B-128327, AUG. 10, 1956

B-128327: Aug 10, 1956

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 5. ACCOMPANIED BY A BID DEPOSIT OF TWENTY PERCENT WAS ACCEPTED OCTOBER 18. 000 PAIRS) WAS RESHIPPED TO A COMPANY IN LOS ANGELES. THE OTHER ONE-HALF WAS RETAINED BY YOU. IT IS ALLEGED THAT AFTER SORTING THE SOLES YOU FOUND 548 TAPS FOR ONE FOOT WHICH HAVE NO VALUE. 037 PAIRS THAT ARE MOLDY. 009 PAIRS LIKEWISE ARE CRACKY OR MOLDY. - ALL PROPERTY LISTED HEREIN IS OFFERED FOR SALE "AS IS" AND . WHERE IS. " AND WITHOUT RECOURSE AGAINST THE GOVERNMENT. * * * THE DESCRIPTION IS BASED ON THE BEST AVAILABLE INFORMATION. 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.

B-128327, AUG. 10, 1956

TO S. H. FRANK AND COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 5, 1956, PROTESTING THE ACTION TAKEN IN SETTLEMENT DATED MAY 25, 1956, WHICH DISALLOWED YOUR CLAIM FOR $1,238.40, REPRESENTING REFUND OF PART OF THE AMOUNT PAID IN CONNECTION WITH THE PURCHASE OF SURPLUS PROPERTY UNDER CONTRACT NO. N665S- 25847.

IN RESPONSE TO INVITATION NO. B-84-56 DATED SEPTEMBER 19, 1955, ISSUED BY UNITED STATES NAVAL SUPPLY DEPOT, CLEAR FIELD, OGDEN, UTAH, YOUR SUBMITTED A BID DATED OCTOBER 10, 1955, OFFERING TO PURCHASE UNDER ITEM 8, 30,000 PAIRS OF LEATHER SOLES AT UNIT PRICES RANGING FROM $0.19 TO $0.205 PER PAIR IN LOTS OF 5,000 PAIRS. THE BID, ACCOMPANIED BY A BID DEPOSIT OF TWENTY PERCENT WAS ACCEPTED OCTOBER 18, 1955, THEREBY CONSUMMATING A VALID AND BINDING CONTRACT.

YOU STATE THAT OF THE 30,000 PAIRS OF SOLES PURCHASED, ONE-HALF OF THE QUANTITY (15,000 PAIRS) WAS RESHIPPED TO A COMPANY IN LOS ANGELES, CALIFORNIA, AND THE OTHER ONE-HALF WAS RETAINED BY YOU. IT IS ALLEGED THAT AFTER SORTING THE SOLES YOU FOUND 548 TAPS FOR ONE FOOT WHICH HAVE NO VALUE, AND 5,037 PAIRS THAT ARE MOLDY, HAVING BEEN EXPOSED TO WATER OR MOISTURE AND CANNOT BE CONSIDERED AS BEING IN AN UNUSED, GOOD CONDITION. OF THE QUANTITY RESHIPPED TO LOS ANGELES, CALIFORNIA, YOU CONTEND THAT 5,009 PAIRS LIKEWISE ARE CRACKY OR MOLDY, AND THEREFORE DID NOT CONFORM TO THE CONTRACT DESCRIPTION OF THE GOODS.

ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS, PROVIDES IN PERTINENT PART AS FOLLOWS:

"2. CONDITION OF PROPERTY.--- ALL PROPERTY LISTED HEREIN IS OFFERED FOR SALE "AS IS" AND ,WHERE IS," AND WITHOUT RECOURSE AGAINST THE GOVERNMENT. * * * 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; THIS IS NOT A SALE BY SAMPLE.'

THE NAVAL SUPPLY DEPOT, CLEAR FIELD, UTAH, HAS ADVISED THAT THE UTAH GENERAL DEPOT DISPOSAL OFFICER, IN CONJUNCTION WITH THE OAKLAND ARMY TERMINAL PROPERTY DISPOSAL OFFICER, AFTER PHYSICAL INSPECTION OF MATERIAL AT DESTINATION, FOUND NO EVIDENCE OF EXCESSIVE CRACKING, BUT THAT APPROXIMATELY 700 SOLES SHOWED EVIDENCE OF BEING EITHER MOLDY OR EXPOSED TO MOISTURE. HOWEVER, THE MATERIAL DELIVERED WAS TAKEN FROM THE SAME LOT AS ADVERTISED AND DISPLAYED FOR SALE.

ASIDE FROM CONFLICTING REPORTS AS TO THE CONDITION AND TYPE OF THE SOLES, IN CONSTRUING PARAGRAPH 2 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. 576. 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 MATERIALS 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 MATERIALS SOLD IS ASSUMED BY THE BUYER AS ONE OF THE ELEMENTS OF THE BARGAIN.

YOU WERE AWARE THAT SALVAGE PROPERTY WAS BEING OFFERED FOR SALE AND IF YOU WERE NOT WILLING TO ASSUME THE RISK INVOLVED, YOUR ALTERNATIVE WOULD HAVE BEEN NOT TO SUBMIT A BID. DISPOSAL OFFICERS ARE NOT ALWAYS AWARE OF THE TRUE NATURE OF THE MATERIAL AND ARE REQUIRED TO RELY UPON STOCK RECORDS AS THE BEST EVIDENCE AVAILABLE WHEN LISTING SURPLUS PROPERTY FOR SALE. NOTWITHSTANDING THE FACT THAT THE CONDITION OF SOME OF THE SURPLUS MAY NOT HAVE CONFORMED TO THE DESCRIPTION IN THE INVITATION, 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.

IN VIEW OF THE FACTS OF RECORD AND THE APPLICABLE LAW THERE IS NO LEGAL BASIS UPON WHICH ANY PART OF THE PURCHASE PRICE MAY BE REFUNDED, AND THEREFORE, THE SETTLEMENT OF MAY 25, 1956, MUST BE SUSTAINED.