B-150269, DEC. 27, 1962

B-150269, DEC. 27, 1962

TO CHEMICAL SERVICE CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 1, 1962, IN REGARD TO OUR SETTLEMENT DATED OCTOBER 25, 1962, DISALLOWING YOUR CLAIM FOR A PARTIAL REFUND OF $135.32 OF THE PURCHASE PRICE OF $2,613.49 PAID BY YOU FOR A CERTAIN QUANTITY OF POTASSIUM FERRICYANIDE UNDER DEFENSE SUPPLY AGENCY CONTRACT NO. N63068A-54831, DATED MAY 31, 1962.

IN RESPONSE TO INVITATION NO. B-176-62-63068, ISSUED ON APRIL 30, 1962, BY THE DEFENSE SURPLUS SALES OFFICE, NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, YOU SUBMITTED A BID DATED MAY 17, 1962, OFFERING TO PURCHASE ALTERNATE ITEM NO. 81A--- COMBINING REGULAR ITEMS NOS. 78 THROUGH 81--- COVERING A TOTAL OF 2,530 5-POUND CANS OF POTASSIUM FERRICYANIDE DESCRIBED AS BEING UNUSED AND IN A FAIR CONDITION FOR $2,613.49. AN ESTIMATED TOTAL WEIGHT OF 11,400 POUNDS WAS SHOWN ON THE INVITATION FOR THE FOUR ITEMS INVOLVED WITH A TOTAL ACQUISITION COST OF $6,325. YOUR BID, BEING HIGHER THAN THE ONLY OTHER BID RECEIVED FOR ITEM NO. 81A, WAS ACCEPTED ON MAY 31, 1962, THEREBY CONSUMMATING CONTRACT NO. N63068S-54831. YOU MADE PAYMENT IN FULL THEREAFTER AND DELIVERY WAS EFFECTED TO YOUR REPRESENTATIVE ON JUNE 8, 1962. BY LETTER DATED JULY 19, 1962, YOU ADVISED THE DEFENSE SURPLUS SALES OFFICE THAT A SHORTAGE OF 316 POUNDS WAS FOUND IN 1,224 OF THE CANS AND YOU THEREFORE CLAIM A REFUND OF $135.32 FOR THE PROPORTIONATE SHORTAGE OF 131 CANS WHICH YOU ESTIMATED WAS INVOLVED IN THE COMPLETE SHIPMENT.

IN YOUR LETTER OF NOVEMBER 1, 1962, YOU CONTEND THAT NO MEASURE OF NORMAL INSPECTION WOULD HAVE REVEALED THE SHORTAGE THAT OCCURRED IN THE SALE AND THAT NO GOVERNMENT DEPOT WOULD HAVE PERMITTED PURCHASERS TO INSPECT EACH ONE OF THE 2,530 CANS. YOU TAKE THE POSITION THAT WHEN THE GOVERNMENT ADVERTISES A 5-POUND CONTAINER FOR SALE PURCHASERS HAVE EVERY RIGHT TO EXPECT TO RECEIVE 5 POUNDS OF THE PRODUCT IN EACH CONTAINER.

INVITATION NO. B-176-62-63068 CLEARLY SHOWS THAT THE BASIC UNITS OF THE POTASSIUM FERRICYANIDE BEING SOLD WERE CANS AND NOT POUNDS. THE RECORD FURTHER SHOWS THAT A TOTAL OF 2,530 CANS WAS ADVERTISED FOR SALE UNDER ITEMS NOS. 78 THROUGH 81--- ALTERNATE ITEM NO. 81A--- AND THE GOVERNMENT CONTRACTING OFFICER REPORTS THAT ALL OF THE MATERIAL DISPLAYED FOR INSPECTION AS ITEM NO. 81A WAS DELIVERED TO YOU AND THAT SUCH DELIVERY CONSISTED OF 2,530 CANS. THUS, IT MUST BE ACCEPTED THAT THE NUMBER OF BASIC UNITS ADVERTISED FOR SALE UNDER THE INVITATION, NAMELY THE 2,530 CANS, WAS DELIVERED UNDER THE CONTRACT OF SALE. IT ALSO MIGHT BE ADDED THAT EVEN IF THE POTASSIUM FERRICYANIDE HAD BEEN SOLD SOLELY ON A WEIGHT BASIS, ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF INVITATION NO. B-176-62-63068, REFERRED TO IN OUR SETTLEMENT DATED OCTOBER 25, 1962, PROVIDES THAT "THE GOVERNMENT MAKES NO WARRANTY, EXPRESSED OR IMPLIED, AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT," ETC. IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND OUR OFFICE THAT, IN THE ABSENCE OF BAD FAITH, SUCH AN EXPRESS DISCLAIMER OF WARRANTY AS TO WEIGHT VITIATES ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT ARISE OUT OF A SALES TRANSACTION. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER CO. V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151; AND I. SHAPIRO AND CO. V. UNITED STATES, TO CT.CL. 424. THERE IS NOTHING IN THE RECORD BEFORE US TO INDICATE BAD FAITH ON THE PART OF THE SALES CONTRACTING OFFICER IN CONNECTION WITH THE TRANSACTION AND, IN FACT, YOU STATE THAT YOU DO NOT QUESTION THE GOOD FAITH OF THE GOVERNMENT IN THIS REGARD. THIS BEING THE CASE, WE WOULD HAVE TO CONCLUDE THAT ANY SHORTAGE IN THE WEIGHT OF THE POTASSIUM FERRICYANIDE, WHICH WAS SHOWN TO HAVE BEEN ONLY ESTIMATED, WAS COMPLETELY COVERED BY THE APPLICABLE DISCLAIMER OF WARRANTY CLAUSE.

WITH RESPECT TO YOUR CONTENTIONS REGARDING THE AVAILABILITY OF INSPECTION OF THE POTASSIUM FERRICYANIDE PRIOR TO SUBMITTING YOUR BID, ARTICLE 1 OF THE GENERAL SALE TERMS AND CONDITIONS NOT ONLY INVITED YOU, AS A BIDDER, TO INSPECT THE PROPERTY BEFORE SUBMITTING YOUR BID BUT EXPRESSLY URGED AND CAUTIONED YOU TO DO SO. THE ARTICLE ALSO INCLUDED A CONDITION WHICH PROVIDES THAT "IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR THE WITHDRAWAL OF A BID AFTER OPENING.' THEREFORE, THERE IS APPLICABLE HERE THE RULE ESTABLISHED BY THE DECISIONS OF OUR OFFICE THAT WHERE A BIDDER FAILS TO MAKE AN 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, WHEREIN IT WAS HELD THAT, NOTWITHSTANDING THE DIFFICULTIES ATTENDANT UPON AN INSPECTION, IT IS INCUMBENT UPON THE BIDDER TO MAKE THE KIND OF INSPECTION THAT IS EFFECTUAL. MOREOVER, IN A MORE RECENT COURT OF CLAIMS CASE DEALING WITH THE IMPOSSIBILITY OF INSPECTION IN A GOVERNMENT SALE CASE OF THIS KIND, STAR WOOLEN COMPANY V. UNITED STATES, CT.CL.NO. 51-61, DATED NOVEMBER 7, 1962, THE COURT DENIED RECOVERY TO A PURCHASER OF SURPLUS GOODS FROM THE GOVERNMENT FOR INFERIOR GOODS RECEIVED ON THE BASIS THAT EVEN IF THE GOVERNMENT HAD FAILED TO DO ALL IT WAS SUPPOSED TO DO TO MAKE ALL OF THE CRATES OF GOODS AVAILABLE FOR INSPECTION, THE PURCHASER WAIVED SUCH FAILURE BY THE SUBMISSION OF ITS BID.