B-126438, JAN. 19, 1956

B-126438: Jan 19, 1956

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TO ACE EQUIPMENT COMPANY: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 6. YOUR CLAIM APPEARS TO BE FOUNDED UPON THE CONTENTION THAT YOUR BID WAS BASED ON MATERIAL DESCRIBED AS MONEL. INDICATES THAT THE MATERIAL DELIVERED WAS STAINLESS STEEL AND NOT MONEL. THAT THE PROPERTY WAS OFFERED FOR SALE "AS IS" AND "WHERE IS. " WITHOUT RECOURSE AGAINST THE GOVERNMENT AND THAT THE DESCRIPTION WAS BASED UPON THE BEST AVAILABLE INFORMATION. THE TRANSACTION WAS NOT A SALE BY SAMPLE. CONCLUDE THAT UNDER SUCH CIRCUMSTANCES BUYERS HAVE NO RIGHT TO EXPECT. HAVE NOTICE NOT TO EXPECT. IN DISPOSING OF SURPLUS PROPERTY THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS UNAWARE OF THE QUALITY OR CONDITION OF THE GOODS IT SELLS.

B-126438, JAN. 19, 1956

TO ACE EQUIPMENT COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 6, 1955, WITH ENCLOSURE, REQUESTING REVIEW OF OUR SETTLEMENT DATED NOVEMBER 18, 1955, WHICH DISALLOWED YOUR CLAIM FOR PARTIAL REFUND OF THE AMOUNT PAID FOR FIREBRICK BOLTS PURCHASED FROM THE DEPARTMENT OF THE NAVY UNDER CONTRACT NO. N189S- 10253A/S).

YOUR CLAIM APPEARS TO BE FOUNDED UPON THE CONTENTION THAT YOUR BID WAS BASED ON MATERIAL DESCRIBED AS MONEL--- WHICH YOU ALLEGE CONSISTS OF 70 PERCENT NICKEL--- WHEREAS THE MATERIAL YOU RECEIVED CONTAINED ONLY 19 PERCENT NICKEL, WHICH, YOU ASSERT, INDICATES THAT THE MATERIAL DELIVERED WAS STAINLESS STEEL AND NOT MONEL.

PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS PROVIDED, IN PERTINENT PART, THAT THE PROPERTY WAS OFFERED FOR SALE "AS IS" AND "WHERE IS," WITHOUT RECOURSE AGAINST THE GOVERNMENT AND THAT THE DESCRIPTION WAS BASED UPON THE BEST AVAILABLE INFORMATION, BUT THE GOVERNMENT MADE NO GUARANTY, WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO KIND, CHARACTER OR QUALITY THEREOF, OR ITS FITNESS FOR ANY USE OR PURPOSE, AND THAT NO CLAIM WOULD 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, ALSO 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 WHATEVER. IN DISPOSING OF SURPLUS PROPERTY 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 PROPERTY SOLD IS ASSUMED BY THE PURCHASER AS ONE OF THE ELEMENTS OF THE BARGAIN.

YOU PLACE CONSIDERABLE EMPHASIS UPON THE FACT THAT YOU WERE REQUIRED TO RELY UPON THE DESCRIPTION IN THE INVITATION. YOU STATE THE ONLY METHOD TO DETERMINE THE DIFFERENCE BETWEEN MONEL AND STAINLESS STEEL IS BY CHEMICAL ANALYSIS, WHICH YOU WERE UNABLE TO DO UNTIL AFTER THE RECEIPT OF THE PROPERTY. WHILE SUCH A SITUATION ISFULLY UNDERSTOOD, IT IS APPARENT THAT UNDER THESE 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 NOT TO SUBMIT A BID. THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE CONTRACTING OFFICER OR HIS AGENTS ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE ENTIRE TRANSACTION

SINCE THERE IS NO LEGAL BASIS UPON WHICH ANY PART OF THE PURCHASE PRICE MAY BE REFUNDED, THE SETTLEMENT OF NOVEMBER 18, 1955, IS SUSTAINED.