B-148626, MAY 25, 1962

B-148626: May 25, 1962

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF APRIL 9. FOR AN ADJUSTMENT ALLEGED TO BE DUE BECAUSE OF AN ALLEGED SHORTAGE OF CAST IRON PIPE UNDER A CONTRACT FOR THE PURCHASE OF SURPLUS GOVERNMENT-OWNED PROPERTY ON AN "AS IS. WHERE IS" BASIS ENTERED INTO JUNE 30. THE THEORY OF RECOVERY ADVANCED BY THE CLAIMANTS IS. THAT ADEQUATE INSPECTION TO PERMIT VERIFICATION OF THE DESCRIPTION OF THE CAST IRON PIPE PURCHASED WAS AN IMPOSSIBILITY BECAUSE OF ITS UNDERGROUND LOCATION. TO A WARRANTY BY THE GOVERNMENT THAT THE INFORMATION CONTAINED IN THE DESCRIPTION WAS REASONABLY ACCURATE. THEY URGE THAT A VARIATION OF APPROXIMATELY 39.9 PERCENT IN THE WEIGHT OF THE PIPE PURCHASED (IN THIS INSTANCE A SHORTAGE) IS OF SUFFICIENT MAGNITUDE TO CONSTITUTE A BREACH OF THE WARRANTY THUS IMPLIED.

B-148626, MAY 25, 1962

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 9, 1962, REQUESTING OUR VIEWS ON A CLAIM BY STAIMAN BROTHERS AND SIMON WRECKING COMPANY, AS JOINT VENTURERS, WILLIAMSPORT, PENNSYLVANIA, FOR AN ADJUSTMENT ALLEGED TO BE DUE BECAUSE OF AN ALLEGED SHORTAGE OF CAST IRON PIPE UNDER A CONTRACT FOR THE PURCHASE OF SURPLUS GOVERNMENT-OWNED PROPERTY ON AN "AS IS, WHERE IS" BASIS ENTERED INTO JUNE 30, 1960, PURSUANT TO GENERAL SERVICES ADMINISTRATION (GSA) INVITATION FOR BIDS NO. 2PRD 313A, ISSUED BY THE DISPOSAL BRANCH OF THE PUBLIC BUILDINGS SERVICE, REGION II, NEW YORK CITY, NEW YORK.

THE THEORY OF RECOVERY ADVANCED BY THE CLAIMANTS IS, IN BRIEF, THAT ADEQUATE INSPECTION TO PERMIT VERIFICATION OF THE DESCRIPTION OF THE CAST IRON PIPE PURCHASED WAS AN IMPOSSIBILITY BECAUSE OF ITS UNDERGROUND LOCATION; THAT UNDER SUCH CIRCUMSTANCES THE INFORMATION SET OUT BY THE GOVERNMENT IN THE DESCRIPTION INCLUDED IN THE INVITATION AS TO APPROXIMATE TONNAGE, THE ESTIMATED SIZES AND QUANTITIES, AND, IN PARTICULAR, THE THICKNESS OF THE 42-INCH PIPE, SHOULD BE REGARDED AS NULLIFYING, BY IMPLICATION, THE EXPRESS DISCLAIMERS BY THE GOVERNMENT OF ANY WARRANTY OR GUARANTY RELATING TO THE CORRECTNESS OF THE DESCRIPTION AND AS GIVING RISE, ALSO BY IMPLICATION, TO A WARRANTY BY THE GOVERNMENT THAT THE INFORMATION CONTAINED IN THE DESCRIPTION WAS REASONABLY ACCURATE.

THEY URGE THAT A VARIATION OF APPROXIMATELY 39.9 PERCENT IN THE WEIGHT OF THE PIPE PURCHASED (IN THIS INSTANCE A SHORTAGE) IS OF SUFFICIENT MAGNITUDE TO CONSTITUTE A BREACH OF THE WARRANTY THUS IMPLIED, FOR WHICH THEY ARE ENTITLED TO RECOVERY AS DAMAGES OF AN ALLEGED LOSS OF APPROXIMATELY $80,014.17 ON THE TRANSACTION.

THE INVITATION COVERED THE SALE AND REMOVAL OF CERTAIN INSTALLED EQUIPMENT OF A WATER SUPPLY SYSTEM LOCATED AT THE SUSQUEHANNA SUB DEPOT, OF LETTERKENNY ORDNANCE DEPOT, ABOUT 15 MILES SOUTHEASTERN OF WILLIAMSPORT, PENNSYLVANIA. THE PROPERTY WAS OFFERED IN TWO LOTS, A AND B, WHICH EMBRACED NUMEROUS ITEMS GROUPED IN SUBDIVISIONS AND INCLUDING VARIOUS SIZES OF CAST IRON PIPE, PUMPS, TRANSFORMERS, CHEMICAL FEEDINGS SYSTEMS, AND RELATED EQUIPMENT. SEPARATE BIDS WERE REQUESTED ON EACH LOT, AND COMPLETE REMOVAL OF THE PROPERTY WAS REQUIRED WITHIN 150 DAYS AFTER DATE OF THE NOTICE TO COMMENCE REMOVAL. THE CLAIMANTS' BID ON LOT A WAS SUBMITTED AND ACCEPTED IN THE AMOUNT OF $301,018.66 ON JUNE 30, 1960.

AFTER THEY HAD COMPLETED REMOVAL OF THE PROPERTY BY LETTER DATED JULY 11, 1961, THE CLAIMANTS SUBMITTED A "CLAIM FOR ADJUSTMENT" IN WHICH IT WAS ALLEGED THAT ONLY 16,232 FEET OF 42-INCH CAST IRON PIPE COULD BE RECOVERED OUT OF THE CONTRACT ESTIMATE OF 22,000 FEET, AND THAT THE PIPE RECOVERED VARIED IN THICKNESS FROM 1.09 TO 1.282 INCHES INSTEAD OF BEING 1.58 INCHES THICK AS DESCRIBED IN THE INVITATION. USING A STANDARD COMPUTATION OF 681.4 POUNDS PER FOOT, THE CLAIMANTS CONTENDED THIS AMOUNTED TO A WEIGHT SHORTAGE OF 2,670.84 GROSS TONS OUT OF AN ESTIMATED TOTAL OF 6,692.32 GROSS TONS OR ABOUT 39.9 PERCENT. A "SUPPLEMENTAL CLAIM" WAS SUBMITTED BY LETTER DATED JANUARY 24, 1962, WHICH INCLUDED REFERENCES TO ALLEGED SHORTAGES AND OVERAGES IN OTHER SIZES OF CAST IRON PIPE PURCHASED UNDER THE LOT AND FURNISHED INFORMATION AND DATA IN SUPPORT OF ADDITIONAL CONTENTIONS SET OUT THEREIN.

BY LETTER DATED FEBRUARY 15, 1962, THE CLAIMANTS SUBMITTED COMPUTATION STATEMENTS AS A BASIS FOR DETERMINING THE ADJUSTMENT CLAIMED. THESE COMPUTATIONS INDICATE A NET LOSS OF $80,014.17 AS OF DECEMBER 31, 1961, BASED ON THE GROSS RECEIPTS FROM SALES OF THE PROPERTY PURCHASED, THE VALUE OF THE INVENTORY ON HAND AND THE ALLEGED COST OF SALES, INCLUDING INTEREST ON AN OUTSTANDING LOAN AND OTHER EXPENSES AS FOLLOWS:

CHART

GROSS RECEIPTS FROM SALES (LESS COMMISSIONS) $374,972.74

COST OF SALES:

PURCHASE PRICE $301,018.66

COST OF REMOVAL AND DELIVERY 144,788.95

445,807.61

LESS INVENTORY 12/31/6115,609.00 430,198.61

(QUANTITIES AND BASIS OF --------------------------

EVALUATION NOT INDICATED) 55,225.87

OTHER EXPENSES: ENGINEERING AND

SURVEY COSTS, ADVERTISING, TRAVEL,

STORAGE, RENT OF STORAGE FIELD,

INSURANCE. 4,788.30

OTHER EXPENSES NOT CHARGED TO JOINT

VENTURE: PARTNERSHIP EXPENDITURES

FOR SUPERVISORY PERSONNEL AND FOR

CRANES AND OPERATORS. 10,000.00

INTEREST AT 6 PERCENT ON $100,000

"OVERPAYMENT TO GOVERNMENT"

FROM JUNE 30, 1960, TO DATE. 10,000.00 20,000.00

ALLEGED NET LOSS TO DATE $ 80,014.17

THE ADJUSTMENT CLAIMED RELATES PRIMARILY TO THE FIRST ITEM INCLUDED IN SUBDIVISION 1 OF LOT A, DESCRIBED IN THE CONTRACT AS FOLLOWS:

CHART

"LOT A--- CONSISTS OF ITEMS SHOWN IN SUBDIVISION 1

THROUGH 5 BELOW:

DESCRIPTION QUANTITY

"1. PIPE, CAST IRON: BELL AND SPIGOT TYPE, INSTALLED

IN 1942 AND 1943, APPROXIMATELY 15,000 TONS IN

THE FOLLOWING ESTIMATED SIZES AND QUANTITIES:

DIAMETER LINEAL FEET

42 INCHES (WALL THICKNESS 1.58 INCHES) 22,000 36

INCHES 10,900 24

INCHES 5,200 20

INCHES 3,750 18

INCHES 13,900 16

INCHES 2,800 14

INCHES 4,100 12

INCHES 9,400 10

INCHES 13,600 8

INCHES 22,500 6

INCHES 14,100

"A GREAT PORTION OF THE PIPE IS IN 12 FOOT LENGTHS. ALL PIPE IS INSTALLED BELOW THE FROST LINE. THE 42 INCH PIPE RUNS FROM THE RIVER PUMP HOUSE NO. 414 NORTHWESTERLY UNDER ROUTE 15 TO THE TWO FILTRATION HOUSES, NO. 413-1 AND 413-2 LOCATED ON THE WEST SIDE OF ROUTE 15. ALL OTHER PIPE IS LOCATED ON THE WEST SIDE OF ROUTE 15 ON LANDS UNDER PERMIT TO THE BUREAU OF PRISONS. THE PIPE LOCATED UNDER ROUTE 15 IS NOT TO BE DISTURBED FOR A DISTANCE OF 60 FEET ON EITHER SIDE FROM THE CENTER LINE OF SAID HIGHWAY AND THE PIPE LOCATED UNDER ROUTE 41118 IS NOT TO BE DISTURBED FOR A DISTANCE OF 30 FEET ON EITHER SIDE FROM THE CENTER LINE OF SAID HIGHWAY AND IS EXCLUDED FROM THE SALE.

"SEE EXHIBIT 1 AND 2 ATTACHED TO SCHEDULE A. WITH THE EXCEPTION OF THE 42 INCH PIPE ALL OTHER PIPE IS USUALLY INSTALLED 3 LINES TO A TRENCH. EXHIBIT 1 SHOWS THE PIPE THAT IS AVAILABLE FOR SALE AND REMOVAL; EXHIBIT 2 SHOWS THE PIPE THAT IS NOT INCLUDED IN THE SALE AND IS NOT TO BE DISTURBED IN THE REMOVAL OPERATIONS.'

EXHIBIT 1 OF SCHEDULE A LISTED THE SAME SIZES AND FOOTAGE PRECEDED BY THE FOLLOWING HEADINGS:

"ESTIMATED: QUANTITY AND SIZE OF CAST IRON PIPE AVAILABLE FOR DISPOSAL. NO GUARANTY IS MADE AS TO THE ACCURACY OF THE ESTIMATED FOOTAGE.'

THE TERMS OF THE CONTRACT OF SALE INCLUDED ALSO CLEARLY EXPRESSED STIPULATIONS DISCLAIMING ANY WARRANTY OR GUARANTY BY THE GOVERNMENT AS TO QUANTITY, QUALITY, CHARACTER, CONDITIONS, SIZE, OR KIND AND SPECIFICALLY EXCLUDED ANY ADJUSTMENTS IN THE PURCHASE PRICE ON SUCH GROUNDS OR DUE TO ANY ERROR IN THE DESCRIPTION OR LOCATION OF THE PROPERTY. THUS, IN PARAGRAPH 2 RELATING TO THE LOCATION AND DESCRIPTION OF THE PROPERTY IT WAS STIPULATED THAT:

"2. * * * THE IDENTIFICATIONS AND LOCATIONS OF THE PROPERTY ARE BELIEVED TO BE CORRECT BUT ANY ERROR OR OMISSION IN THE DESCRIPTION OF THE PROPERTY SHALL NOT CONSTITUTE ANY GROUND OR REASON FOR NON PERFORMANCE OF THE CONTRACT OF SALE, OR CLAIM BY THE PURCHASER FOR ANY ALLOWANCE, REFUND, OR DEDUCTION FROM THE PURCHASE PRICE.' A SIMILAR STIPULATION WAS INCLUDED IN PARAGRAPH 6, URGING PROSPECTIVE BIDDERS TO INSPECT THE PROPERTY, WHERE IT WAS STATED THAT:

"6. * * * THE FAILURE OF ANY BIDDER TO MAKE SUCH INSPECTION OR TO BE FULLY INFORMED AS TO THE CONDITION OF THE PROPERTY WILL NOT CONSTITUTE GROUNDS FOR ANY CLAIM OR DEMAND FOR ADJUSTMENT OR WITHDRAWAL OF A BID AFTER OPENING.'

FURTHERMORE, UNDER PARAGRAPH 7, PROSPECTIVE BIDDERS WERE EXPRESSLY WARNED THAT NO ADJUSTMENTS WOULD BE ALLOWED FOR BREACH OF WARRANTY AS FOLLOWS:

"7. SOLD "AS IS.' THE PROPERTY OFFERED FOR SALE FOR REMOVAL FOR OFF-SITE USE AND/OR SALVAGE, WILL BE SOLD "AS IS" AND "WHERE IS" WITHOUT WARRANTY OR GUARANTY AS TO QUANTITY, QUALITY, CHARACTER, CONDITION, SIZE, OR KIND, OR THAT THE SAME ARE IN CONDITION OR FIT TO BE USED FOR THE PURPOSE FOR WHICH INTENDED, AND NO CLAIM FOR ANY ALLOWANCE OR DEDUCTION UPON SUCH GROUNDS WILL BE CONSIDERED AFTER THE BIDS HAVE BEEN OPENED.'

IN THEIR SUPPLEMENTAL CLAIM THE CLAIMANTS ATTRIBUTED THE ASSERTED IMPOSSIBILITY OF INSPECTION TO FACTUAL CIRCUMSTANCES WHICH WERE RECITED IN CONSIDERABLE DETAIL. IT WAS ALLEGED THAT THE PIPE INVOLVED WAS ALL COMPLETELY UNDERGROUND, RANGING IN DEPTHS FROM 6 TO 18 FEET WHERE IT HAD BEEN INSTALLED SOME 18 TO 20 YEARS PREVIOUSLY SO THAT THE INTERVENING TIME HAD COMPLETELY ERASED ANY VESTIGE ON THE SURFACE OF THE GROUND OF ITS LOCATION; THAT PART OF THE PIPE LAY WITHIN THE CONFINES OF AN AREA USED AS A FEDERAL PRISON CAMP; THAT "SECURITY REGULATIONS MADE IT IMPOSSIBLE FOR PROSPECTIVE PURCHASERS TO WANDER AROUND OVER THE INTERVENING GROUNDS AND TAKE MEASUREMENTS; " THAT THE INSPECTION ON THE PRISON GROUNDS CONSISTED OF A TOUR IN A GOVERNMENT VEHICLE ON ROADS WITHIN THE AREA WITH THE AGENCY'S REPRESENTATIVE POINTING OUT FROM THE CAR BY A WAVE OF THE HAND THE GENERAL AREA IN WHICH THE PIPE LAY; THAT A REQUEST FOR PERMISSION TO EXAMINE SAMPLES OF THE PIPE WAS TURNED DOWN ON THE BASIS THAT NO SUCH SAMPLES WERE AVAILABLE. IT WAS ALSO ALLEGED THAT PERMISSION TO TRESPASS ON PRIVATELY OWNED LANDS WAS NOT GRANTED UNTIL EXECUTION OF THE CONTRACT; THAT "INSPECTION WOULD STILL HAVE BEEN RENDERED IMPOSSIBLE BY EVEN MODERN ELECTRONIC DEVICES, BY VIRTUE OF THE UNDERGROUND LOCATION" OF THE PIPE; THAT THEY "DID EVERYTHING POSSIBLE TO AVAIL (THEMSELVES) OF PROPER KNOWLEDGE OF THE SUBJECT MATTER" WHICH "INCLUDED SPECIFIC QUESTIONING OF THE AGENCY REPRESENTATIVE AND WAS ANSWERED BY THE ORAL REPRESENTATION THAT THE THICKNESS OF THE 42 INCH PIPE WAS 1.58 INCHES, THE SAME AS REPRESENTED ON THE INVITATION TO BID.' THEY ASSERTED ,THE ORAL REPRESENTATION AS TO THICKNESS WAS UNQUALIFIED; " THAT USING PUBLISHED WEIGHTS FOR THIS CLASS OF PIPE (CLASS SIX) MULTIPLIED BY THE WEIGHT THEY ARRIVED AT A TOTAL FIGURE OF APPROXIMATELY 16,000 TONS AND THEREFORE FELT THE 15,000-TON FIGURE WAS UNQUESTIONABLY CONSERVATIVE AND WOULD SERVE AS A MINIMUM. THEY URGED THAT THE IMPOSSIBILITY OF INSPECTION IS A BASIC FACTOR WHICH DISTINGUISHES THIS CASE FROM OTHERS CONSIDERED BY THE COURTS IN THAT AN OPPORTUNITY FOR INSPECTION WAS PRESENT IN THOSE CASES. THEY ALSO URGED THAT "THERE HAD TO BE COMPLETE RELIANCE ON THE REPRESENTATIONS OF THE AGENCY" IN THIS CASE AND "IN SPITE OF THE FACT THAT INSPECTION WAS INVITED IN THE INVITATION TO BID, THE MATERIAL WAS ABSOLUTELY UNAVAILABLE FOR SUCH INSPECTION, MAKING THIS CLAUSE A NULLITY, AND THE CLAUSE BASED THEREON, DENYING LIABILITY FOR FAILURE TO INSPECT, ALSO BEGAN A NULLITY.' THE CLAIMANTS POINTED OUT THAT "THE ONLY DRAWING SUPPLIED BY THE AGENCY WAS IN THE NATURE OF A "SCHEMATIC," " WHICH DOES NOT PURPORT TO BE A SCALE DIAGRAM AS TO LAYOUT; SO,"THAT SOME AGENCY OF THE GOVERNMENT MUST HAVE HAD IN ITS POSSESSION A COMPLETE DRAWING OF THE WATER SYSTEM OF A GOVERNMENT INSTALLATION; " THAT "ALTHOUGH REQUESTS WERE MADE, SUCH A DETAILED PRINT WAS NOT RENDERED AVAILABLE" AND THAT "THE AGENCY DID NOT, THEREFORE, SUPPLY THE BEST INFORMATION AVAILABLE TO THE GOVERNMENT.'

THE CLAIMANTS POINT OUT FURTHER THAT A PRIOR INVITATION ON THIS PROPERTY WAS WITHDRAWN BECAUSE OF THE INADEQUACY OF THE BIDS RECEIVED. IN THIS CONNECTION THEY ALLEGED "CERTAINLY, THE CONTRACTING OFFICIAL WAS FAMILIAR WITH THE MARKET VALUE OF THE MATERIAL, AND HIS COURSE IN REFUSING TO ACCEPT LESS THAN THE FULL MARKET VALUE, BASED ON THE ESTIMATED TONNAGE, COMPOSED OF THE PUBLISHED LENGTHS, SIZES, AND THICKNESSES, CONSTITUTES AN IMPLIED REPRESENTATION THAT THOSE ITEMS WERE APPROXIMATELY CORRECT.' THEY ALSO ALLEGED THAT THIS "PERMITTED A SUBSEQUENT INCREASE TO THE SUCCESSFUL BID PRICE, AND CONSTITUTED ONLY THE TAKING OF A CHANCE WITHIN THOSE LIMITS; " THAT THE CORRECTNESS OF THIS IS ATTESTED TO BY THE FACT "THE FINALLY COMPILED FIGURES, COMPUTED BY SURVEY, AS AGAINST ACTUAL TONNAGE RECOVERED, REVEALS A DISCREPANCY OF 340 TONS, A MINIMAL DIFFERENCE, PARTICULARLY TAKING INTO ACCOUNT THE POSSIBILITY THAT THE REMOVAL CREWS MAY HAVE LEFT A LITTLE MORE PIPE THAN ABSOLUTELY NECESSARY UNDER THE ROADWAYS, AS SPECIFIED IN THE CONDITIONS OF REMOVAL AS CONTAINED IN THE INVITATION AND CONTRACT.' IN OUR OPINION THE AVAILABLE RECORD DOES NOT SUBSTANTIATE THE CLAIMANTS' CONTENTION THAT INSPECTION OF THE PROPERTY PURCHASED WAS AN IMPOSSIBILITY AND NO AUTHORITIES SUPPORTING THE THEORY OF RECOVERY UPON WHICH THE CLAIM IS BASED HAVE BEEN SUBMITTED OR BROUGHT TO OUR ATTENTION. ON THE CONTRARY IT SEEMS ABUNDANTLY CLEAR THAT THE CLAIM IS UNTENABLE UNDER LONG-ESTABLISHED PRINCIPLES ALMOST UNIVERSALLY RECOGNIZED WHICH WE BELIEVE TO BE CONTROLLING.

THE RECORD DISCLOSES THAT AT THE TIME THE INVITATION WAS ISSUED THE OFFICIAL INVENTORY OF THE 42-INCH PIPE SHOWED 16,600 LINEAL FEET OUTSIDE THE PROPOSED BOUNDARY OF THE FEDERAL PRISON (PARCEL A) AND 6,000 LINEAL FEET INSIDE THE PROPOSED BOUNDARY (PARCEL B) SUBJECT TO SALE BY GSA. FROM THIS TOTAL OF 22,600 LINEAL FEET, 600 FEET WERE ALLOWED FOR CROSSING UNDER ESTABLISHED ROADS AND THE BALANCE OF 22,000 FEET WAS ACCORDINGLY OFFERED FOR SALE BASED ON THIS INVENTORY. NO DRAWINGS WERE AVAILABLE FOR THE 42- INCH LINES AND APPARENTLY NONE ARE IN EXISTENCE, SO THAT THE QUANTITY OF 42-INCH PIPE WAS NOT SUSCEPTIBLE OF ASCERTAINING BY SCALING. THE RECORD ALSO SHOWS IT HAS BEEN DETERMINED BY ACTUAL MEASUREMENT THAT A TOTAL OF 16,232 LINEAL FEET OF 42-INCH PIPE WAS REMOVED BY THE CLAIMANTS WHICH COMBINED WITH THE 600 LINEAL FEET REQUIRED TO BE LEFT FOR THE PROTECTION OF EXISTING HIGHWAYS WOULD INDICATE AN OVER-ALL TOTAL OF APPROXIMATELY 16,832 LINEAL FEET. THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE INFORMATION USED WAS NOT THE BEST AVAILABLE TO GSA AT THE TIME THE INVITATION WAS ISSUED AND EVEN IF MORE ACCURATE INFORMATION IN THE FORM OF DETAILED INSTALLATION DRAWINGS AND DATA MAY HAVE REPOSED IN THE FILES OF SOME OTHER GOVERNMENT UNIT OR AGENCY, A POSSIBILITY SUGGESTED BY THE CLAIMANTS, IT SEEMS WELL SETTLED THAT KNOWLEDGE THEREOF COULD NOT BE IMPUTED TO THE CONTRACTING OFFICER. SEE FANSTEEL METALLURGICAL CORPORATION V. UNITED STATES, 145 CT.CL. 496 (1959) AND THE AUTHORITIES CITED AT P. 501; ALSO S.T.G. CONSTRUCTION CO., INC. V. UNITED STATES, DECIDED BY THE COURT OF CLAIMS, MAY 9, 1962.

ELECTRONIC DEVICES AND SURVEY OF THE PIPE LOCATIONS WERE MEANS AVAILABLE TO BOTH PARTIES FOR VERIFYING THE ESTIMATE. GSA ELECTED TO PLACE THE RESPONSIBILITY AND THE EXPENSE OF ASCERTAINING THE EXACT QUANTITIES ON THE PROSPECTIVE BIDDERS BY THE USE OF ESTIMATES AND BY THE USE OF EXPRESS DISCLAIMERS, THE NATURE AND NUMBER OF WHICH APPARENTLY WERE DESIGNED TO EMPHASIZE THAT THE CORRECTNESS OF THE DESCRIPTIONS AND ESTIMATES WOULD BE AT THE RISK OF THE PURCHASERS. THIS ELECTION NO DOUBT WAS IMPELLED BY THE NATURE OF THE INSTALLATION ITSELF, PARTICULARLY THE FACT THAT A SUBSTANTIAL PORTION OF THE PIPE WAS UNDERGROUND. MOREOVER, THE RECORD ADEQUATELY ESTABLISHES THAT THE CLAIMANTS WERE FULLY INFORMED CONCERNING ALL THE CONDITIONS OF THE PROPERTY AND THAT THEY WERE AFFORDED THE OPPORTUNITY OF MAKING SUCH VISUAL OR MECHANICAL INSPECTIONS AS THEY MIGHT FIND DESIRABLE. THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE CLAIMANTS BEFORE SUBMITTING THEIR BID ATTEMPTED TO REMOVE ANY OF THE PIPE TO DETERMINE ITS SIZE OR THICKNESS OR THAT THEY UNDERTOOK ANY MEASUREMENTS TO VERIFY THE ESTIMATED FOOTAGE SPECIFIED IN THE DESCRIPTION. THE COURTS HAVE CONSISTENTLY HELD THAT UNDER SIMILAR CIRCUMSTANCES CLAIMANTS MAY NOT SHIFT TO THE GOVERNMENT THE BURDEN ATTRIBUTABLE TO THEIR FAILURE TO MAKE A PROPER OR SUFFICIENTLY THOROUGH INSPECTION.

CLOSELY ANALOGOUS TO THE INSTANT CASE ARE PAXTON-MITCHELL COMPANY V. UNITED STATES, 145 CT.CL. 502 (1959); SACHS MERCANTILE CO. V. UNITED STATES, 78 CT.CL. 801 (1934); AND SNYDER CORP. V. UNITED STATES, 68 CT.CL. 667 (1930). IN ALL THREE CASES SURPLUS PROPERTY WAS SOLD BY THE LOT ON AN "AS IS, WHERE IS" BASIS AND CLAIMED ADJUSTMENTS WERE DENIED BY THE COURT OF CLAIMS.

IN THE PAXTON CASE A LOT OF SCRAP STEEL WAS PURCHASED BUT UPON DELIVERY IT TURNED OUT TO BE 49.7 MALLEABLE IRON. STEEL AND MALLEABLE IRON ARE NOT DISTINGUISHABLE BY THE NAKED EYE. THEY CAN BE DIFFERENTIATED ONLY BY MICROSCOPIC EXAMINATION OR CHEMICAL ANALYSIS. IN POINTING THIS OUT THE COURT STATED THAT WHILE VISUAL INSPECTION WAS INEFFECTUAL, MICROSCOPIC INSPECTION AND CHEMICAL ANALYSIS WERE EFFECTUAL; AND THAT THE PLAINTIFF WAS REQUIRED TO MAKE THE SORT OF INSPECTION THAT WAS EFFECTUAL. THE COURT HELD THAT FAILURE TO DO SO LEFT IT NO ROOM TO COMPLAIN.

IN THE SACHS CASE THE PLAINTIFF ATTEMPTED TO RECOVER LOSSES ON THE SALE OF A LOT OF TROUSERS PURCHASED WITHOUT INSPECTING ALL THE TROUSERS CONTAINED IN THE LOT AS "IT WAS MANIFESTLY IMPOSSIBLE FOR THEM TO DO SO BECAUSE OF THE LARGE QUANTITY IN THE LOT, AND THE FACT THAT HUNDREDS OF CASES IN WHICH THEY WERE STORED WERE NOT OPENED.' THE COURT HELD THAT IF THE PLAINTIFF, DESPITE THE UNMISTAKABLE POSITIVE PROVISION IN THE TERMS AND CONDITIONS OF SALE,"SAW FIT TO SUBMIT BID FOR THE ENTIRE LOT OF TROUSERS OFFERED FOR SALE, WITHOUT HAVING EXAMINED AND INSPECTED THE WHOLE OF THEM," AND ELECTED TO RELY ON UNAUTHORIZED STATEMENTS OF PERSONS CONDUCTING THE SALE IT DID THAT AT ITS OWN RISK AND HAD NO LEGAL CLAIM AGAINST THE GOVERNMENT FOR ANY LOSS IT MAY HAVE SUSTAINED.

IN THE SNYDER CASE THE PLAINTIFF PURCHASED A LOT OF EMPTY SHELLS DESCRIBED AS HAVING CERTAIN METAL CONTENT AND WEIGHT RELYING ON THE FIGURES FURNISHED IN THE DESCRIPTION. ITS CLAIM FOR RECOVERY OF A WEIGHT SHORTAGE IN THE COPPER CONTENT BASED ON THE DESCRIPTION WAS DENIED, THE COURT HOLDING THAT THE DOCTRINE OF CAVEAT EMPTOR APPLIED.

FOLLOWING THE REASONING AND LANGUAGE OF THE FIRST CIRCUIT WHEN CONSTRUING A SIMILAR CONTRACT OF SALE, UNITED STATES V. SILVERTON, 200 F.2D 824 (1952), WE ARE OF THE OPINION THAT UNDER THE TERMS OF SALE IN THE INSTANT CASE THE RULE OF CAVEAT EMPTOR WAS CERTAINLY INTENDED TO BE APPLIED TO THE FURTHEST LIMIT THAT CONTRACT STIPULATIONS COULD ACCOMPLISH IT. THE SALE AS MADE COVERED A LOT OF PROPERTY "AS IS, WHERE IS" CONSISTING OF NUMEROUS ITEMS OF ESTIMATED SIZES AND QUANTITIES. IT CLEARLY WAS NOT A SALE BY SAMPLE. A SUBSTANTIAL PORTION OF THE PROPERTY WAS UNDERGROUND AND THE FURNISHING OF SAMPLES WAS NOT CONTEMPLATED NOR REQUIRED. THE CLAIMANTS RECOVERED ALL OF THE CAST IRON PIPE INCLUDING THE 42-INCH PIPE INTENDED TO BE SOLD AND THE GOVERNMENT DID NOT UNDERTAKE TO WARRANT OR GUARANTEE THE NUMBER OF LINEAL FEET OR THE WEIGHT OF THE PIPE INCLUDED IN THIS OR ANY OF THE OTHER ITEMS DESCRIBED IN THE LOT PURCHASED. THE CONTRACT DID NOT INCLUDE A VARIATION IN QUANTITY CLAUSES AND, AS POINTED OUT IN THE SILVERTON CASE, SUPRA,"THIS IS NOT A CASE OF ORDERING APPLES AND GETTING ORANGES.' IN THIS CONNECTION SEE MAGUIRE AND CO. V. UNITED STATES, 273 U.S. 67 (1927), WHERE THE SUPREME COURT STATED AT PAGE 69 THAT THIS ASPECT OF THAT CASE, AND WE BELIEVE FOR THE SAME REASONS OF THIS CASE, WAS ANALOGOUS TO LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, 92 (1925). IN THAT CASE, AS HERE, THE QUANTITIES TURNED OUT TO BE MUCH LESS THAN LISTED AND IT WAS HELD THAT THE NAMING OF QUANTITIES "CANNOT BE REGARDED AS IN THE NATURE OF A WARRANTY, BUT MERELY AN ESTIMATE OF THE PROBABLE AMOUNTS IN REFERENCE TO WHICH GOOD FAITH ONLY COULD BE REQUIRED OF THE PARTY MAKING IT.' THE SAME PRINCIPLES WERE APPLIED BY THE SECOND CIRCUIT TO THE SALE OF AN ITEM OF SCRAP STEEL IN DADOURIAN EXPORT CORPORATION V. UNITED STATES, 291 F.2D 178 (1961). SEE, ALSO, WESTERN NON-FERROUS METALS CORPORATION V. UNITED STATES, 192 F.SUPP. 774 (N.D. CALIFORNIA, S.D. 1961), HOLDING A CONTRACTUAL PROVISION THAT THE DESCRIPTION WAS BASED UPON THE BEST AVAILABLE INFORMATION DID NOT ENTITLE THE BUYER TO AN ADJUSTMENT FOR WEIGHT SHORTAGE UNDER A CONTRACT FOR THE SALE OF VARIOUS ITEMS OF SURPLUS ALUMINUM WHERE THE DESCRIPTION INCLUDED AN ESTIMATED TOTAL WEIGHT FOR EACH ITEM. NO LACK OF GOOD FAITH HAS BEEN ALLEGED OR SHOWN IN THE INSTANT CASE.

OUR DECISION OF SEPTEMBER 15, 1961, B-145819, REFERRED TO BY THE CLAIMANTS, WHICH INVOLVED A REFUSAL TO ACCEPT THE PROPERTY INVOLVED AND A CLAIM FOR REFUND OF THE BID DEPOSIT, IS NOT REGARDED AS APPLICABLE TO THE INSTANT CLAIM WHICH IS FOR DAMAGES AND NOT FOR RESCISSION. SEE W. E. HEDGER CO. V. UNITED STATES, 52 F.2D 31 (1931). CF. 36 COMP. GEN. 612, AND B-147160, OCTOBER 17, 1961.

THE CASES OF INDUSTRIAL SALVAGE CORPORATION V. UNITED STATES, 122 CT.CL. 611 (1952) AND KRUGG V. FEDERAL HOUSING ADMINISTRATION, 285 F.2D 833 (1 CIR. 1961), MENTIONED IN YOUR LETTER, MAY BE DISTINGUISHED ON THE FACTS. THE INDUSTRIAL SALVAGE CORPORATION CASE INVOLVED THE SALE AND REMOVAL OF AN ELECTRICAL DISTRIBUTION SYSTEM, INCLUDING UNDERGROUND COPPER CABLE. THE TWO ENDS OF THE CABLE WERE STICKING OUT OF THE GROUND AT THE TERMINALS INDICATED ON THE DRAWINGS, BUT THE INTERMEDIATE CABLE HAD BEEN REMOVED AND DID NOT EXIST AS SHOWN. NONE OF THE 42-INCH CAST IRON PIPE OFFERED UNDER THE INVITATION INVOLVED IN THE INSTANT CASE HAD BEEN REMOVED PRIOR TO THE SALE. THE KRUPP CASE INVOLVED THE SALE OF REAL ESTATE UNDER TERMS AND CONDITIONS QUITE DIFFERENT FROM THOSE EMPLOYED IN THE INSTANT CONTRACT.

AS INDICATED ABOVE, THE BASIS FOR DETERMINING THE VALUE OF THE INVENTORY ON HAND HAS NOT BEEN STATED AND THE CLAIM AS PRESENTED IS RESTRICTED TO ONLY ONE SUBDIVISION OUT OF FIVE INCLUDED IN THE LOT PURCHASED. THEREFORE IT OBVIOUSLY DOES NOT REFLECT THE TRANSACTION AS A WHOLE. FURTHERMORE THE COMPUTATIONS SUBMITTED BY THE CLAIMANTS ARE WITHOUT DOCUMENTARY SUPPORT AND IT IS WELL SETTLED THAT THE UNITED STATES IS NOT LIABLE FOR THE PAYMENT OF INTEREST, WHETHER CLAIMED AS SUCH OR AS COSTS OR DAMAGES, IN THE ABSENCE OF AN EXPRESS CONTRACT PROVISION OR STATUTORY AUTHORIZATION. UNITED STATES V. HOTEL CO., 329 U.S. 585; WILLIAM C. RAMSEY, ET AL. V. UNITED STATES, 121 CT.CL. 426, CERTIORARI DENIED, 343 U.S. 977, AND KOMATSU MFG. CO. V. UNITED STATES, 131 F.SUPP. 949. ..END :