B-149182, JUL. 23, 1962

B-149182, JUL. 23, 1962

TO AMERICAN NICKEL ALLOY MANUFACTURING CORP.:

REFERENCE IS MADE TO YOUR LETTER OF MAY 29, 1962, REQUESTING REVIEW OF OUR SETTLEMENT DATED MAY 25, 1962, WHICH DISALLOWED YOUR CLAIM FOR $70.94 REPRESENTING A PART OF THE PRICE PAID BY YOU TO THE GOVERNMENT FOR CERTAIN SURPLUS PROPERTY PURCHASED BY YOU.

IN RESPONSE TO INVITATION NO. B-53-62-63068, ISSUED BY THE CONSOLIDATED SURPLUS SALES OFFICE, NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, YOU SUBMITTED A BID DATED SEPTEMBER 29, 1961, OFFERING TO PURCHASE ITEM 9 AT A PRICE OF $0.321 PER POUND WHICH WAS DESCRIBED AS CONSISTING OF APPROXIMATELY 645 POUNDS OF MONEL TAPERED PINS. YOUR BID AS TO ITEMS 8 AND 9 WAS ACCEPTED ON OCTOBER 10, 1961. SUBSEQUENT TO DELIVERY YOU ALLEGED THAT 221 POUNDS OF THE PINS WERE MADE OF STAINLESS STEEL INSTEAD OF MONEL METAL AS ADVERTISED IN THE INVITATION. IN YOUR LETTER DATED MAY 29, 1962, YOU STATE:

"WE HAVE NOTED THAT YOU DENY OUR CLAIM FOR REFUND FOR $70.94 ON THE GROUNDS THAT WE HAVE FAILED TO INSPECT THE MATERIAL.

"WE CANNOT BE SATISFIED WITH YOUR DECISION FOR THE FOLLOWING REASON:

"AN INSPECTION WOULD NOT HAVE DISCLOSED THE PRESENCE OF STAINLESS STEEL PINS BECAUSE ALL PINS WERE PACKED IN LITTLE CARTONS AND THERE WAS NO DESCRIPTION ON THE OUTSIDE WHICH WOULD HAVE DISCLOSED WHETHER THE CONTENTS WERE MONEL OR STAINLESS STEEL. A GOOD PART OF THESHIPMENT CONSISTS OF MONEL METAL, AS DESCRIBED IN THE SALES INVITATION. HOWEVER, THERE WERE ALSO 221 LBS. OF STAINLESS STEEL PINS. IN ORDER TO DETECT THESE, IT WOULD HAVE BEEN NECESSARY TO OPEN EACH AND EVERY CARTON. THIS WOULD HAVE DESTROYED THE PACKING AND WOULD HAVE REDUCED THE VALUE OF THE MERCHANDISE. BESIDES, THE HOLDING ACTIVITY DEFINITELY DOES NOT PERMIT THE DESTRUCTION OF CARTONS WHICH CONTAIN SMALL PARTS SUCH AS TAPERED PINS.

"THE PRESENCE OF STAINLESS STEEL PINS COULD BE DETECTED ONLY AFTER THE MATERIAL HAD ARRIVED AT OUR WEEHAWKEN, NEW JERSEY PLANT, WHERE ALL CARTONS WERE OPENED IN ORDER TO EXAMINE THE CONTENTS.'

WHILE ORDINARILY IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION THERE IS AN IMPLIED WARRANTY THAT THE PROPERTY WILL CORRESPOND WITH THE DESCRIPTION --- AND THIS APPEARS TO BE THE BASIS OF YOUR CLAIM--- NO SUCH WARRANTY, HOWEVER, MAY BE IMPLIED WHERE, AS HERE, THE SALES CONTRACT CONTAINS AN EXPRESS DISCLAIMER. MOREOVER, THE GOVERNMENT IN DISPOSING OF ITS SURPLUS PROPERTY IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS NOT AWARE OF THE TRUE DESCRIPTION OF THE GOODS IT SELLS. LUMBRAZO V. WOODRUFF, 175 N.E. 525; UNITED STATES V. KELLY, 112 F.SUPP. 831; I. SHAPIRO AND CO. V. UNITED STATES, 66 CT.CL. 424; AND MAGUIRE AND CO. V. UNITED STATES, 273 U.S. 67. THESE CASES AND OTHERS CONCLUDE THAT UNDER SUCH PROVISIONS, IN THE ABSENCE OF BAD FAITH OR FRAUD, BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT ANY WARRANTIES WHATEVER. ALSO, THE COURTS HAVE HELD THAT AN EXPRESS DISCLAIMER OF WARRANTY AS USED IN SURPLUS PROPERTY SALES BY THE GOVERNMENT PRECLUDES A SUIT FOR DAMAGES ON THE THEORY OF MUTUAL MISTAKE. UNITED STATES V. HATHAWAY, 242 F.2D 897; AND AMERICAN SANITARY RAG CO. V. UNITED STATES, 142 CT.CL. 293.

THERE IS NO EVIDENCE IN THE RECORD OF WILLFUL MISREPRESENTATION OR OF BAD FAITH ON THE PART OF THE GOVERNMENT. IT DOES NOT APPEAR THAT THE OFFICER IN CHARGE OF THE SALE KNEW THAT THE MATERIAL WAS NOT AS DESCRIBED. THE DESCRIPTION IN THE BID INVITATION FOR ITEM 9 WAS BASED ON THE "BEST AVAILABLE INFORMATION," AS STATED IN THE INVITATION. THE MATERIAL WAS SOLD FOR WHAT THE GOVERNMENT THOUGHT IT TO BE. UNDER THE CONDITIONS OF THE SALE THE GOVERNMENT WAS ONLY OBLIGED TO ACT IN GOOD FAITH, AND THIS IT DID.

IN REGARD TO YOUR STATEMENT THAT HAD YOU ATTEMPTED TO MAKE AN INSPECTION OF THE MATERIAL THE DISPOSAL AGENCY WOULD NOT HAVE PERMITTED YOU TO OPEN ALL OF THE CARTONS, IT MAY BE STATED THAT EVEN IF THE AGENCY DID NOT PERMIT YOU TO OPEN ALL OF THE CARTONS AND YOU STILL SUBMITTED A BID, THERE WOULD BE APPLICABLE THE RULE ESTABLISHED BY THE DECISIONS OF THIS OFFICE THAT WHERE A BIDDER FAILS TO MAKE INSPECTION UNDER SUCH A CONTRACT OF SALE --- WHETHER SUCH FAILURE WAS DUE TO THE BIDDER'S OPINION THAT INSPECTION WAS NOT NECESSARY OR WHETHER THE INSPECTION WAS IMPRACTICAL, IF NOT IMPOSSIBLE--- THE BIDDER HAS ELECTED TO ASSUME ANY RISK WHICH MIGHT EXIST BY REASON OF A VARIANCE BETWEEN THE DESCRIPTION OF THE PROPERTY SET FORTH IN THE INVITATION AND THE PROPERTY ACTUALLY DELIVERED. THE BIDDER'S RESPONSIBILITIES IN THIS CONNECTION APPEAR TO BE CLEARLY SET FORTH IN PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463, WHERE IT WAS HELD THAT, NOTWITHSTANDING THE DIFFICULTIES ATTENDANT UPON AN INSPECTION, IT IS INCUMBENT UPON THE BIDDER TO MAKE THE SORT OF INSPECTION THAT IS EFFECTUAL.

ACCORDINGLY, WE FIND NO LEGAL BASIS UPON WHICH YOUR CLAIM MAY BE ALLOWED AND THE SETTLEMENT OF MAY 25, 1962, MUST BE, AND IS, SUSTAINED.