B-126816, FEB. 15, 1956

B-126816, FEB. 15, 1956

TO HONORABLE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED JANUARY 27, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS) RELATIVE TO AN ALLEGED ERROR ON ITEM NO. 3 OF AN UNDATED BID SUBMITTED BY M. J. R. CORPORATION ON WHICH CONTRACT NO. OI/S/30-182-56-120 DATED OCTOBER 13, 1955, WAS BASED.

THE RECORD SHOWS THAT IN THE INSTANT SALE OF GOVERNMENT-OWNED SURPLUS PROPERTY THE BIDS WERE OPENED ON SEPTEMBER 28, 1955, AND THAT ITEMS NOS. 3, 6, 7 AND 12 WERE AWARDED TO THE CORPORATION ON OCTOBER 13, 1955. THE RECORD FURTHER SHOWS THAT BY TELEPHONE CALL DATED OCTOBER 24, AND BY LETTER DATED OCTOBER 31, 1955, THE CORPORATION ALLEGED THAT A MISTAKE HAD BEEN MADE IN ITS BID ON ITEM NO. 3 IN THAT WHEN ITS BID WAS SUBMITTED IT ASSUMED THAT THE ITEM COVERED ANSCO COLOR DUPLICATING FILM OF THE SAME TYPE AND QUALITY AS THE FILM FOR SALE UNDER THE OTHER ITEMS ON WHICH IT BID. IT CLAIMS THAT IT WAS NOT UNTIL AFTER AWARD THAT IT DISCOVERED THE FILM IT PURCHASED UNDER ITEM NO. 3 WAS ANSCO COLOR NEGATIVE WHICH TYPE IT ALLEGED IS OF NO VALUE TO ANYONE. IT ATTRIBUTES THE MISTAKE TO POOR LIGHTING WHERE THE FILMS WERE STORED AND TO THE FACT THAT THE READING ON THE LABEL AND THE COLOR OF THE LABEL ON THE FILMS UNDER ITEM NO. 3 WERE THE SAME AS ON THE FILMS IT HAD JUST FINISHED INSPECTING UNDER ITEMS NOS. 6, 7 AND 12. ALSO, THE MISTAKE WAS ASCRIBED IN PART TO ITS HASTE IN THE INSPECTION WHICH WAS MADE NECESSARY BY REASON OF THE FACT THAT THE INSPECTION WAS VERY CLOSE TO THE CLOSING TIME FOR THE FILING OF BIDS. REASON OF THE FOREGOING MISTAKE IT REQUESTED THAT IT BE RELEASED FROM ITS OBLIGATION UNDER THE CONTRACT WITH RESPECT TO ITEM NO. 3. THE CORPORATION'S BID OF $1,001.33 WAS THE ONLY BID RECEIVED ON ITEM NO. 3, WHEREAS THERE WERE SEVERAL OTHER UNSUCCESSFUL BIDDERS FOR ITEMS NOS. 6, 7 AND 12, COVERING THE DUPLICATING FILM IT PURCHASED.

THE CONTRACTING OFFICER IN HIS FINDINGS OF FACT DATED DECEMBER 6, 1955, REPORTED IN PERTINENT PART THAT IN VIEW OF THE CONTRACTOR'S CLAIM THAT THE FILM FOR SALE UNDER ITEM NO. 3 WAS WORTHLESS, AN INQUIRY WAS MADE AS TO THE ACTUAL VALUE THEREOF AND THAT THE MANAGER OF DELUXE LABORATORIES, INC., NEW YORK, NEW YORK, REPORTED THAT THE FILMS WERE OF NOMINAL OR NO VALUE, WHEREAS THE EASTERN SALES MANAGER FOR ANSCO DIVISION OF GENERAL ANILINE AND FILM CORPORATION, NEW YORK, NEW YORK, THE MANUFACTURER, ADVISED THAT THEY WERE OF NO VALUE. BY REASON OF HIS FOREGOING FINDINGS AND HIS ADMISSION THAT THE FILM WAS STORED IN A ROOM THAT WAS POORLY LIGHTED MAKING AN ACCURATE INSPECTION UNUSUALLY DIFFICULT, THE CONTRACTING OFFICER RECOMMENDS THAT THE CONTRACTOR'S REQUEST FOR RELIEF BE AUTHORIZED.

ALTHOUGH IT WAS SPECIFICALLY STATED IN THE INVITATION'S DESCRIPTION OF ITEM NO. 3 THAT THE FILM FOR SALE WAS ANSCO COLOR NEGATIVE, IT APPEARS THAT THE CONTRACTOR INADVERTENTLY OVERLOOKED THAT DESCRIPTION AND RELYING ON ITS FINDINGS IN A HASTY INSPECTION, ACTUALLY BELIEVED IT WAS OFFERING TO BUY ANSCO COLOR DUPLICATING FILM WHEN THE BID WAS SUBMITTED AND THAT THE MISTAKE WAS NOT DISCOVERED UNTIL AFTER THE BID WAS ACCEPTED AND THE FILM WAS DELIVERED. ORDINARILY IN AN "AS IS" SALE WITH AN EXPRESS DISCLAIMER OF WARRANTY WHERE THE BID HAS BEEN ACCEPTED, AND CIRCUMSTANCES SUBSTANTIALLY SUCH AS WE HAVE HERE PREVAIL, THE BUYER IS NOT ENTITLED TO RELIEF. HOWEVER, SINCE, IN THE PRESENT CASE, IT HAS BEEN ESTABLISHED THAT THE FILM THAT WAS OFFERED FOR SALE UNDER ITEM NO. 3 IS OF NO VALUE WHATSOEVER A CONTRACT FOR SALE THEREOF AT A PRICE OF $1,001.33 MUST BE REGARDED AS UNCONSCIONABLE.

ACCORDINGLY, THE CONTRACT AS TO ITEM NO. 3 SHOULD BE CANCELLED AND UPON RETURN OF THE FILMS THE PURCHASE PRICE MAY BE REFUNDED TO THE CORPORATION.