B-128468, JUL. 13, 1956

B-128468: Jul 13, 1956

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TO NORFOLK HIDE AND METAL COMPANY: REFERENCE IS MADE TO YOUR LETTER OF JULY 2. UNDER THE CONTRACT YOU WERE AWARDED SEVERAL ITEMS ON A "PRICE FOR THE LOT" BASIS. PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT PROVIDED THAT THE PROPERTY WAS OFFERED . AS IS" AND "WHERE IS" AND THAT THE DESCRIPTION WAS BASED ON THE BEST AVAILABLE INFORMATION. THE BIDDERS WERE WARNED. NO ADJUSTMENT FOR SUCH VARIATION WOULD BE MADE WHERE AN AWARD WAS MADE ON A "PRICE FOR THE LOT" BASIS. ORAL INFORMATION CONCERNING THE SHORTAGES WAS GIVEN PROSPECTIVE BIDDERS AT THE TIME THE INDIVIDUAL FIRMS MADE INSPECTIONS. INASMUCH AS THE SALE WAS ON A LOT BASIS AND SINCE THE CONTRACT CONTAINED AN EXPRESS DISCLAIMER OF WARRANTY ON THE PART OF THE GOVERNMENT.

B-128468, JUL. 13, 1956

TO NORFOLK HIDE AND METAL COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JULY 2, 1956, CONCERNING YOUR CLAIM FOR REFUND OF $199.56 ON ACCOUNT OF A SHORTAGE IN WEIGHT OF CERTAIN MATERIAL PURCHASED FROM THE U.S. NAVAL AMMUNITION DEPOT, HASTINGS, NEBRASKA, UNDER CONTRACT NO. N60136S-2963, DATED MARCH 14, 1956.

UNDER THE CONTRACT YOU WERE AWARDED SEVERAL ITEMS ON A "PRICE FOR THE LOT" BASIS. PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT PROVIDED THAT THE PROPERTY WAS OFFERED ,AS IS" AND "WHERE IS" AND THAT THE DESCRIPTION WAS BASED ON THE BEST AVAILABLE INFORMATION, BUT THAT THE GOVERNMENT MADE NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO QUANTITY OR WEIGHT. ALSO, THE BIDDERS WERE WARNED, UNDER PARAGRAPH 20 OF THE ADDITIONAL PROVISIONS, MADE A PART OF THE CONTRACT, THAT IN THE EVENT OF ANY VARIATION BETWEEN THE QUANTITY OR WEIGHT LISTED FOR ANY ITEM AND THE QUANTITY OR WEIGHT OF SUCH ITEM TENDERED OR DELIVERED TO THE PURCHASER, NO ADJUSTMENT FOR SUCH VARIATION WOULD BE MADE WHERE AN AWARD WAS MADE ON A "PRICE FOR THE LOT" BASIS.

THE RECORD SHOWS THAT AFTER THE MAILING OF THE BID INVITATIONS AND PRIOR TO BID OPENING, THE NAVAL AMMUNITION DEPOT DISCOVERED THAT SHORTAGES EXISTED IN THE WEIGHTS APPROXIMATED IN THE SALES CATALOG FOR SOME OF THE ITEMS. SINCE TIME DID NOT PERMIT THE MAILING OF AN AMENDMENT TO THE SALES INVITATION, ORAL INFORMATION CONCERNING THE SHORTAGES WAS GIVEN PROSPECTIVE BIDDERS AT THE TIME THE INDIVIDUAL FIRMS MADE INSPECTIONS. THE DEPARTMENT OF THE NAVY HAS REPORTED THAT TWO OF ITS SUPPLY DEPARTMENT REPRESENTATIVES ADVISED YOU BY TELEPHONE, PRIOR TO THE SUBMISSION OF YOUR BID, THAT SHORTAGES DID EXIST AND CAUTIONED YOU TO INSPECT THE MATERIAL. YOU FAILED, HOWEVER, TO MAKE AN INSPECTION AND IMMEDIATELY UPON RECEIPT OF THE MATERIAL INITIATED A CLAIM FOR SHORTAGES IN THE WEIGHT OF ITEMS 5, 21, 26 AND 33. INASMUCH AS THE SALE WAS ON A LOT BASIS AND SINCE THE CONTRACT CONTAINED AN EXPRESS DISCLAIMER OF WARRANTY ON THE PART OF THE GOVERNMENT, YOUR CLAIM WAS DENIED BY THE DEPARTMENT OF THE NAVY.

IN YOUR LETTER OF JULY 2, 1956, YOU DENY THAT THE PERSONNEL OF THE NAVAL AMMUNITION DEPOT INFORMED YOU OF THE SHORTAGES PRIOR TO THE SUBMISSION OF YOUR BID. IN OTHER WORDS, IT APPEARS TO BE YOUR CONTENTION THAT THE GOVERNMENT MISREPRESENTED THE WEIGHT OF CERTAIN OF THE ITEMS OFFERED FOR SALE.

IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND THIS OFFICE THAT AN EXPRESS DISCLAIMER OF WARRANTY--- AS HERE--- VITIATES ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT ARISE OUT OF A SALES TRANSACTION. W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; UNITED STATES V. KELLY, 112 F.SUPP. 831; TRIAD CORPORATION V. UNITED STATES, 63 C.CLS. 151. TO ILLUSTRATE, THE CASE OF MAGUIRE AND COMPANY V. UNITED STATES, 273 U.S. 67, INVOLVED AN "AS IS" SALE OF CLOTH BY THE GOVERNMENT UNDER AN INVITATION WHICH GAVE THE WEIGHT PER YARD OF THE MATERIALS. IT TURNED OUT THAT THE MATERIALS DID NOT CONFORM TO THE SPECIFIED WEIGHT. IN DENYING THE PLAINTIFF RECOVERY, THE UNITED STATES SUPREME COURT HELD THAT THE GIVEN WEIGHT COULD NOT BE CONSIDERED AS A WARRANTY UNDER THE ADVERTISED TERMS OF THE SALE. ALSO, IN LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, AN AGENT FOR THE GOVERNMENT LISTED FOR SALE CERTAIN ITEMS OF JUNK AT SEVERAL LOCATIONS, SETTING FORTH THE WEIGHTS AND KINDS OF EACH. ALTHOUGH THE QUANTITIES TURNED OUT TO BE MUCH LESS THAN THOSE SHOWN IN THE ADVERTISEMENT, THE PLAINTIFFS WERE HELD NOT TO HAVE ANY CAUSE OF ACTION, SINCE, AS STATED BY THE SUPREME COURT, THE MENTIONING OF THE QUANTITIES "CANNOT BE REGARDED AS IN THE NATURE OF A WARRANTY, BUT MERELY AS AN ESTIMATE OF THE PROBABLE AMOUNTS IN REFERENCE TO WHICH GOOD FAITH ONLY COULD BE REQUIRED OF THE PARTY MAKING IT.'

IN VIEW OF THE FOREGOING, THERE EXISTS NO LEGAL BASIS FOR MAKING AN ADJUSTMENT OF THE CONTRACT PRICE BASED UPON A SHORTAGE OF THE ITEMS INVOLVED UNLESS IT CAN BE SHOWN THAT THE REPRESENTATIVES OF THE GOVERNMENT DID NOT ACT IN GOOD FAITH. FROM THE EVIDENCE PRESENTED THERE IS NO REASONABLE BASIS FOR CONCLUDING THAT THE REPRESENTATIVES OF THE GOVERNMENT DID NOT ACT IN GOOD FAITH. ALTHOUGH YOU DENY THAT YOU WERE ADVISED OF THE DISCREPANCY IN THE WEIGHTS, THAT MATTER RESOLVES ITSELF INTO ONE OF A DISPUTED QUESTION OF FACT BETWEEN YOU AND THE ADMINISTRATIVE OFFICE. SUCH A CASE IT IS THE LONG-STANDING PRACTICE OF OUR OFFICE TO RELY UPON THE ACCURACY AND CORRECTNESS OF THE REPORT OF FACTS AS SUBMITTED BY THE ADMINISTRATIVE OFFICE IN THE ABSENCE OF EVIDENCE SUFFICIENT TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS OF THE ADMINISTRATIVE REPORT. THERE IS NOTHING IN THE PRESENT CASE TO REQUIRE OR JUSTIFY A DEPARTURE FROM THAT PRACTICE.

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