B-152434, DEC. 6, 1963

B-152434: Dec 6, 1963

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INC.: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 21. THE ABOVE ITEM WAS DESCRIBED IN THE INVITATION AS FOLLOWS: "HIGH TEMPERATURE ALLOY SCRAP. YOU WERE AWARDED ITEM 52 AS HIGH BIDDER IN THE AMOUNT OF $0.1667 PER POUND AND HAVE PAID $316.73 FOR THE MATERIAL. YOU REQUEST AN ADJUSTMENT ON THE BASIS THAT THE MATERIAL DELIVERED TO YOU WAS PLAIN STEEL SCRAP RATHER THAN HIGH TEMPERATURE ALLOY SCRAP. THAT IT WAS THE RESPONSIBILITY OF THE DISPOSAL AGENCY TO DESCRIBE ACCURATELY THE MATERIAL BEING SOLD. YOU STATE FURTHER THAT IT IS NOT ECONOMICALLY PRACTICAL FOR YOU TO SEND A MAN FROM DETROIT TO SAN ANTONIO TO INSPECT 2. THE FIRST TWO GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT RELATE TO INSPECTION AND DISCLAIMER OF WARRANTY AND ARE CLOSELY RELATED.

B-152434, DEC. 6, 1963

TO THE SAMUEL G. KEYWELL CO., INC.:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 21, 1963, REQUESTING RECONSIDERATION OF OUR SETTLEMENT DATED AUGUST 13, 1963, WHICH DISALLOWED YOUR CLAIM FOR AN ADJUSTMENT OF THE PRICE PAID FOR ITEM 52 OF SALES INVITATION NO. 36-S-63-20, CONTRACT NO. DSA 36-S-578.

THE ABOVE ITEM WAS DESCRIBED IN THE INVITATION AS FOLLOWS:

"HIGH TEMPERATURE ALLOY SCRAP, CONSISTING OF COMPRESSOR ROTOR DISC SPACER ASSEMBLY, P/N 206974, GROUP 55, MAY CONTAIN THE FOLLOWING MATERIAL ALLOY, TUNGSTEN. UNPREPARED FOR MILL RUN OR DIRECT CHARGE INTO ELECTRIC FURNACE.'

YOU WERE AWARDED ITEM 52 AS HIGH BIDDER IN THE AMOUNT OF $0.1667 PER POUND AND HAVE PAID $316.73 FOR THE MATERIAL, PLUS FREIGHT COSTS FROM KELLY AIR FORCE BASE, TEXAS, TO DETROIT, MICHIGAN.

YOU REQUEST AN ADJUSTMENT ON THE BASIS THAT THE MATERIAL DELIVERED TO YOU WAS PLAIN STEEL SCRAP RATHER THAN HIGH TEMPERATURE ALLOY SCRAP, AS ADVERTISED, AND THAT IT WAS THE RESPONSIBILITY OF THE DISPOSAL AGENCY TO DESCRIBE ACCURATELY THE MATERIAL BEING SOLD, OR TO MERELY DESCRIBE IT AS SCRAP. YOU STATE FURTHER THAT IT IS NOT ECONOMICALLY PRACTICAL FOR YOU TO SEND A MAN FROM DETROIT TO SAN ANTONIO TO INSPECT 2,000 POUNDS OF SCRAP.

THE FIRST TWO GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT RELATE TO INSPECTION AND DISCLAIMER OF WARRANTY AND ARE CLOSELY RELATED. BEFORE DISCLAIMING ANY WARRANTY THE GOVERNMENT INVITES, URGES AND CAUTIONS ALL BIDDERS TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING A BID AND WARNS THAT IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR THE WITHDRAWAL OF A BID AFTER OPENING. THIS REQUIREMENT FOR INSPECTION HAS BEEN GIVEN UNIFORMLY RIGID EFFECT BY THE COURTS. AS STATED IN PAXTON- MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463:

"A BIDDER FAILS TO INSPECT AT HIS PERIL. HAD PLAINTIFF MADE AN INSPECTION BEFORE MAKING ITS BID, AS IT DID AFTERWARDS, IT COULD HAVE DISCOVERED THAT MUCH OF THE MATERIAL WAS MALLEABLE FROM. VISUAL INSPECTION WAS INEFFECTUAL, BUT MICROSCOPIC INSPECTION WAS EFFECTUAL AS WAS ALSO CHEMICAL ANALYSIS. PLAINTIFF WAS REQUIRED TO MAKE THE SORT OF INSPECTION THAT WAS EFFECTUAL. IT MADE NONE, NOT EVEN VISUAL INSPECTION. THE FAILURE TO DO SO LEAVES IT NO ROOM TO COMPLAIN.'

ALSO, THE UNITED STATES V. SILVERTON, 200 F.2D 824, 827, IT IS STATED, WITH REFERENCE TO THE INSPECTION PROVISIONS, THAT:

"* * * UNDER THE TERMS OF THE SALE, WITH INSPECTION INVITED PRIOR TO THE SUBMISSION OF BIDS, CAVEAT EMPTOR WAS CERTAINLY INTENDED TO BE APPLIED TO THE FURTHEST LIMIT THAT CONTRACT STIPULATIONS COULD ACCOMPLISH IT.'

WE AGREE THAT IT MAY NOT HAVE BEEN PRACTICAL FOR YOU TO SEND A MAN TO SAN ANTONIO TO INSPECT 2,000 POUNDS OF SCRAP, BUT THIS FACT DOES NOT ENLARGE THE GOVERNMENT'S OBLIGATION OR RELIEVE YOU OF THE NECESSITY FOR PROTECTING YOUR OWN INTERESTS.

THE DISCLAIMER OF WARRANTY SPECIFICALLY ADVISES BIDDERS THAT THE DESCRIPTION OF THE MATERIAL IS BASED ON THE BEST AVAILABLE INFORMATION, WHICH WAS DEFINITELY THE CASE HERE. TAGS ATTACHED TO THE MATERIAL AND OTHER INFORMATION FURNISHED SALES PERSONNEL WHEN THE PROPERTY WAS MADE AVAILABLE FOR DISPOSAL INDICATED THAT THIS PARTICULAR LOT WAS HIGH TEMPERATURE ALLOY SCRAP. BIDDERS ARE ALSO WARNED THAT THE PROPERTY IS OFFERED FOR SALE "AS IS" AND "WHERE IS," WHICH MEANS THAT THE SELLER SELLS WITHOUT GUARANTY AS TO THE AMOUNT OR CONDITION OF THE MATERIAL, THAT HE SELLS WHAT MAY BE FOUND IN THE LOT, THAT HE DOES NOT PROFESS TO KNOW ACCURATELY HIMSELF THE AMOUNT OR CHARACTER OF THE MATERIAL, AND THAT THE PURCHASER MUST TAKE HIS CHANCES ON WHAT HE WILL GET. M. SAMUEL AND SONS V. UNITED STATES, 61 CT.CL. 373, 381.

IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND BY OUR OFFICE THAT THE EXPRESS AND VERY COMPREHENSIVE DISCLAIMER OF WARRANTY IN THIS AND SIMILAR SALES OF SURPLUS PROPERTY VITIATES ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT ARISE OUT OF A SALES TRANSACTION. IT IMPOSES UPON THE BIDDER THE RISK OF MISDESCRIPTION AND REQUIRES OF THE GOVERNMENT ONLY THE EXERCISE OF GOOD FAITH. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED, 284 U.S. 676; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151. THE GOVERNMENT ACTED IN GOOD FAITH AND WITHOUT ANY INTENTION OF MISLEADING PROSPECTIVE PURCHASERS, AND THE MATERIAL WAS DESCRIBED AND SOLD FOR WHAT THE SELLERS REALLY BELIEVED IT TO BE.

FOR THE REASONS STATED, WE FIND NO LEGAL OBJECTION TO THE VALIDITY OF CONTRACT NO. DSA 36-S-578, AND THE SETTLEMENT OF AUGUST 13, 1963, IS THEREFORE SUSTAINED.