B-161181, JUN. 21, 1967

B-161181, JUN. 21, 1967

TO GENERAL SCRAP MATERIAL COMPANY:

YOUR LETTER OF MARCH 27, 1967, REQUESTS RECONSIDERATION OF OUR SETTLEMENT DATED NOVEMBER 16, 1966, WHICH DISALLOWED YOUR CLAIM FOR $6,164.79, REPRESENTING COSTS INCURRED FOR FREIGHT, HANDLING, AND CLEANING OF SURPLUS SCRAP PURCHASED FROM THE GOVERNMENT UNDER CONTRACT NO. 37-6029-020, DATED SEPTEMBER 23, 1965.

THE RECORD SHOWS THAT YOUR BID ON WHICH THE CONTRACT IS BASED WAS SUBMITTED IN RESPONSE TO SALES INVITATION NO. 37-6029 ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, FORT WORTH, TEXAS, OFFERING FOR SALE AT THE RED RIVER ARMY DEPOT, ITEM 25,"STEEL, NO. 1, HEAVY MELTING, PREPARED, SCRAP, CONSISTING OF 280MM PROJECTILES, DEMILITARIZED, WITH ROTATING BANDS REMOVED. (LOC: OUTDOOR STORAGE, NORTH YARD - UNPACKED). 900 GT.' PAGE 12 OF THE INVITATION CONTAINS A GUARANTEED DESCRIPTIONS CLAUSE WHICH PROVIDES, IN PERTINENT PART, THAT THE GOVERNMENT WARRANTS AND GUARANTEES THAT THE PROPERTY TO BE DELIVERED TO THE PURCHASER UNDER ANY CONTRACT RESULTING FROM THE INVITATION WILL BE AS DESCRIBED THEREIN. IF THE DESCRIPTION IS INCORRECT THE GOVERNMENT MAY EXERCISE AN OPTION TO ALLOW RETURN OF THE PROPERTY OR TO MAKE AN EQUITABLE ADJUSTMENT IN THE PURCHASE PRICE. PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS PROVIDES THAT UNLESS OTHERWISE PROVIDED IN THE INVITATION ALL PROPERTY IS OFFERED FOR SALE "AS IS" AND THAT THE GOVERNMENT DOES NOT WARRANT THE CONDITION OF THE PROPERTY.

IT APPEARS THAT AFTER RECEIPT OF THE SCRAP, YOU ALLEGED THAT THE SCRAP WAS CONTAMINATED WITH LEAD AND THEREFORE COULD NOT BE SOLD TO MILLS HAVING ELECTRIC FURNACES SINCE DAMAGE COULD OCCUR TO THE FURNACES. YOUR CLAIM FOR THE COSTS INCURRED BECAUSE OF THE ALLEGED CONTAMINATION WAS DISALLOWED FOR THE REASON THAT THE AMOUNT OF LEAD WAS CONSIDERED NEGLIGIBLE AND WITHIN THE ACCEPTABLE REQUIREMENTS OF TRADE AND TECHNICAL JOURNALS.

IN YOUR LETTER OF MARCH 27, 1967, YOU CONTEND, IN EFFECT, THAT SINCE THE SCRAP WAS CONTAMINATED THE DESCRIPTION OF THE SCRAP WAS INACCURATE AND, CONSEQUENTLY, ADJUSTMENT SHOULD BE MADE PURSUANT TO THE GUARANTEED DESCRIPTIONS CLAUSE OF THE CONTRACT.

THE GUARANTEED DESCRIPTIONS CLAUSE EXPRESSLY WARRANTED THE DESCRIPTION ONLY AS TO KIND OR IDENTITY SO THAT IF THE PROPERTY DELIVERED COULD NOT REASONABLY BE CONSIDERED AS NO. 1 STEEL, HEAVY MELTING SCRAP THERE WOULD HAVE BEEN A BREACH OF THIS WARRANTY. CONDITION OF THE SCRAP WAS NOT WARRANTED, HOWEVER, THE GOVERNMENT GUARANTEEING ONLY THE ACCURACY OF THE FACTUAL INFORMATION CONTAINED IN THE CATALOG DESCRIPTION OF THE ITEM. BOTH PARAGRAPH 2 AND THE GUARANTEED DESCRIPTIONS CLAUSE EXCLUDED ANY GUARANTEE AS TO THE CONDITION OF THE PROPERTY.

THE INSTITUTE OF SCRAP IRON AND STEEL, INC., IN ITS BOOKLET, "SPECIFICATIONS FOR IRON AND STEEL SCRAP" DEFINES NO. 1 HEAVY MELTING STEEL AS WROUGHT IRON AND/OR STEEL SCRAP 1/4 INCH AND OVER IN THICKNESS; INDIVIDUAL PIECES NOT OVER 60 BY 24 INCHES. THIS DEFINITION CLEARLY EMBRACES THE SCRAP HERE INVOLVED SINCE EACH PROJECTILE IS STEEL, EACH HAS WALLS WHICH ARE .9 INCH THICK, AND EACH HAS DIMENSIONS OF APPROXIMATELY 49 BY 11 INCHES. WHILE YOU CONTEND THAT THE .02 PERCENT LEAD CONTAMINATION RESULTS IN A MISDESCRIPTION OF THE PROPERTY, THE INSTITUTE'S BOOKLET INDICATES THAT THE PRESENCE OF A NEGLIGIBLE AMOUNT OF NONFERROUS MATERIALS OR OFF GRADE MATERIAL WOULD NOT EFFECT A CHANGE OF IDENTITY OF THE PROPERTY. IN ADDITION, THE ADMINISTRATIVE OFFICE REPORTS THAT THE LEAD REMAINING ON THE PROJECTILES AFTER THE DEMILITARIZATION PROCESS WOULD VOLATILIZE OR PASS OFF IN VAPOR, IN A FURNACE WITHOUT DOING HARM TO THE FURNACE. IN VIEW OF THE FOREGOING, WE THINK THAT THE DESCRIPTION IN THE INVITATION WAS ACCURATE FOR THE PROPERTY DELIVERED. ALTHOUGH THE DESCRIPTION DID NOT INDICATE THAT THE SCRAP CONTAINED ANY LEAD IT MAY BE POINTED OUT THAT THE GOVERNMENT WAS UNDER NO OBLIGATION TO INCLUDE ALL FACTUAL INFORMATION WHICH MIGHT RELATE TO THE PROPERTY IN THE CATALOG DESCRIPTION. AS A MATTER OF FACT, SINCE VARIOUS BIDDERS ARE INTERESTED IN DIFFERENT INFORMATION ACCORDING TO THEIR INDIVIDUAL NEEDS, IT WOULD BE IMPRACTICAL TO ATTEMPT TO INCLUDE ALL OF THE INFORMATION THAT MIGHT BE OF SOME VALUE TO THE BIDDERS.

SINCE THE CONTAMINATION OF THE SCRAP RELATES TO ITS CONDITION WHICH WAS NOT GUARANTEED, THERE IS NO LEGAL BASIS FOR PAYMENT OF YOUR CLAIM. SEE DADOURIAN EXPORT CORPORATION V. UNITED STATES, 291 F.2D 178, 41 COMP. GEN. 185.