B-125938, DEC. 1, 1955

B-125938, DEC. 1, 1955

TO FISLER-S:

YOUR LETTER OF OCTOBER 19, 1955, REQUESTS REVIEW OF SETTLEMENT DATED OCTOBER 11, 1955, DISALLOWING YOUR CLAIM FOR REFUND OF $473.60 IN CONNECTION WITH YOUR PURCHASE OF VACUUM BOTTLES UNDER CONTRACT NO. N261S- 6268, DATED AUGUST 18, 1954.

BY INVITATION NO. B-25-55 DATED JULY 14, 1954, THE U.S. NAVAL SUPPLY DEPOT, SAN PEDRO, CALIFORNIA, REQUESTED BIDS FOR THE PURCHASE FROM THE UNITED STATES OF MISCELLANEOUS USABLE MATERIALS DESCRIBED UNDER ITEMS 1 TO 27, INCLUSIVE. ITEM 25 COVERED 1,004 VACUUM BOTTLES DESCRIBED AS "UNUSED, GOOD.' PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS PROVIDED:

"CONDITION OF PROPERTY.--- ALL PROPERTY LISTED HEREIN IS OFFERED FOR SALE "AS IS" AND "WHERE " AND WITHOUT RECOURSE AGAINST THE GOVERNMENT. IF IT IS PROVIDED HEREIN THAT THE GOVERNMENT SHALL LOAD, THEN "WHERE IS" MEANS F.O.B. CONVEYANCE AT THE POINT SPECIFIED IN THE INVITATION. 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 * * *.'

AFTER ACCEPTANCE OF YOUR BID ON ITEM 25, THE PAYMENT BY YOU OF THE PURCHASE PRICE AND THE DELIVERY OF THE VACUUM BOTTLES, YOU ALLEGED THAT A PART OF THE CRATES HAD BEEN WET AND THAT THE 320 BOTTLES IN SUCH CRATES WERE RUSTED. IT IS ASSERTED THAT THE CLAIM FOR $473.60 REPRESENTS THE COST OF RECONDITIONING AND REPACKING THE BOTTLES. YOU STATE THAT WHILE YOU MADE AN INSPECTION PRIOR TO SUBMITTING YOUR BID, SUCH INSPECTION WAS LIMITED TO A FEW BOTTLES SINCE THE GOVERNMENT'S REPRESENTATIVE WOULD NOT ALLOW YOU TO INSPECT OTHER THAN THE FEW BOTTLES WHICH HAD BEEN REMOVED FROM THEIR CRATES. IT IS ALSO CONTENDED THAT SINCE THE BOTTLES WHICH YOU WERE ALLOWED TO EXAMINE WERE IN EXCELLENT CONDITION WHEREAS 320 OF THE BOTTLES DELIVERED TO YOU WERE RUSTY, THE GOVERNMENT'S ACTION AMOUNTED TO FRAUD AND RENDERED IT LIABLE FOR THE AMOUNT CLAIMED.

IT HAS BEEN HELD CONSISTENTLY BY THE COURTS AND OUR OFFICE THAT, IN THE ABSENCE OF BAD FAITH OR WHERE IT IS NOT SHOWN THAT THE PROPERTY SOLD WAS OTHER THAN THAT ADVERTISED FOR SALE, NO RELIEF MAY BE GIVEN WHERE, AS HERE, THERE HAS BEEN AN EXPRESS DISCLAIMER OF 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. NO BAD FAITH ON THE PART OF THE CONTRACTING OFFICER HAS BEEN SHOWN. IN DISPOSING OF SURPLUS PROPERTY THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE AND ITS REPRESENTATIVES FREQUENTLY ARE IGNORANT OF THE CONDITION OF THE PROPERTY IT SELLS. THAT FACT IS MADE KNOWN TO PROSPECTIVE BIDDERS BY THE "AS IS" TERMS WHICH BECOME A PARTY OF THE CONTRACT OF SALE AND BY WHICH THE PARTIES TO THE CONTRACT AGREE THAT THE RISK AS TO THE CONDITION OF THE PROPERTY SOLD IS ASSUMED BY THE PURCHASER AS ONE OF THE ELEMENTS OF THE BARGAIN.

MOREOVER, IN THE PRESENT CASE YOU HAVE NOT FURNISHED EVIDENCE TO ESTABLISH YOUR ALLEGATION THAT THE CRATES HAD BEEN WET CAUSING 320 OF THE BOTTLES TO RUST OR, IF SO, THAT SUCH CONDITION DID NOT ARISE AFTER DELIVERY TO THE CARRIER DESIGNATED AS YOUR AGENT TO RECEIVE THE BOTTLES. IN FACT, THE CONTRACTING OFFICER HAS REPORTED THAT THE BOTTLES INVOLVED, TOGETHER WITH OTHERS, WERE RECEIVED AT THE NAVAL SUPPLY DEPOT WAREHOUSE IN SAN PEDRO, DIRECTLY FROM THE MANUFACTURER; THAT THEY ALWAYS HAD BEEN STORED IN A WAREHOUSE; AND THAT THEY WERE ACCEPTED BY THE CARRIER WITHOUT ANY EXCEPTIONS. HE REPORTED FURTHER THAT A SPOT CHECK OF THE BOTTLES REMAINING IN THE WAREHOUSE, MADE IN THE PRESENCE OF A PERSON SUGGESTED BY THE CARRIER AFTER YOUR ALLEGATION THAT THOSE DELIVERED TO YOU WERE DEFECTIVE, REVEALED THAT THEY WERE IN EXCELLENT CONDITION. ALSO, BY REASON OF THIS, HE INFORMED YOU THAT IT WAS HIS OPINION THAT THE RUST DEVELOPED BY EXPOSURE DURING SHIPMENT ALTHOUGH THE CARRIER HAS DENIED THIS TO BE THE CASE. FOR THESE REASONS THE CONTRACTING OFFICER RECOMMENDED DISALLOWANCE OF YOUR CLAIM.

ACCORDINGLY, FOR THE REASONS STATED ABOVE, THE SETTLEMENT OF OCTOBER 11, 1955, IS SUSTAINED.