B-140214, SEP. 12, 1960

B-140214, SEP. 12, 1960

TO A AND B SURPLUS COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 24, 1960, ADDRESSED TO THE "CONTRACT BOARD OF APPEALS," REQUESTING RECONSIDERATION OF OUR DECISION DATED AUGUST 5, 1959, TO THE SECRETARY OF THE ARMY, WHEREIN HE WAS ADVISED THAT THERE WAS NO LEGAL BASIS FOR RELIEVING YOU OF YOUR OBLIGATIONS UNDER A CONTRACT ISSUED PURSUANT TO INVITATION FOR BIDS NO. 15-010-S-59-14, DATED APRIL 15, 1959--- A SPOT BID SALE.

THE FACTS IN THE MATTER WERE STATED IN OUR DECISION OF AUGUST 5, 1959, AND NEED NOT BE RESTATED HERE. THE QUESTION FOR CONSIDERATION IS NOT WHETHER YOU MADE AN ERROR IN YOUR BID BUT WHETHER A VALID AND BINDING CONTRACT AROSE BY THE ACCEPTANCE OF YOUR BID.

THE RECORD SHOWS THAT YOUR BID WAS ACCEPTED IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. THE ACCEPTANCE UNDER SUCH CIRCUMSTANCES GAVE RISE TO A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. THE RIGHT TO HAVE PERFORMANCE IN STRICT ACCORDANCE WITH THE TERMS OF THE CONTRACT FOR THE PRICE QUOTED IN YOUR BID WHICH VESTED IN THE GOVERNMENT CANNOT BE GIVEN AWAY OR SURRENDERED BY ANY OFFICER OF THE GOVERNMENT. SEE UNITED STATES V. AMERICAN SALES COMPANY, 27 F.2D 389, AFFIRMED 32 F.2D 141 AND CERTIORARI DENIED 280 U.S. 574; PACIFIC HARDWARE AND STEEL COMPANY V. UNITED STATES, 49 C.CLS. 327, 335; AND BAUSCH AND LOMB OPTICAL COMPANY V. UNITED STATES, 78 C.CLS. 584, CERTIORARI DENIED 292 U.S. 645.

ACCORDINGLY, THE DECISION OF AUGUST 5, 1959, IS AFFIRMED.

IN CONNECTION WITH YOUR REFERENCE TO A SALE AT THE MARION ENGINEER DEPOT, INVITATION TO BID NO. 33-062-S-60-7 ON WHICH YOU ALLEGE THAT CERTAIN PROPERTY WAS MISDESCRIBED, IT APPEARS THAT THE DRILL RODS WERE SOLD ON AN "AS IS, WHERE IS" BASIS. THE RECORDS DISCLOSE THAT THE DESCRIPTION OF THE DRILL RODS WAS BASED UPON THE BEST INFORMATION AVAILABLE TO THE PROCUREMENT OFFICE. IT APPEARS THAT THE CONTRACTING OFFICER ACTUALLY HAD NO MORE PERSONAL KNOWLEDGE OF THE TRUE FACTS THAN YOU, BUT BY THE EXPRESS TERMS OF THE OFFERING ALL OF THE RISKS AS TO THE ACCURACY OF THE DESCRIPTION WERE ACCEPTED BY YOU WHEN YOU BID, AND WERE IMPOSED UPON YOU BY THE ACCEPTANCE OF YOUR OFFER. IN DISPOSING OF SURPLUS MATERIAL THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS IGNORANT OF THE CONDITIONS OF THE GOODS IT SELLS. THAT FACT IS MADE KNOWN TO ALL BIDDERS BY THE "AS IS" TERMS OF THE CONTRACT WHEREBY THE PARTIES AGREE THAT THE RISK AS TO THE CONDITION OF THE MATERIAL SOLD IS ASSUMED BY THE PURCHASER AS ONE OF THE ELEMENTS OF THE BARGAIN. IN THE CASE OF OVERSEAS NAVIGATION CORPORATION V. UNITED STATES, 131 C.CLS. 70, THE COURT HELD THAT THE TERMS OF THE SALE CONTRACT THEN UNDER CONSIDERATION, INCLUDING ITS "AS IS, WHERE IS" PROVISIONS, SPOKE FOR THEMSELVES AND THE PLAINTIFF WAS LEGALLY BOUND BY THEM. THERE WAS AN EXPRESS DISCLAIMER OF ANY WARRANTY THAT THE DRILL RODS WERE AS DESCRIBED. THE MERE FACT THAT THE GOVERNMENT WAS HONESTLY MISTAKEN ABOUT THE DESCRIPTION OF THE DRILL RODS DOES NOT ENTITLE YOU TO RELIEF. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525, A.L.R. 1017; AND HOOVER V. UTAH NURSERY COMPANY, 7 F.2D. 270.

WITH REGARD TO YOUR COMPLAINT AS TO THE DIFFERENCE IN THE FORMS USED AT SELLING INSTALLATIONS FOR DISPOSAL OF SURPLUS PROPERTY, THE DEPARTMENT OF THE ARMY HAS ADVISED THIS OFFICE THAT IT IS PRESENTLY WORKING ON REGULATIONS DESIGNED TO ACHIEVE GREATER UNIFORMITY IN THIS AREA. THE SPOT BID CARD NOW UNDER CONSIDERATION PROVIDES A SPACE FOR BOTH UNIT AND TOTAL PRICES.