B-136586, JUL. 14, 1958

B-136586: Jul 14, 1958

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LTD.: REFERENCE IS MADE TO YOUR LETTER DATED JUNE 20. 396.78 FOR LOSS ALLEGED TO HAVE BEEN SUSTAINED IN CONNECTION WITH THE PURCHASE OF BRASS SCRAP UNDER CONTRACT NO. YOUR BID WAS ACCEPTED AND AFTER MAKING PAYMENT FOR THE MATERIALS AND AFTER TAKING DELIVERY. YOU CONTEND THAT THE MATERIALS AWARDED YOU AS ITEM 1 WERE DESCRIBED AND SOLD AS 100 PERCENT BRASS SHELL CASINGS. 392 POUNDS OF IRON SHEELS WERE REPORTED BY THE REVERE COPPER AND BRASS COMPANY AS HAVING BEEN RECEIVED BY THEM AND YOU HAVE ON HAND AN ADDITIONAL 75 POUNDS SEGREGATED FROM ITEM 1. 396.78 YOUR CLAIM WAS DISALLOWED IN VIEW OF THE CONDITIONS OF SALE AS CONTAINED IN PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT WHICH STATES IN PART THAT: "THE GOVERNMENT MAKES NO GUARANTY.

B-136586, JUL. 14, 1958

TO HONOLULU SUPPLY CO., LTD.:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 20, 1958, REQUESTING REVIEW OF OUR SETTLEMENT OF JUNE 9, 1958, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF $4,396.78 FOR LOSS ALLEGED TO HAVE BEEN SUSTAINED IN CONNECTION WITH THE PURCHASE OF BRASS SCRAP UNDER CONTRACT NO. N-604-S 31627 DATED SEPTEMBER 20, 1957.

IN RESPONSE TO INVITATION NO. B-35-58-604 DATED AUGUST 20, 1957, ISSUED BY THE DISPOSAL DIVISION, NAVAL SUPPLY CENTER, PEARL HARBOR, T.H., YOU SUBMITTED A BID DATED SEPTEMBER 17, 1957, TO PURCHASE 1,682,000 POUNDS BRASS SCRAP (ITEM 1) FOR THE PRICE $0.14513 PER POUND OR FOR A TOTAL PRICE OF $244,108.66. YOUR BID WAS ACCEPTED AND AFTER MAKING PAYMENT FOR THE MATERIALS AND AFTER TAKING DELIVERY, YOU CHARGED THAT THE MATERIALS CONTAINED A QUANTITY OF IRON SHELL CASINGS IN BOTH THE 5 INCH SIZE AND THE 40 MM SIZE.

YOU CONTEND THAT THE MATERIALS AWARDED YOU AS ITEM 1 WERE DESCRIBED AND SOLD AS 100 PERCENT BRASS SHELL CASINGS, WHEREAS THE LOT CONTAINED A TOTAL OF 3,467 POUNDS OF IRON SHELL CASINGS. OF THIS QUANTITY, 3,392 POUNDS OF IRON SHEELS WERE REPORTED BY THE REVERE COPPER AND BRASS COMPANY AS HAVING BEEN RECEIVED BY THEM AND YOU HAVE ON HAND AN ADDITIONAL 75 POUNDS SEGREGATED FROM ITEM 1. YOUR CLAIM FOR REFUND OF $4,396.78 COMPRISES THE FOLLOWING ITEMS:

TABLE

SORTING 1,529,871 POUNDS OF SHELLS AT ?0025 PER POUND $3,824.68

PRICE PAID FOR 3,467 POUNDS OF SHELLS (IRON) 503.16

FREIGHT CHARGES 47.51

COST OF BACKING SHELLS AT ?0062 PER POUND 21.43

$4,396.78

YOUR CLAIM WAS DISALLOWED IN VIEW OF THE CONDITIONS OF SALE AS CONTAINED IN PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT WHICH STATES IN 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 READJUSTMENT OR FOR RESCISSION OF THE SALE BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED.'

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.R. 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 CONDITION OF THE MATERIALS SOLD IS ASSUMED BY THE BUYER AS ONE OF THE ELEMENTS OF THE BARGAIN.

THE RECORD INDICATES THAT THE DISPOSAL OFFICERS WERE NOT AWARE OF THE TRUE NATURE OF THE MATERIALS AND THEREFORE WERE REQUIRED TO RELY UPON THEIR STOCK RECORDS, THE BEST EVIDENCE AVAILABLE, IN LISTING THE ITEM IN THE INVITATION. 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.

WITH REGARD TO YOUR CLAIM FOR AMOUNTS OTHER THAN THE PURCHASE PRICE OF THE MATERIALS YOUR ATTENTION IS INVITED TO PARAGRAPH 11 OF THE GENERAL SALE TERMS AND CONDITIONS WHICH LIMIT THE GOVERNMENT'S LIABILITY TO REFUND OF THE PURCHASE PRICE OF THE PARTICULAR QUANTITY IN CONTROVERSY. WITH REGARD TO YOUR STATEMENT THAT YOU CAN PRODUCE AFFIDAVITS THAT GOVERNMENT OFFICIALS GUARANTEED THE SHELL CASINGS TO BE 100 PERCENT BRASS, YOUR FURTHER ATTENTION IS INVITED TO PARAGRAPH 12 OF THE CONTRACT CONDITIONS TO THE EFFECT THAT ANY ORAL STATEMENT BY ANY REPRESENTATIVE OF THE GOVERNMENT, MODIFYING OR CHANGING ANY CONDITIONS OF THIS CONTRACT, IS AN EXPRESSION OF OPINION ONLY AND CONFERS NO RIGHT UPON THE PURCHASER.

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 JUNE 9, 1958, MUST BE SUSTAINED.