHOWS THAT THE LOT OF CLOTHING WAS PICKED UP FOR SHIPMENT TO YOU BY A TRUCKING FIRM OF YOUR CHOICE ON AUGUST 4, 1953, WHEN A REPRESENTATIVE OF THE CARRIER AFFIXED HIS SIGNATURE TO A DEPARTMENT OF THE ARMY SHIPPING DOCUMENT CONTAINING A LIST OF THE ARTICLES OF CLOTHING INVOLVED, INCLUDING UNIT QUANTITIES ACCORDING TO ITEM, WHICH WAS IDENTICAL TO THAT SET FORTH ON THE ,ATTACHED SHEET," REFERRED TO ABOVE. THE REPRESENTATIVE ACKNOWLEDGED THAT THE LOT OF CLOTHING DESCRIBED HAD BEEN RECEIVED FOR SHIPMENT.

IN ACKNOWLEDGING RECEIPT OF THE SHIPMENT BY LETTER OF AUGUST 11, 1953, TO THE DISPOSAL AGENCY, YOU STATED THAT, UPON INSPECTING THE CLOTHING, YOU FOUND THAT MOST OF IT WAS SCRAP, WHICH WAS NOT USABLE, AND YOU ASKED ADVICE AS TO HOW TO FILE A CLAIM. IN A LETTER DATED AUGUST 13, 1953, YOUR ATTORNEY ADVISED THE DISPOSAL AGENCY THAT YOU DESIRED TO ENTER A CLAIM FOR REFUND OF THE PURCHASE PRICE BECAUSE THE CLOTHING WHICH HAD BEEN RECEIVED WAS JUNK, AND THAT, REGARDLESS OF WHETHER YOUR CLAIM ON THAT ACCOUNT COULD BE FAVORABLY ENTERTAINED, THE ITEMS OF CLOTHING HAD BEEN BOUGHT BY QUANTITIES, AND YOU WISHED TO CLAIM AN ADJUSTMENT IN THE PURCHASE PRICE BASED UPON A SHORTAGE IN DELIVERY. THE CONTRACTING OFFICER ADVISED YOUR ATTORNEY BY LETTER OF SEPTEMBER 8, 1953, THAT NEITHER OF YOUR CLAIMS COULD BE FAVORABLY CONSIDERED.

BY LETTER OF JANUARY 8, 1954, YOU FILED CLAIM WITH THIS OFFICE THROUGH YOUR ATTORNEY FOR THE AMOUNT OF $400 ON ACCOUNT OF THE SHORTAGE IN DELIVERY OF THE ITEMS OF CLOTHING REFERRED TO IN YOUR LETTER OF AUGUST 13, 1953, STATING THAT, ALTHOUGH THE AGGREGATE CONTRACT PRICE OF THESE ITEMS AMOUNTED TO $532.87, THE SUM OF $400 HAD BEEN DETERMINED IN A CONFERENCE WITH "A MEMBER OF THE LEGAL DIVISION OF THE DEPARTMENT OF THE ARMY" TO REPRESENT A MUTUALLY AGREEABLE SETTLEMENT. THE RECORD REVEALS NO FURTHER INFORMATION REGARDING THE SUM OF $400, OR HOW IT WAS ARRIVED AT. A LETTER DATED NOVEMBER 13, 1953, FROM THE DEPARTMENT OF THE ARMY TO YOUR ATTORNEY, STATES THAT:

"* * * AFTER A LENGTHY TELEPHONE CONVERSATION MR. BROSSELL (THE INDIVIDUAL WHO SIGNED YOUR LETTER OF AUGUST 11, 1953) DECIDED THAT HE WOULD FILE A CLAIM THROUGH THIS OFFICE TO THE GENERAL ACCOUNTING OFFICE IN THE AMOUNT OF $261.00.'

AS APPARENTLY RECOGNIZED BY YOU, NO BASIS WHATEVER EXISTS FOR ALLOWANCE TO YOU OF ANY AMOUNT DUE TO THE FACT THAT THE MERCHANDISE WAS INFERIOR OR UNUSABLE, IN VIEW OF THE DISCLAIMER OF WARRANTY. ALSO, ADMITTING, FOR THE PURPOSE OF ARGUMENT, THE CORRECTNESS OF YOUR CONTENTION THAT THE SALE MUST BE CONSIDERED TO HAVE BEEN ON A PER-ITEM BASIS, RATHER THAN ON A LOT BASIS, BECAUSE OF THE MANNER IN WHICH THE ARTICLES OF CLOTHING WERE DESCRIBED IN THE INVITATION, IT MUST BE HELD THAT YOU ARE NOW PRECLUDED FROM SUCCESSFULLY CONTENDING THAT YOU DID NOT RECEIVE THE ENTIRE QUANTITY OF CLOTHING PURCHASED IN VIEW OF THE ACKNOWLEDGMENT MADE ON THE SHIPPING DOCUMENT. INSOFAR AS THE GOVERNMENT IS CONCERNED, THE TRANSACTION WAS COMPLETED BY THE ACKNOWLEDGMENT OF DELIVERY, AND THE ACCEPTANCE OF THE PROPERTY BY YOUR AGENT. MOREOVER, BECAUSE OF YOUR FAILURE TO REMOVE THE PROPERTY BY JULY 29, 1953, AS REQUIRED, THE GOVERNMENT WOULD NOT, BY THE TERMS OF PARAGRAPH 10 OF THE CONDITIONS, BE UNDER A DUTY TO MAKE AN ADJUSTMENT ON ACCOUNT OF ANY UNEXPLAINED SHORTAGE IN ANY EVENT.