B-143625, AUG. 19, 1960

B-143625: Aug 19, 1960

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TO AMERICAN NICKEL ALLOY MANUFACTURING CORP.: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JULY 22. WHICH WAS ISSUED ON FEBRUARY 26. WAS ACCEPTED ON MARCH 21. PAYMENT WAS MADE BY YOU IN THE AMOUNT OF $2. WHICH IS THE VALUE YOU PLACE ON THE 93.91 PERCENT NICKEL. YOUR REQUEST FOR REVIEW OF THE SETTLEMENT IS BASED ON THE CONTENTION THAT THE BUREAU OF ENGRAVING AND PRINTING ADVERTISED THE MATERIAL AS "PURE NICKEL SCRAP" AND THAT THIS IS A CLEARLY DEFINED QUALITY. 214 POUNDS OF NICKEL SCRAP WAS A HIDDEN DEFICIENCY WHICH COULD NOT HAVE BEEN DISCOVERED BY INSPECTION BUT ONLY BY A CHEMICAL ANALYSIS. THE PRINCIPAL QUESTION IN CASES OF THIS KIND IS WHETHER THE GOVERNMENT DID OR DID NOT WARRANT THE PROPERTY SOLD.

B-143625, AUG. 19, 1960

TO AMERICAN NICKEL ALLOY MANUFACTURING CORP.:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JULY 22, 1960, REQUESTING REVIEW OF OUR SETTLEMENT DATED JULY 20, 1960, DISALLOWING YOUR CLAIM FOR $124.81 UNDER A CONTRACT OF SALE ARISING OUT OF INVITATION NO. BEP-S-12.

IN RESPONSE TO THE INVITATION, WHICH WAS ISSUED ON FEBRUARY 26, 1960, BY THE BUREAU OF ENGRAVING AND PRINTING, TREASURY DEPARTMENT, WASHINGTON, D.C., YOU SUBMITTED A BID DATED MARCH 14, 1960, OFFERING TO PURCHASE ITEM NO. 1, COVERING APPROXIMATELY 3,824 POUNDS OF PURE NICKEL SCRAP AT $0.60281 A POUND, OR FOR A TOTAL PRICE OF $2,305.15. YOUR BID, BEING THE HIGHEST RESPONSIVE BID RECEIVED, WAS ACCEPTED ON MARCH 21, 1960, AND PAYMENT WAS MADE BY YOU IN THE AMOUNT OF $2,305.15. SUBSEQUENT TO DELIVERY YOU ALLEGED THAT 1,214 POUNDS OF THE NICKEL SCRAP CONTAINED ONLY 93.91 PERCENT NICKEL INSTEAD OF THE PURE NICKEL, AS ADVERTISED IN THE INVITATION. YOU, THEREFORE, CLAIM THE DIFFERENCE ON THE 1,214 POUNDS BETWEEN YOUR BID OF $0.60281 A POUND AND $0.50 A POUND, WHICH IS THE VALUE YOU PLACE ON THE 93.91 PERCENT NICKEL, OR $124.81.

YOUR REQUEST FOR REVIEW OF THE SETTLEMENT IS BASED ON THE CONTENTION THAT THE BUREAU OF ENGRAVING AND PRINTING ADVERTISED THE MATERIAL AS "PURE NICKEL SCRAP" AND THAT THIS IS A CLEARLY DEFINED QUALITY; ALSO, YOU POINT OUT THAT THE INFERIOR QUALITY OF THE 1,214 POUNDS OF NICKEL SCRAP WAS A HIDDEN DEFICIENCY WHICH COULD NOT HAVE BEEN DISCOVERED BY INSPECTION BUT ONLY BY A CHEMICAL ANALYSIS.

THE PRINCIPAL QUESTION IN CASES OF THIS KIND IS WHETHER THE GOVERNMENT DID OR DID NOT WARRANT THE PROPERTY SOLD. IN THIS REGARD, YOUR ATTENTION IS AGAIN DIRECTED TO ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE INVITATION WHEREIN, AS POINTED OUT IN OUR SETTLEMENT OF JULY 20, 1960, IT IS EXPRESSLY PROVIDED THAT THE GOVERNMENT MAKES NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO KIND, CHARACTER, QUALITY, ETC., OF THE PROPERTY OFFERED FOR SALE. IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND OUR OFFICE THAT, IN THE ABSENCE OF BAD FAITH, SUCH AN EXPRESS DISCLAIMER OF WARRANTY VITIATES ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT ARISE OUT OF A SALES TRANSACTION. 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 CT. CL. 151; AND I. SHAPIRO AND COMPANY V UNITED STATES, 66 CT. CL. 424.

MOREOVER, THE REASON ADVANCED BY YOU AS JUSTIFICATION FOR YOUR FAILURE TO INSPECT WOULD APPEAR TO BE WITHOUT MERIT. WHILE WE DO NOT QUESTION THAT A CHEMICAL ANALYSIS WOULD HAVE BEEN NECESSARY TO DETERMINE THE EXACT PERCENTAGE OF NICKEL CONTAINED IN THE MATERIAL OFFERED FOR SALE, THE REPORT FROM THE BUREAU OF ENGRAVING AND PRINTING ON THE MATTER INDICATES THAT HAD YOU REQUESTED PERMISSION TO MAKE SUCH AN ANALYSIS, SAMPLE SCRAPINGS OF THE NICKEL SCRAP WOULD HAVE BEEN MADE AVAILABLE TO YOU FOR THAT PURPOSE. IN ANY EVENT, WHERE A BIDDER FAILS TO MAKE AN INSPECTION UNDER SUCH A CONTRACT OF SALE IT MUST BE CONCLUDED THAT HE HAS ELECTED TO ASSUME ANY RISK WHICH MIGHT EXIST BY REASON OF A VARIANCE BETWEEN THE DESCRIPTION OF THE PROPERTY SET FORTH IN THE INVITATION AND THE PROPERTY ACTUALLY DELIVERED. THE BIDDER'S RESPONSIBILITIES IN THIS CONNECTION APPEAR TO BE CLEARLY SET FORTH IN PAXTON-MITCHELL COMPANY V UNITED STATES, 172 F.SUPP. 463, WHEREIN IT WAS HELD THAT, NOTWITHSTANDING THE DIFFICULTIES ATTENDANT UPON AN INSPECTION, IT IS INCUMBENT UPON THE BIDDER TO MAKE THE SORT OF INSPECTION THAT IS EFFECTUAL.