B-148436, APR. 20, 1962

B-148436, APR. 20, 1962

TO THE AMERICAN NICKEL ALLOY MANUFACTURING CORP.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 6, 1962, REQUESTING REVIEW OF OUR SETTLEMENT DATED FEBRUARY 27, 1962, WHICH DISALLOWED YOUR CLAIM FOR $79.98 REPRESENTING A PART OF THE PRICE PAID BY YOU TO THE GOVERNMENT FOR CERTAIN SURPLUS PROPERTY PURCHASED BY YOU UNDER SALES CONTRACT NO. N63068S-50902 DATED JULY 5, 1961.

BY SALES INVITATION NO. B-215-61-63068 DATED JUNE 8, 1961, U.S. NAVY CONSOLIDATED SURPLUS SALES OFFICE, OAKLAND, CALIFORNIA, SOLICITED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF A NUMBER OF ITEMS OF MISCELLANEOUS SURPLUS PROPERTY. IN RESPONSE THERETO, YOU SUBMITTED A BID ON THREE OF THE ITEMS, INCLUDING ITEMS NOS. 107 AND 123, HERE INVOLVED, WHICH WERE DESCRIBED IN THE INVITATION AS FOLLOWS:

ITEM NO. 107.

"2,367 PLUG SCREW, MONEL, 1-1/8 INCH, 20 NS THREAD, HEXAGON HEAD, 0.593" LONG OVER-ALL, 0.813" DIAMETER BORE.

20,880 COLLAR, MONEL, .438" O.D., BY 1/4 INCH LONG FOR .319 INCH TUBE SIZE.

ACQUISITION: $7,379.10. UNUSED--- IN GOOD CONDITION. EST. WT. 494 LBS. CU 10. IN BOXES--- PACKED FOR SHIPMENT. QUANTITY--- 23,247 EACH"

ITEM NO. 123.

"TUBING, MONEL, RANDOM LENGTHS FROM 14 FT. TO 20 FT. INSIDE DIMENSION.375 INCHES BY .120 INCHES WALL THICKNESS. APPROXIMATELY 960 DIMENSION .375 INCHES BY .120 INCHES WALL THICKNESS. APPROXIMATELY 960 FT.

ACQUISITION: UNUSED--- IN GOOD CONDITION. EST. WT. 500 LB.S CU 10. LOOSE--- NOT PACKED FOR SHIPMENT.

LOCATION: BLDG. 571 (INSIDE). QUANTITY--- 55 LENGTHS"

YOUR BID OF $0.00327 EACH FOR THE 23,247 SCREWS AND COLLARS IN ITEM NO. 107 AND OF $2.3631 EACH FOR THE ADVERTISED 55 LENGTHS OF TUBING IN ITEM NO. 123, BEING THE HIGHEST, WAS ACCEPTED AND THE TWO ITEMS WERE AWARDED TO YOU ON CONTRACT NO. N63068S-50902 DATED JULY 5, 1961, AT A TOTAL CONTRACT PRICE OF $205.99. THAT AMOUNT WAS DEDUCTED FROM YOUR TOTAL BID DEPOSIT OF $500, AND ON JULY 5, 1961, REFUND OF THE BALANCE OF $294.01 OF THE DEPOSIT WAS AUTHORIZED TO BE MADE TO YOU AND WAS PAID ON JULY 17, 1961. DELIVERY WAS MADE OF ITEM NO. 107 ON JULY 14, 1961,AND OF ITEM NO. 123 ON JULY 17 TO THE NAVAJO FREIGHT LINES, INC., AS DIRECTED BY YOU.

SUBSEQUENTLY, IN LETTER DATED AUGUST 21, 1961, TO THE CONTRACTING OFFICER, YOU REQUESTED AN ADJUSTMENT IN THE CONTRACT PRICE BY WAY OF A TOTAL REFUND OF $79.98 BECAUSE OF ALLEGED WEIGHT SHORTAGE IN THE TWO ITEMS AS WELL AS A VARIANCE BETWEEN THE MATERIAL DELIVERED TO YOU AND THAT DESCRIBED IN THE INVITATION UNDER THOSE ITEMS. WITH RESPECT TO YOUR CLAIM AS TO ITEM NO. 107 YOU STATED TO THE CONTRACTING OFFICER THAT A LARGE PART OF THE 20,880 COLLARS INCLUDED IN THE ITEM, DESCRIBED IN THE INVITATION AS "MONEL," ARE COPPER; THAT IT IS IMPOSSIBLE TO COUNT THE PIECES EXACTLY BUT IT IS ASSUMED THAT ABOUT ONE-HALF OF THE COLLARS ARE COPPER; THAT AN EMPLOYEE OF THE HOLDING ACTIVITY HAD INFORMED YOU BY LETTER DATED JUNE 14, 1961, PRIOR TO SUBMISSION OF YOUR BID, THAT THE COLLARS WEIGHED 3 GRAMS EACH, WHEN IN FACT THEY WEIGHED 2-1/2 GRAMS EACH; AND THAT YOUR BID WAS BASED ON A WEIGHT OF 3 GRAMS PER COLLAR AGGREGATING 138 POUNDS OF MONEL FOR THE ITEM. ADJUSTMENT OF THE CONTRACT PRICE FOR ITEM NO. 107, BY REASON OF A REDUCED VALUE OF THE COLLARS RESULTING FROM THE LESSER WEIGHT AND THE COPPER CONTENT, IN THE AMOUNT OF $20 WAS, THEREFORE, REQUESTED. WITH RESPECT TO ITEM NO. 123 YOU STATED THAT THE TUBING COMPRISING THIS ITEM DELIVERED TO YOU MEASURES 517 FEET INSTEAD OF THE APPROXIMATE 960 FEET STATED IN THE INVITATION; THAT THE MATERIAL WEIGHS 362 POUNDS INSTEAD OF AN ESTIMATED WEIGHT OF 500 POUNDS AS STATED IN THE DESCRIPTION; AND THAT YOUR BID WAS BASED ON A FOOTAGE OF APPROXIMATELY 960 FEET AND A WEIGHT OF 500 POUNDS, WHICH IS THE APPROXIMATE WEIGHT OF THE FOOTAGE ADVERTISED. ADJUSTMENT OF THE CONTRACT PRICE FOR ITEM NO. 123 IN THE AMOUNT OF $59.98 WAS, THEREFORE, REQUESTED.

BY LETTER DATED SEPTEMBER 29, 1961, THE CONTRACTING OFFICER DENIED YOUR REQUEST FOR PRICE ADJUSTMENT, AND CALLED YOUR ATTENTION TO THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT, PARTICULARLY PARAGRAPH 1,"INSPECTION" AND PARAGRAPH 2,"CONDITION AND LOCATION OF PROPERTY.' UPON REQUEST TO THE CONTRACTING OFFICER FOR RECONSIDERATION, YOUR CLAIM WAS FORWARDED TO OUR OFFICE FOR SETTLEMENT AND WAS DISALLOWED FOR THE REASONS SET FORTH IN CLAIMS DIVISION CERTIFICATE OF SETTLEMENT DATED FEBRUARY 27, 1962.

IN CONSIDERING YOUR REQUEST FOR REVIEW OF OUR SETTLEMENT ACTION, YOUR ATTENTION IS AGAIN INVITED TO THE GENERAL SALE TERMS AND CONDITIONS OF THE BID INVITATION WHICH ARE APPLICABLE TO THE USUAL SALE OF GOVERNMENT SURPLUS PROPERTY. THESE TERMS WERE AGREED TO BY YOU UPON THE SUBMISSION OF YOUR BID AND WERE INCORPORATED IN AND BECAME A MATERIAL PART OF CONTRACT NO. N63068S-50902. THE PROVISIONS OF THAT DOCUMENT PERTINENT TO YOUR CLAIM ARE AS FOLLOWS:

"1. INSPECTION. THE BIDDER IS INVITED, URGED, AND CAUTIONED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING A BID. PROPERTY WILL BE AVAILABLE FOR INSPECTION AT THE PLACES AND TIMES SPECIFIED IN THE INVITATION. IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR THE WITHDRAWAL OF A BID AFTER OPENING.

"2. CONDITION AND LOCATION OF PROPERTY. UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THE INVITATION, ALL PROPERTY LISTED THEREIN IS OFFERED FOR SALE "AS IS" AND "WHERE IS.' IF IT IS PROVIDED THEREIN THAT THE GOVERNMENT SHALL LOAD, THEN "WHERE IS" MEANS F.O.B. CONVEYANCE AT THE POINT SPECIFIED IN THE INVITATION. 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 NOS. 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.

"8. ADJUSTMENT FOR VARIATION IN QUANTITY OR WEIGHT. WHEN PROPERTY IS SOLD ON A "UNIT PRICE" BASIS, THE GOVERNMENT RESERVES THE RIGHT TO VARY THE QUANTITY OR WEIGHT DELIVERED BY 10 PERCENT FROM THE QUANTITY OR WEIGHT LISTED IN THE INVITATION; AND THE PURCHASER AGREES TO ACCEPT DELIVERY OF ANY QUANTITY OR WEIGHT WITHIN THESE LIMITS. THE PURCHASE PRICE WILL BE ADJUSTED UPWARDS OR DOWNWARDS IN ACCORDANCE WITH THE UNIT PRICE AND ON THE BASIS OF THE QUANTITY OR WEIGHT ACTUALLY DELIVERED. NO ADJUSTMENT FOR VARIATION WILL BE MADE WHERE PROPERTY IS SOLD ON A "PRICE FOR THE LOT" BASIS.'

THE COURTS MANY TIMES HAVE CONSIDERED, IN CASES INVOLVING THE SALE OF GOVERNMENT-OWNED SURPLUS GOODS, SUCH CONTRACT STIPULATIONS AS PARAGRAPHS 1 AND 2, ABOVE QUOTED, AND HAVE HELD CONSISTENTLY THAT SUCH PROVISIONS CONSTITUTE AN EXPRESS DISCLAIMER OF WARRANTY. LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, 92; W. E. HEDGER CO. V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED, 284 U.S. 676; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151. THESE CASES AND OTHERS CONCLUDE THAT UNDER SUCH PROVISIONS BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT, ANY WARRANTIES WHATEVER. IN THE CASE OF OVERSEAS NAVIGATION CORPORATION V. UNITED STATES, 131 CT.CL. 70, THE COURT OF CLAIMS HELD THAT THE TERMS OF THE SALES CONTRACT THERE UNDER CONSIDERATION, INCLUDING ITS "AS IS, WHERE IS" PROVISIONS, SPOKE FOR THEMSELVES AND THE PLAINTIFF WAS LEGALLY BOUND BY THEM.

WHILE THE INVITATION DESCRIPTIONS MAY NOT HAVE BEEN ENTIRELY ACCURATE IN EVERY DETAIL, THEY WERE BASED ON THE "BEST AVAILABLE INFORMATION"--- AS STATED IN THE INVITATION--- HAVING BEEN TAKEN FROM THE INFORMATION FURNISHED BY THE PROPERTY HOLDING ACTIVITY REQUESTING SALE OF ITEMS NOS. 107 AND 123. THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE CONTRACTING OFFICER KNEW THAT ANY OF THE MATERIAL, HERE INVOLVED, WAS DIFFERENT THAN THAT DESCRIBED IN THE INVITATION. THE PROPERTY WAS DESCRIBED FOR WHAT THE GOVERNMENT THOUGHT IT TO BE. 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, SUPRA; LUMBRAZO V. WOODRUFF, 175 N.E. 525; AND UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, AFFIRMED 253 F.2D 956. THERE IS NO BASIS, THEREFORE, FOR GRANTING ANY RELIEF ON THE GROUND THAT THE PROPERTY IN QUESTION WAS MISDESCRIBED IN THE BID INVITATION.

REGARDING YOUR CONTENTION THAT YOU ARE ENTITLED TO AN ADJUSTMENT IN THE CONTRACT PRICE FOR BOTH ITEMS, ON THE BASIS OF AN ALLEGED "SHORTAGE IN WEIGHT" OF THE MATERIAL DELIVERED TO YOU UNDER THE CONTRACT, ATTENTION IS INVITED TO PARAGRAPH 8,"ADJUSTMENT FOR VARIATION IN QUANTITY OR WEIGHT," OF THE GENERAL SALE TERMS AND CONDITIONS OF THE SALE, REFERRED TO ABOVE, WHICH PROVIDES THAT "THE PURCHASE PRICE WILL BE ADJUSTED * * * IN ACCORDANCE WITH THE UNIT PRICE AND ON THE BASIS OF THE QUANTITY OR WEIGHT ACTUALLY DELIVERED.' THE PROPERTY IN ITEM NO. 107 WAS OFFERED FOR SALE ON A UNIT PRICE PER EACH SCREW OR COLLAR AND WAS SOLD TO YOU AT YOUR UNIT BID PRICE OF "$0.00327 EACH" FOR THE 23,247 SCREWS AND COLLARS AS ADVERTISED. THE RECORD SHOWS THAT THAT NUMBER WAS DELIVERED TO YOU. ALSO, ITEM NO. 123 WAS OFFERED FOR SALE AT A UNIT PRICE PER LENGTH AND WAS SOLD ON THE BASIS OF YOUR UNIT BID PRICE OF $2.3631 EACH" FOR THE ADVERTISED 55 LENGTHS OF TUBING, AND THAT QUANTITY WAS DELIVERED TO YOU. ACCORDINGLY, UNDER THE PROVISIONS OF PARAGRAPH 8 NO ADJUSTMENT IN THE CONTRACT PRICE MAY BE MADE TO YOU ON THE GROUND OF "SHORTAGE IN WEIGHT" IN EITHER OF THE TWO ITEMS.

YOU STATE THAT IT WAS IMPRACTICABLE FOR YOU TO MAKE AN INSPECTION OF THE PROPERTY PRIOR TO SUBMITTING YOUR BID THEREON AND YOU CONTEND THAT THERE WAS NO LEGAL BURDEN ON YOU TO INSPECT THE MATERIALS PRIOR TO SUBMITTING YOUR BID BUT THAT THE GOVERNMENT SHOULD HAVE MADE AN APPROPRIATE INSPECTION OF ALL OF THE ADVERTISED MATERIALS PRIOR TO OFFERING THEM FOR SALE AND THAT HAD IT DONE SO THE MATERIALS IN ITEMS NOS. 107 AND 123, HERE INVOLVED, WOULD NOT HAVE BEEN MISDESCRIBED IN THE INVITATION. IN THAT CONNECTION, YOUR ATTENTION IS AGAIN INVITED TO PARAGRAPH 1,"INSPECTION," OF THE GENERAL SALE TERMS AND CONDITIONS OF THE SALE--- QUOTED ABOVE--- WHICH PROVIDES THAT "IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR THE WITHDRAWAL OF A BID AFTER OPENING.' THE EVIDENCE ESTABLISHES THAT THE PROPERTY DELIVERED TO YOU WAS THE SAME PROPERTY DISPLAYED FOR INSPECTION AS ITEMS NOS. 107 AND 123. HAD YOU MADE AN INSPECTION, AS YOU WERE CAUTIONED TO DO, BEFORE SUBMITTING YOUR BID AS YOU DID AFTERWARDS YOU COULD HAVE DISCOVERED THE CONDITION OF THE PROPERTY OF WHICH YOU NOW COMPLAIN.

THE LAW IS CLEAR THAT WHERE SURPLUS MATERIALS ARE OFFERED FOR SALE BY THE GOVERNMENT ON AN "AS IS" AND "WHERE IS" BASIS, WITHOUT A WARRANTY OR GUARANTY OF ANY KIND, AS IN THE INSTANT SALE, A BIDDER WHO FAILS TO TAKE ADVANTAGE OF AN OPPORTUNITY TO INSPECT CANNOT SUBSEQUENTLY RECOVER ON THE GROUNDS THAT THE MATERIALS ARE OF AN INFERIOR QUALITY OR THAT THEY ARE SOMETHING OTHER THAN WHAT HE THOUGHT HE WAS BUYING. IN THE CASE OF AMERICAN SANITARY RAG CO. V. UNITED STATES, 151 F.SUPP. 414, CONCERNING A SALE OF SURPLUS PROPERTY UNDER SIMILAR CONDITIONS, THE COURT HELD THAT THE RISK AS TO THE ACTUAL CONDITION OF THE PROPERTY WAS PLACED SQUARELY UPON THE PURCHASER. THE BIDDER'S RESPONSIBILITIES ALSO APPEAR TO BE CLEARLY SET FORTH IN THE CASE OF PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463, WHERE IT WAS STATED THAT A BIDDER FAILS TO INSPECT AT HIS PERIL, AND THAT PLAINTIFF WAS REQUIRED TO MAKE THE SORT OF INSPECTION THAT WAS EFFECTUAL. ALSO, IN THE RECENT CASE OF KRUPP V. FEDERAL HOUSING ADMINISTRATION, 85 F.SUPP. 638, THE COURT HELD THAT THE PURCHASER WHO RELIES ON INFORMATION FURNISHED HIM BY THE GOVERNMENT 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, SUPRA; DEDOURIAN EXPORT CORPORATION V. UNITED STATES, 291 F.2D 178 (1961) AND M. BERGER CO. V. UNITED STATES, 199 F.SUPP. 22 (1961).

IN THESE CIRCUMSTANCES, THERE IS NO LEGAL BASIS FOR ALLOWING YOU ANY RELIEF UNDER SALES CONTRACT NO. N63068S-50902, AND THE SETTLEMENT DATED FEBRUARY 27, 1962, IS SUSTAINED.