B-125687, NOV. 30, 1955

B-125687: Nov 30, 1955

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TO IMPERIAL METAL PRODUCTS COMPANY: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 20. WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR $1. REPRESENTING DAMAGES ALLEGED TO HAVE BEEN INCURRED IN CONNECTION WITH THE PURCHASE OF CERTAIN AUTOLITE GENERATORS FROM THE PHILADELPHIA NAVAL AVIATION SUPPLY DEPOT. YOUR CLAIM IS BASED UPON THE CONTENTION THAT 272 OF THE 292 GENERATORS DIFFERED FROM THE DESCRIPTION CONTAINED IN THE INVITATION IN THAT ONLY 20 UNITS WERE USABLE. PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS MADE A PART OF THE CONTRACT PROVIDES THAT THE DESCRIPTION OF THE PROPERTY OFFERED FOR SALE IS BASED UPON THE BEST AVAILABLE INFORMATION. THAT NO CLAIM WILL BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED.

B-125687, NOV. 30, 1955

TO IMPERIAL METAL PRODUCTS COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 20, 1955, REQUESTING REVIEW OF SETTLEMENT DATED AUGUST 1, 1955, WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR $1,100.97, REPRESENTING DAMAGES ALLEGED TO HAVE BEEN INCURRED IN CONNECTION WITH THE PURCHASE OF CERTAIN AUTOLITE GENERATORS FROM THE PHILADELPHIA NAVAL AVIATION SUPPLY DEPOT, UNDER CONTRACT NO. N288S-39202. YOUR CLAIM IS BASED UPON THE CONTENTION THAT 272 OF THE 292 GENERATORS DIFFERED FROM THE DESCRIPTION CONTAINED IN THE INVITATION IN THAT ONLY 20 UNITS WERE USABLE, AND THAT THE BALANCE HAD NO VALUE EXCEPT AS SCRAP.

PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS MADE A PART OF THE CONTRACT PROVIDES THAT THE DESCRIPTION OF THE PROPERTY OFFERED FOR SALE IS BASED UPON THE BEST AVAILABLE INFORMATION, BUT THE GOVERNMENT MAKES NO GUARANTY, WARRANTY OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO THE CHARACTER OR QUALITY THEREOF, OR ITS FITNESS FOR ANY USE OR PURPOSE, AND THAT NO CLAIM WILL BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED. THE TRANSACTION WAS NOT A SALE BY SAMPLE. IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND BY OUR OFFICE THAT SUCH A PROVISION CONSTITUTES AN EXPRESS DISCLAIMER OF WARRANTY AND NO WARRANTY MAY BE IMPLIED. 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, AND OTHERS TOO NUMEROUS TO MENTION, INVOLVING A VARIANCE IN THE CONDITION OF THE PROPERTY WITH THAT OF THE DESCRIPTION IN THE INVITATION, 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.

CONSIDERABLE EMPHASIS IS PLACED UPON THE FACT 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 A REASONABLE INSPECTION OF ALL, OR A PORTION OF, THE GENERATORS. WHILE SUCH SITUATION IS FULLY UNDERSTOOD, IT IS APPARENT THAT UNDER THOSE CIRCUMSTANCES NO LEGAL LIABILITY WOULD ATTACH TO THE GOVERNMENT IN THE ABSENCE OF BAD FAITH ON THE PART OF THE DISPOSAL OFFICER OR HIS AGENTS. YOU WERE AWARE THAT SALVAGE PROPERTY WAS BEING OFFERED FOR SALE AND IF YOU WERE UNABLE TO MAKE AN INSPECTION THEREOF IN SUCH A MANNER AS WOULD REASONABLY INSURE THE PROTECTION OF YOUR INTERESTS, YOUR ALTERNATIVE WOULD HAVE BEEN TO NOT SUBMIT A BID. THERE IS NOTHING IN THE RECORD TENDING TO ESTABLISH THAT THE CONTRACTING OFFICER OR HIS AGENTS ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE TRANSACTION.

SINCE THERE IS NO LEGAL BASIS UPON WHICH ANY PART OF THE PURCHASE PRICE MAY BE REFUNDED, THE SETTLEMENT OF AUGUST 1, 1955, MUST BE SUSTAINED.