B-144886, FEB. 21, 1961

B-144886, FEB. 21, 1961

TO CHEMICAL SERVICE CORPORATION:

REFERENCE IS MADE TO YOUR LETTERS DATED JANUARY 3 AND 19, AND FEBRUARY 6, 1961, CONCERNING YOUR REQUEST FOR REVIEW OF OUR SETTLEMENT DATED DECEMBER 21, 1960, WHICH DISALLOWED YOUR CLAIM FOR $2,769.05 IN CONNECTION WITH SALES CONTRACT NO. N665S-49328 AWARDED TO YOU ON MAY 18, 1960, BY THE UNITED STATES NAVAL SUPPLY DEPOT CLEAR FIELD, OGDEN, UTAH.

YOUR LETTER OF JANUARY 3, 1961, IN SUBSTANCE, RESTATES THE CONTENTIONS EXPRESSED IN PREVIOUS CORRESPONDENCE BUT IT CONTAINS NO INFORMATION OR DATA IN ADDITION TO THAT PREVIOUSLY FURNISHED BY YOU. THE CONTENTIONS URGED BY YOU IN THE MATTER HAVE RECEIVED CAREFUL CONSIDERATION AND, FOR THE REASONS SET FORTH IN THE CERTIFICATE OF SETTLEMENT, NO LEGAL AUTHORITY WAS FOUND FOR THE ALLOWANCE OF YOUR CLAIM.

YOUR REQUEST FOR REVIEW OF OUR ACTION IN DISALLOWING YOUR CLAIM APPEARS TO BE BASED SOLELY ON YOUR ALLEGATION THAT THE MATERIAL DELIVERED TO YOU UNDER ITEM NO. 11 OF THE CONTRACT WAS DIFFERENT THAN THAT DESCRIBED IN THE BID INVITATION. IN YOUR LETTER OF JANUARY 3, 1961, YOU STATE THAT "IF ANY REASONABLE INSPECTION HAD BEEN MADE BY THE DEPOT, THEY WOULD READILY HAVE SEEN THE CONDITIONS WE REFER TO; " AND THAT "THIS IS SO BLATANT A MISDESCRIPTION OF THE OFFERING THAT WE ARE QUITE SURE THAT THE COURTS WOULD DECIDE IN A DIFFERENT MANNER IN THIS CASE THAN WHAT YOU INDICATE IN THE LAST PARAGRAPH OF YOUR LETTER.'

IN SUCH A CLAIM THE PRINCIPAL ISSUE TO BE CONSIDERED IS WHETHER THE GOVERNMENT DID OR DID NOT WARRANT THE PROPERTY. IN THIS REGARD YOUR ATTENTION IS AGAIN DIRECTED TO PARAGRAPH 2. CONDITION OF PROPERTY OF THE GENERAL SALE TERMS AND CONDITIONS OF THE BID INVITATION (PAGE 2), WHEREIN IT IS EXPRESSLY PROVIDED THAT ALL PROPERTY LISTED IS OFFERED FOR SALE "AS IS" AND "WHERE IS," AND WITHOUT RECOURSE AGAINST THE GOVERNMENT; THAT THE GOVERNMENT MAKES NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO KIND, CHARACTER, QUALITY, DESCRIPTION, ETC., OF ANY OF THE PROPERTY, OR ITS FITNESS FOR ANY USE OR PURPOSE; THAT 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; AND THAT THIS IS NOT A SALE BY SAMPLE.

IT IS EVIDENT, THEREFORE, THAT YOU HAD ACTUAL NOTICE OF THE FACT THAT THIS WAS NOT A SALE BY SAMPLE AND THAT THE GOVERNMENT'S DESCRIPTION OF THE PROPERTY BEING SOLD UNDER ITEM NO. 11 WAS NOTHING MORE THAN A MERE STATEMENT OF OPINION. MOREOVER, WHILE THE DESCRIPTION OF THE PROPERTY IN QUESTION MAY NOT HAVE BEEN ENTIRELY ACCURATE, YOU DO NOT ALLEGE, AND THERE IS NOTHING IN THE RECORD TO INDICATE, THAT IT WAS INTENTIONALLY MISDESCRIBED IN THE INVITATION TO BID, OR THAT THE GOVERNMENT AGENTS ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE SALES 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, 269 U.S. 90, 92; LUMBRAZO V. WOODRUFF, 175 N.E. 525; AND UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, AFFIRMED 253 F.2D 956.

MOREOVER, THE RECORD FURTHER INDICATES THAT YOU MADE ONLY A PARTIAL INSPECTION OF THE MATERIAL OF ITEM NO. 11 PRIOR TO SUBMITTING YOUR BID THEREON, AND YOU DO NOT ALLEGE THAT YOU WERE PREVENTED BY THE GOVERNMENT FROM MAKING A COMPLETE INSPECTION OF THE MATERIAL. THE FACTS IN THIS CASE ARE SIMILAR TO THOSE CONSIDERED IN THE RECENT CASE OF KRUPP V. FEDERAL HOUSING ADMINISTRATION, 185 F.SUPP. 638, WHEREIN THE COURT STATED THAT IT IS CLEAR THAT THE GOVERNMENT AND ITS AGENCIES IN THE DISPOSAL OF EXCESS PROPERTY ARE NOT TO BE PLACED ON THE SAME FOOTING AS THE ORDINARY COMMERCIAL VENDOR. WHERE THE GOVERNMENT AGENCY DISPOSING OF SUCH PROPERTY MAKES IT CLEAR THAT IT IS MAKING THE SALE ONLY ON THE BASIS THAT THE PROPERTY IS BEING SOLD ON AN "AS IS" BASIS, AND THAT THE PURCHASER IS TO RAKE THE PROPERTY AT HIS OWN RISK WITH DUE OPPORTUNITY FOR INSPECTION BEING AFFORDED HIM SUCH A CONTRACT IS TO BE STRICTLY INTERPRETED IN FAVOR OF THE GOVERNMENT. THE PURCHASER WHO RELIES ON INFORMATION FURNISHED HIM BY THE GOVERNMENT UNDER THOSE CONDITIONS AND FAILS TO INSPECT OR DOES NOT FULLY INSPECT DOES SO AT HIS OWN RISK; AND EVEN IF HE MAKES A BAD BARGAIN BECAUSE OF DEFECTS IN THE PROPERTY WHICH EVEN A REASONABLY CAREFUL INSPECTION WOULD NOT DISCLOSE, THE RISK OF LOSS STILL FALLS ON HIM; AND THAT IF HE IS MISLED BY HIS RELIANCE ON ANY STATEMENT OF THE SELLER AS TO THE PROPERTY THIS IS THE RISK WHICH HE KNEW OR SHOULD HAVE KNOWN HE WAS TAKING BECAUSE THE PROSPECTUS CLEARLY WARNED HIM THAT THE SALE WAS BEING MADE ON THOSE TERMS. SEE ALSO TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151; AND PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463.

IN VIEW OF THE FOREGOING, THERE IS NO LEGAL BASIS FOR GRANTING ANY RELIEF UNDER CONTRACT NO. N665S-49328, AND OUR SETTLEMENT DATED DECEMBER 21, 1960, IS SUSTAINED.

IN RESPONSE TO YOUR INQUIRY AS TO LEGAL ACTION IN THE MATTER, YOUR ATTENTION IS INVITED TO 28 U.S.C. 1346 AND 1491 PERTAINING TO CLAIMS AGAINST THE UNITED STATES GENERALLY WHICH ARE COGNIZABLE IN THE DISTRICT COURTS AND THE COURT OF CLAIMS OF THE UNITED STATES.