B-152503, DEC. 10, 1963

B-152503, DEC. 10, 1963

TO SAXON METAL COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 3, 1963, REQUESTING RECONSIDERATION OF OUR SETTLEMENT DATED AUGUST 13, 1963, WHICH DISALLOWED YOUR CLAIM FOR $711.73, REPRESENTING PART OF THE COST OF LEAD SCRAP PURCHASED BY YOU UNDER CONTRACT NO. DSA-27-S-915.

ITEM 32 OF THE INVITATION TO BID WAS DESCRIBED AS LEAD SCRAP, PREDOMINANTLY TELEPHONE CABLE, AND YOUR HIGH BID OF $0.0948 PER POUND WAS ACCEPTED. THE TOTAL WEIGHT SHIPPED UNDER THIS ITEM WAS 107,870 POUNDS AND YOU STATE THAT THE VARIOUS GRADES OF SCRAP WERE WEIGHED IN SEPARATELY AND SHOWED A TOTAL OF 50,176 POUNDS OF TELEPHONE CABLE AND 25,881 POUNDS OF LEAD WIRE ON STEEL SPOOLS, PLUS SMALLER QUANTITIES OF OTHER TYPES OF LEAD SCRAP. YOUR CLAIM REPRESENTS A PROPOSED ADJUSTMENT OF $0.0275 PER POUND AS THE ALLEGED DIFFERENCE IN THE VALUE OF 25,881 POUNDS OF LEAD WIRE AND THE SAME QUANTITY OF TELEPHONE CABLE.

IT IS YOUR CONTENTION THAT THE MATERIAL WAS NOT ACCURATELY DESCRIBED IN THAT IT WAS NOT PREDOMINANTLY TELEPHONE CABLE, AND THAT IT WAS DISPLAYED IN SUCH A MANNER THAT IT WAS IMPOSSIBLE TO DETECT THE INCLUSION OF THE POOR MATERIAL. YOU ALSO REFER TO TWO OTHER SALES, IN ONE OF WHICH THE MATERIAL WITH A LOWER COMMERCIAL VALUE WAS CLEARLY DISPLAYED, AND IN THE OTHER THE TELEPHONE CABLE WAS OFFERED AS A SEPARATE ITEM, WHICH YOU CONSIDER TO BE A TACIT ADMISSION THAT MATERIAL SHOULD BE OFFERED IN THIS MANNER TO AVOID ANY CLAIMS FOR IMPROPER DISPLAY.

WE HAVE NO RECORD OF THE SALES TO WHICH YOU REFER, BUT IT SEEMS LIKELY THAT IF, AS INDICATED BY YOU, TELEPHONE CABLE IS MORE VALUABLE THAN OTHER LEAD SCRAP, THE SEPARATE LISTING OF THIS CABLE WOULD BE FOR THE PURPOSE OF GETTING A BETTER PRICE, RATHER THAN AVOIDING MISDESCRIPTION OR IMPROPER DISPLAY.

IN THE PRESENT CASE IT APPEARS THAT 46.5 PERCENT OF THE WEIGHT OF ITEM 32 WAS TELEPHONE CABLE, 24 PERCENT WAS LEAD WIRE, AND THE BALANCE WAS SPREAD AMONG FOUR OTHER TYPES OF LEAD SCRAP. SINCE THE QUANTITY OF TELEPHONE CABLE WAS SUBSTANTIALLY GREATER THAN ANY OTHER SINGLE ITEM IN THE LOT AND REPRESENTED ALMOST HALF OF THE TOTAL, IT CANNOT REASONABLY BE ARGUED THAT THERE WAS A MISDESCRIPTION OF THE ITEM, PARTICULARLY IN VIEW OF THE NATURE OF THE TRANSACTION. TO PREDOMINATE DOES NOT NECESSARILY IMPLY EVEN A MAJORITY, SUCH LESS A SUBSTANTIAL MAJORITY, AS YOU SEEM TO BELIEVE. DOES IMPLY A PREPONDERANCE IN DEGREE, WHICH WE HAVE HERE.

REGARDLESS OF ANY DISTINCTIONS THAT MAY BE DRAWN IN THE INTERPRETATION OF THE LANGUAGE, IN VIEW OF THE PLAIN TERMS OF THE INVITATION, URGING ALL BIDDERS TO INSPECT THE PROPERTY AND DISCLAIMING ANY WARRANTY, EXPRESS OR IMPLIED, AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE, OR DESCRIPTION OF ANY OF THE PROPERTY, BIDDERS ARE GIVEN FAIR WARNING OF THE RISKS INVOLVED AND MAY NOT BE HEARD TO COMPLAIN BECAUSE THE PROPERTY FAILS TO CORRESPOND WITH THE STANDARD EXPECTED. THE FACT THAT IT MAY NOT HAVE BEEN POSSIBLE TO EXAMINE ALL OF THE MATERIAL ON DISPLAY IS ONE OF THE RISKS INVOLVED. SEE 32 COMP. GEN. 181.

THE COURTS HAVE CONSISTENTLY RECOGNIZED THAT SALES OF SURPLUS PROPERTY ARE NOT ORDINARY BUSINESS TRANSACTIONS AND THAT PURCHASERS MUST BE HELD STRICTLY ACCOUNTABLE FOR THE RESPONSIBILITY PLACED UPON THEM BY THE CONTRACT TERMS RELATING TO INSPECTION AND DISCLAIMER OF WARRANTY. SEE AMERICAN ELASTICS, INC. V. UNITED STATES, 84 F.SUPP. 194, 196; LUMBRAZO V. WOODRUFF, 175 N.E. 525; I. SHAPIRO AND COMPANY V. UNITED STATES, 66 CT.CL. 424. FURTHERMORE, IN THE ABSENCE OF A RADICAL MISDESCRIPTION OF THE NATURE OF THE ITEM BEING SOLD, THE GOVERNMENT NEED ONLY ACT IN GOOD FAITH BASED ON THE BEST AVAILABLE INFORMATION. SEE LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, 2; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151.

IN VIEW OF THE CLEAR AND VERY COMPREHENSIVE TERMS OF THE CONTRACT, AND SINCE THE GOVERNMENT CLEARLY MET THE REQUIREMENT OF GOOD FAITH IN BOTH THE DISPLAY AND DESCRIPTION OF THE MATERIAL, THE SETTLEMENT OF AUGUST 13, 1963, MUST BE SUSTAINED.