B-125827, DEC. 15, 1955

B-125827, DEC. 15, 1955

TO HARSID, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 17, 1955, RELATING TO AN ALLEGED SHORTAGE IN DELIVERY OF THE SURPLUS PROPERTY COVERED BY YOUR BID UNDER SALE NO. AEC-SS-112.

BY INVITATION NO. AEC-SS-112, DATED AUGUST 22, 1955, THE HANFORD OPERATIONS OFFICE, UNITED STATES ATOMIC ENERGY COMMISSION, RICHLAND, WASHINGTON, OFFERED FOR SALE CERTAIN SALVAGE MATERIAL CONSISTING (ITEM 1) OF STAINLESS STEEL ANGLE, FLAT BAR, TUBING, CUTTINGS, PIPE AND WIRE, AS INDICATED IN THE INVITATION, AND (ITEM 2) STAINLESS STEEL TUBING AS INDICATED, THE BIDS TO BE OPENED SEPTEMBER 13, 1955. IN RESPONSE, YOU SUBMITTED A BID FOR ITEM 1 IN THE AMOUNT OF $6,535.12, AND A BID OF $1,097.56 FOR ITEM 2. YOUR BIDS AS TO THESE ITEMS BEING THE HIGHEST RECEIVED, AWARD WAS MADE ACCORDINGLY. ONLY ITEM 1 IS BEING CONSIDERED HERE SINCE IT IS ONLY WITH RESPECT TO ITEM 1 (D) THAT YOU ALLEGE THERE WAS A SHORTAGE IN DELIVERY.

IT WAS STATED IN YOUR LETTER OF OCTOBER 17, 1955, AMONG OTHER THINGS, THAT YOU SENT YOUR REPRESENTATIVE TO INSPECT THE MATERIAL IN QUESTION; THAT HE WAS SHOWN THE MATERIAL COVERED BY THE INVITATION AND THAT YOUR BID WAS MADE ACCORDINGLY; THAT WHEN YOUR REPRESENTATIVE ARRIVED TO REMOVE THE MATERIAL HE WAS ADVISED THAT ITEM 1 (D/--- CONSISTING OF 109 PIECES OF PIPE, 1/2 INCH TO 10 INCHES DIA., 1 FOOT TO 385 FEET LENGTH, SCH. 40 AND SCH. 80, TYPE 347 AND 304 L, 10,000 POUNDS--- WAS NOT AVAILABLE FOR DELIVERY. YOU STATED FURTHER THAT YOU BID WAS BASED PRIMARILY ON THIS ITEM, AND THAT YOU DID NOT PURCHASE THIS MATERIAL ON A PER POUND BASIS, BUT ON A LOT BASIS, AND THAT "BASED ON YOUR DESCRIPTION AND INSPECTION BY OUR REPRESENTATIVE," YOU SOLD 10,000 POUNDS OF PIPE.

A REPORT DATED NOVEMBER 23, 1955, HAS BEEN RECEIVED FROM THE ATOMIC ENERGY COMMISSION, IN WHICH IT WAS ADMITTED THAT A MISTAKE WAS MADE IN THE INVITATION TO BID. ITEM 1 (D) WAS DESCRIBED AS APPROXIMATELY 10,000 POUNDS OF PIPE WHEREAS, IT WAS REPORTED, THAT ITEM CONSISTED OF 3,300 POUNDS OF PIPE AND 4,218 POUNDS OF SHEET METAL. IN YOUR LETTER OF OCTOBER 17, 1955, YOU STATED THAT YOUR BID WAS BASED, IN PART, UPON AN INSPECTION BY YOUR REPRESENTATIVE. RESPECTING THIS STATEMENT, THERE HAS BEEN FURNISHED OUR OFFICE A COPY OF A MEMORANDUM DATED NOVEMBER 9, 1955, BY MR. J. E. TRAVIS, MANAGER OF THE HANFORD OPERATIONS OFFICE, STATING, IN SUBSTANCE, THAT THE MATERIAL INVOLVED WAS IN "SEGREGATED STORAGE; " THAT A REPRESENTATIVE OF THE ELECTRIC BOAST COMPANY ACCOMPANIED EACH PROSPECTIVE BIDDER AND "POINTED OUT EACH LOT AND ITEM IN THE SALE," AND THAT IT WAS THE COMPANY'S OPINION THAT THE SHORTAGE WAS READILY DISCERNIBLE TO ANY BIDDER MAKING AN INSPECTION, AND THAT THERE WAS NO CAUSE FOR CONFUSION OR ERROR. THE MEMORANDUM CONTAINS THE FOLLOWING PARAGRAPH:

"THE STATEMENT OF HARSID, INC. CONTAINED IN THE THIRD PARAGRAPH OF MR. COHEN'S LETTER SEEMS TO ALLEGE THAT ITEM 1 (D) STAINLESS STEEL PIPE WAS AVAILABLE IN ITS STATED QUANTITY DURING INSPECTION, BUT WAS LATER WITHDRAWN AND BECAME UNAVAILABLE FOR DELIVERY. THIS IS NOT THE CASE. THE PROPERTY AVAILABLE FOR DELIVERY WAS THE SAME AS THAT INSPECTED. AT NO TIME AFTER PREPARATION OF THE SALE WAS ITS AMOUNT INCREASED OR DECREASED IN ANY WAY.'

IT SEEMS PERFECTLY CLEAR FROM WHAT HAS BEEN SAID ABOVE THAT THE "LOT" OF MATERIAL AVAILABLE FOR SALE AND WHICH WAS INSPECTED BY YOUR REPRESENTATIVE, WAS THE SAME LOT OF MATERIAL DELIVERED TO YOU. IN OTHER WORDS, YOUR BID WAS MADE AND ACCEPTED ON THE BASIS OF A SALE BY "LOT.' THE MATERIAL IN THIS CASE WAS OFFERED FOR SALE "AS IS" AND "WHERE IS" AND WITHOUT GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO QUANTITY, ETC.

IN THE GENERAL SALE TERMS AND CONDITIONS MADE A PART OF THE BID INVITATION IT WAS STATED THAT THE DESCRIPTION OF THE PROPERTY WAS BASED ON THE BEST AVAILABLE INFORMATION. SINCE THE MATERIAL WAS MADE AVAILABLE FOR INSPECTION AND WAS INSPECTED BY YOUR REPRESENTATIVE, IT APPEARS THERE WAS NO MISREPRESENTATION ON THE PART OF THE GOVERNMENT AS TO THE QUANTITY OF MATERIAL TO BE SOLD. IN THE CASE OF LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, IT WAS UNSUCCESSFULLY CONTENDED THAT THE UNITED STATES WAS LIABLE IN DAMAGES FOR A SHORTAGE IN DELIVERY OF SPECIFIED LOTS OF SCRAP IRON AND STEEL WHICH HAD BEEN OFFERED FOR SALE IN A SCHEDULE SHOWING THE VARIOUS FORTS WHERE THE SCRAP IRON WAS ACCUMULATED AND THE APPROXIMATE WEIGHTS AT EACH LOCATION AND WHICH HAD BEEN PURCHASED "AS IS" FOR A STIPULATED LUMP SUM PRICE, THE COURT STATED AT PAGE 92 THAT:

"* * * THE NAMING OF QUANTITIES CANNOT BE REGARDED AS IN THE NATURE OF A WARRANTY, BUT MERELY AS AN ESTIMATE OF THE PROBABLE AMOUNTS IN REFERENCE TO WHICH GOOD FAITH ONLY COULD BE REQUIRED OF THE PARTY MAKING IT.'

IN THE CIRCUMSTANCES, IT FOLLOWS AS A NECESSARY CONCLUSION THAT YOUR CLAIM IN AN UNSTATED AMOUNT ON ACCOUNT OF THE ALLEGED SHORTAGE IN DELIVERY MUST BE DENIED.