B-134310, DEC. 4, 1957
Highlights
BLOON AND SON: REFERENCE IS MADE TO LETTER OF OCTOBER 18. IN YOUR ATTORNEY'S LETTER IT IS CONTENDED THAT THE CONTRACT SHOULD BE RESCINDED AND THE PURCHASE PRICE REFUNDED ON THE GROUND THAT THE CABLE DID NOT CONFORM TO THE DESCRIPTION OF THAT MATERIAL SET FORTH IN ITEM 22 OF THE INVITATION IN THAT SOME OF THE COMPONENT CONDUCTERS OF THE CABLE CONTAINED STRANDS OF STAINLESS STEEL WIRE. THAT THE TRUE METAL CONTENT OF THE CABLE WAS UNKNOWN TO BOTH PARTIES TO THE CONTRACT. THAT A NORMAL EXAMINATION OF THE SAMPLE WOULD NOT HAVE DISCLOSED THE PRESENCE OF THE STEEL WIRE. WAS ACCEPTED BY THE CONTRACTOR IN GOOD FAITH WITHOUT KNOWLEDGE THAT SUCH OFFER WAS MADE ON THE BASIS OF AN ERRONEOUS ASSUMPTION AS TO THE METAL CONTENT OF THE CABLE.
B-134310, DEC. 4, 1957
TO L. BLOON AND SON:
REFERENCE IS MADE TO LETTER OF OCTOBER 18, 1957, WRITTEN IN YOUR BEHALF BY MILTON A. OMAN, ATTORNEY, REQUESTING RECONSIDERATION OF SETTLEMENT DATED SEPTEMBER 26, 1957, ISSUED BY THE CLAIMS DIVISION OF OUR OFFICE WHICH DISALLOWED YOUR CLAIM FOR $13,766.48, REPRESENTING THE PURCHASE PRICE (LESS THE PRO-RATA COST FOR TWO REELS) PAID FOR A QUANTITY OF ELECTRICAL CABLE UNDER CONTRACT NO. N665A-33359, WITH THE UNITED STATES NAVAL SUPPLY DEPOT, CLEAR FIELD, OGDEN, UTAH. IN YOUR ATTORNEY'S LETTER IT IS CONTENDED THAT THE CONTRACT SHOULD BE RESCINDED AND THE PURCHASE PRICE REFUNDED ON THE GROUND THAT THE CABLE DID NOT CONFORM TO THE DESCRIPTION OF THAT MATERIAL SET FORTH IN ITEM 22 OF THE INVITATION IN THAT SOME OF THE COMPONENT CONDUCTERS OF THE CABLE CONTAINED STRANDS OF STAINLESS STEEL WIRE; THAT THE TRUE METAL CONTENT OF THE CABLE WAS UNKNOWN TO BOTH PARTIES TO THE CONTRACT; THAT A PART OF THE CABLE FAILED TO CONFORM TO THE SAMPLE EXHIBITED BY THE DISPOSAL AGENCY; AND, THAT A NORMAL EXAMINATION OF THE SAMPLE WOULD NOT HAVE DISCLOSED THE PRESENCE OF THE STEEL WIRE.
THE RECORD SHOWS THAT YOUR BID OF $13,877.78 FOR THE LOT, CONSISTING OF OVER 1,500,000 POUNDS OF CABLE HAVING AN ACQUISITION COST OF $431,224.78, COMPARED FAVORABLY WITH THE NEXT LOW BID OF $11,000, AND THEREFORE, AS ADMINISTRATIVELY REPORTED, WAS ACCEPTED BY THE CONTRACTOR IN GOOD FAITH WITHOUT KNOWLEDGE THAT SUCH OFFER WAS MADE ON THE BASIS OF AN ERRONEOUS ASSUMPTION AS TO THE METAL CONTENT OF THE CABLE. ALSO, SINCE THE CABLE WAS UNUSED, REGARDLESS OF ITS POSSIBLE LIMITED USAGE, THE PURPOSE FOR WHICH IT WAS PURCHASED WAS NOT KNOWN. FREQUENTLY IN CASES SUCH AS THIS IT IS NECESSARY THAT THE ADVERTISED DESCRIPTION OF SURPLUS GOODS SOLD BY THE GOVERNMENT BE TAKEN FROM INVENTORY RECORDS WITH THE RESULT THAT THE STATED CONDITION OR QUALITY OF THE COMMODITY BASED ON THE BEST INFORMATION AVAILABLE IS NOT ALWAYS COMPLETELY ACCURATE. IN DISPOSING OF EXCESS MATERIALS THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE OR BUSINESS AND, ON OCCASION, IS UNAWARE OF THE NATURE OF THE GOODS IT SELLS. FOR THAT REASON PURCHASERS GENERALLY ARE APPRISED BY THE DISCLAIMER OF WARRANTY PROVISION IN THE INVITATION, BID, AND ACCEPTANCE FORM, OF THE FACT THAT THE PROPERTY IS TO BE SOLD WITHOUT ANY GUARANTEE WHATEVER AS TO THE DESCRIPTION THEREOF, AND ANY RISK IN THAT REGARD MUST, UNDER THE TERMS OF THE AGREEMENT BETWEEN THE PARTIES, BE ASSUMED BY THE PURCHASER. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HODGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED, 284 U.S. 676. THE TERMS OF YOUR CONTRACT CONTAINED THAT PROVISION, AND ALSO STIPULATED THAT THE TRANSACTION WAS NOT A SALE BY SAMPLE, THUS RENDERING THE QUESTION OF CONFORMANCE A NULLITY. SINCE IT IS STATED THAT YOU PURCHASED THE CABLE FOR ITS SCRAP METAL VALUE, RATHER THAN FOR RESALE AS ACQUIRED, IT WOULD APPEAR THAT YOU SHOULD HAVE HAD AN ANALYSIS MADE RATHER THAN TO HAVE RELIED UPON YOUR VISUAL INSPECTION OF THE SAMPLE.
AS PREVIOUSLY STATED, THE ACCEPTANCE OF YOUR BID WAS IN GOOD FAITH, AND UNDER THE CIRCUMSTANCES INVOLVED CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. UNITED STATES V. PURCELL ENVELOPE CO., 249 U.S. 313; AMERICAN SMELTING AND REFINING CO. V. UNITED STATES, 259 U.S. 75. ACCORDINGLY, ON THE FACTS OF RECORD AND APPLICABLE LAW THERE IS NO LEGAL BASIS UPON WHICH WE MAY AUTHORIZE RESCISSION OF THE CONTRACT, OR DIRECT THE REFUND OF ANY ..END :