B-125279, OCT. 5, 1955

B-125279, OCT. 5, 1955

TO WALTER METALS COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JULY 25, 1955, REQUESTING REVIEW OF SETTLEMENT OF JUNE 24, 1955, WHICH DISALLOWED YOUR CLAIM FOR $5,024.19, IN CONNECTION WITH CERTAIN STAINLESS STEEL SCRAP PURCHASED BY YOU FROM THE DEPARTMENT OF THE AIR FORCE, MCCLELLAN AIR FORCE BASE, CALIFORNIA, UNDER CONTRACT NO. S.O. (04-606/S-55-1, DATED AUGUST 5, 1954.

IN RESPONSE TO FORMAL INVITATION ISSUED JULY 16, 1954, YOU OFFERED TO PURCHASE VARIOUS ITEMS OF LISTED SCRAP MATERIAL. INCLUDED IN THE LIST WAS ITEM NO. 41, DESCRIBED AS STAINLESS STEEL SCRAP, MIXED, JET ENGINE ALLOYS, ETC., 150,000 POUNDS, ON WHICH YOU QUOTED A UNIT PRICE OF $0.1277, OR A TOTAL PRICE OF $19,155. THE AWARD MADE TO YOU ON AUGUST 5, 1954, IN THE CIRCUMSTANCES AS HIGHEST BIDDER ON ITEM NO. 41, CONSTITUTED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO.

THE RECORD SHOWS THAT ON AUGUST 9, 1954, A MEMBER OF YOUR COMPANY PHONED THE PROCUREMENT OFFICE AND STATED THAT AT THE TIME OF HIS INSPECTION (JULY 28) OF THE MATERIAL, TWO SEPARATE PILES OF SCRAP WERE SHOWN TO HIM, WHICH WERE INDICATED AS COMPRISING THE MATERIAL OFFERED FOR SALE UNDER ITEM 41 AND THAT YOUR BID PRICE INCLUDED BOTH PILES. YOU REQUESTED CANCELLATION OF THE CONTRACT BECAUSE OF AN ALLEGED MISREPRESENTATION. DURING AN EXCHANGE OF CORRESPONDENCE WITH THE ADMINISTRATIVE OFFICE, YOU WERE ADVISED THAT THE REMOVAL BY YOU OF THE MATERIAL MARKED ITEM NO. 41 WAS MANDATORY BUT WITHOUT PREJUDICE TO YOUR FILING A CLAIM IN THE MATTER. AFTER DELIVERY OF THE ITEM, WITHOUT THE REPORTED 19,000 POUNDS OF SCRAP YOU LOCATED IN THE PILE ACROSS THE ROADWAY FROM THE LOT MARKED NO. 41, YOU FILED A CLAIM FOR REMITTANCE OF $5,024.19, AS REPRESENTING YOUR LOSS IN THE TRANSACTION.

THE PILE OF THE MATERIAL, WHICH YOU CONTEND YOU RELIED UPON AS INCLUDED IN ITEM 41, WAS LOCATED APPROXIMATELY 75 FEET DIAGONALLY ACROSS THE ROADWAY FROM ITEM 41, AND WAS UNMARKED. THERE APPEARS NO VALID REASON FOR ITS INCLUSION AS PART OF THE CONTRACT ITEM. IN YOUR REQUEST FOR REVIEW, YOU STRESS THE CIRCUMSTANCES REGARDING YOUR RECEIPT OF THE ALLEGED INFORMATION THAT THE UNMARKED MATERIAL WAS A PART OF ITEM 41 AND INVITE ATTENTION TO THE FACT THAT THE REPORTED WEIGHT OF 19,000 POUNDS APPROXIMATES THE DIFFERENCE BETWEEN THE LISTED WEIGHT OF 150,000 POUNDS AND THE ACTUAL POUNDAGE OF MATERIAL DELIVERED TO YOU.

THE ADMINISTRATIVE REPORTS SHOW THAT YOUR GENERAL MANAGER CONFERRED WITH THE CONTRACTING OFFICIALS ON AUGUST 19, 1954, WHEN HE VOLUNTEERED TO IDENTIFY THE PERSON WHO INFORMED HIM RELATIVE TO THE UNMARKED MATERIAL. HE SELECTED AN EMPLOYEE, ADMITTEDLY NOT A PURCHASING OFFICIAL, WHO, WHILE RECALLING THE INSTANCE, STATED HIS REPLY TO THE QUESTIONS DIRECTED TO HIM WAS THAT HE DIDN-T KNOW, BUT THAT HE WOULD SEEK TO FIND AN EMPLOYEE WHO DID KNOW. NO FURTHER QUESTIONS WERE ASKED AND AFTER THE CONFERENCE A VISIT WAS MADE TO THE STORAGE SITE WHERE ATTENTION WAS INVITED TO THE ITEM 41 IDENTIFICATION TAG AFFIXED TO THE STACKED BOXES OF MATERIAL. YOUR GENERAL MANAGER NOTED THE VARIANCE BETWEEN STORAGE SPACE AVAILABLE AND THAT TAKEN BY THE BOXED MATERIAL AND POINTED OUT THE SIMILARITY BETWEEN CERTAIN MATERIAL AND POINTED OUT THE SIMILARITY BETWEEN CERTAIN MATERIAL INCLUDED IN ITEM 41 WITH MATERIAL WHICH WAS NOT INCLUDED. HOWEVER THAT MAY BE, IT IS ADMINISTRATIVELY REPORTED THAT THE MATERIAL WAS OFFERED FOR SALE UNDER APPROPRIATE ESTABLISHED SEALED BID PROCEDURES AND WAREHOUSING PRACTICES. FURTHERMORE, THERE APPEARS NO EVIDENCE OF RECORD THAT THE ADVERTISED ITEM PURCHASED BY YOU WAS MISREPRESENTED IN THE OFFICIAL LISTING OR OTHERWISE BY ANY AUTHORIZED PURCHASING OFFICIAL. THE FACT THAT YOU MAY HAVE RELIED UPON THE STATEMENT OF SOME OTHER EMPLOYEE AS TO THE IDENTITY OF THE ENTIRE ITEM, AND SUCH IS NOT WITHOUT DISPUTE HERE, THAT FACT ALONE DOES NOT SERVE TO ALTER THE OFFICIAL DESCRIPTION OF THE ITEM OR ESTABLISH ANY MISREPRESENTATION IN CONNECTION THEREWITH.

IN SITUATIONS SUCH AS HERE, OUR OFFICE, OF COURSE, HAS NO FIRSTHAND KNOWLEDGE OF THE ACTUAL FACTS RELATING TO THE CIRCUMSTANCES OF YOUR INSPECTION AND BIDDING, BUT MUST RELY UPON THE ADMINISTRATIVE OFFICIALS CONCERNED. IT IS THE INVARIABLE RULE TO ACCEPT AS CORRECT THE REPORT OF SAID OFFICIALS ON SUCH DISPUTED QUESTIONS OF FACT IN THE ABSENCE OF EVIDENCE TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS THEREOF. 11 COMP. GEN. 473, 476; 16 ID. 410, 414; 20 ID. 573, 578. MOREOVER, A REVIEW OF THE INVITATION TO BID DISCLOSES A SINGLE LOCATION SITE OF ITEM NO. 41 AND THAT ITEM ONLY DISPLAYED THE LISTED IDENTIFICATION "ITEM NO. 41.' THERE APPEARS NO DISPUTE THAT THE MATERIAL YOU SEEK TO INCLUDE WITHIN THE INVITATION ITEM WAS NOT MARKED.

WITH RESPECT TO THE DELIVERY OF LESS THAN THE LISTED QUANTITY IN THIS CASE, IT MAY BE STATED THAT ORDINARILY, IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION, THERE IS AN IMPLIED WARRANTY THAT THE PROPERTY WILL CORRESPOND WITH THE DESCRIPTION, BUT WHERE THERE IS AN EXPRESS DISCLAIMER OF WARRANTY--- THE SITUATION HERE--- NO SUCH WARRANTY MAY BE IMPLIED FROM THE DESCRIPTION OF THE PROPERTY SOLD, AS THE DISCLAIMER OF WARRANTY EXTENDS TO AND INCLUDES THE QUANTITY THEREOF. SEE IN THAT CONNECTION, W. E. HEDGER COMPANY V. UNITED STATES, 63 C.CLS. 151; AND I. SHAPIRO AND COMPANY V. UNITED STATES, 66 C.CLS. 424.

UNDER THE CIRCUMSTANCES, THERE APPEARS NO LEGAL BASIS UPON WHICH THE CLAIM FOR REFUND OF ANY PART OF THE PURCHASE PRICE MAY BE ALLOWED, AND THE SETTLEMENT DISALLOWING YOUR CLAIM IS SUSTAINED.