B-173980, DEC 9, 1971

B-173980, DEC 9, 1971

CONTRACTS - SCRAP METAL SALE - ERRONEOUS WEIGHT ADVERTISED - DISCLAIMER OF WARRANTY DECISION DENYING CLAIM FOR REFUND OF $.06 PER POUND FOR 9,030 POUNDS DELIVERED TO BILL'S SALVAGE CO., UNDER A SURPLUS SALES CONTRACT BY THE DEFENSE SURPLUS SALES OFFICE, WHOSE INVITATION LISTED 21,970 POUNDS OF COPPER SCRAP. WHILE CLAIMANT WAS NOT LEGALLY OBLIGATED TO ACCEPT LESS THAN A 25% VARIANCE WHICH WOULD HAVE BEEN 16,478 POUNDS, WHEN IT DID ACCEPT THE 9,030 POUNDS AT A PROPORTIONALLY REDUCED PRICE, IT BECAME ENTITLED TO NO MORE THAN REFUND OF THE PURCHASE PRICE FOR THE PORTION UNDELIVERED. THE INSTANT SALE WAS "AS IS" AND "WHERE IS" AND THE GOVERNMENT LIMITED ITS LIABILITY AS ABOVE INDICATED. THEREFORE, A CLAIM FOR $.06 PER POUND ON THE 9,030 POUNDS REPRESENTING THE DIFFERENCE BETWEEN THE ADVERTISED PRICE AND THAT PAID BY CLAIMANT TO FULFILL A RESALE CONTRACT MAY NOT BE ALLOWED.

TO BILL'S SALVAGE CO.:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 26, 1971, WITH ENCLOSURES, SUBMITTING A CLAIM IN THE AMOUNT OF $660 ALLEGED TO BE DUE YOU BY REASON OF THE GOVERNMENT'S INABILITY TO DELIVER THE QUANTITY OF PROPERTY UNDER THE CONTRACT AWARDED TO YOU FOR ITEM NO. 60 UNDER INVITATION FOR BIDS 27- 1153-026 ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, COLUMBUS, OHIO.

THE INVITATION OFFERED FOR SALE ON A SEALED BID BASIS VARIOUS TYPES OF SCRAP METAL. ITEM NO. 60 WAS DESCRIBED AS 21,970 POUNDS OF COPPER SCRAP. BY NOTICE OF AWARD DATED MAY 24, 1971, YOU WERE AWARDED ITEM NO. 60 ON THE BASIS OF YOUR HIGH BID OF $.3819 PER POUND SUBMITTED ON MAY 18, 1971. THEREAFTER, WHEN YOU CALLED FOR THE MATERIAL, IT WAS DISCOVERED THAT THERE WAS A SHORTAGE IN THE WEIGHT OF ITEM NO. 60. YOU STATE THAT WHEN YOU COMPLAINED ABOUT THE SHORTAGE TO THE PROPERTY DISPOSAL OFFICER, HE INSISTED THAT YOU LOAD AND REMOVE THE MATERIAL.

THE ADVERTISED QUANTITY FOR ITEM NO. 60 WAS SUBJECT TO PARAGRAPH 12 OF THE "SALE BY REFERENCE INSTRUCTIONS, TERMS AND CONDITIONS" WHICH PROVIDED:

"ADJUSTMENT FOR VARIATION IN QUANTITY OR WEIGHT. EXCEPT FOR TERM CONTRACTS, WHEN PROPERTY IS SOLD BY UNIT OTHER THAN 'WEIGHT,' THE GOVERNMENT RESERVES THE RIGHT TO VARY THE QUANTITY TENDERED OR DELIVERED TO THE PURCHASER BY 10 PERCENT; WHEN THE PROPERTY IS SOLD BY 'WEIGHT,' THE GOVERNMENT RESERVES THE RIGHT TO VARY THE WEIGHT TENDERED OR DELIVERED TO THE PURCHASER BY 25 PERCENT. THE PURCHASE PRICE WILL BE ADJUSTED UPWARDS OR DOWNWARDS IN ACCORDANCE WITH THE UNIT PRICE AND ON THE BASIS OF THE QUANTITY OR WEIGHT ACTUALLY DELIVERED. UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THE INVITATION, NO ADJUSTMENT FOR SUCH VARIATION WILL BE MADE WHERE THE PROPERTY IS SOLD ON 'PRICE FOR THE LOT' BASIS."

UNDER THIS PROVISION, THE GOVERNMENT COULD DELIVER A MINIMUM OF 16,478 POUNDS FOR ITEM NO. 60. IT IS REPORTED THAT ONLY 9,030 POUNDS WERE DELIVERED TO YOU AND THAT YOU PAID FOR SUCH QUANTITY AT YOUR UNIT PRICE. YOU REQUEST A REFUND OF $.06 PER POUND BASED UPON THE DIFFERENCE BETWEEN THE PRICE PER POUND ON ITEM NO. 60 AND THE $.42 PER POUND YOU CLAIM THAT YOU PAID FOR SCRAP PURCHASED ELSEWHERE TO FULFILL THE RESALE CONTRACT.

YOU STATE YOU HAD ENTERED INTO A CONTRACT FOR THE RESALE OF 20,000 POUNDS OF THE COPPER SCRAP.

ARTICLES 2 AND 15 OF THE GENERAL SALE TERMS AND CONDITIONS PROVIDED IN PERTINENT PART, AS FOLLOWS:

"2. CONDITION AND LOCATION OF PROPERTY.

UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THE INVITATION ALL PROPERTY LISTED THEREIN IS OFFERED FOR SALE 'AS IS' AND 'WHERE IS.' THE DESCRIPTION OF THE PROPERTY IS BASED ON THE BEST INFORMATION AVAILABLE TO THE SALES OFFICE. HOWEVER, UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THE INVITATION, 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 AND EXCEPT AS PROVIDED IN CONDITIONS NO. 12 AND 14 OR OTHER SPECIAL CONDITIONS OF THE INVITATION, NO REQUEST FOR ADJUSTMENT IN PRICE OR FOR RECISSION OF THE SALE WILL BE CONSIDERED. THIS IS NOT A SALE BY SAMPLE.

"15. LIMITATION ON GOVERNMENT'S LIABILITY

EXCEPT FOR REASONABLE PACKING, LOADING, AND TRANSPORTATION COSTS, WHEN A RETURN OF PROPERTY AT GOVERNMENT COST IS AUTHORIZED, THE MEASURE OF THE GOVERNMENT'S LIABILITY IN ANY CASE WHERE LIABILITY OF THE GOVERNMENT TO THE PURCHASER HAS BEEN ESTABLISHED SHALL NOT EXCEED REFUND OF SUCH PORTION OF THE PURCHASE PRICE AS THE GOVERNMENT MAY HAVE RECEIVED."

ALTHOUGH THERE WAS AN OVERESTIMATE IN THE INVITATION FOR BIDS AS TO THE WEIGHT OF THE SCRAP COPPER, IT DOES NOT APPEAR THAT THE OVERESTIMATE WAS MADE IN BAD FAITH. SUCH BEING THE CASE, ANY EXPRESS DISCLAIMER OF WARRANTY, SUCH AS THAT CONTAINED IN PARAGRAPH 2, QUOTED ABOVE, VITIATES ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT ARISE OUT OF THE SALE. FURTHER, DECISION B-151993, SEPTEMBER 9, 1963, INVOLVED A FACTUAL SITUATION AND CONTRACTUAL PROVISIONS SIMILAR TO THE INSTANT CASE. THE INVITATION THERE CONTAINED A DISCLAIMER OF WARRANTY AND A LIMITATION ON THE GOVERNMENT'S LIABILITY (CONDITIONS 2 AND 11, RESPECTIVELY) AND AN ADJUSTMENT FOR VARIATION IN QUANTITY OR WEIGHT CLAIM WHICH RESERVED FOR THE GOVERNMENT THE RIGHT TO VARY THE QUANTITY OR WEIGHT BY 10 PERCENT (CONDITION NO. 8). IN PERTINENT PART, WE HELD IN THAT DECISION:

"THE DISCLAIMER OF WARRANTY IN CONDITION NO. 2 APPLIED TO QUANTITY AND WEIGHT OF THE PROPERTY OFFERED FOR SALE. THE PROVISIONS OF CONDITIONS NOS. 8 AND 11 MUST BE REGARDED AS MODIFYING THE GENERAL DISCLAIMER OF WARRANTY IN CONDITION NO. 2. IN OTHER WORDS, UNDER CONDITION NO. 8 YOU WERE NOT BOUND TO ACCEPT PROPERTY OFFERED FOR SALE ON A 'UNIT PRICE' BASIS WHERE THE QUANTITY OR WEIGHT VARIATION WAS MORE THAN 10 PERCENT BEYOND OR BELOW THAT LISTED IN THE INVITATION. ALSO, CONDITION NO. 11 LIMITS THE GOVERNMENT'S LIABILITY TO THE PURCHASER TO A REFUND OF SUCH PORTION OF THE PURCHASE PRICE AS THE GOVERNMENT MAY HAVE RECEIVED' *** ."

IT WAS INDICATED FURTHER IN THAT DECISION THAT IT WAS THE CONTRACTOR'S RIGHT UNDER THE CONTRACT NOT TO ACCEPT THE PROPERTY IN QUESTION WHEN THE VARIATION IN WEIGHT WAS MORE THAN 10 PERCENT OF THE ADVERTISED WEIGHT. SINCE THE CONTRACTOR THERE HAD ACCEPTED AND USED THE PROPERTY, HE WAS HELD TO THE ADJUSTMENT PROVIDED IN CONDITION NO. 8.

DECISION B-151993 IS EQUALLY APPLICABLE HERE. THE REMEDY AFFORDED YOU UNDER THE VARIATION IN QUANTITY OR WEIGHT PARAGRAPH DETERMINED THE RIGHTS OF THE PARTIES TO THE CONTRACT. WHEN YOU ACCEPTED A QUANTITY LESS THAN THAT AUTHORIZED TO BE DELIVERED UNDER THE TERMS OF THE CONTRACT, YOU WERE NOT ENTITLED TO ANYTHING MORE THAN REFUND OF THE PURCHASE PRICE FOR THE UNDELIVERED PORTION. WE UNDERSTAND THAT THIS WAS ACCOMPLISHED WHEN YOU WERE BILLED FOR THE 9,030 POUNDS RELEASED TO YOU UNDER THE CONTRACT.

ACCORDINGLY, FOR THE REASONS SET FORTH ABOVE, YOUR CLAIM IS DENIED.