B-129428, NOV. 19, 1956

B-129428, NOV. 19, 1956

TO FAIR RADIO SALES COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 20, 1956, REQUESTING REVIEW OF OUR SETTLEMENT DATED SEPTEMBER 17, 1956, WHICH DISALLOWED YOUR CLAIM FOR ADJUSTMENT IN PRICE ON SURPLUS MATERIAL PURCHASED FROM THE DEPARTMENT OF THE NAVY, NAVAL AVIATION SUPPLY DEPOT, PHILADELPHIA, PENNSYLVANIA, UNDER CONTRACT NO. N-288S-40619.

THE RECORD SHOWS THAT IN RESPONSE TO INVITATION NO. B-13-56 DATED SEPTEMBER 27, 1955, ISSUED BY THE NAVAL AVIATION SUPPLY DEPOT, PHILADELPHIA, PENNSYLVANIA, YOU SUBMITTED A BID DATED OCTOBER 24, 1955, OFFERING TO PURCHASE ITEM NO. 25 COVERING 188 UNITS OF USABLE ELECTRONIC EQUIPMENT WHICH WAS DESCRIBED AS TRANSMITTER-RECEIVER, CONSISTING OF RT- 24A/APX-2, RT-57/APX2A, RT-55/APX, TN90/APX1A, G 56A/APX2, C-57/APX2, AT THE UNIT PRICE OF $11. AN AWARD WAS MADE TO YOU ON OCTOBER 28, 1955, FOR 187 UNITS AT $11 EACH OR A TOTAL OF $2,057. AFTER PAYMENT OF THE PURCHASE PRICE AND DELIVERY OF THE ITEM TO YOU, YOU FILED A CLAIM FOR A REFUND OF PART OF THE PURCHASE PRICE BECAUSE THE PROPERTY DID NOT CONFORM TO THE DESCRIPTION SHOWN ON THE INVITATION FOR BIDS.

PARAGRAPHS 1 AND 2 OF THE GENERAL SALE TERMS AND CONDITIONS, MADE A PART OF THE CONTRACT, PROVIDE AS FOLLOWS:

"1. INSPECTION.--- BIDDERS ARE INVITED AND URGED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING BIDS. PROPERTY WILL BE AVAILABLE FOR INSPECTION AT THE PLACES AND TIMES SPECIFIED IN THE INVITATION. THE GOVERNMENT WILL NOT BE OBLIGED TO FURNISH ANY LABOR FOR SUCH PURPOSE. NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING.

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

YOU CONTEND THAT YOU ARE ENTITLED TO RELIEF UNDER PARAGRAPH 15 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT AND UNDER PARAGRAPH 20 OF THE "ADDITIONAL PROVISIONS" OF THE CONTRACT, ENTITLED "DISPUTES" AND "ADJUSTMENT FOR VARIATION IN QUANTITY," RESPECTIVELY, BECAUSE THE MATERIAL ON WHICH YOU BID WAS MISREPRESENTED. THE GOVERNMENT TAKES THE POSITION THAT PARAGRAPHS 1 AND 2 OF THE GENERAL SALE TERMS AND CONDITIONS ARE IN ISSUE AND NOT PARAGRAPHS 15 AND 20.

UNDER PARAGRAPH 1 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT YOU WERE NOT ONLY INVITED BUT URGED TO INSPECT THE PROPERTY PRIOR TO SUBMITTING A BID AND IT APPEARS THAT YOU IGNORED THE INVITATION AND FAILED TO MAKE AN INSPECTION OF THE SURPLUS PROPERTY.

UNDER PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS MADE A PART OF THE CONTRACT, IT WAS PROVIDED 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 THAT THE GOVERNMENT MADE NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO THE CHARACTER AND QUALITY THEREOF OR ITS FITNESS FOR ANY USE OR PURPOSE, AND THAT NO CLAIM WOULD BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT BASED UPON THE FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED.

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.2ND 31, CERTIORARI DENIED, 284 U.S.C. 676. THOSE CASES, AND OTHERS TOO NUMEROUS TO MENTION INVOLVING VARIATIONS IN THE CONDITIONS OF THE PROPERTY WITH 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 MATERIAL THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS UNAWARE OF THE QUALITY AND 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 MATERIAL SOLDIS ASSUMED BY THE PURCHASER AS ONE OF THE ELEMENTS OF THE BARGAIN. YOU WERE AWARE THAT SALVAGE PROPERTY WAS BEING OFFERED FOR SALE AND YOU SHOULD HAVE INSPECTED THE PROPERTY BEFORE SUBMITTING A BID. 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.

THE MATTER OF GRANTING RELIEF TO PURCHASERS OF SURPLUS PROPERTY UNDER TERMS AND CONDITIONS SIMILAR TO THOSE HERE PRESENT HAS BEEN THE SUBJECT OF NUMEROUS DECISIONS OF OUR OFFICE AND OF THE COURTS, AND IT HAS BEEN UNIFORMLY HELD THAT RECOVERY CANNOT BE HAD IN SUCH CASES. SEE SACHS MERCANTILE COMPANY, INC. V. UNITED STATES, 78 C.CLS. 801; S. BRODY V. UNITED STATES, 64 C.CLS. 38; AND PARTICULARLY LIPSHITZ AND COHEN V. UNITED STATES, 69 U.S. 90. WHILE THOSE DECISION MAY APPEAR TO BE HARSH, THE GOVERNMENT HAS USED THE PLAINEST LANGUAGE POSSIBLE TO ADVISE PROSPECTIVE BIDDERS THAT IN SURPLUS SALES CONTRACTS SUCH AS HERE INVOLVED, THE PRINCIPLE OF CAVEAT EMPTOR WILL APPLY RIGIDLY.