B-144723, FEB. 14, 1961

B-144723, FEB. 14, 1961

TO MISSOURI PAPER STOCK COMPANY:

WE REFER TO YOUR LETTER OF DECEMBER 16, 1960, WITH ENCLOSURE, WHEREIN YOU CLAIM $446.55 IN CONNECTION WITH THE PURCHASE OF SCRAP PROPERTY FROM THE DEPARTMENT OF THE ARMY UNDER INVITATION NO. 14-021-S 60-9, WHICH CLAIM WAS DISALLOWED BY OUR SETTLEMENT OF DECEMBER 1, 1960.

THE INVITATION WAS ISSUED ON APRIL 18, 1960, BY THE QUARTERMASTER PROPERTY DISPOSAL BRANCH, FORT LEAVENWORTH, KANSAS,CALLING FOR BIDS ON SCRAP AND SALVAGE GOVERNMENT PROPERTY LISTED THEREIN FOR SALE UNDER ITEM NOS. 1 THROUGH 35. ITEM NO. 35, LISTED IN THE INVITATION UNDER "WASTE PAPER," WAS DESCRIBED AS "COLORED LEDGER, BALED, EST PROC COST $4,474.00" (APPROXIMATELY 11 NET TONS). THE MISSOURI PAPER STOCK COMPANY RECEIVED THE AWARD ON ITEM NO. 35 ON A BID OF $10 PER NET TON FOR A TOTAL PRICE OF $120.55, WHICH INCLUDED AN ADJUSTMENT FOR VARIATION IN QUANTITY, AS PROVIDED IN THE INVITATION, FOR 24,110 POUNDS RECEIVED. THE ONLY OTHER BID SUBMITTED ON THAT ITEM WAS IN THE AMOUNT OF $1.50 PER NET TON.

YOU SAY THAT THE SCRAP PAPER OFFERED UNDER ITEM NO. 35 CONTAINED, IN PART, MAPS ON WET STRENGTH PAPER AND YOU WERE UNABLE TO DISPOSE OF IT SINCE SUCH PAPER IS PROHIBITIVE MATERIAL UNDER THE STANDARD DEFINITION OF "COLORED LEDGER.' YOU HAVE ALSO FURNISHED A COPY OF A RECENT DEPARTMENT OF THE AIR FORCE INVITATION OFFERING WASTE PAPER FOR SALE, IN WHICH SEVERAL OF THE ITEMS ARE DESCRIBED AS "WET STRENGTH," AND YOU INDICATE THAT THE BIDS RECEIVED ON THESE ITEMS RANGED IN PRICE FROM $1.26 PER NET TON TO $5.60 PER NET TON. BASED ON THE FOREGOING, YOU CLAIM THAT THE GOVERNMENT'S FAILURE TO CLASSIFY THE MAPS HERE INVOLVED AS WET STRENGTH MATERIAL WAS AN ERROR AND THAT YOU ARE ENTITLED TO A COMPLETE REFUND OF THE PURCHASE PRICE OF $120.55, PLUS FREIGHT COSTS OF $326, OR A TOTAL OF $446.55.

THE FACE OF THE INVITATION CONTAINS A STATEMENT CAUTIONING PROSPECTIVE BIDDERS TO INSPECT THE PROPERTY OFFERED FOR SALE. IN ADDITION, THE "GENERAL SALE TERMS AND CONDITIONS," FORMING A PART OF THE INVITATION AND RESULTING CONTRACT, PROVIDES IN PART AS FOLLOWS:

"1. INSPECTION.--- BIDDERS ARE INVITED AND URGED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING BIDS. PROPERTY WILL BE AVAILABLE FOR INSPECTION AT THE PLACES AND TIMES SPECIFIED IN THE INVITATION. THE GOVERNMENT WILL NOT BE OBLIGED TO FURNISH ANY LABOR FOR SUCH PURPOSE. NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING.

"2. CONDITION OF PROPERTY.--- ALL PROPERTY LISTED HEREIN IS OFFERED FOR SALE "AS IS" AND ,WHERE IS," AND WITHOUT RECOURSE AGAINST THE GOVERNMENT. IF IT IS PROVIDED HEREIN THAT THE GOVERNMENT SHALL LOAD, THEN "WHERE IS" MEANS F.O.B. CONVEYANCE AT THE POINT SPECIFIED IN THE INVITATION. THE DESCRIPTION IS BASED ON THE BEST AVAILABLE INFORMATION, BUT THE GOVERNMENT MAKES NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE, OR DESCRIPTION OF ANY OF THE PROPERTY, OR ITS FITNESS FOR ANY USE OR PURPOSE, AND NO CLAIM WILL BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT OR FOR RESCISSION OF THE SALE BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED; THIS IS NOT A SALE BY SAMPLE.'

UNDER THESE TERMS, THE BUYER CONTRACTS FOR THE PURCHASE OF THE MATERIALS AT HIS OWN RISK AND HE FAILS TO INSPECT AT HIS PERIL. IN OUR DECISION B- 144318, NOVEMBER 21, 1960, WE CONSIDERED A SIMILAR SET OF FACTS ARISING UNDER SUCH CONTRACT PROVISIONS AND WE STATED IN PART AS FOLLOWS:

"* * * IN EFFECT, THE GOVERNMENT TELLS PROSPECTIVE PURCHASERS THAT IT HAS A QUANTITY OF MISCELLANEOUS SURPLUS MATERIALS IT WISHES TO DISPOSE OF, BUT THAT IT DOES NOT WANT TO ACCEPT RESPONSIBILITY FOR THE INHERENT RISKS INVOLVED IN THIS SORT OF OPERATION. IT THEREFORE PROPOSES TO SELL THE MATERIAL ON AN "AS IS" "WHERE IS," BASIS, WITH RECOURSE AGAINST THE GOVERNMENT EXPLICITLY NEGATIVED. IN THESE SITUATIONS, THE COURTS HAVE CONSISTENTLY HELD THAT THE BUYER ACQUIRES NO WARRANTIES WHATEVER, AND, IN THE ABSENCE OF EVIDENCE AMOUNTING TO A SHOWING OF BAD FAITH BY THE GOVERNMENT, THE SALES CONTRACT WILL BE ENFORCED AT THE BID PRICE. SEE LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90; UNITED STATES V. HATHAWAY, 242 F.2D 897; PAXTON-MITCHELL COMPANY V. UNITED STATES, CT.CL. NO. 109-58, DECIDED APRIL 8, 1959.'

THERE IS NO EVIDENCE IN THE RECORD HERE OF BAD FAITH BY THE REPRESENTATIVES OF THE GOVERNMENT. THE FOLLOWING STATEMENT BY THE COURT OF CLAIMS IN TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151, IS FULLY APPLICABLE TO YOUR CLAIM:

"UNDER THE TERMS OF THE CONTRACT IT IS DIFFICULT TO PERCEIVE HOW THE GOVERNMENT COULD HAVE GIVEN PURCHASERS MORE SPECIFIC WARNING THAN IT DID, THAT THEY BOUGHT AT THEIR RISK WHAT MATERIAL IT HAD AND WAS OFFERING FOR SALE; THAT IF A PURCHASER WISHED TO PROTECT HIMSELF HE COULD DO SO BY INSPECTION, FULL OPPORTUNITIES FOR WHICH WERE OFFERED, AND THAT IF HE FAILED TO INSPECT AND RECEIVED SOMETHING OTHER THAN WHAT HE THOUGHT HE WAS BUYING HE COULD HAVE NO REDRESS AND COULD NOT CLAIM ALLOWANCES BY REASON THEREOF. MORE THAN THAT, HE WAS DISTINCTLY TOLD THAT FAILURE TO INSPECT WOULD NOT BE CONSIDERED AS A GROUND FOR ADJUSTMENT. IF PLAINTIFF NEGLECTED TO EMBRACE THE OPPORTUNITY OFFERED TO IT TO INSPECT AND PURCHASED THE PROPERTY WITHOUT DOING SO, WITH NOTICE THAT IT BOUGHT AT ITS OWN RISK, IT CREATED BY ITS OWN NEGLIGENCE THE SITUATION FROM WHICH IT NOW SEEKS RELIEF.' BY ITS OWN NEGLIGENCY THE SITUATION FROM WHICH IT NOW SEEKS RELIEF.'

WE HAVE NO AUTHORITY TO RELIEVE A CONTRACTOR FROM HIS CONTRACTUAL OBLIGATIONS EXCEPT ON VALID LEGAL GROUNDS. IN THIS INSTANCE THE LAW CLEARLY REQUIRES DENIAL OF YOUR CLAIM, AND THE DISALLOWANCE IS THEREFORE AFFIRMED.