B-159340, AUG. 19, 1966

B-159340, AUG. 19, 1966

TO MIDWEST WASTE MATERIAL COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 27, 1966, REQUESTING RECONSIDERATION OF OUR DECISION OF JUNE 16, 1966, WHICH DENIED YOUR REQUEST FOR CANCELLATION OF CONTRACT 21-6031-001 WITH THE DEFENSE LOGISTICS SERVICES CENTER FOR THE PURCHASE OF SCRAP CLOTH. YOUR REQUEST FOR CANCELLATION WAS BASED ON YOUR CONTENTION THAT THE DESCRIPTIONS OF ITEMS 118,"COTTON RAGS, CRAP:--- CONSISTING OF SHIRTS, TROUSERS, BLOUSES, SKIRTS, ETC.' AND 119,"WOOL RAGS, SCRAP:--- CONSISTING OF TROUSERS, COATS, SKIRTS, ETC.' WERE INCOMPLETE INASMUCH AS THE ITEMS CONSISTED OF ARTICLES WHICH WERE MUTILATED. THE DISPOSAL AGENCY CONTENDS THAT MUTILATION REFERS TO THE CONDITION OF THE PROPERTY, UPON WHICH THERE IS AN EXPRESS DISCLAIMER OF WARRANTY BY THE GOVERNMENT, WHILE YOUR POSITION IS THAT "MUTILATED" IS A DESCRIPTIVE TERM AND THAT YOU ARE PROTECTED BY THE GUARANTEED DESCRIPTION CLAUSE OF SALES INVITATION 21-6031. YOUR REQUEST FOR CANCELLATION OF THE CONTRACT WAS DENIED FOR THE REASON THAT SINCE THE MUTILATION OF THE CLOTH REFERRED TO THE CONDITION OF THE PROPERTY AND THE EXPRESS DISCLAIMER OF WARRANTY REMOVED ANY WARRANTY AS TO ITS CONDITION, THE DUTY FELL UPON YOUR COMPANY, AS A PROSPECTIVE BIDDER, TO INSPECT THE ITEMS AND HAVING FAILED TO DO SO, YOU WERE NOT ENTITLED TO RELIEF FROM YOUR OBLIGATION UNDER THE CONTRACT, CITING W. E. HEDGER CO. V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676, AND PAXTON MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463.

IN YOUR REQUEST FOR RECONSIDERATION YOU STATE THAT OUR DENIAL WAS BASED UPON THE DEFINITION OF VARIOUS WORDS IN WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY AND THAT YOU BELIEVE THAT IN COMMERCIAL TRANSACTIONS WEBSTER'S DEFINITIONS ARE INCOMPLETE, AMBIGUOUS AND SOMETIMES MISLEADING. YOU STATE FURTHER THAT, FROM YOUR EXPERIENCE IN HANDLING MILLIONS OF POUNDS OF RAGS AND SCRAP FROM VARIOUS GOVERNMENT INSTALLATIONS, SELDOM DO TWO DEPOTS GRADE AND BALE RAGS AND SCRAP IN A LIKE MANNER AND THAT ALL WILL BEAR THE SAME TERMINOLOGY BUT THAT THE CONTENTS VARY GREATLY. AS A CASE IN POINT YOU RELATE YOUR RECENT PURCHASE OF APPROXIMATELY 60,000 POUNDS OF WHAT WAS TERMED AS "SCRAP" AND STATE THAT THE DEFINITION OF "SCRAP" AS "A SMALL DETACHED PIECE," AS CONTAINED IN OUR LETTER OF JUNE 16, 1966, WAS NOT APPLICABLE TO THIS PURCHASE SINCE IT DID NOT CONTAIN 2 PERCENT OF SUCH DETACHED PIECES BUT FULL COMPLETE GARMENTS, AND THAT BECAUSE THEY WERE IN THIS CONDITION YOU BID $ .1839 AND $ .1984 PER POUND. ON THE PREMISE THAT THE VARIOUS DISPOSAL CENTERS ARE ADVERTISING SCRAP AND ACTUALLY SELLING GARMENTS, YOU STATE THE DESCRIPTIONS ARE MISLEADING AND IN ERROR.

IT IS SHOWN TO BE THE BASIS OF YOUR CONTENTION THAT SINCE THE DESCRIPTIONS OF THE ITEMS OF THE INVITATION DID NOT CONTAIN THE WORD "MUTILATED" THEY WERE ERRONEOUS AND MISLEADING AND THE FACT THAT THE ITEMS CONTAINED RAGS AND SCRAP THAT WERE MUTILATED AFFECTED THE VALUE OF THEIR BASIC CONTENT FOR YOUR INTENDED PURPOSES. YOU FURTHER CONTEND THAT THE WORD "MUTILATION" HAS NOW BECOME AN INTEGRAL PART OF DESCRIPTIONS AS EVIDENCED BY THE NUMEROUS BIDS WHERE THE WORD "MUTILATED" IS A PART OF THE DESCRIPTION.

PARAGRAPHS 1 AND 2 OF THE GENERAL SALES TERMS AND CONDITIONS OF SALES INVITATION NO. 21-6031 PROVIDED AS FOLLOWS:

"1. INSPECTION. THE BIDDER IS INVITED, URGED, AND CAUTIONED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING A BID. PROPERTY WILL BE AVAILABLE FOR INSPECTION AT THE PLACES AND TIMES SPECIFIED IN THE INVITATION. IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR THE WITHDRAWAL OF A BID AFTER OPENING.

"2. CONDITION AND LOCATION OF PROPERTY. UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THE INVITATION, ALL PROPERTY LISTED THEREIN IS OFFERED FOR SALE "AS IS" AND "WHERE IS.' IF IT IS PROVIDED THEREIN 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. HOWEVER, THE GOVERNMENT MAKES NO WARRANTY, EXPRESS 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. EXCEPT AS PROVIDED IN CONDITIONS NO. 8 AND 10, NO REQUEST FOR ADJUSTMENT IN PRICE OR FOR RESCISSION OF THE SALE WILL BE CONSIDERED. THIS IS NOT A SALE BY SAMPLE.'

IN ADDITION, THE INVITATION CONTAINS A SPECIAL CONDITION, HEADED "GUARANTEED DESCRIPTIONS," IN PERTINENT PART, AS FOLLOWS:

"/1) EXCEPT AS PROVIDED IN SUB-PARAGRAPHS (2) AND (3) OF THIS CLAUSE, AND WITH THE EXCEPTION OF STATED OPINIONS AS TO THE CONDITION OF THE PROPERTY, AND NOTWITHSTANDING ANY OTHER TERMS AND CONDITIONS OF THIS INVITATION FOR BIDS TO THE CONTRARY, THE GOVERNMENT HEREBY WARRANTS AND GUARANTEES THAT THE PROPERTY TO BE DELIVERED TO THE PURCHASER UNDER ANY CONTRACT RESULTING FROM THIS INVITATION FOR BIDS WILL BE AS DESCRIBED IN THE INVITATION FOR BIDS. * * *

"/3) IN THE EVENT THAT * * * THERE IS A DISCREPANCY BETWEEN THE DETAILED DESCRIPTIVE DATA USED IN THE ITEM DESCRIPTION ITSELF AND THE DETAILED DESCRIPTIVE DATA APPLICABLE * * *, ONLY THE DESCRIPTIVE DATA USED IN THE ITEM DESCRIPTION SHALL BE GUARANTEED. * * *"

GENERALLY, WHEN GOVERNMENT SURPLUS PROPERTY IS SOLD WITH AN EXPRESS DISCLAIMER OF WARRANTY, AS PROVIDED IN THE INSTANT CASE IN PARAGRAPH 2, CONDITION AND LOCATION OF PROPERTY, OF THE GENERAL SALE TERMS AND CONDITIONS, THE SUCCESSFUL BIDDER IS NOT ENTITLED TO CANCEL THE CONTRACT EVEN WHERE THERE IS AN ERRONEOUS DESCRIPTION. COMPARE 41 COMP. GEN. 185.

THE GUARANTEED DESCRIPTION CLAUSE EXPRESSLY WARRANTED THE DESCRIPTION ONLY AS TO KIND OR IDENTITY SO THAT IF THE PROPERTY DELIVERED COULD NOT REASONABLY BE CONSIDERED AS "RAGS," "SCRAP" CONSISTING OF SHIRTS, TROUSERS, BLOUSES, COATS, SKIRTS, ETC., THERE WOULD HAVE BEEN A BREACH OF THIS WARRANTY. CONDITION OF THE SCRAP RAGS WAS NOT WARRANTED, HOWEVER, THE GOVERNMENT GUARANTEEING ONLY THE ACCURACY OF THE FACTUAL INFORMATION CONTAINED IN THE CATALOG DESCRIPTION OF THE ITEMS. BOTH PARAGRAPH 2 AND THE GUARANTEED DESCRIPTIONS CLAUSE EXCLUDED ANY GUARANTEE OF OPINIONS AS TO THE CONDITION OF THE PROPERTY. THE FACTUAL INFORMATION WHICH WAS FURNISHED BY THE ITEM DESCRIPTIONS IS FOUND TO BE ACCURATE, THE GOVERNMENT BEING PREPARED TO DELIVER EXACTLY WHAT WAS DESCRIBED IN THE CATALOG.

IN CONNECTION WITH THE EFFECTIVENESS OF THE RESTRICTIVE PROVISIONS OF INVITATIONS YOUR ATTENTION IS INVITED TO THE CASE OF DADOURIAN EXPORT COMPANY V. UNITED STATES, DECIDED BY THE U.S. COURT OF APPEALS FOR THE SECOND CIRCUIT ON JUNE 5, 1961, 291 F.2D 178, WHEREIN THE COURT STATED:

"* * * WHEN THE GOVERNMENT SELLS SURPLUS GOODS IT IS TRYING TO DISPOSE OF A VAST MISCELLANY OF USED AND UNUSED PROPERTY IN AN EFFORT, SO FAR AS MAY UNDER THE CIRCUMSTANCES BE POSSIBLE, TO MINIMIZE ITS LOSS. SALES OF THIS CHARACTER ARE PROCESSED ON A MASS QUANTITY BASIS BY MEMBERS OF THE ARMED FORCES WHO SELDOM IF EVER HAVE ANY EXPERTISE IN THE PARTICULAR ITEMS WHICH COME TO THEIR WAREHOUSE AND DEPOTS. BUYERS OF SUCH SURPLUS PROPERTY KNOW PERFECTLY WELL THAT THERE IS ALWAYS THE CHANCE OF BUYING PROPERTY THAT MAY TURN OUT TO BE OF LITTLE VALUE, OR MAY DEVELOP INTO A GREAT BARGAIN WITH A HUGE WINDFALL OF PROFIT. ACCORDINGLY, THE GOVERNMENT VERY PROPERLY HAS PROTECTED ITSELF BY FORMULATING ITS CONTRACT FOR THE SALE OF SUCH SURPLUS PROPERTY SO AS TO SHIFT THE RISK FROM ITSELF TO THE BUYER. AS PROFESSOR CORBIN TELLS US, A PARTY TO A CONTRACT MAY AGREE TO ASSUME CERTAIN RISKS THAT IN THE ABSENCE OF AGREEMENT THE LAW WOULD NOT CAST UPON HIM. SEE 3 CORBIN CONTRACTS (1960), SECTION 598. SEE, ALSO, UNITED STATES V. HATHAWAY, 9 CIR., 1957, 242 F.2D 897. * * *"

EVIDENCE IN THE FILE INDICATES THAT YOU MADE NO INSPECTION OF THE PROPERTY PRIOR TO THE TIME THE CONTRACT CAME INTO BEING. THE EVIDENCE FURTHER INDICATES THAT THE BEST AVAILABLE INFORMATION WAS USED IN THE PREPARATION OF THE INVITATION DESCRIPTION OF ITEMS 118 AND 119 AND THAT GOVERNMENT PERSONNEL ACTED IN GOOD FAITH THROUGHOUT THE TRANSACTION. THE INVITATION CONTAINED THE USUAL "AS IS"--- "WHERE IS" AND THE INVITATION CONTAINED THE USUAL "AS IS" - "WHERE IS" AND DISCLAIMER OF WARRANTY CLAUSE. IN ADDITION, IT CONTAINED THE LIMITED GUARANTEED DESCRIPTIONS CLAUSE. WHILE YOU CLAIM RELIEF UNDER THIS CLAUSE IT MUST BE POINTED OUT THAT THE GOVERNMENT WAS UNDER NO OBLIGATION THEREBY TO INCLUDE ALL FACTUAL INFORMATION WHICH MIGHT RELATE TO THE PROPERTY IN THE CATALOG DESCRIPTION. SIMILARLY, THE SALES OFFICE WAS UNDER NO OBLIGATION TO ADOPT PRACTICES AND USAGES OF OTHER SALES OFFICES IN ITS METHOD OF DESCRIBING PROPERTY, NOR WAS IT UNDER AN OBLIGATION TO ADOPT TRADE USAGES IN THE PREPARATION OF DESCRIPTIONS. 41 COMP. GEN. 97. WHILE USE OF THE TERM "MUTILATED" MAY HAVE BEEN SUBJECTIVELY HELPFUL TO YOUR UNDERSTANDING OF THE CONDITION OF THE PROPERTY, INCLUSION OF THE TERM IN THE DESCRIPTIONS OF ITEMS 118 AND 119 WOULD NOT HAVE CHANGED YOUR RIGHTS OR THE GOVERNMENT'S OBLIGATIONS UNDER THE GUARANTEED DESCRIPTIONS CLAUSE. CANNOT SAY, AS A MATTER OF LAW, THAT THE TERM SHOULD HAVE BEEN INCLUDED.

UNDER THE CIRCUMSTANCES AND HAVING REGARD FOR THE PLAIN PROVISIONS OF THE INVITATION FOR BIDS AND SINCE YOU PRESENT NO EVIDENCE THAT THE PROPERTY AVAILABLE FOR DELIVERY AS ITEMS 118 AND 119 WAS OTHER THAN AS DESCRIBED IN THE INVITATION, THERE IS NO LEGAL BASIS FOR CANCELING THE CONTRACT WHICH CAME INTO BEING UPON ACCEPTANCE OF YOUR BID. ACCORDINGLY, THE ACTION HERETOFORE TAKEN BY THIS OFFICE IN THE MATTER IS, UPON REVIEW, AFFIRMED.