B-142512, MAY 2, 1960

B-142512: May 2, 1960

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TO THE BREMAN IRON AND METAL CO.: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MARCH 25. YOUR REQUEST FOR REVIEW APPEARS TO BE BASED SOLELY ON THE ALLEGATION THAT THE MATERIAL IN ITEM NO. 15 PURCHASED BY YOU WAS MISREPRESENTED IN THE BID INVITATION SINCE IT WAS DESCRIBED THEREIN AS "SCRAP CABLE AND WIRE: NON- FERROUS. "BUT THE MATERIAL DELIVERED TO YOU WAS "ONLY FERROUS.'. THE RIGHTS AND LIABILITIES OF THE PARTIES UNDER A PARTICULAR CONTRACT ARE OF COURSE LIMITED TO THE TERMS OF THE CONTRACT. THE INVITATION WAS ON STANDARD FORM 114 REVISED. " STIPULATED THAT ALL PROPERTY LISTED IN THE INVITATION WAS OFFERED FOR SALE "AS IS" AND "WHERE IS. THAT THE DESCRIPTION WAS BASED ON THE BEST AVAILABLE INFORMATION BUT THE GOVERNMENT MADE NO GUARANTY.

B-142512, MAY 2, 1960

TO THE BREMAN IRON AND METAL CO.:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MARCH 25, 1960, IN THE NATURE OF A REQUEST FOR REVIEW OF OUR CLAIMS DIVISION SETTLEMENT DATED MARCH 15, 1960, WHICH DISALLOWED YOUR CLAIM FOR REIMBURSEMENT OF $207.60 REPRESENTING THE PURCHASE PRICE OF SCRAP CABLE AND WIRE, ITEM NO. 15 OF SALES CONTRACT NO. N67004-3168 (BID INVITATION NO. B-10-60 DATED OCTOBER 5, 1959).

YOUR REQUEST FOR REVIEW APPEARS TO BE BASED SOLELY ON THE ALLEGATION THAT THE MATERIAL IN ITEM NO. 15 PURCHASED BY YOU WAS MISREPRESENTED IN THE BID INVITATION SINCE IT WAS DESCRIBED THEREIN AS "SCRAP CABLE AND WIRE: NON- FERROUS, SLIGHTLY CONTAMINATED, "BUT THE MATERIAL DELIVERED TO YOU WAS "ONLY FERROUS.'

THE RIGHTS AND LIABILITIES OF THE PARTIES UNDER A PARTICULAR CONTRACT ARE OF COURSE LIMITED TO THE TERMS OF THE CONTRACT. SEE 3 COMP. GEN. 54. THE INSTANT CASE, THE INVITATION WAS ON STANDARD FORM 114 REVISED, AUGUST 1950, AND CONTAINED THE USUAL GENERAL SALE TERMS AND CONDITIONS WHICH BECAME A MATERIAL PART OF THE CONTRACT. PARAGRAPH 1 OF THAT DOCUMENT INVITED AND URGED BIDDERS TO INSPECT THE PROPERTY PRIOR TO THE SUBMISSION OF BIDS, AND PROVIDED THAT IN NO CASE WOULD FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING. PARAGRAPH 2,"CONDITION OF PROPERTY," STIPULATED THAT ALL PROPERTY LISTED IN THE INVITATION WAS OFFERED FOR SALE "AS IS" AND "WHERE IS," AND WITHOUT RECOURSE AGAINST THE GOVERNMENT; THAT THE DESCRIPTION WAS BASED ON THE BEST AVAILABLE INFORMATION BUT THE GOVERNMENT MADE 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 THAT NO CLAIM WOULD BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT OR FOR RESCISSION OF THE SALE BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED.

THE COURTS MANY TIMES HAVE CONSIDERED SUCH CONTRACT STIPULATIONS IN CASES INVOLVING THE SALE OF GOVERNMENT-OWNED SURPLUS AND SCRAP GOODS AND HAVE HELD CONSISTENTLY THAT SUCH LANGUAGE CONSTITUTES AN EXPRESS DISCLAIMER OF WARRANTY. SEE LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, 92; M. SAMUEL AND SONS V. UNITED STATES, 61 C.CLS. 373, 381; TRIAD CORPORATION V. UNITED STATES, 63 C.CLS. 151; S. BRODY V. UNITED STATES, 64 C.CLS. 538; I. SHAPIRO AND CO. V. UNITED STATES, 66 C.CLS. 424, 428; AND SILBERSTEIN AND SON V. UNITED STATES, 69 C.CLS. 412. WHILE ORDINARILY IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION THERE IS AN IMPLIED WARRANTY THAT THE PROPERTY WILL CORRESPOND WITH THE DESCRIPTION--- AND THIS APPEARS TO BE THE BASIS OF YOUR CLAIM--- NO SUCH WARRANTY, HOWEVER, MAY BE IMPLIED WHERE, AS HERE, THE SALES CONTRACT CONTAINS AN EXPRESS DISCLAIMER. MOREOVER, THE GOVERNMENT IN DISPOSING OF ITS SURPLUS PROPERTY IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS IGNORANT OF THE TRUE DESCRIPTION OF THE GOODS IT SELLS. LUMBRAZO V. WOODRUFF, 175 N.E. 525; UNITED STATES V. KELLY, 112 F.SUPP. 831; AND MAGUIRE AND CO. V. UNITED STATES, 273 U.S. 67. THESE CASES AND OTHERS CONCLUDE THAT UNDER SUCH PROVISIONS, IN THE ABSENCE OF BAD FAITH OR FRAUD, BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT ANY WARRANTIES WHATEVER.

YOUR COMPLAINT RELATES SPECIFICALLY TO THE KIND OR CHARACTER OF THE MATERIAL DELIVERED TO YOU UNDER THE SALE CONTRACT, THAT IS, THAT IT IS FERROUS INSTEAD OF NON-FERROUS AS DESCRIBED IN THE BID INVITATION. THE MATERIAL WAS DESCRIBED IN THE INVITATION ACCORDING TO WHAT THE GOVERNMENT BELIEVED IT TO BE, AND IT DOES NOT APPEAR THAT THE CONTRACTING OFFICER, AT THE TIME OF HIS ACCEPTANCE OF YOUR BID AND AWARD OF THE SALE OF ITEM NO. 15 TO YOU, WAS AWARE THAT THE MATERIAL IN QUESTION WAS AT VARIANCE WITH THE DESCRIPTION. THAT OFFICER HAS STATED THAT INSPECTION OF THE MATERIAL BY NUMEROUS BIDDERS WAS MADE PRIOR TO OPENING OF BIDS, WITH NO CORRECTIVE COMMENTS BEING RECEIVED FROM THEM AS TO THE DESCRIPTION. THE MATERIAL IN ITEM NO. 15 WAS DESCRIBED AS CABLE AND WIRE AND YOU ADMIT THAT "WIRE" ROPE WAS DELIVERED TO YOU. YOU HAVE NOT SUBMITTED ANY EVIDENCE SUBSTANTIATING, AND THERE IS NOTHING IN THE RECORD OTHERWISE INDICATING, ANY WILLFUL MISREPRESENTATION ON THE PART OF THE GOVERNMENT IN THE SALE TRANSACTION. UNDER THE CONDITIONS OF THE SALE THE GOVERNMENT WAS ONLY OBLIGED TO ACT IN GOOD FAITH, AND THIS IT DID. SEE LIPSHITZ AND COHEN, V. UNITED STATES AND LUMBRAZO V. WOODRUFF, SUPRA; ALSO, SEE UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683; AFFIRMED 253 F.2D 956.

FURTHERMORE, THE RECORD SHOWS THAT YOU MADE NO INSPECTION OF THE MATERIAL IN ITEM NO. 15 PRIOR TO THE SUBMISSION OF YOUR BID, AS ALL PROSPECTIVE BIDDERS WERE CAUTIONED TO DO. ACCORDINGLY, THE FACTS IN THE INSTANT CASE FALL SQUARELY WITHIN THE PRINCIPLE OF LAW ANNOUNCED BY THE UNITED STATES COURT OF CLAIMS IN THE TRIAD CORPORATION CASE, SUPRA, WHEREIN THE COURT REJECTED THE PLAINTIFF'S CLAIM AND STATED, AT PAGE 156, THAT:

"THE PLAINTIFF DID NOT TAKE ADVANTAGE OF ITS RIGHT TO INSPECT BUT BOUGHT THE LOT WITHOUT INSPECTING IT.

"UNDER THE TERMS OF THE CATALOGUE IT IS DIFFICULT TO PERCEIVE HOW THE GOVERNMENT COULD HAVE GIVEN PURCHASERS MORE SPECIFIC WARNING THAN IT DID, THAT THEY BOUGHT AT THEIR RISK WHAT MATERIAL IT HAD AND WAS OFFERING FOR SALE; THAT IF A PURCHASER WISHED TO PROTECT HIMSELF HE COULD DO SO BY INSPECTION, FULL OPPORTUNITIES FOR WHICH WERE OFFERED, AND THAT IF HE FAILED TO INSPECT AND RECEIVED SOMETHING OTHER THAN WHAT HE THOUGHT HE WAS BUYING HE COULD HAVE NO REDRESS AND COULD NOT CLAIM ALLOWANCES BY REASON THEREOF. MORE THAN THAT, HE WAS DISTINCTLY TOLD THAT FAILURE TO INSPECT WOULD NOT BE CONSIDERED AS A GROUND FOR ADJUSTMENT. IF PLAINTIFF NEGLECTED TO EMBRACE THE OPPORTUNITY OFFERED IT TO INSPECT AND PURCHASED THE PROPERTY WITHOUT DOING SO, WITH NOTICE THAT IT BOUGHT AT ITS OWN RISK, IT CREATED BY ITS OWN NEGLIGENCE THE SITUATION FROM WHICH IT NOW SEEKS RELIEF.'

IN THE RECENT CASE OF PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463, WHERE THE FACTS ARE VERY SIMILAR, THE COURT ALSO SAID:

"A BIDDER FAILS TO INSPECT AT HIS PERIL. HAD PLAINTIFF MADE AN INSPECTION BEFORE MAKING ITS BID, AS IT DID AFTERWARDS, IT COULD HAVE DISCOVERED THAT MUCH OF THE MATERIAL WAS MALLEABLE IRON. VISUAL INSPECTION WAS INEFFECTUAL, BUT MICROSCOPIC INSPECTION WAS EFFECTUAL, AS WAS ALSO CHEMICAL ANALYSIS. PLAINTIFF WAS REQUIRED TO MAKE THE SORT OF INSPECTION THAT WAS EFFECTUAL. IT MADE NONE, NOT EVEN A VISUAL INSPECTION. ITS FAILURE TO DO SO LEAVES IT NO ROOM TO COMPLAIN.'

IN VIEW OF THE FOREGOING, THERE IS NO LEGAL BASIS FOR AUTHORIZING A REFUND OF ANY PART OF THE AMOUNT REPRESENTING THE PURCHASE PRICE OF THE MATERIAL IN ITEM NO. 15 ON SALE CONTRACT NO. ..END :