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B-126186, FEB. 8, 1956

B-126186 Feb 08, 1956
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WHEREIN THERE WAS DISALLOWED THE CORPORATION'S CLAIM FOR REFUND OF $656.50 UNDER CONTRACT NO. THE CORPORATION'S BID WAS ACCEPTED ON AUGUST 25. REFUSED TO ACCEPT DELIVERY OF ITEM NO. 46 WHICH WAS DESCRIBED IN THE INVITATION AS CABLE. BECAUSE THE CORPORATION ALLEGED THIS PARTICULAR ITEM WAS GROSSLY MISREPRESENTED IN THE INVITATION IN THAT THE ACTUAL SIZE OF THE CABLE WAS ONLY NO. 2. 7 STRANDS AND THAT THE OD WAS LESS THAN ONE-HALF OF .81. IT WAS WITHOUT AUTHORITY TO GRANT ANY RELIEF IN THE MATTER AND RETAINED $656.50 UNDER PARAGRAPH 18 OF THE ADDITIONAL PROVISIONS OF THE INVITATION. 31 AND 45 WERE DELIVERED TO THE CORPORATION AND PAYMENT MADE THEREFOR. THE CLAIM OF THE CORPORATION FOR REFUND OF THE $656.50 WITHHELD WAS FORWARDED HERE.

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B-126186, FEB. 8, 1956

TO NATHAN TEITELMAN, ATTORNEY AT LAW:

PURSUANT TO YOUR REQUEST BY LETTER DATED JANUARY 5, 1956, ON BEHALF OF THE EASTERN ELECTRIC SALES COMPANY, INC., OUR OFFICE HAS REVIEWED THE SETTLEMENT DATED JANUARY 4, 1956, WHEREIN THERE WAS DISALLOWED THE CORPORATION'S CLAIM FOR REFUND OF $656.50 UNDER CONTRACT NO. N171S-5902A DATED AUGUST 25, 1954.

IN RESPONSE TO INVITATION NO. B-20-55 DATED JULY 9, 1955, ISSUED BY THE NAVAL GUN FACTORY, WASHINGTON, D.C., EASTERN ELECTRIC SALES COMPANY, INC., SUBMITTED A BID OFFERING TO PURCHASE, AMONG OTHERS, ITEMS NOS. 13, 31, 45 AND 46 AT A TOTAL PRICE OF $3,778.10 FOR THE FOUR ITEMS. THE CORPORATION'S BID WAS ACCEPTED ON AUGUST 25, 1954, THEREBY CONSUMMATING CONTRACT NO. N171S-5902A. SUBSEQUENTLY IT APPEARS THAT THE EASTERN ELECTRIC SALES COMPANY, INC., REFUSED

TO ACCEPT DELIVERY OF ITEM NO. 46 WHICH WAS DESCRIBED IN THE INVITATION AS CABLE, POWER, 250 MCM, 37 STRANDS, .81 OD, ETC., BECAUSE THE CORPORATION ALLEGED THIS PARTICULAR ITEM WAS GROSSLY MISREPRESENTED IN THE INVITATION IN THAT THE ACTUAL SIZE OF THE CABLE WAS ONLY NO. 2, 7 STRANDS AND THAT THE OD WAS LESS THAN ONE-HALF OF .81. THE CONTRACTING OFFICER ADVISED THE EASTERN ELECTRIC SALES COMPANY, INC., THAT, FOR THE REASONS STATED, IT WAS WITHOUT AUTHORITY TO GRANT ANY RELIEF IN THE MATTER AND RETAINED $656.50 UNDER PARAGRAPH 18 OF THE ADDITIONAL PROVISIONS OF THE INVITATION. ITEMS NOS. 13, 31 AND 45 WERE DELIVERED TO THE CORPORATION AND PAYMENT MADE THEREFOR. THE CLAIM OF THE CORPORATION FOR REFUND OF THE $656.50 WITHHELD WAS FORWARDED HERE, ADMINISTRATIVELY DISAPPROVED.

YOUR REQUEST OF JANUARY 5, 1956, FOR REVIEW IS BASED ON THE CONTENTION THAT THE GOVERNMENT DID NOT DELIVER THE MERCHANDISE CLAIMED TO BE FOR SALE, THAT IT HAD NO MERCHANDISE AS DESCRIBED IN THE INVITATION TO DELIVER AND THAT THE GOVERNMENT ADMITS THAT IT DESCRIBED AN ARTICLE WHICH IT DID NOT HAVE ON SALE. ALSO, YOU REQUEST THE SOURCE OF HIGHER AUTHORITY TO WHICH YOU MAY PURSUE APPELLATE ACTION IN THE EVENT OF A FURTHER UNFAVORABLE DECISION HERE.

A SUMMATION OF YOUR CONTENTIONS CLEARLY ADVANCES THE POSITION OF THE EASTERN ELECTRIC SALES COMPANY, INC., THAT THE CABLE COVERED BY ITEM NO. 46 WAS GROSSLY MISREPRESENTED BY THE GOVERNMENT. IT IS READILY ADMITTED THAT ORDINARILY THERE IS AN IMPLIED WARRANTY IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION THAT THE PROPERTY WILL CORRESPOND WITH THE DESCRIPTION, BUT WHERE THERE IS AN EXPRESS DISCLAIMER OF WARRANTY--- AS IN THE INSTANT CASE--- NO SUCH WARRANTY MAY BE IMPLIED FOR THE DESCRIPTION OF THE PROPERTY SOLD. SEE, IN THAT CONNECTION, LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; TRIAD CORPORATION V. UNITED STATES, 63 C.CLS. 151; AND L. SHAPIRO AND COMPANY V. UNITED STATES, 66 C.CLS. 424. NOT ONLY DOES PARAGRAPH NO. 2 OF THE GENERAL SALE TERMS AND CONDITIONS CLEARLY SET FORTH THE EXPRESS DISCLAIMER OF WARRANTY BUT IN THIS PARTICULAR CASE THE DISCLAIMER IS SPECIFICALLY DIRECTED TO, AMONG OTHERS,"QUANTITY," "KIND" AND "SIZE," WHICH APPEARS TO BE THE SOLE BASIS OF THE SUBJECT CLAIM. WHILE THE NAVAL GUN FACTORY ADMITS THAT THE CABLE WAS INCORRECTLY DESCRIBED THERE IS NOTHING IN THE RECORD TO SHOW, OR INDICATE, THAT BAD FAITH MAY BE ATTRIBUTED TO THE GOVERNMENT IN THIS RESPECT. MOREOVER, WHILE THERE CAN BE LITTLE DOUBT THAT THE SIZE OF THE CABLE WAS THE SPECIFIC ARTICLE FULLY INTENDED AND ACTUALLY OFFERED FOR SALE AND DELIVERY.

OF EQUAL, IF NOT EVEN MORE, SIGNIFICANCE IN A PURCHASE COVERED BY A CONTRACT OF SALE SUCH AS THAT WITH WHICH WE ARE HERE CONCERNED IS THE MATTER OF INSPECTION OF THE PROPERTY OFFERED FOR SALE PRIOR TO THE SUBMISSION OF A BID. IN THIS CONNECTION PARAGRAPH 1 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE INVITATION NOT ONLY INVITED, BUT URGED, BIDDERS TO INSPECT THE PROPERTY PRIOR TO SUBMITTING BIDS. IT PROVIDED FURTHER THAT "IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING.' NOTWITHSTANDING SUCH URGING AND WARNING, THE EASTERN ELECTRIC SALES COMPANY, INC., SUBMITTED A BID WITHOUT MAKING AN INSPECTION WHICH IMMEDIATELY WOULD HAVE REVEALED ANY INACCURACIES IN THE DESCRIPTION AS TO SIZE. SEE, IN THIS CONNECTION 29 COMP. GEN. 310, AT 311, AND THE COURT CASES THEREIN CITED RELATIVE TO RECOVERY WITHOUT INSPECTION AND PARTICULARLY THE COURT'S OBSERVATION IN THIS RESPECT IN THE TRIAD CORPORATION CASE, SUPRA.

THE EASTERN ELECTRIC SALES COMPANY, INC., WAS FULLY APPRISED OF THE EXPRESS DISCLAIMER OF WARRANTY, THAT NO ADJUSTMENT WOULD BE MADE FOR ANY VARIANCE IN THE DESCRIPTION OF THE PROPERTY AND THAT FAILURE TO INSPECT WOULD NOT CONSTITUTE GROUNDS FOR A CLAIM. HENCE, IF THE CORPORATION ELECTED TO SUBMIT A BID UNDER SUCH CIRCUMSTANCES WITHOUT MAKING AN INSPECTION, IT MUST BE CONCLUDED THAT IT ASSUMED ANY RISK WHICH MIGHT EXIST BY REASON OF A VARIANCE BETWEEN THE DESCRIPTION OF THE PROPERTY IN THE SALES INVITATION AND THE PROPERTY OFFERED FOR DELIVERY.

ACCORDINGLY, THERE APPEARS TO BE NO LEGAL BASIS UPON WHICH THE CLAIM FOR REFUND MAY BE ALLOWED AND, THEREFORE, THE SETTLEMENT OF JANUARY 4, 1956, IS SUSTAINED.

FINAL ACTION OF THE GENERAL ACCOUNTING OFFICE IS CONCLUSIVE ON THE EXECUTIVE BRANCH OF THE GOVERNMENT AND THE LAW MAKES NO PROVISION FOR AN APPEAL THEREFROM. SEE SECTION 304, ACT OF JUNE 10, 1921, 42 STAT. 24. HOWEVER, YOUR ATTENTION IS INVITED TO SECTION 24, AS AMENDED, AND SECTION 145 OF THE JUDICIAL CODE, TITLE 28, U.S. CODE, SECTIONS 1491 AND 1346, PERTAINING TO SUITS AGAINST THE UNITED STATES WHICH ARE COGNIZABLE IN THE DISTRICT COURTS OF THE UNITED STATES AND IN THE COURT OF CLAIMS OF THE UNITED STATES.

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