B-153211, MAR. 9, 1964

B-153211, MAR. 9, 1964

TO THE AMERICAN NICKEL ALLOY MANUFACTURING CORP.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 18, 1963, REQUESTING REVIEW OF CLAIMS DIVISION SETTLEMENT DATED DECEMBER 12, 1963, DENYING YOUR CLAIM FOR REFUND OF $770.49 OF THE $3,101.78 PAID FOR ITEM 12, NICKEL SCRAP, AWARDED TO YOU UNDER INVITATION NO. 15-S-63 78 ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, FORT HOLABIRD, BALTIMORE, MARYLAND.

THE RECORD SHOWS THAT BY THE ABOVE-CITED INVITATION, BIDS WERE REQUESTED FOR THE SALE BY THE GOVERNMENT OF VARIOUS ITEMS OF MISCELLANEOUS SCRAP. ITEM 12 WAS DESCRIBED AS,"NICKEL SCRAP, CONSISTING OF 47 EACH 55 GAL. DRUMS, CONTAMINATED WITH IRON BANDS. 5,546 LBS.' THE INVITATION SOLICITED AND URGED INSPECTION OF THE PROPERTY AND CONTAINED THE USUAL "AS IS" AND "WHERE IS" AND EXPRESS DISCLAIMER OF WARRANTY CLAUSES IN ADDITION TO A PROVISION (CLAUSE 12) WHICH PROVIDED THAT "ANY ORAL STATEMENT OR REPRESENTATION BY ANY REPRESENTATIVE OF THE GOVERNMENT, CHANGING OR SUPPLEMENTING THIS CONTRACT OR ANY CONDITION THEREOF, IS UNAUTHORIZED AND SHALL CONFER NO RIGHTS UPON THE PURCHASER.'

IT APPEARS THAT RATHER THAN INSPECTING THE PROPERTY AS URGED BY THE INVITATION, YOU CONTACTED THE PROPERTY DISPOSAL OFFICER AND IN THIS CONNECTION IT IS STATED IN YOUR LETTER OF AUGUST 19, 1963, IN PART, AS FOLLOWS:

"THIS NICKEL SCRAP HAS BEEN DESCRIBED IN THE ORIGINAL INVITATION TO CONSIST OF 47 SCRAP NICKEL DRUMS CONTAMINATED WITH IRON BANDS. OUR RECORDS SHOW THAT WE INQUIRED WITH THE EDGEWOOD ARSENAL ON APRIL 22, 1963 ABOUT THE PHYSICAL CONDITION OF THIS NICKEL SCRAP. WE ASKED AMONG OTHER QUESTIONS WHAT IS MEANT BY "CONTAMINATED WITH IRON BANDS? " OUR LETTER WAS RETURNED TO US WITH THE NOTATION THAT "THE IRON ROLLING BANDS IS THE IRON MENTIONED IN THE SALE.' UPON RECEIPT OF THIS ANSWER ON APRIL 24TH, 1963, WE CALLED THE EDGEWOOD ARSENAL ON THE TELEPHONE AND INQUIRED HOW MUCH THE IRON BANDS WEIGH. THE ANSWER RECEIVED OVER THE TELEPHONE WAS "NOT OVER 10 LBS. PER DRUM.'"

A MEMORANDUM IN THE RECORD SHOWS THAT THE PROPERTY DISPOSAL OFFICER'S RECOLLECTION OF WHAT HE TOLD YOU CONCERNING THE WEIGHT OF THE IRON BANDS IS,"* * * DUE TO DETERIORATION BY RUST, IT WOULD BE DIFFICULT TO GIVE A FAIR ESTIMATE BUT I THOUGHT TEN LBS. PER DRUM WOULD BE CLOSE.' APPARENTLY YOU HAD ALSO REQUESTED THAT A PIECE FROM THE DRUMS BE SENT TO YOU FOR ANALYSIS AND IN A LETTER DATED MAY 10, 1963, YOU ADVISED THE PROPERTY DISPOSAL OFFICER AS FOLLOWS:

"YOU WERE GOOD ENOUGH TO MAIL TO OUR WEEHAWKEN, NEW JERSEY PLANT A PIECE FROM THE NICKEL DRUMS, ITEM NO. 12.

"WE HAD THIS ANALYZED AND ARE REPORTING TO YOU HEREWITH THE NICKEL CONTENT AS PROMISED. THE PIECE WHICH YOU SENT US CONTAINS 99.29 PERCENT NICKEL.

"WE HAVE JUST ONE MORE QUESTION. ARE THE IRON HOOPS SOLDERED ON OR ARE THEY WELDED ON? "

IN ANSWER TO YOUR QUESTION THE PROPERTY DISPOSAL OFFICER BY LETTER DATED MAY 14, 1963, ADVISED AS FOLLOWS:

"THANK YOU VERY MUCH FOR FURNISHING THE NICKEL CONTENT. THE IRON HOOPS LOOK TO ME LIKE THEY ARE WELDED.'

ON THE BASIS OF THE ABOVE INFORMATION YOU SUBMITTED A BID DATED MAY 17, 1963, ACCOMPANIED BY BID DEPOSIT OF $700.00 OF $0.60112 PER POUND FOR ITEM 12. YOUR BID ON THAT ITEM BEING THE HIGHEST RECEIVED WAS ACCEPTED ON MAY 28, 1963, CONSUMMATING CONTRACT NO. DSA-15-S-1759. THEREAFTER YOU PAID THE BALANCE OF THE CONTRACT PRICE AND PICKED UP THE MATERIAL. AFTER RECEIVING AND REMOVING THE IRON BANDS FROM THE DRUMS IT WAS LEARNED THAT THE ACTUAL WEIGHT WAS 33 POUNDS PER DRUM. YOUR CLAIM FOR $770.49 IS STATED TO REPRESENT THE DAMAGE SUFFERED BY YOU DUE TO THE DIFFERENCE BETWEEN THE ACTUAL WEIGHT OF THE IRON BANDS AND THE ORAL INFORMATION YOU RECEIVED FROM THE PROPERTY DISPOSAL OFFICER AND ON THE BASIS OF WHICH YOU COMPUTED YOUR BID PRICE. THE CLAIM WAS DENIED BY THE SETTLEMENT OF DECEMBER 12, 1963.

YOUR LETTER OF DECEMBER 18, 1963, IS IN PART AS FOLLOWS:

"WE ARE HEREWITH APPEALING YOUR DECISION AND WOULD LIKE YOU TO RECONSIDER IT FOR THE FOLLOWING REASONS: THIS IS NOT AN ORDINARY CASE WHERE A CERTAIN MATERIAL WAS OFFERED FOR SALE AND TURNED OUT TO BE DIFFERENT FROM THE DESCRIPTION. WE REALIZE THAT THE GOVERNMENT PROTECTS ITSELF AGAINST SUCH CASES THROUGH THE GENERAL SALES TERMS AND CONDITIONS, WHICH WHICH WE ARE FAMILIAR, AND REJECTS CLAIMS ON THE STRENGTH OF THESE TERMS AND CONDITIONS.

"THE MATERIAL WAS OFFERED FOR SALE BUT NO EXACT AMOUNT OF IRON ATTACHMENTS WAS SPECIFIED. BY INSPECTING THE DRUMS, THE AMOUNT OF IRON COULD NOT BE DETERMINED ACCURATELY. FOR THIS REASON, WE ASKED THE OFFICER -IN-CHARGE AND WE WERE ADVISED THAT THE IRON DOES NOT WEIGH OVER TEN POUNDS PER NICKEL DRUM. ACTUALLY, THE IRON ATTACHMENTS WEIGH MORE THAN THREE TIMES AS MUCH. WE WERE ALSO ADVISED THAT THESE SAME DRUMS HAVE BEEN SOLD PREVIOUSLY AND THEREFORE THE INFORMATION RECEIVED FROM THE SELLING AGENCY MUST HAVE BEEN BASED ON PREVIOUS EXPERIENCE.

"AS IT TURNED OUT, THIS INFORMATION WAS WRONG AND CONSEQUENTLY WE HAVE HERE A CASE OF MISREPRESENTATION WHICH ENTITLES US TO AN ADJUSTMENT.'

IN OUR OPINION THE RECORD DOES NOT SUBSTANTIATE YOUR ALLEGATION THAT THE INFORMATION FURNISHED BY THE PROPERTY DISPOSAL OFFICER CONSTITUTED A "MISREPRESENTATION" EVEN THOUGH SUCH INFORMATION WAS LATER FOUND TO BE SUBSTANTIALLY IN ERROR. RATHER IT APPEARS THAT THE INFORMATION GIVEN BY THE PROPERTY DISPOSAL OFFICER WAS MERELY AN EXPRESSION OF OPINION MADE IN GOOD FAITH. REGARDLESS OF SUCH A QUESTION, HOWEVER, THE INVITATION INVITED AND URGED INSPECTION OF THE MATERIAL AND BY NOT SPECIFYING THE WEIGHT OF THE IRON BANDS ON THE DRUMS, LEFT IT UP TO THE BIDDERS TO DECIDE FOR THEMSELVES AS TO THEIR WEIGHT. THE INVITATION SPECIFICALLY PROVIDED THAT THE PROPERTY LISTED WAS OFFERED FOR SALE "AS IS" AND "WHERE IS" 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 * * *.' IT WAS FURTHER PROVIDED THAT "ANY ORAL STATEMENT OR REPRESENTATION BY ANY REPRESENTATIVE OF THE GOVERNMENT, CHANGING OR SUPPLEMENTING THIS CONTRACT OR ANY CONDITION THEREOF, IS UNAUTHORIZED AND SHALL CONFER NO RIGHTS UPON THE PURCHASER.'

YOU ARE ATTEMPTING TO CONVERT THE ORAL STATEMENT OF OPINION BY THE PROPERTY DISPOSAL OFFICER INTO A WARRANTY WHICH CLEARLY IS CONTRARY TO THE SPECIFIC TERMS OF THE INVITATION UNDER WHICH YOUR BID WAS MADE. IN THE CASE OF KRUPP V. FEDERAL HOUSING ADMINISTRATION 185 F.SUPP. 638, THE COURT HELD THAT THE PURCHASER WHO RELIES ON INFORMATION FURNISHED HIM BY THE GOVERNMENT AND FAILS TO INSPECT OR DOES NOT FULLY INSPECT DOES SO AT HIS OWN RISK, AND EVEN IF HE MAKES A BAD BARGAIN BECAUSE OF DEFECTS IN THE PROPERTY WHICH EVEN A REASONABLY CAREFUL INSPECTION WOULD NOT DISCLOSE, THE RISK OF LOSS STILL FALLS ON HIM; AND THAT, IF HE IS MISLED BY HIS RELIANCE ON ANY STATEMENT OF THE SELLER AS TO THE PROPERTY, THIS IS THE RISK WHICH HE KNEW OR SHOULD HAVE KNOWN HE WAS TAKING BECAUSE THE PROSPECTUS CLEARLY WARNED HIM THAT THE SALE WAS BEING MADE ON THESE TERMS. SEE ALSO STAR WOOLEN COMPANY V. UNITED STATES 309 F.2D 409.

WITH RESPECT TO YOUR REQUEST FOR INFORMATION AS TO WHOM YOU SAY ADDRESS A FURTHER APPEAL, YOU ARE ADVISED THAT THE ACTION OF THIS OFFICE ON CLAIMS AGAINST THE UNITED STATES IS FINAL AND CONCLUSIVE ON THE EXECUTIVE BRANCH OF THE GOVERNMENT. HOWEVER, THE COURT OF CLAIMS OF THE UNITED STATES HAS JURISDICTION TO CONSIDER AND DETERMINE CERTAIN CLAIMS AGAINST THE UNITED STATES. 28 U.S.C. 2501. ALSO, THE DISTRICT COURTS OF THE UNITED STATES HAVE SIMILAR JURISDICTION.

FOR THE FOREGOING REASONS, THERE IS NO LEGAL BASIS FOR THE ALLOWANCE OF YOUR CLAIM AND, ACCORDINGLY, THE SETTLEMENT OF DECEMBER 12, 1963, IS SUSTAINED.