B-127083, MAR. 27, 1956

B-127083: Mar 27, 1956

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TO INDUSTRIAL SUPPLY COMPANY: REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 17 AND JANUARY 27. YOU CONTEND THAT THE QUANTITY OF ONE OF THE FOUR ITEMS OF SCREWS OFFERED FOR SALE UNDER LOT 128 WAS DESCRIBED IN THE INVITATION AS 111. YOU CONTEND THAT YOUR PHYSICAL INSPECTION OF THE PROPERTY INDICATED THAT THE MATERIAL TO BE AS DESCRIBED BUT DID NOT ENABLE YOU TO DETERMINE THE ACTUAL COUNT AND YOU NATURALLY ASSUMED THAT THE COUNT WAS AS DESCRIBED IN THE INVITATION. THERE IS SOME MORAL JUSTIFICATION ON THE PART OF THE GOVERNMENT TO EFFECT A SETTLEMENT FOR THE SHORTAGE. IN THE "GENERAL SALE TERMS AND CONDITIONS" ON PAGE 2 OF THE INVITATION PROSPECTIVE BIDDERS WERE URGED TO INSPECT THE PROPERTY PRIOR TO THE SUBMISSION OF BIDS AND UNDER THAT SAME PARAGRAPH IT WAS CLEARLY STATED THAT THE SALE WAS ON AN "AS IS" AND "WHERE IS" BASIS WITHOUT GUARANTY.

B-127083, MAR. 27, 1956

TO INDUSTRIAL SUPPLY COMPANY:

REFERENCE IS MADE TO YOUR LETTERS OF FEBRUARY 17 AND JANUARY 27, 1956, REQUESTING RECONSIDERATION OF OUR SETTLEMENT DATED JANUARY 25, 1956, WHICH DISALLOWED YOUR CLAIM FOR $865.97, REPRESENTING REFUND OF A PORTION OF THE PURCHASE PRICE OF ITEM 128, COVERING THE SALE OF GOVERNMENT-OWNED SURPLUS PROPERTY BY THE MT. RAINIER ORDNANCE DEPOT, TACOMA, WASHINGTON, UNDER CONTRACT NO. 45-021-OI (S/-318-55.

THE CONTRACT COVERS THE PURCHASE BY YOU OF 15 LOTS OF ASSORTED BOLTS, WASHERS AND SCREWS FOR THE TOTAL PRICE OF $3,643.88, WHICH INCLUDED LOT 128. THAT LOT COMPRISED FOUR ITEMS OF UNUSED SCREWS WITH AN ACQUISITION COST OF $1,501.67 AND FOR WHICH YOU AGREED TO PAY THE SUM OF $1,367. YOU CONTEND THAT THE QUANTITY OF ONE OF THE FOUR ITEMS OF SCREWS OFFERED FOR SALE UNDER LOT 128 WAS DESCRIBED IN THE INVITATION AS 111,603 1/4-20 BY 1 1/2 SOCKET HEAD CAP SCREWS, WITH AN ACQUISITION COST OF THREE CENTS EACH, BUT THAT UPON RECEIPT OF THE MATERIALS YOU ACTUALLY RECEIVED ONLY 11,500 SCREWS AND THAT SUBSEQUENT THERETO THE CONTRACTING OFFICER AT THE DEPOT CONFIRMED YOUR CLAIM OF A SHORTAGE STATING THAT A TYPOGRAPHICAL ERROR HAD OCCURRED THEREBY RAISING THE FIGURES FROM 11,500 TO 111,5000, A DIFFERENCE OF 100,000 SCREWS. ALSO, YOU CONTEND THAT YOUR PHYSICAL INSPECTION OF THE PROPERTY INDICATED THAT THE MATERIAL TO BE AS DESCRIBED BUT DID NOT ENABLE YOU TO DETERMINE THE ACTUAL COUNT AND YOU NATURALLY ASSUMED THAT THE COUNT WAS AS DESCRIBED IN THE INVITATION. YOU STATE THAT WHILE YOU MAY BE WITHOUT LEGAL RECOURSE ON THIS TRANSACTION, THERE IS SOME MORAL JUSTIFICATION ON THE PART OF THE GOVERNMENT TO EFFECT A SETTLEMENT FOR THE SHORTAGE.

IN THE "GENERAL SALE TERMS AND CONDITIONS" ON PAGE 2 OF THE INVITATION PROSPECTIVE BIDDERS WERE URGED TO INSPECT THE PROPERTY PRIOR TO THE SUBMISSION OF BIDS AND UNDER THAT SAME PARAGRAPH IT WAS CLEARLY STATED THAT THE SALE WAS ON AN "AS IS" AND "WHERE IS" BASIS WITHOUT GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESS OR IMPLIED, AMONG OTHER THINGS, AS TO QUANTITY, QUALITY, WEIGHT, OR DESCRIPTION OF ANY OF THE PROPERTY. ALSO, THE BIDDERS WERE WARNED THAT UNDER PARAGRAPH 8, IN THE EVENT OF ANY VARIATION BETWEEN THE QUANTITY OR WEIGHT LISTED FOR ANY ITEM AND THE QUANTITY OR WEIGHT OF SUCH ITEM TENDERED OR DELIVERED TO THE PURCHASER, NO ADJUSTMENT FOR SUCH VARIATION WOULD BE MADE WHERE AN AWARD WAS MADE ON A "PRICE FOR THE LOT" BASIS. YOUR BID WAS MADE AND ACCEPTED ON THESE TERMS.

IN THE CASE OF LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, WHEREIN IT WAS UNSUCCESSFULLY CONTENDED THAT THE UNITED STATES WAS LIABLE IN DAMAGES FOR A SHORTAGE IN DELIVERY OF SPECIFIED LOTS OF SCRAP IRON AND STEEL WHICH HAD BEEN OFFERED FOR SALE IN A SCHEDULE SHOWING THE VARIOUS FORTS WHERE THE SCRAP IRON WAS ACCUMULATED AND THE APPROXIMATE WEIGHTS AT EACH LOCATION AND WHICH HAD BEEN PURCHASED "AS IS" FOR A STIPULATED LUMP- SUM PRICE, THE COURT SAID AT PAGE 92:

"* * * THE NAMING OF QUANTITIES CANNOT BE REGARDED AS IN THE NATURE OF A WARRANTY, BUT MERELY AS AN ESTIMATE OF THE PROBABLE AMOUNTS IN REFERENCE TO WHICH GOOD FAITH ONLY COULD BE REQUIRED OF THE PARTY MAKING IT.'

ALSO, SEE IN THIS CONNECTION BRAWLEY V. UNITED STATES, 96 U.S. 168 AND MOTTRAM V. UNITED STATES, 271 U.S. 15.

THE VERY PURPOSE OF A DISCLAIMER OF WARRANTY AS TO QUANTITY ETC., IS TO ABSOLVE THE GOVERNMENT FROM LIABILITY BECAUSE OF MISTAKES THAT MAY BE MADE IN THE ADVERTISEMENT OF SUPPLIES OFFERED FOR SALE. IN CASES SUCH AS THE ONE HERE INVOLVED BIDDERS ARE URGED TO INSPECT THE PROPERTY AND THEN BID ACCORDINGLY. EVEN THOUGH YOU MAY NOT HAVE BEEN ABLE TO INSPECT THE ENTIRE QUANTITY OF SCREWS OFFERED FOR SALE, A CURSORY INSPECTION SHOULD HAVE INDICATED TO YOU A POSSIBLE MISTAKE IF THE QUANTITY OF THIS ITEM WAS ONLY ONE-TENTH OF THAT OFFERED FOR SALE. FURTHERMORE, THE ACQUISITION COST OF THE STATED QUANTITY, IF CORRECT, WOULD HAVE BEEN FAR IN EXCESS OF THAT SHOWN FOR THE ITEMS COMPRISING THE LOT, WHICH WAS $1,501.67. IN ANY EVENT, THE CONTRACT PRICE FOR LOT 128, WHEN THE ACTUAL QUANTITY IS CONSIDERED, MAY BY NO MEANS BE REGARDED AS UNCONSCIONABLE. THE FACT THAT THE CONTRACTING OFFICER MAY HAVE IMPROPERLY OFFERED TO FURNISH YOU WITH MORE SCREWS TO "MAKE UP THE SHORTAGE" DOES NOT CHANGE THE CONCLUSION THAT YOUR CLAIM FOR REFUND SHOULD BE DISALLOWED. SEE 17 COMP. GEN. 749.