B-149550, OCT. 7, 1963

B-149550, OCT. 7, 1963

TO UNIVERSAL RELAY CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 26, 1963, AND PRIOR CORRESPONDENCE, CONCERNING YOUR REQUEST FOR REVIEW OF SETTLEMENT DATED JULY 16, 1962, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF THE SUM OF $100.10 PAID TO THE GOVERNMENT IN ACCORDANCE WITH A CONTRACT OF SALE WHICH RESULTED FROM THE ACCEPTANCE OF YOUR BID ON 2,328 WIRE-WOUND ELECTRIC COILS, ADVERTISED FOR SALE UNDER ITEM NO. 39 OF INVITATION FOR BIDS NO. 33 -604-S-10, ISSUED ON SEPTEMBER 29, 1961, BY THE DAYTON AIR FORCE BASE, OHIO.

THE COILS ADVERTISED FOR SALE WERE DESCRIBED AS PARTS (NO. 1021), MANUFACTURED BY THE LEACH RELAY COMPANY, AND IT WAS STATED THAT THE COILS WERE IN MANUFACTURER'S PACKAGES, UNUSED AND APPARENTLY EXCELLENT. APPEARS THAT APPROXIMATELY 28 COILS WERE CONTAINED IN AN OPENED CARTON AND THAT, IN BIDDING ON THE LOT OF 2,328 COILS, YOU RELIED UPON A REPORT OF INSPECTION BY THE REPRESENTATIVE OF ANOTHER FIRM WHICH ALSO SUBMITTED A BID ON ITEM NO. 39 OF THE INVITATION. WHEN THE COILS WERE DELIVERED, HOWEVER, IT WAS FOUND THAT, WHILE 28 COILS WERE ACCEPTABLE, THE BALANCE OF 3,000 COILS DID NOT CONFORM TO THE DESCRIPTION SHOWN ON THE INDIVIDUAL PACKAGES AND THE MASTER CARTONS. IT IS YOUR POSITION THAT, IN THE PARTICULAR CIRCUMSTANCES, THE PERSON WHO INSPECTED THE PARTICULAR LOT OF MATERIAL ON YOUR BEHALF, AS WELL AS FOR HIS OWN COMPANY, WAS JUSTIFIED IN ASSUMING THAT THE COILS OFFERED FOR SALE WERE ALL OF THE SAME TYPE.

IN THE SETTLEMENT DATED JULY 16, 1962, YOUR ATTENTION WAS DIRECTED TO THE GENERAL SALE TERMS AND CONDITIONS MADE A PART OF THE INVITATION FOR BIDS AND, MORE PARTICULARLY, TO PARAGRAPHS 1 AND 2 THEREOF. THOSE PARAGRAPHS PROVIDE, IN PERTINENT PART, THAT IN NO CASE WOULD FAILURE TO INSPECT CONSTITUTE GROUNDS FOR THE WITHDRAWAL OF A BID AFTER OPENING, THAT "THIS IS NOT A SALE BY SAMPLE," AND THAT "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.'

MANY CASES INVOLVING SALES OF PUBLIC PROPERTY BY THE GOVERNMENT UNDER CONTRACTS CONTAINING AN EXPRESS DISCLAIMER OF WARRANTY CLAUSE SIMILAR TO THAT INCORPORATED IN THE SALE AGREEMENT HERE INVOLVED HAVE BEEN CONSIDERED BY THE FEDERAL COURTS. THE DECISIONS IN THOSE CASES HAVE UNIFORMLY UPHELD THE USE OF SUCH DISCLAIMER CLAUSES AND CONCLUDED THAT THE RULE OF CAVEAT EMPTOR SHOULD BE APPLIED. SEE, IN THIS CONNECTION, THE COURT DECISIONS IN THE CASES OF SNYDER CROP. V. UNITED STATES, 68 CT.CL. 667; SACHS MERCANTILE CO. V. UNITED STATES, 78 CT.CL. 801; AMERICAN SANITARY RAG CO. V. UNITED STATES, 142 CT.CL. 293; PAXTON-MITCHELL CO. V. UNITED STATES, 145 CT.CL. 502; STAR WOOLEN CO. V. UNITED STATES, NO. 51-61 CT.CL., DECIDED NOVEMBER 7, 1962; AMERICAN AUTO PARTS CO., INC. V. UNITED STATES, NO. 120-57 CT.CL., DECIDED JUNE 7, 1963; AMERICAN ELASTICS V. UNITED STATES, 187 F.2D. 109, CERTIORARI DENIED, 342 U.S. 829; MILLER HARNESS CO., INC. V. UNITED STATES, 241 F.2D. 781; UNITED STATES V. HATHAWAY, 242 F.2D. 897; AND DADOURIAN EXPORT CORP. V. UNITED STATES, 291 F.2D. 178. IT WILL BE NOTED THAT IN SOME OF THESE CASES THE COURTS CONSIDERED AND REJECTED CONTENTIONS TO THE EFFECT THAT COMPLETE INSPECTION WOULD HAVE BEEN DIFFICULT BECAUSE THE BULK OF THE MATERIAL OR ARTICLES OFFERED FOR SALE WAS PACKED IN BOXES OR CARTONS, WITH ONLY A REPRESENTATIVE QUANTITY OF THE PARTICULAR GOODS HAVING BEEN DISPLAYED AT THE GOVERNMENT WAREHOUSE. THUS, IN THE CASE OF MILLER HARNESS CO., INC., WHICH INVOLVED THE SALE OF SADDLE PARTS MOST OF WHICH WERE PACKED IN BOXES, THE UNITED STATES COURT OF APPEALS, SECOND CIRCUIT, STATED THAT:

"* * * A CURSORY AND PERFUNCTORY EXAMINATION OF A SMALL PART OF THE GOODS OFFERED UNDER AN ,INVITATION" SO LIMITED AND CIRCUMSCRIBED BY CONDITIONS AND WARNINGS IS PLAINLY INSUFFICIENT TO WARRANT ANY RECOVERY WHATEVER. HERE THERE WAS NO SALE BY DESCRIPTION, AND THE BUYER TOOK THE RISK THAT THE ALREADY IDENTIFIED BOXES DID NOT CONTAIN WHAT HE HOPED WAS IN THEM.'

IN THE CIRCUMSTANCES, WE MUST CONCLUDE THAT THERE IS NO LEGAL BASIS UPON WHICH WE WOULD BE WARRANTED IN AUTHORIZING PAYMENT OF ANY PART OF YOUR CLAIM. ACCORDINGLY, THE SETTLEMENT WHICH DISALLOWED THE CLAIM IS SUSTAINED.