B-124516, AUG. 26, 1955

B-124516: Aug 26, 1955

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VETERANS ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF JUNE 29. THE PROPERTY INVOLVED WAS DESCRIBED AS USED MOTION PICTURE EQUIPMENT AND EACH ITEM WAS IDENTIFIED BY SERIAL NUMBER. " THAT BIDDERS WERE INVITED AND URGED TO INSPECT THE PROPERTY PRIOR TO THE SUBMISSION OF BIDS AND THAT IN NO CASE WOULD FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING. " THAT THE PROPERTY WAS OFFERED FOR SALE "AS IS" AND "WHERE IS. " THAT THE DESCRIPTION "IS BASED ON THE BEST AVAILABLE INFORMATION. THAT "NO CLAIM WILL BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT OR FOR RESCISSION OF THE SALE BASED UPON THE FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED.'.

B-124516, AUG. 26, 1955

TO HONORABLE H. V. HIGLEY, ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 29, 1955, RELATING TO AN APPEAL BY THE CROWN EQUIPMENT COMPANY, LIMITED, 1011 BLEURY STREET, MONTREAL 1, CANADA, FROM A DECISION RENDERED JANUARY 27, 1955, BY MR. JAMES N. O-NEIL, THE CHIEF PURCHASING AGENT OF THE VETERANS ADMINISTRATION, IN CONNECTION WITH A CONTROVERSY WHICH AROSE UNDER SALES CONTRACT (INV. 54-17), COVERING THE SALE OF CERTAIN MOTION PICTURE EQUIPMENT. YOU REQUEST A DECISION AS TO WHETHER THERE EXISTS ANY MANNER OR MEANS OF PROVIDING RELIEF TO THIS FIRM, STATING IN CONNECTION THEREWITH THAT THE INVENTORY LIST FURNISHED BY THE FIRM CLEARLY INDICATES THAT THE DESCRIPTION OF THE EQUIPMENT INCLUDED IN THE SALES INVITATION MISREPRESENTED ITS TRUE CONDITION.

IT APPEARS THAT THE VETERANS ADMINISTRATION SUPPLY DEPOT, SOMERVILLE, NEW JERSEY, ADVERTISED FOR SALE CERTAIN MOTION PICTURE EQUIPMENT LOCATED AT THAT DEPOT AS LISTED AND DESCRIBED IN INVITATION NO. 54-17, DATED DECEMBER 2, 1953, AND SUBJECT TO THE "GENERAL SALE TERMS AND CONDITIONS" INCORPORATED IN THE INVITATION. THE INVITATION SPECIFIED THAT BIDS WOULD BE OPENED DECEMBER 16, 1953; THAT EACH BID SHOULD BE ACCOMPANIED WITH A DEPOSIT OF TEN PERCENT OF THE TOTAL AMOUNT BID, AND THAT THE SUCCESSFUL BIDDER SHOULD REMOVE THE PROPERTY WITHIN THIRTY CALENDAR DAYS AFTER NOTICE OF AWARD. THE PROPERTY INVOLVED WAS DESCRIBED AS USED MOTION PICTURE EQUIPMENT AND EACH ITEM WAS IDENTIFIED BY SERIAL NUMBER, MANUFACTURER AND MODEL NUMBERS.

THE "GENERAL SALE TERMS AND CONDITIONS" INCORPORATED IN THE INVITATION CONTAIN VARIOUS STIPULATIONS INCLUDING PARAGRAPH 1, "INSPECTION," THAT BIDDERS WERE INVITED AND URGED TO INSPECT THE PROPERTY PRIOR TO THE SUBMISSION OF BIDS AND THAT IN NO CASE WOULD FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING; AND PARAGRAPH "CONDITION OF PROPERTY," THAT THE PROPERTY WAS OFFERED FOR SALE "AS IS" AND "WHERE IS," AND ,WITHOUT RECOURSE AGAINST THE GOVERNMENT," THAT 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, FURTHER, THAT "NO CLAIM WILL BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT OR FOR RESCISSION OF THE SALE BASED UPON THE FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED.'

UNDER DATE OF DECEMBER 4, 1953, THE CROWN EQUIPMENT COMPANY, LIMITED, MADE INQUIRY AS TO WHETHER THE MACHINES WERE COMPLETE AS TO PARTS AND IN OPERATING CONDITION. BY LETTER DATED DECEMBER 8, 1953--- PRIOR TO THE BID --- MR. JOSEPH F. JASION, SUPPLY OFFICER, VETERANS ADMINISTRATION SUPPLY DEPOT, SOMERVILLE, NEW JERSEY, ADVISED THE BIDDER, IN PART, AS FOLLOWS:

"IN REFERENCE TO YOUR LETTER OF DECEMBER 4, 1953, THE ONLY STATEMENT WE CAN MAKE REGARDING THE CONDITION OF THESE MACHINES IS THAT THEY ARE USED AND ARE IN VARYING DEGREES OF CONDITION. SOME ARE INCOMPLETE AND ARE NOT IN OPERATING CONDITION. YOU ARE CAUTIONED TO INSPECT THE PROPERTY BEFORE BIDDING.'

IT APPEARS THAT SIX BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION, THE THREE HIGHEST BEING IN THE APPROXIMATE AMOUNTS OF $10, $26, AND $58 EACH FOR THE 24 ITEMS INVOLVED. THE BID OF STANLEY ENTERPRISE IN THE APPROXIMATE AMOUNT OF $26 EACH WAS CONDITIONED UPON EACH OF THE MACHINES BEING IN OPERATING CONDITION. THE HIGH BID OF THE CROWN EQUIPMENT COMPANY, LIMITED, ACCOMPANIED BY THE REQUIRED DEPOSIT OF TEN PERCENT IN THE AMOUNT OF $140 WAS ACCEPTED AND AWARD MADE ACCORDINGLY. PAYMENT IN FULL WAS ACCOMPLISHED AND THE EQUIPMENT WAS REMOVED BY THE CONTRACTOR FROM THE SOMERVILLE DEPOT AND WAS SHIPPED BY THE FIRM TO A BONDED WAREHOUSE LOCATED IN THE STATE OF VERMONT, WHERE, IT APPEARS THE PROPERTY IS LOCATED AT THE PRESENT TIME. IT IS REPORTED IN YOUR LETTER THAT AT THIS STAGE THE CONTRACTOR CONDUCTED AN INVENTORY OF THAT WHICH HAD BEEN PURCHASED AND AS A RESULT REQUESTED THE CONTRACT BE RESCINDED AND THE MONIES REFUNDED.

IT APPEARS TO BE TRUE THAT THE CONDITION OF THE EQUIPMENT WAS NOT ACCURATELY DESCRIBED IN THE INVITATION TO BID ISSUED BY YOUR ADMINISTRATION, IN THAT THE SAME WAS SHOWN ONLY TO BE "USED" MOTION PICTURE EQUIPMENT, WHEREAS, THE CONTRACTOR SUBSEQUENTLY REPORTED THAT NOT ONE SINGLE PIECE OF MOTION PICTURE EQUIPMENT WAS COMPLETE AND IN OPERATING CONDITION. THE RECORD DISCLOSES THAT BY LETTER OF DECEMBER 8, 1953--- QUOTED, IN PART, ABOVE--- THE PROSPECTIVE BIDDER WAS ADVISED THAT SOME OF THE ITEMS WERE INCOMPLETE AND WERE NOT IN OPERATING CONDITION. THIS WAS ALSO AN INACCURATE DESCRIPTION, IF THE SUBSEQUENT REPORT OF THE CONTRACTOR MAY BE ACCEPTED AS CORRECT.

IT HAS BEEN HELD THAT WHERE THERE IS AN EXPRESS DISCLAIMER OF WARRANTY--- AS IN THE INSTANT CASE--- NO SUCH WARRANTY MAY BE IMPLIED FROM THE DESCRIPTION OF THE PROPERTY SOLD, AS THE DISCLAIMER OF WARRANTY EXTENDS TO AND INCLUDES THE DESCRIPTION. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED, 284 U.S. 676; TRIAD CORPORATION V. UNITED STATES, 63 C.CLS. 151; AND I. SHAPIRO AND COMPANY V. UNITED STATES, 66 C.CLS. 424.

NO INSPECTION OF THE EQUIPMENT WAS MADE BY THE CONTRACTOR PRIOR TO THE SUBMISSION OF ITS BID. THE LAW IS CLEAR THAT WHERE SURPLUS MATERIALS ARE OFFERED FOR SALE BY THE GOVERNMENT ON AN "AS IS" BASIS WITHOUT WARRANTY OR GUARANTY OF ANY KIND, A BIDDER WHO FAILS TO TAKE ADVANTAGE OF AN OPPORTUNITY TO INSPECT CANNOT SUBSEQUENTLY RECOVER ON THE GROUNDS THAT THE MATERIALS ARE OF AN INFERIOR QUALITY. SEE M. SAMUEL AND SONS V. UNITED STATES, 61 C.CLS. 373; TRIAD CORPORATION V. UNITED STATES, 63 C.CLS. 151; S. BRODY V. UNITED STATES, 64 C.CLS. 538; SILBERSTEIN AND SON V. UNITED STATES, 69 C.CLS. 412; SACHS MERCANTILE CO. V. UNITED STATES, 78 C.CLS. 801; LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90; MOTTRAM V. UNITED STATES, 271 U.S. 15; MAGUIRE AND CO. V. UNITED STATES, 273 U.S. 67.

UNDER THE CIRCUMSTANCES, THERE APPEARS TO BE NO LEGAL BASIS FOR RESCINDING THE CONTRACT IN THIS CASE, AND REFUNDING THE AMOUNT PAID.