B-131980, AUG. 28, 1957

B-131980, AUG. 28, 1957

TO EASTERN ENGINEERING COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JULY 6, 1957, RELATIVE TO YOUR CLAIM FOR REFUND OF $6,600, REPRESENTING THE BID DEPOSIT WHICH ACCOMPANIED YOUR OFFER OF SEPTEMBER 5, 1956, SUBMITTED IN RESPONSE TO INVITATION NO. B-35- 57, AND WHICH HAS BEEN WITHHELD BY THE DEPARTMENT OF THE NAVY BECAUSE OF YOUR DEFAULT UNDER CONTRACT NO. N189S-22731A (S). YOU NOW CONTEND THAT OUR DECISION OF JULY 1, 1957, WAS ERRONEOUS IN THAT YOU DID NOT STATE HERETOFORE THAT YOUR REPRESENTATIVE EXAMINED THE ENGINES AND NOTED THEIR CONDITION TO BE FAIR. ALSO, YOU ADVISE THAT THE SAME ENGINES AGAIN ARE BEING OFFERED FOR SALE BY THE DISPOSAL DEPOT AT NORFOLK, VIRGINIA, AND IN BOTH CASES THE CONDITION IS STATED AS BEING "POOR.' SINCE THEY WERE ADVERTISED PREVIOUSLY AS BEING IN FAIR CONDITION YOU CONCLUDE THAT THE DISPOSAL OFFICERS WERE IN ERROR AND THAT ADVANTAGE IS BEING TAKEN BY US OF THE MISTAKE MADE BY THE GOVERNMENT.

AS TO YOUR FIRST CONTENTION IT IS TRUE, AS YOU NOW EMPHASIZE, THAT IN YOUR LETTER OF DECEMBER 1, 1956, YOU STATED YOUR REPRESENTATIVE "NOTED" AND THEREFORE "ACCEPTED THE BID INVITATION STATEMENT THAT THE CONDITION OF THE ENGINES WAS FAIR.' BUT YOU ALSO STATED THAT YOUR AGENT WAS UNABLE TO SUBJECT THEM TO CLOSE EXAMINATION, WHICH IMPLIES THAT THE ENGINES WERE, AT LEAST TO SOME DEGREE, INSPECTED BY HIM. FURTHER, IT WOULD SEEM APPARENT THAT YOUR REPRESENTATIVE MUST HAVE REPORTED TO YOU THAT THE ENGINES APPEARED TO BE IN FAIR CONDITION, AND NOT SCRAP, OTHERWISE YOU WOULD NOT HAVE SUBMITTED THE OFFER IN QUESTION. HENCE, WE FELT JUSTIFIED IN CONCLUDING THAT YOUR DECISION TO SUBMIT A BID MUST HAVE BEEN BASED UPON YOUR AGENT'S REPORT REFLECTING HIS OPINION AS TO THE CONDITION OF THE EQUIPMENT AFTER INSPECTION. HOWEVER, THAT POINT IS NOT MATERIAL TO A PROPER DISPOSITION OF THE CASE IN VIEW OF THE CLEAR TERMS AND CONDITIONS OF THE CONTRACT.

CASES INVOLVING SIMILAR CIRCUMSTANCES HAVE BEEN CONSIDERED MANY TIMES BY THE COURTS AND IT HAS BEEN HELD REPEATEDLY THAT A MISDESCRIPTION OF SURPLUS PROPERTY AFFORDS NO LEGAL BASIS, PER SE, FOR RESCINDING A CONTRACT. IN DISPOSING OF SUCH MATERIALS THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE OR BUSINESS AND, AS STATED IN OUR DECISION OF JULY 1, 1957, FREQUENTLY IS UNAWARE OF THE QUALITY OR CONDITION OF THE GOODS IT SELLS. FOR THAT REASON PROSPECTIVE PURCHASERS ARE APPRISED OF THE FACT THAT THE DESCRIPTION IS BASED UPON THE BEST AVAILABLE INFORMATION BUT THE GOVERNMENT MAKES NO GUARANTY AS TO ITS CONDITION; THAT THE PROPERTY IS SOLD "AS IS" WITHOUT RECOURSE; AND, THAT NO CLAIM WILL BE CONSIDERED FOR ALLOWANCE, ADJUSTMENT, OR FOR RESCISSION OF THE SALE, DUE TO FAILURE OF THE PROPERTY TO CORRESPOND WITH THE CONDITION EXPECTED. IN DENYING RELIEF IN SIMILAR CASES THE COURTS HAVE HELD UNIFORMLY THAT TO CONCLUDE OTHERWISE WOULD RENDER THE DISCLAIMER OF WARRANTIES PROVISION A NULLITY. SEE SILBERSTEIN AND SON V. UNITED STATES, 69 C.CLS. 412; TRIAD CORP. V. UNITED STATES, 63 C.CLS. 151; LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90; W. E. HEDGER CO. V. UNITED STATES, 52 F.2D 31; SNYDER CORP. V. UNITED STATES, 68 C.CLS. 667.

THE FACT THAT POSSIBLY THE ENGINES SHOULD HAVE BEEN DESCRIBED AS BEING IN "POOR" CONDITION--- POSSIBLY AFTER A MORE DETAILED EXAMINATION BY GOVERNMENT AGENTS--- RATHER THAN "USED, REPAIRS REQUIRED FAIR CONDITION" IN THE FORMER INVITATION, AND THAT THEY ARE NOW OFFERED FOR RESALE AND DESCRIBED AS BEING IN POOR CONDITION, IS NOT MATERIAL TO THE ISSUE HERE INVOLVED, AND THEREFORE ..END :