B-135711, JUN. 19, 1958

B-135711, JUN. 19, 1958

TO DALLAS SCRAP BALING CORP.:

REFERENCE IS MADE TO A LETTER DATED MAY 19, 1958, FROM MR. MAX PRESSLER, EXECUTIVE VICE PRESIDENT OF YOUR CORPORATION, REQUESTING RECONSIDERATION OF OUR SETTLEMENT OF MAY 14, 1958, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF $2,940.50, REPRESENTING LOSS ALLEGED TO HAVE BEEN SUSTAINED IN CONNECTION WITH THE PURCHASE OF COPPER WIRE LISTED AS ITEMS 1 AND 9 OF SPOT BID SURPLUS PROPERTY SALE NO. 41-014-S-57-9, BY THE DEPARTMENT OF THE ARMY, OFFICE OF THE QUARTERMASTER, PROPERTY DISPOSAL DIVISION, FORT BLISS, TEXAS.

IT APPEARS THAT UNDER THE CITED CONTRACT YOU AGREED TO PURCHASE AT THE BID PRICE OF $0.268 PER POUND, ALL OF THE MATERIAL IN EACH OF THE TWO LOTS OFFERED FOR SALE UNDER ITEMS NOS. 1 AND 9 OF THE INVITATION, CONSISTING OF A QUANTITY OR ESTIMATED QUANTITY OF 300,000 POUNDS UNDER ITEM 1, AND 35,000 POUNDS UNDER ITEM 9, FOR A TOTAL QUANTITY OF 335,000 POUNDS. LETTER DATED AUGUST 27, 1957, TO THE ADMINISTRATIVE AGENCY YOU MADE FORMAL CLAIM FOR REFUND UNDER THE CONTRACT IN THE AMOUNT OF $2,940.50 BASED ON 8,040 POUNDS OF IRON WIRE RECEIVED. YOU STATED THAT YOUR PORTION OF THE CLAIM AMOUNTS TO $1,993.92 AND THAT THE REMAINDER WAS SHIPPED BY YOU TO CHASE BRASS AND COPPER CO., WATERBURY, CONNECTICUT, AND THIS PORTION OF YOUR CLAIM IS FOR $946.58.

IN YOUR LETTER OF MAY 19, 1958, TO OUR OFFICE YOU STATE THAT ALL PAPERS SUPPLIED TO US WITH YOUR CLAIM AND SUPPORTING EVIDENCE, INDICATES THAT THE MATERIALS IN QUESTION WERE MISREPRESENTED IN THE SALE BUT THAT YOU DO NOT CONTEND THIS WAS INTENTIONAL. YOU DO NOT CLAIM A SHORTAGE IN THE QUANTITY OF MATERIALS DELIVERED BUT FOR A VARIANCE BETWEEN THE KIND, CHARACTER OR QUALITY OF THE MATERIAL DELIVERED AND THE ADVERTISED DESCRIPTION IN THE BID INVITATION; THAT IS, THAT A PORTION OF THE TWO LOTS OF MATERIAL DELIVERED WAS NOT BARE COPPER WIRE, BUT WIRE CONTAINING IRON. IT IS NOTED THAT THE ACQUISITION COST OF THE BARE COPPER WIRE WAS STATED AS $0.60 PER POUND.

PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT PROVIDES, IN PERTINENT PART, THAT THE MATERIAL IS OFFERED FOR SALE "AS IS" AND "WHERE IS," WITHOUT RECOURSE AGAINST THE GOVERNMENT, AND THAT THE DESCRIPTION IS BASED UPON THE BEST AVAILABLE INFORMATION, BUT THAT THE GOVERNMENT MAKES NO GUARANTY, WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE OR DESCRIPTION THEREOF, OR ITS FITNESS FOR ANY USE OR PURPOSE, AND THAT NO CLAIM WILL BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED. THE ADMINISTRATIVE AGENCY HAS REPORTED THAT THE DESCRIPTION FURNISHED OF THE MATERIAL IN QUESTION WAS MADE IN GOOD FAITH, FROM AVAILABLE INFORMATION.

IN CONSTRUING THAT CONTRACT STIPULATION IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND OUR OFFICE THAT SUCH A PROVISION CONSTITUTES AN EXPRESS DISCLAIMER OF WARRANTY AND NO WARRANTY MAY BE IMPLIED. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525 AND W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676. THOSE CASES, ALSO INVOLVING A VARIANCE IN THE CONDITION OF THE PROPERTY FROM THAT OF THE DESCRIPTION IN THE INVITATION, CONCLUDE THAT UNDER SUCH CIRCUMSTANCES BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT, ANY WARRANTIES WHATSOEVER. IN DISPOSING OF SURPLUS PROPERTY THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS UNAWARE OF THE QUALITY OR CONDITION OF THE MATERIALS IT SELLS. THAT FACT IS MADE KNOWN TO ALL BIDDERS BY THE "AS IS" TERMS OF THE CONTRACT WHEREBY THE PARTIES AGREE THAT THE RISK AS TO THE CONDITION OF THE MATERIALS SOLD IS ASSUMED BY THE BUYER AS ONE OF THE ELEMENTS OF THE BARGAIN. YOU WERE AWARE THAT SALVAGE PROPERTY WAS BEING OFFERED FOR SALE AND IF YOU WERE NOT WILLING TO ASSUME THE RISK INVOLVED, YOUR ALTERNATIVE WOULD HAVE BEEN NOT TO SUBMIT A BID.

THE RECORD SHOWS THAT THE DISPOSAL OFFICERS WERE NOT AWARE OF THE TRUE NATURE OF THE MATERIAL AND THEREFORE WERE REQUIRED TO RELY UPON THEIR STOCK RECORDS, THE BEST EVIDENCE AVAILABLE, IN LISTING THE ITEM IN THE INVITATION. NOTWITHSTANDING SUCH DESCRIPTION, THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE CONTRACTING OFFICER OR HIS AGENTS ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE ENTIRE TRANSACTION.

IN VIEW OF THE FACTS OF RECORD AND THE APPLICABLE LAW THERE IS NO LEGAL BASIS UPON WHICH ANY PART OF THE PURCHASE PRICE MAY BE REFUNDED, AND, THEREFORE, THE SETTLEMENT OF MAY 14, 1958, MUST BE SUSTAINED.