B-147469, NOV. 16, 1961

B-147469: Nov 16, 1961

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TO THE BALTIMORE FIBRE COMPANY: REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 17. AMONG WHICH WAS ITEM NO. 6. YOUR COMPANY WAS THE HIGHEST BIDDER FOR THIS ITEM AT THE BID PRICE OF $1. 22 BALES OF WASTE WERE SHIPPED TO AND RECEIVED BY YOUR COMPANY FOR WHICH FULL PAYMENT WAS MADE. THAT UPON EXAMINATION IT WAS FOUND THAT ALMOST ALL OF THE BALES CONTAINED MISCELLANEOUS WASTE SUCH AS COLORED THREADS. THE LAST OF WHICH WAS A LETTER DATED JUNE 13. FOR THE REASONS STATED YOUR CLAIM WAS ADMINISTRATIVELY DENIED. THE BASIS FOR REQUESTING RECONSIDERATION OF THE SETTLEMENT ACTION TAKEN IN THIS CASE IS THAT IT WAS IMPRACTICABLE TO INSPECT THE MATERIAL SINCE THE COST WOULD HAVE BEEN PROHIBITIVE. YOU URGE THAT THE GOVERNMENT SHOULD ACCEPT SOME RESPONSIBILITY IN SUCH MATTERS AND SHOULD NOT "MAINTAIN THE HARD AND FAST RULE THAT ALL BIDS ARE ON AN "AS IS.

B-147469, NOV. 16, 1961

TO THE BALTIMORE FIBRE COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 17, 1961, REQUESTING RECONSIDERATION OF SETTLEMENT DATED OCTOBER 3, 1961, BY WHICH OUR CLAIMS DIVISION DISALLOWED YOUR CLAIM FOR THE SUM OF $520.78, REPRESENTING LABOR COSTS ALLEGEDLY INCURRED IN REMOVING OBJECTIONABLE MATTER FROM CERTAIN SALVAGE WASTE SOLD TO YOU BY FEDERAL PRISON INDUSTRIES, INC., UNDER CONTRACT NO. 31PI-1379.

THE SALE IN QUESTION RESULTED FROM ACCEPTANCE OF YOUR BID UNDER SALES INVITATION NO. 31PI-973, ISSUED BY FEDERAL PRISON INDUSTRIES, INC., REQUESTING BIDS FOR THE SALE OF CERTAIN SURPLUS SALVAGE WASTE, IN COMPRESSED BALES, AMONG WHICH WAS ITEM NO. 6, DESCRIBED AS "W-3-K WHITE COTTON FILLING HARD ENDS. 16,024 LBS.' YOUR COMPANY WAS THE HIGHEST BIDDER FOR THIS ITEM AT THE BID PRICE OF $1,842.76. THEREAFTER, 22 BALES OF WASTE WERE SHIPPED TO AND RECEIVED BY YOUR COMPANY FOR WHICH FULL PAYMENT WAS MADE. SUBSEQUENTLY, YOU REPORTED TO FEDERAL PRISON INDUSTRIES, INC., THAT UPON EXAMINATION IT WAS FOUND THAT ALMOST ALL OF THE BALES CONTAINED MISCELLANEOUS WASTE SUCH AS COLORED THREADS, RAGS, WOOL WASTE, ETC., WHICH MADE IT NECESSARY TO SORT THE ENTIRE LOT TO REMOVE THE UNDESIRABLE MATTER, AND THAT IN DOING SO YOUR COMPANY INCURRED LABOR COSTS AMOUNTING TO $520.78.

THE RECORD SHOWS CONSIDERABLE CORRESPONDENCE BETWEEN YOUR COMPANY AND FEDERAL PRISON INDUSTRIES, INC., RELATING TO YOUR CLAIM, THE LAST OF WHICH WAS A LETTER DATED JUNE 13, 1961, FROM THE ACTING SECRETARY, FEDERAL PRISON INDUSTRIES, INC., WHEREIN, FOR THE REASONS STATED YOUR CLAIM WAS ADMINISTRATIVELY DENIED.

THE BASIS FOR REQUESTING RECONSIDERATION OF THE SETTLEMENT ACTION TAKEN IN THIS CASE IS THAT IT WAS IMPRACTICABLE TO INSPECT THE MATERIAL SINCE THE COST WOULD HAVE BEEN PROHIBITIVE. IN YOUR LETTER OF OCTOBER 17, 1961, YOU URGE THAT THE GOVERNMENT SHOULD ACCEPT SOME RESPONSIBILITY IN SUCH MATTERS AND SHOULD NOT "MAINTAIN THE HARD AND FAST RULE THAT ALL BIDS ARE ON AN "AS IS, WHERE IS, HOW IS BASIS" AND THAT FAILURE TO INSPECT THE GOODS IS NO BASIS FOR A CLAIM.'

THE SALES INVITATION CONTAINED THE PRESCRIBED STANDARD CLAUSES UNDER WHICH BIDDERS WERE INVITED, URGED, AND CAUTIONED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING BIDS. PARAGRAPH 17 OF THE GENERAL SALES TERMS AND CONDITIONS PROVIDED THAT---

"17. THE PROPERTY UNDER THIS INVITATION, MORE OR LESS IS TO BE SOLD "AS IS" AND "WHERE IS.' UNDER NO CIRCUMSTANCES WILL A REFUND OR ADJUSTMENT BE MADE ON ACCOUNT OF PROPERTY NOT COMING UP TO THE STANDARDS EXPECTED, NOR WILL FAILURE TO INSPECT BE CONSIDERED GROUNDS FOR A CLAIM.'

ALSO, PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS, WHICH BECAME A MATERIAL PART OF THE CONTRACT, PROVIDED, IN PART, AS FOLLOWS:

"* * * ALL PROPERTY LISTED THEREIN IS OFFERED FOR SALE "AS IS" AND "WHERE IS.' * * * THE DESCRIPTION IS BASED ON THE BEST AVAILABLE INFORMATION. HOWEVER, THE GOVERNMENT MAKES NO WARRANTY, EXPRESS 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. EXCEPT AS PROVIDED IN CONDITIONS NO. 8 AND 10, NO REQUEST FOR ADJUSTMENT IN PRICE OR FOR RESCISSION OF THE SALE WILL BE CONSIDERED. THIS IS NOT A SALE BY SAMPLE.'

IN CONSTRUING LANGUAGE SIMILAR TO THAT QUOTED ABOVE IT HAS CONSISTENTLY BEEN HELD BY THE COURTS THAT SUCH A CONTRACT PROVISION CONSTITUTES AN EXPRESS DISCLAIMER OF WARRANTY, AND THAT, WHILE ORDINARILY THERE IS AN IMPLIED WARRANTY IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION THAT THE PROPERTY WILL CORRESPOND WITH THE DESCRIPTION, WHERE THERE EXISTS AN EXPRESS DISCLAIMER OF WARRANTY--- AS IN THE INSTANT CASE--- NO SUCH WARRANTY MAY BE IMPLIED FROM THE ADVERTISED DESCRIPTION OF THE PROPERTY SOLD. SEE W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; UNITED STATES V. KELLY, 112 F.SUPP. 831; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151; I. SHAPIRO COMPANY V. UNITED STATES, 66 CT.CL. 424, 428; AND SILBERSTEIN AND SON V. UNITED STATES, 69 CT.CL. 412. THESE CASES AND OTHERS CONCLUDE THAT UNDER SUCH A DISCLAIMER PROVISION 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.

RESPECTING YOUR FAILURE TO INSPECT THE PROPERTY IN THIS CASE, THE COURTS HAVE UNIFORMLY CONSTRUED THE STANDARD GOVERNMENT PROVISIONS FOR INSPECTION, SUCH AS ARE INVOLVED IN THE INSTANT CASE, AS PRECLUDING ANY CLAIM BY A PURCHASER ON THE GROUND THAT THE MATERIAL OR PROPERTY DELIVERED DID NOT CONFORM TO THE ADVERTISED DESCRIPTION. SEE TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151; PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463.

IN VIEW OF THE WELL-SETTLED LEGAL RIGHTS OF THE GOVERNMENT UNDER SUCH SALES CONDITIONS WE HAVE NO AUTHORITY TO AUTHORIZE ALLOWANCE OF CLAIMS OF THE KIND ASSERTED BY YOU UNDER CONTRACTS OF SALE CONTAINING THEM.

WE THEREFORE CONCLUDE THAT THE ACTION TAKEN IN THE SETTLEMENT OF OCTOBER 3, 1961, DENYING YOUR CLAIM, WAS CORRECT, AND THE SAME IS HEREBY SUSTAINED.