B-125449, OCT. 17, 1955

B-125449: Oct 17, 1955

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO ALL-STATE SUPPLY COMPANY: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 22. YOUR CLAIM WAS DISALLOWED FOR THE REASON THAT UNDER THE TERMS OF THE CONTRACT THE MATERIAL WAS SOLD BY THE GOVERNMENT WITHOUT ANY WARRANTIES OR GUARANTIES WHATSOEVER. THAT THE LOSS OF WHICH YOU NOW COMPLAIN WAS OCCASIONED BY YOUR FAILURE TO INSPECT THE PROPERTY BEFORE SUBMITTING YOUR BID. " AND THAT SINCE THE PENHOLDERS WERE WITHOUT A HARD- RUBBER GRIP. A MISREPRESENTATION WAS MADE WHICH ENTITLED YOU TO A REFUND OF THE AMOUNT PAID FOR SUCH MATERIAL. THAT: "ALL PROPERTY LISTED HEREIN IS OFFERED FOR SALE "AS IS" AND "WHERE IS. " AND WITHOUT RECOURSE AGAINST THE GOVERNMENT. * * * THE DESCRIPTION IS BASED ON THE BEST AVAILABLE INFORMATION.

B-125449, OCT. 17, 1955

TO ALL-STATE SUPPLY COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 22, 1955, REQUESTING REVIEW OF SETTLEMENT DATED JUNE 14, 1955, WHICH DISALLOWED YOUR CLAIM FOR $365.95, REPRESENTING A REFUND OF THE AMOUNT PAID FOR ITEMS 31, 32 AND 33, PURCHASED FROM THE DEPARTMENT OF THE NAVY UNDER SURPLUS PROPERTY CONTRACT NO. N228S-7326 DATED JANUARY 6, 1955.

YOUR CLAIM WAS DISALLOWED FOR THE REASON THAT UNDER THE TERMS OF THE CONTRACT THE MATERIAL WAS SOLD BY THE GOVERNMENT WITHOUT ANY WARRANTIES OR GUARANTIES WHATSOEVER, EXPRESS OR IMPLIED, AND THAT THE LOSS OF WHICH YOU NOW COMPLAIN WAS OCCASIONED BY YOUR FAILURE TO INSPECT THE PROPERTY BEFORE SUBMITTING YOUR BID.

SPECIFICALLY, YOU CONTEND THAT SALES INVITATION NO. B-143-55 DESCRIBED THE MATERIAL HERE INVOLVED AS "PENHOLDERS, WRITING, HARD RUBBER GRIP, TYPE II, 3/8 INCHES DIA., 6-5/8 INCHES LONG, NATURAL COLOR. APPARENTLY UNUSED, IN GOOD CONDITION," AND THAT SINCE THE PENHOLDERS WERE WITHOUT A HARD- RUBBER GRIP, A MISREPRESENTATION WAS MADE WHICH ENTITLED YOU TO A REFUND OF THE AMOUNT PAID FOR SUCH MATERIAL.

PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS APPEARING ON PAGE 2 OF THE INVITATION PROVIDES, IN PERTINENT PART, THAT:

"ALL PROPERTY LISTED HEREIN IS OFFERED FOR SALE "AS IS" AND "WHERE IS," AND WITHOUT RECOURSE AGAINST THE GOVERNMENT. * * * 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.'

FURTHERMORE, PARAGRAPH 1 OF THE SAME CONDITIONS ADVISED THAT BIDDERS WERE INVITED AND URGED TO INSPECT THE PROPERTY PRIOR TO SUBMITTING BIDS, STATING THAT IN NO CASE WOULD FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING.

ORDINARILY, IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION, THERE IS AN IMPLIED WARRANTY THAT THE PROPERTY WILL CORRESPOND WITH THE DESCRIPTION; HOWEVER, THIS RULE IS NOT FOR APPLICATION IN THIS CASE SINCE THE ABOVE- QUOTED LANGUAGE OF PARAGRAPH 2 OF THE CONDITIONS CONSTITUTES AN EXPRESS DISCLAIMER OF WARRANTY AS TO DESCRIPTION.

THE PRESENT RECORD BEFORE OUR OFFICE SHOWS THAT THE CONTRACTING AGENCY BELIEVED IN GOOD FAITH THAT THE MATERIAL WAS ACCURATELY DESCRIBED. THAT REGARD THE ADMINISTRATIVE OFFICE REPORTED THAT THE MERCHANDISE WAS DISPLAYED FOR INSPECTION AND THE CARTONS WHICH WERE OPENED DID CONTAIN PENHOLDERS WHICH CONFORMED IN EVERY RESPECT TO THE DESCRIPTION IN THE INVITATION TO BID. FURTHERMORE, THE APPLICABLE SUPPORTING INVOICES DESCRIBED THE PROPERTY AS POSSESSING HARD-RUBBER GRIPS. THE DESCRIPTION IS NO MORE THAN A REPRESENTATION OF OPINION AND UNDERSTANDING OF THE CONDITION OR QUALITY OF THE PROPERTY AND IS NOT FURTHER TO BE RELIED UPON BY PROSPECTIVE BUYERS. SEE JOHNSON V. WAISMAN BROS., 36 A.2D 634.

MOREOVER, IT APPEARS FROM YOUR LETTER OF JANUARY 24, 1955, THAT YOU MADE NO PHYSICAL INSPECTION OF THE MATERIAL PRIOR TO THE SUBMISSION OF YOUR BID. IT IS NOTED THAT THE HIGH BID PRICE OF $365.95 ON ITEMS 31, 32 AND 33 IS CONSIDERABLY LOWER THAN THE INITIAL COST OF THE PROPERTY WHICH WAS $8,955.36. THE MERCHANDISE WAS OFFERED FOR SALE ON A SALES INVITATION OFFERING FOR SALE MISCELLANEOUS USABLE MATERIAL, AND WAS APPARENTLY UNUSED AND IN GOOD CONDITION. 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 THE MATERIALS CANNOT SUBSEQUENTLY RECOVER FOR INACCURACIES OR DEFICIENCIES WHICH AN INSPECTION WOULD HAVE READILY DISCLOSED.

THE MATTER OF GRANTING RELIEF TO PURCHASERS OF SURPLUS PROPERTY UNDER TERMS AND CONDITIONS SIMILAR TO THOSE HERE PRESENT HAS BEEN THE SUBJECT OF CONSIDERATION IN NUMEROUS DECISIONS OF OUR OFFICE AND OF THE COURTS, AND IT HAS BEEN UNIFORMLY HELD THAT RECOVERY CANNOT BE HAD IN SUCH CASES. SEE 4 COMP. GEN. 286; 16 ID. 749; 18 ID. 594; 28 ID. 306; SACHS MERCANTILE COMPANY, INC. V. UNITED STATES, 78 C.CLS. 801; AND S. BRODY V. UNITED STATES, 64 C.CLS. 538.

I REALIZE THAT THE RESULTS IN THESE CASES MAY SOMETIMES SEEM HARSH BUT THE GOVERNMENT HAS USED THE PLAINEST AND CLEAREST LANGUAGE POSSIBLE TO ADVISE PROSPECTIVE BIDDERS THAT IN THESE SUPRLUS SALES THE PRINCIPLE OF CAVEAT EMPTOR WILL APPLY RIGIDLY.