B-141239, DEC. 31, 1959

B-141239, DEC. 31, 1959

TO PENN CONVOY PETROLEUM PRODUCTS:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 2, 1959, REQUESTING REVIEW OF GENERAL ACCOUNTING OFFICE SETTLEMENT DATED OCTOBER 29, 1959, WHICH DISALLOWED YOUR CLAIM IN THE AMOUNT OF $830.61 FOR PARTIAL REFUND OF AN AMOUNT PAID BY YOU FOR SURPLUS PROPERTY PURCHASED FROM THE NAVAL SUPPLY CENTER, NORFOLK, VIRGINIA, INCLUDING COST OF TRANSPORTATION, UNDER CONTRACT NO. N189S-46340A (S) DATED JULY 15, 1959.

BY INVITATION NO. B-7-60-189, BIDS--- TO BE OPENED JULY 8, 1959--- WERE SOLICITED ON VARIOUS ITEMS OF SURPLUS GOVERNMENT PROPERTY, THE PROPERTY INCLUDED IN ITEM NO. 328 BEING DESCRIBED AS FOLLOWS:

"CARBON TETRACHLORIDE: NON-FULFILLMENT, CLEAR, CC14 FORMULA, SPEC. NO. OC 141, CAUTION ,POISON," USE; DRY CLEANING AND DECREASED ELECTRICAL PARTS AND MACHINERY, IN 55 GALLON METAL DRUMS, DRUMS RUSTED. AS IS. MFG. UNKNOWN. PACKED FOR SHIPMENT. UNUSED, FAIR CONDITION. 1815 GALLONS * *

IN RESPONSE TO THE INVITATION, YOU SUBMITTED A BID ON THREE ITEMS, INCLUDING A PRICE OF $0.783 PER GALLON OR A TOTAL OF $1,421.15 ON ITEM NO. 328. THE OTHER BIDS RECEIVED ON THIS ITEM WERE IN THE AMOUNTS RANGING FROM $0.01 TO $0.6899 PER GALLON. ON JUNE 30, 1959, AWARD WAS MADE TO YOU AS THE HIGHEST BIDDER ON ITEMS NOS. 309 (LUBRICATING OIL) AND 328 AND YOU COMPLETED PAYMENT OF THE AMOUNT OF YOUR BID ON THOSE ITEMS.

IN YOUR LETTER OF AUGUST 17, 1959, TO THE NAVAL SUPPLY CENTER, YOU STATED THAT OF THE 33 DRUMS OF CARBON TETRACHLORIDE PURCHASED 16 DRUMS WERE VALUELESS, BEING DIRTY AND DISCOLORED, AND YOU REQUESTED THAT YOU BE PERMITTED TO RETURN THE 16 DRUMS AND THAT THE AMOUNT OF $830.61 BE REFUNDED TO YOU ($689.04 PAID FOR THE 16 DRUMS AND $141.57 FREIGHT COST PAID BY YOU ON 33 DRUMS AT $4.29 PER DRUM). THE DEPARTMENT OF THE NAVY DECLINED PAYMENT OF YOUR CLAIM AND SUBMITTED THE MATTER TO THE GENERAL ACCOUNT OFFICE, WHICH DISALLOWED YOUR CLAIM BY THE REFERRED-TO SETTLEMENT OF OCTOBER 29, 1959, FOR THE REASONS SET OUT THEREIN.

PARAGRAPH 1 AND 2 OF GENERAL SALE TERMS AND CONDITIONS INCLUDED IN THE INVITATION PROVIDED:

"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 OBLIGATED TO FURNISH ANY LABOR FOR SUCH PURPOSE. IN 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.'

IT IS DIFFICULT TO PERCEIVE HOW CLEARER OR MORE EXPLICIT LANGUAGE COULD HAVE BEEN USED TO APPRISE ALL PROSPECTIVE BIDDERS THAT THEY WERE CONTRACTING FOR THE PURCHASE OF LISTED MATERIALS AT THEIR OWN RISK. THE COURTS HAVE HELD REPEATEDLY THAT SUCH PROVISIONS CONSTITUTE AN EXPRESS DISCLAIMER OF WARRANTY. MAGUIRE AND COMPANY V. UNITED STATES, 273 U.S. 67; LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED, 284 U.S.C. 676. SEE, ALSO, LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, WHEREIN AN AGENT FOR THE GOVERNMENT LISTED FOR SALE CERTAIN ITEMS OF JUNK LOCATED AT SEVERAL FORTS, SETTING FORTH THE WEIGHTS AND KINDS OF EACH ITEM. ALTHOUGH THE QUANTITIES ACTUALLY WERE ONLY APPROXIMATELY ONE-HALF OF THOSE SHOWN IN THE ADVERTISEMENT, THE PLAINTIFFS WERE HELD NOT TO HAVE ANY CAUSE OF ACTION SINCE, AS STATED BY THE SUPREME COURT, THE MENTIONING OF THE QUANTITIES "CANNOT BE REGARDED AS IN THE NATURE OF A WARRANTY, BUT MERELY AN ESTIMATE OF THE PROBABLE AMOUNTS IN REFERENCE TO WHICH GOOD FAITH ONLY COULD BE REQUIRED OF THE PARTY MAKING IT.'

THOSE CASES AND OTHERS TOO NUMEROUS TO MENTION CONCLUDE THAT, UNDER SUCH CIRCUMSTANCES, BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT ANY WARRANTIES WHATEVER. IN DISPOSING OF SURPLUS MATERIALS, THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS NOT AWARE OF THE CONDITION OR THE QUANTITY OF THE GOODS IT SELLS. THAT FACT IS MADE KNOWN TO ALL BIDDERS BY THE TERMS OF THE CONTRACT WHEREBY THE PARTIES AGREE THAT THE RISK AS TO THE CONDITION AND THE QUANTITY OF THE MATERIAL SOLD IS ASSUMED BY THE PURCHASER AS ONE OF THE ELEMENTS OF THE BARGAIN. SEE 36 COMP. GEN. 612.

NO LEGAL RESPONSIBILITY WOULD ATTACH TO THE GOVERNMENT IN THE ABSENCE OF A SHOWING OF BAD FAITH ON THE PART OF THE DISPOSAL OFFICER OR HIS AGENTS. LIPSHITZ AND COHEN V. UNITED STATES, SUPRA. THERE IS NOTHING IN THE RECORD TO ESTABLISH THAT THE CONTRACTING OFFICER OR HIS AGENTS ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE TRANSACTION.

FOR THE REASONS ABOVE SET OUT, THE SETTLEMENT OF OCTOBER 29, 1959, DISALLOWING YOUR CLAIM APPEARS CORRECT AND HEREBY IS SUSTAINED.