B-127322, MAR. 30, 1956

B-127322, MAR. 30, 1956

TO RICHARD WALLACH METALS AND SUPPLY COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 8, 1956, REQUESTING REVIEW OF SETTLEMENT DATED FEBRUARY 27, 1956, WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR REFUND OF $17,505.76, UNDER CONTRACT NO. DA/S/-11-052-AV- 1095, DATED JULY 29, 1955. YOUR LETTER OF MARCH 12, 1956, WITH ENCLOSURES, ADDRESSED TO THE HONORABLE STUART SYMINGTON, UNITED STATES SENATE, RELATIVE TO THIS MATTER ALSO HAS BEEN REFERRED TO OUR OFFICE FOR CONSIDERATION.

IN RESPONSE TO INVITATION NO. 11-052-S-56-4, DATED JULY 8, 1955, ISSUED BY THE GRANITE CITY ENGINEER DEPOT, GRANITE CITY, ILLINOIS, YOU SUBMITTED A BID DATED JULY 27, 1955, OFFERING TO PURCHASE, AMONG OTHERS, ITEM NO. 1, COVERING ONE LOT OF SEARCHLIGHT CABLE ASSEMBLIES, CONSISTING OF APPROXIMATELY 568 REELS OF CONTROL ASSEMBLIES--- 14 CONDUCTOR COPPER WIRE CABLE RUBBER COVERED--- OF A CERTAIN DESIGNATED TYPE, SIZE, CONDITION, ETC., AND APPROXIMATELY 501 REELS OF RUBBER COVERED COPPER CABLE POWER ASSEMBLIES, ALSO OF A CERTAIN TYPE, SIZE, CONDITION, ETC., FOR A TOTAL PRICE OF $36,687.87. YOU ALSO SUBMITTED AN ALTERNATE BID, AS PROVIDED BY THE INVITATION, FOR EACH OF THE TWO UNITS COMPRISING ITEM NO. 1, IN THE AMOUNT OF $12.11 EACH FOR THE 568 CONTROL ASSEMBLIES, OR FOR A TOTAL PRICE OF $6,878.48, AND $58.87 EACH FOR THE 500 POWER ASSEMBLIES, OR FOR A TOTAL PRICE OF $29,493.87. IT APPEARS THAT IN THE AFTERNOON OF JULY 28, 1955, THE DAY BIDS WERE OPENED, MR. WALLACH VISITED THE CONTRACTING OFFICE AND PROTESTED THE COPPER WIRE CONTENT OF THE 568 CONTROL ASSEMBLIES. HOWEVER, ON JULY 29, 1955, YOUR BID BY LOT FOR ITEM NO. 1 IN THE TOTAL AMOUNT OF $36,687.87, TOGETHER WITH YOUR BID FOR 484 UNITS OF ITEM NO. 5 AND YOUR BID FOR ITEM NO. 6 WAS ACCEPTED IN THE TOTAL AMOUNT OF $83,058.46, FOR THOSE THREE ITEMS, THEREBY CONSUMMATING CONTRACT NO. DA/S/-11-052-AV- 1095. AFTER CONSIDERABLE NEGOTIATIONS RELATIVE TO ACCEPTANCE AND REMOVAL OF THE 568 CONTROL ASSEMBLIES YOU ULTIMATELY ACCEPTED, PAID FOR, AND REMOVED THE ASSEMBLIES FROM THE GRANITE CITY ENGINEER DEPOT. SUBSEQUENTLY YOU FILED A CLAIM FOR $17,505.76, WHICH APPARENTLY IS THE AMOUNT OF THE ALLEGED LOSS SUFFERED BY YOU AS A RESULT OF THE IRON WIRE RATHER THAN COPPER WIRE CONTENT IN THE 568 CONTROL ASSEMBLIES. HOWEVER, YOUR CLAIM WAS FORWARDED HERE, ADMINISTRATIVELY DISAPPROVED, AND IT WAS POINTED OUT THAT IN YOUR ALTERNATE BID YOU QUOTED A PRICE OF $12.11 EACH FOR THE 568 CONTROL ASSEMBLIES, TOTAL $6,878.48, AND FOR WHICH YOU NOW CLAIM A REFUND OF $17,505.76 OR $34.32 EACH WHEREAS YOU HAVE AT NO TIME OBJECTED TO THE 501 POWER ASSEMBLIES AS TO PRICE AND QUALITY ALTHOUGH YOU BID $58.87 EACH ON THE LATTER ASSEMBLIES. ALSO, IT IS INDICATED THAT BY REASON OF THE VARIATION IN THE UNIT PRICES BID ON THE TWO ASSEMBLIES, YOU UNDERSTOOD THE DESCRIPTION AND QUALITY OF ITEM NO. 1.

IT APPEARS FROM YOUR LETTERS DATED MARCH 8, 1956, AND MARCH 12, 1956, THAT YOUR REQUEST FOR REVIEW IS BASED PRIMARILY ON THE CONTENTIONS THAT YOUR BID FOR THE LOT--- APPARENTLY ITEM NO. 1--- HAD BEEN DISQUALIFIED SINCE IT DID NOT STATE "ALL OR NONE; " THAT YOUR BID WAS REINSTATED AND ACCEPTED, AND REMOVAL OF THE PROPERTY WAS MADE, AGAINST YOUR WISHES AND ONLY UNDER DURESS OF THE CONTRACTING OFFICER; THAT YOU INSPECTED THE REELS OF WIRE TO THE BEST OF YOUR ABILITY; AND, THAT, IN ANY EVENT, THE INVITATION DESCRIBED THE CABLE IN THE CONTROL ASSEMBLIES TO BE COMPOSED OF COPPER WIRE THEREBY AMOUNTING TO A GUARANTY OR WARRANTY.

WITH RESPECT TO THE ALLEGED DISQUALIFICATION, WHICH YOU STATE WAS MADE ON THE BASIS OF YOUR BID FOR THE LOT, A REVIEW OF THE FORM OF THE ENTIRE BID REVEALS THAT ITEM NO. 1 WAS ADVERTISED AS ONE LOT FOR BOTH THE CONTROL ASSEMBLIES AND POWER ASSEMBLIES WITH AN ALTERNATE PROVISION WHEREBY BIDDERS, IF THEY SO DESIRED, COULD SUBMIT BIDS IN UNITS OF ONE OR MORE EACH. YOUR BID WAS SUBMITTED BOTH ON A LOT BASIS AND FOR THE ALTERNATE INDIVIDUAL UNITS IN THE AMOUNTS SET FORTH IN THE SECOND PARAGRAPH HEREIN. IN VIEW OF THIS, AND SINCE THERE APPEAR NO INSTRUCTIONS, EITHER IN ITEM NO. 1 OR IN THE GENERAL PROVISIONS OF THE INVITATION WITH RESPECT TO THE SUBMISSION OF BIDS FOR THIS ITEM, WHICH REQUIRE AN EXPRESS STATEMENT THAT THE BID FOR THE LOT WAS ON AN "ALL OR ONE" BASIS IT MAY NOT BE CONCLUDED THAT THIS PART OF THE BID CONTAINED ANY DISQUALIFYING FEATURE. WHEN YOU INSERTED THE AMOUNT OF $36,687.87 IN THAT PART OF THE BID FROM COVERING ONE LOT SUCH BID, WITHOUT MORE, REASONABLY COULD BE CONSTRUED ONLY AS A PRICE FOR THE ENTIRE LOT, OR A BID FOR ALL OF THE PROPERTY COVERED THEREIN, OR NONE AND THERE WOULD BE NO BASIS FOR CONSIDERING YOUR BID SUBMITTED IN THAT FORM ON ANY OTHER THAN AN "ALL OR NONE" BASIS. IN FACT, IT APPEARS THAT THE CONTRACTING OFFICER WOULD HAVE BEEN REMISS IN HIS OFFICIAL DUTY HAD HE NOT ACCEPTED YOUR LOT BID ON ITEM NO. 1 WHICH WAS THE HIGHEST BID RECEIVED FOR THIS ITEM. MOREOVER, EVEN IF THE BID WAS DEFECTIVE IN SOME OTHER RESPECT, NOT APPARENT IN THE RECORD, THE FACT REMAINS THAT BY YOUR SUBSEQUENT ACCEPTANCE, PAYMENT AND REMOVAL OF THE CONTROL ASSEMBLIES YOU APPEAR TO HAVE FORFEITED ANY RIGHTS WHICH YOU OTHERWISE MIGHT HAVE HAD IN THE MATTER AND IT MAY NOT BE CONCLUDED THAT YOUR ACTIONS IN THIS REGARD WERE EFFECTED UNDER DURESS. THE INSISTENCE OF THE CONTRACTING OFFICER UPON REMOVAL OF THE PROPERTY WAS MERELY THE ASSERTION OF THE RIGHT THAT OFFICER ACQUIRED UNDER PARAGRAPH 7 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE SUBJECT CONTRACT.

SINCE IT APPEARS THAT A VALID AND BINDING OBLIGATION RESULTED FROM THE CONTRACT IN THIS MATTER IT NOW BECOMES NECESSARY TO DETERMINE THE RIGHTS OF THE PARTIES WITH RESPECT TO THE ALLEGED SHORTAGE OF THE COPPER WIRE IN THE 568 CONTROL ASSEMBLIES. IN THIS CONNECTION, ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT PROVIDED, IN PERTINENT PART, THAT:

"* * * 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 FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED; * * *"

IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND OUR OFFICE THAT, IN THE ABSENCE OF BAD FAITH, OR WHERE IT IS NOT SHOWN THAT THE PROPERTY SOLD WAS OTHER THAN THAT ADVERTISED FOR SALE, SUCH LANGUAGE CONSTITUTES AN EXPRESS DISCLAIMER OF WARRANTY AND WHILE ORDINARILY THERE IS AN IMPLIED WARRANTY, IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION, THAT THE PROPERTY WILL CORRESPOND WITH THE DESCRIPTION, BUT WHERE THERE EXISTS AN EXPRESS DISCLAIMER OF WARRANTY--- AS IN THE INSTANT CASE--- NO SUCH WARRANTY MAY BE IMPLIED FROM THE DESCRIPTION OF THE PROPERTY SOLD. SEE LUMBRASO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; TRIAD CORPORATION V. UNITED STATES, 63 C.CLS. 151; AND I. SHAPIRO AND COMPANY V. UNITED STATES, 66 C.CLS. 424. IT IS PARTICULARLY SIGNIFICANT TO NOTE FURTHER THAT THE DISCLAIMER OF WARRANTY SPECIFICALLY REFERS TO, AMONG OTHER THINGS, THE "KIND" AND "CHARACTER" OF THE MATERIAL INVOLVED. ALSO, THERE IS NOTHING IN THE RECORD TO SHOW OR INDICATE, NOR DO YOU ALLEGE, THAT BAD FAITH MAY BE ATTRIBUTED TO THE GOVERNMENT IN THE TRANSACTION. THE RECORD DOES SHOW HOWEVER THAT NOTWITHSTANDING AN ALLEGED SHORTAGE IN THE COPPER CONTENT OF THE WIRE CABLE IN THE 568 CONTROL ASSEMBLIES YOU DID RECEIVE CONTROL ASSEMBLIES WHICH WAS THE SPECIFIC PROPERTY ADVERTISED FOR SALE.

OF EQUAL IMPORTANCE IN A MATTER SUCH AS THAT WITH WHICH WE ARE HERE CONCERNED IS THE INSPECTION FEATURE. IN THIS REGARD ARTICLE 1 OF THE GENERAL SALE TERMS AND CONDITIONS NOT ONLY INVITED, BUT URGED, BIDDERS TO INSPECT THE PROPERTY PRIOR TO SUBMITTING BIDS. THIS ARTICLE PROVIDED FURTHER THAT "IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING.' NOTWITHSTANDING SUCH URGING AND WARNING YOU NEVERTHELESS SUBMITTED A BID WITHOUT MAKING A THOROUGH INSPECTION OF THE 568 CONTROL ASSEMBLIES. MOREOVER, HAD YOU MADE AN INSPECTION THE DESCRIPTION INACCURACIES IN THE INVITATION, TO WHICH YOU REFER, IMMEDIATELY WOULD HAVE REVEALED AS SHOWN BY YOUR OWN ADMISSION THAT A PACKING SLIP WAS ATTACHED TO THE MAJORITY OF THE REELS OF CABLE WHICH YOU STATE SHOWED THAT THE CONTROL ASSEMBLIES CONSISTED OF IRON WIRE INSTEAD OF COPPER WIRE. THIS THEN APPEARS TO BE IN DIRECT CONTRADICTION OF YOUR POSITION THAT IT WOULD HAVE BEEN PRACTICALLY IMPOSSIBLE TO MAKE A COMPLETE INSPECTION OF THE 1,069 REELS OF WIRE--- BOTH UNITS OF ITEM NO. 1 --- DUE TO THE SIZE, PACKING AND STACKING OF THE PROPERTY. NEITHER MAY THE IMPLICATION THAT ONE OF THE EMPLOYEES OF THE GRANITE CITY ENGINEER DEPOT PREVENTED YOU FROM MAKING A MORE THOROUGH INSPECTION BE GIVEN ANY MERIT. IN THIS CONNECTION, THERECORD DOES NOT SHOW THAT YOU WERE ABSOLUTELY REFUSED FURTHER INSPECTION PRIVILEGES. MOREOVER, EVEN HAD THIS BEEN THE CASE NOTWITHSTANDING YOUR INSISTENCE OTHERWISE, WHICH ALSO IS NOT SHOWN IN THE RECORD, AND YOU STILL ELECTED TO SUBMIT A BID, AFTER HAVING BEEN COMPLETELY APPRISED OF ALL OF THE CONDITIONS OF ARTICLES 1 AND 2 OF THE GENERAL SALE TERMS AND CONDITIONS, IT MUST BE CONCLUDED THAT YOU ASSUMED ANY RISK WHICH MIGHT EXIST BY REASON OF A VARIANCE BETWEEN THE DESCRIPTION OF THE PROPERTY IN THE SALE INVITATION AND THE ACTUAL PROPERTY DELIVERED.