B-129271, OCT. 31, 1956

B-129271: Oct 31, 1956

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 31. WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR $4. 487.30 IS CLAIMED BECAUSE OF THE DIFFERENCE IN VALUE OF THE MATERIAL OFFERED FOR SALE BY THE GOVERNMENT AND THE VALUE OF THE MATERIAL SENT TO YOU. 213 WAS ACCEPTED BY THE SHIPYARD ON MARCH 26. INCLUDED IN THIS AWARD WAS LOT NO. 2. WHICH SUBSEQUENTLY WAS DIRECTED BY THE PUGET SOUND NAVAL SHIPYARD TO YOU WAS DIVERTED TO YOUR CUSTOMER. WHO REJECTED THE SHIPMENT ON THE GROUND THAT IT WAS CONTAMINATED WITH BRASS. YOU NOW ARE CLAIMING A PARTIAL REFUND OF $2. THAT YOUR REQUEST FOR REVIEW IS BASED PRIMARILY ON YOUR CONTENTIONS THAT THE NAVY MANUAL STIPULATES THE GRADES AND TYPES OF SUCH MATERIALS THAT CAN BE.

B-129271, OCT. 31, 1956

TO ALASKA JUNK COMPANY OF SEATTLE, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 31, 1956, REQUESTING REVIEW OF SETTLEMENT DATED AUGUST 22, 1956, WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR $4,321.19 UNDER CONTRACT NO. N251S-8458 A, DATED MARCH 26, 1956. OF THIS SUM THE AMOUNT OF $2,487.30 IS CLAIMED BECAUSE OF THE DIFFERENCE IN VALUE OF THE MATERIAL OFFERED FOR SALE BY THE GOVERNMENT AND THE VALUE OF THE MATERIAL SENT TO YOU.

IN RESPONSE TO INVITATION NO. B-44-56, ISSUED BY THE PUGET SOUND NAVAL SHIPYARD, BREMERTON, WASHINGTON, YOU SUBMITTED A BID DATED MARCH 20, 1956, OFFERING TO PURCHASE VARIOUS LOTS OF SCRAP MATERIAL ON A POUND BASIS FOR THE ESTIMATED QUANTITIES UNDER EACH LOT. YOUR BID ON FIVE LOTS FOR A TOTAL PRICE OF $27,213 WAS ACCEPTED BY THE SHIPYARD ON MARCH 26, 1956. INCLUDED IN THIS AWARD WAS LOT NO. 2, COVERING AN ESTIMATED 25,000 POUNDS OF SCRAP ALUMINUM AT $0.2269 PER POUND. IT APPEARS THAT THE SHIPMENT OF LOT NO. 2, WHICH SUBSEQUENTLY WAS DIRECTED BY THE PUGET SOUND NAVAL SHIPYARD TO YOU WAS DIVERTED TO YOUR CUSTOMER, THE KAISER ALUMINUM COMPANY AT TRENTWOOD, WASHINGTON, WHO REJECTED THE SHIPMENT ON THE GROUND THAT IT WAS CONTAMINATED WITH BRASS, IRON, COPPER, STAINLESS STEEL AND OTHER FOREIGN SUBSTANCES. IN VIEW OF THIS YOU RETURNED THE SHIPMENT TO THE PUGET SOUND NAVAL SHIPYARD, TRANSPORTATION COLLECT. UPON BEING INFORMED BY THE SHIPYARD THAT THE RETURNED CAR WOULD NOT BE UNLOADED AND THAT ANY FREIGHT CHARGES INCURRED WOULD BE CHARGEABLE TO YOUR ACCOUNT, YOU HAD THE SHIPMENT RECALLED. YOU NOW ARE CLAIMING A PARTIAL REFUND OF $2,487.30 OF THE TOTAL PURCHASE PRICE PAID FOR LOT NO. 2, PLUS $1,833.89 TO COVER SUCH ADDITIONAL ALLEGED COSTS INVOLVED IN PROCESSING, GRADING, TRANSPORTATION, ETC., MADE NECESSARY BY REASON OF THE CONTAMINATION OF THIS LOT OR A TOTAL OF $4,321.19.

IT APPEARS FROM YOUR LETTER OF AUGUST 31, 1956, THAT YOUR REQUEST FOR REVIEW IS BASED PRIMARILY ON YOUR CONTENTIONS THAT THE NAVY MANUAL STIPULATES THE GRADES AND TYPES OF SUCH MATERIALS THAT CAN BE, AND SHOULD HAVE BEEN, INCLUDED IN LOT NO. 2; THAT THE GENERAL WARRANTY RELIED UPON IN THE SETTLEMENT WILL NOT, IN THE FINAL ANALYSIS, PROTECT THE GOVERNMENT UNDER THE CIRCUMSTANCES IN THIS CASE; AND THAT IT IS YOUR PERSONAL OPINION THAT LOT NO. 2 WAS DELIBERATELY CONTAMINATED.

IN THE FIRST INSTANCE IT MIGHT BE STATED THAT COPIES OF ALL OF THE CORRESPONDENCE FORWARDED WITH YOUR LETTER OF AUGUST 31, 1956, WERE IN THERECORDS OF OUR OFFICE AND WERE FULLY CONSIDERED PRIOR TO REACHING THE CONCLUSION SET FORTH IN OUR SETTLEMENT OF AUGUST 22, 1956.

IN A CASE COVERED BY A CONTRACT SUCH AS HERE INVOLVED THE SOLE ISSUE IS WHETHER THE GOVERNMENT DOES OR DOES NOT WARRANT THE PROPERTY SOLD. THIS CONNECTION, ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS, WHICH APPLIES TO THE CONDITION OF THE PROPERTY, EXPRESSLY STATES:

"ALL PROPERTY LISTED HEREIN IS OFFERED FOR SALE "AS IS" AND "WHERE IS," AND WITHOUT RECOURSE AGAINST THE GOVERNMENT. * * * 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. ALSO, 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 LUMBRAZO 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. WHILE YOU ADVANCE THE PERSONAL OPINION THAT THE SCRAP ALUMINUM UNDER LOT NO. 2 WAS DELIBERATELY CONTAMINATED THERE IS NOTHING IN THE RECORD TO SHOW, OR EVEN REMOTELY INDICATE, THAT ANY FORM OF BAD FAITH MAY BE ATTRIBUTED TO GOVERNMENT OFFICIALS IN CONNECTION WITH THE SALE. THE RECORD DOES SHOW, HOWEVER, THAT NOTWITHSTANDING THAT THERE WAS SOME CONTAMINATION OF LOT NO. 2--- THE REMELT SUPERINTENDENT OF THE KAISER ALUMINUM COMPANY ESTIMATED A MERE ONE OR TWO PERCENT OF CONTAMINATION AT THE MOST WHICH YOU ALLEGE WAS ONLY AN ESTIMATE OF THE FOREIGN MATERIAL WHICH HAD NO ALUMINUM ATTACHED TO IT--- YOU DID RECEIVE SCRAP ALUMINUM WHICH WAS THE SPECIFIC PROPERTY OFFERED FOR SALE. MOREOVER, WHILE THE NAVY MANUAL MAY BE USED AS A GUIDE IN ADVERTISING SUCH PROPERTY FOR SALE, THE INSTRUCTIONS THEREIN ARE NOT INTENDED, AND MAY NOT BE ACCEPTED, AS CONTROLLING UNDER A CONTRACT CONTAINING AN EXPRESS DISCLAIMER OF WARRANTY PROVISION.