B-152409, OCT. 10, 1963

B-152409: Oct 10, 1963

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BIDS WERE OPENED ON MARCH 5. SINCE YOU SUBMITTED THE HIGHEST BID ON ITEM 27 OF $0.6240 PER POUND FOR NICKEL ALLOY SCRAP THAT ITEM CONSISTING OF 500 POUNDS WAS AWARDED TO YOU ON MARCH 8. IT IS YOUR CONTENTION THAT THE SCRAP WAS CONTAMINATED WITH OTHER MATERIAL WHICH WAS NOT APPARENT UNTIL AFTER THE SCRAP HAD BEEN RECEIVED. YOU DID NOT INSPECT THE BOTTOM OF THE SCRAP CONTAINERS WHERE THE CONTAMINATION WAS PRESENT. YOU HAD NOTICE OF THE FACT THAT "THIS IS NOT A SALE BY SAMPLE. THE BIDDER IS EXPECTED NOT TO RELY ON THE GOVERNMENT'S DESCRIPTION OF THE PROPERTY BUT ON HIS OWN THOROUGH INSPECTION. THE COURTS HAVE CONSISTENTLY HELD THAT A BIDDER WHO FAILS TO RELY ON A THOROUGH AND EFFECTUAL INSPECTION OF SURPLUS PROPERTY ADVERTISED FOR SALE DOES SO AT HIS PERIL.

B-152409, OCT. 10, 1963

TO WALKER METAL COMPANY:

YOUR LETTER OF AUGUST 19, 1963, REQUESTS RECONSIDERATION OF OFFICE SETTLEMENT DATED AUGUST 13, 1963, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF $84.80, REPRESENTING AN ADJUSTMENT IN YOUR BID PRICE AND COST OF LABOR IN ASSORTING THE MATERIAL PURCHASED UNDER CONTRACT NO. DSA 36-S-1178.

ON FEBRUARY 6, 1963, THE DEFENSE SURPLUS SALES OFFICE, KELLY AIR FORCE BASE, TEXAS, ISSUED INVITATION FOR BIDS NO. 36-S-63-47. BIDS WERE OPENED ON MARCH 5, 1963, AND SINCE YOU SUBMITTED THE HIGHEST BID ON ITEM 27 OF $0.6240 PER POUND FOR NICKEL ALLOY SCRAP THAT ITEM CONSISTING OF 500 POUNDS WAS AWARDED TO YOU ON MARCH 8, 1963. FULL PAYMENT HAS BEEN MADE FOR THE 500 POUNDS OF NICKEL ALLOY SCRAP DELIVERED. IT IS YOUR CONTENTION THAT THE SCRAP WAS CONTAMINATED WITH OTHER MATERIAL WHICH WAS NOT APPARENT UNTIL AFTER THE SCRAP HAD BEEN RECEIVED, AND THAT THE SCRAP HAD TO BE HAND -PICKED AT A COST OF $84.80 TO REALIZE ANY SCRAPE VALUE. YOU CONTEND THAT WHILE YOU INSPECTED THE SCRAP, YOU DID NOT INSPECT THE BOTTOM OF THE SCRAP CONTAINERS WHERE THE CONTAMINATION WAS PRESENT.

UNDER THE TERMS AND CONDITIONS OF THE SALES INVITATION, YOU HAD NOTICE OF THE FACT THAT "THIS IS NOT A SALE BY SAMPLE; " THAT THE GOVERNMENT MADE NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE QUANTITY,KIND, OR DESCRIPTION OF THE PROPERTY BEING SOLD, OR ITS FITNESS FOR ANY PURPOSE; AND THAT YOU ASSUMED ALL RISKS WITH RESPECT THERETO.

THE BIDDER IS EXPECTED NOT TO RELY ON THE GOVERNMENT'S DESCRIPTION OF THE PROPERTY BUT ON HIS OWN THOROUGH INSPECTION. THE COURTS HAVE CONSISTENTLY HELD THAT A BIDDER WHO FAILS TO RELY ON A THOROUGH AND EFFECTUAL INSPECTION OF SURPLUS PROPERTY ADVERTISED FOR SALE DOES SO AT HIS PERIL, AND HAS ONLY HIMSELF TO BLAME FOR THE PREDICAMENT OF DISCOVERING THAT THE ACTUAL CONDITION OF THE PROPERTY DOES NOT MEET HIS EXPECTATIONS OR IS AT VARIANCE WITH THE DESCRIPTION IN THE INVITATION. SEE PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463 (1959); DADOURIAN EXPORT CORP. V. UNITED STATES, 291 F.2D. 178 (1961); LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90 (1925). SEE, ALSO, 41 COMP. GEN. 97; ID. 185.

WHILE YOU POINT OUT THAT OTHER BIDS IN LOWER AMOUNTS WERE RECEIVED ON ITEM 27, NO ERROR IN BID WAS ALLEGED. IN THIS CONNECTION, SEE UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, 688, WHERE THE COURT SAID:

"THIS BEING A SALE OF SURPLUS ENGINE PARTS, THE CONTRACTING OFFICER HAD NO METHOD OF KNOWING THAT THERE WAS AN ERROR IN THE DEFENDANT'S BID. THE GOVERNMENT WAS INTERESTED ONLY IN GETTING THE HIGHEST POSSIBLE PRICE FOR THE MATERIAL TO BE SOLD; IT WAS NOT IN THE METAL TRADE. THERE IS NO REASON WHY THE SPREAD IN BIDS SHOULD HAVE APPEARED PALPABLE TO THE GOVERNMENT. THE ADMINISTRATIVE AGENCY WAS NOT REQUIRED TO EMPLOY OR UTILIZE EXPERTS FOR THE BENEFIT OF THE DEFENDANT, NOR TO ASSUME THE BURDEN OF EXAMINING EVERY LOW BID FOR POSSIBLE ERROR BY THE BIDDER.'