B-123651, JUL. 29, 1955

B-123651, JUL. 29, 1955

TO ATLANTIC STEEL AND TRADING COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 16, 1955, REQUESTING RECONSIDERATION OF OUR DECISION OF MAY 12, 1955, B-123651, TO THE SECRETARY OF THE NAVY, WHEREIN IT WAS HELD THAT THERE EXISTED NO LEGAL BASIS FOR THIS OFFICE TO AUTHORIZE A MODIFICATION OR CANCELLATION OF YOUR CONTRACT NO. N189S-6750A/S) COVERING THE PURCHASE OF A QUANTITY OF SURPLUS ELECTRICAL CABLES FROM THE DEPARTMENT OF THE NAVY. PARTICULARLY, YOU TAKE EXCEPTION TO THE STATEMENT IN THE DECISION THAT AN ERROR WAS ALLEGED BY YOU TO HAVE BEEN MADE IN YOUR BID, WHEREAS NO SUCH ALLEGATION WAS, IN FACT, MADE.

IT HAS BEEN A GENERAL RULE OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT WHEN A DECISION HAS BEEN RENDERED TO AN AUTHORIZED OFFICIAL OF AN ADMINISTRATIVE AGENCY PURSUANT TO LAW, SUCH DECISION MAY NOT BE RECONSIDERED AT THE REQUEST OF ANY OTHER PARTY. HOWEVER, YOU MAY BE ADVISED THAT IN SUBMITTING THE MATTER HERE FOR DECISION THE ADMINISTRATIVE OFFICE TERMED YOUR PROTEST AS ,A MISTAKE IN BID," WHICH ACCOUNTS FOR THE REFERENCE THERETO IN OUR REPLY. WHILE IT IS UNDERSTOOD THAT SUCH PHRASE DID NOT PROPERLY DESCRIBE YOUR REQUEST FOR RELIEF, IT WAS NOT MATERIAL IN THE DISPOSITION OF THE CASE.

AS TO THE MERITS OF YOUR CLAIM, THE INVITATION PROVIDED THAT THE MATERIAL WAS OFFERED "AS IS" WHICH, IN EFFECT, APPRISED ALL PROSPECTIVE BIDDERS THAT THEY WERE CONTRACTING FOR THE PURCHASE OF THE LISTED MATERIALS AT THEIR OWN RISK. THE COURTS HAVE HELD REPEATEDLY THAT SUCH STIPULATIONS CONSTITUTE AN EXPRESS DISCLAIMER OF WARRANTY. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525, AND W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED, 284 U.S. 676. THOSE CASES, ALSO INVOLVING A VARIANCE IN THE CONDITION OF THE PROPERTY WITH THAT OF THE DESCRIPTION IN THE INVITATION, 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 WHATSOEVER. IN DISPOSING OF SURPLUS MATERIALS THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS UNAWARE OF THE QUALITY OR CONDITION 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.

WITH RESPECT TO YOUR CONTENTION THAT YOU WERE REQUIRED TO RELY UPON THE DESCRIPTION OF THE GOODS SET FORTH IN THE INVITATION BECAUSE OF THE DIFFICULTY WHICH WOULD HAVE BEEN ENCOUNTERED IN ATTEMPTING AN INSPECTION THEREOF, IT IS APPARENT THAT UNDER SUCH CIRCUMSTANCES NO LEGAL LIABILITY WOULD ATTACH TO THE GOVERNMENT IN THE ABSENCE OF BAD FAITH ON THE PART OF THE DISPOSAL OFFICER ISSUING THE INVITATION OR HIS AGENTS. YOU WERE AWARE OF THE FACT THAT SALVAGE PROPERTY WAS BEING OFFERED FOR SALE AND, IF YOU WERE NOT WILLING TO ASSUME THE RISKS IMPOSED BY THE CONTRACT TERMS WITHOUT INSPECTING THE CABLE, YOU SHOULD NOT HAVE SUBMITTED YOUR BID. THERE IS NOTHING IN THE RECORD TO ESTABLISH THAT THE CONTRACTING OFFICER OR HIS AGENTS ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE TRANSACTION.

ACCORDINGLY, THERE IS PERCEIVED NO LEGAL JUSTIFICATION FOR ANY CHANGE IN THE CONCLUSION REACHED ..END :