B-131586, MAY 24, 1957

B-131586: May 24, 1957

Additional Materials:

Contact:

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

 

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

TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO LETTER DATED APRIL 19. THE PROPERTY WAS OFFERED FOR SALE ON AN "AS IS. BIDS FOR THE SLEEPING BAGS WERE RESTRICTED TO A MINIMUM OF 100 EACH. CAUTIONED THEM THAT IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM AGAINST THE GOVERNMENT. THE NELSON SALES COMPANY WAS AWARDED THE ENTIRE QUANTITY OF 14. A SHORTAGE OF 51 SLEEPING BAGS WAS DISCOVERED. FOR WHICH AN ADJUSTMENT OF $80.01 IS AUTHORIZED UNDER ARTICLE 21 OF THE GENERAL SALE TERMS AND CONDITIONS. IT WAS ALSO FOUND THAT APPROXIMATELY 65 PERCENT OF THE DELIVERED ITEMS CONSISTED OF USED SLEEPING BAGS. 547.10 BOTH THE CONTRACTING OFFICER AND THE COMMANDANT OF THE MARINE CORPS HAVE REPORTED FAVORABLY ON THE INSTANT CLAIM.

B-131586, MAY 24, 1957

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED APRIL 19, 1957, R112 L8/L8/KK, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, TRANSMITTING FOR DECISION A LETTER DATED APRIL 8, 1957, AE/CSQ-1-RAC, FROM THE OFFICE OF HEADQUARTERS UNITED STATES MARINE CORPS, AND OTHER PAPERS RELATIVE TO CLAIM OF THE NELSON SALES COMPANY, KANSAS CITY, MISSOURI, FOR AN ADJUSTMENT IN THE PRICE PAID FOR A QUANTITY OF SLEEPING BAGS PURCHASED BY IT FROM THE SUPPLY BATTALION, FIRST COMBAT SERVICE GROUP, FLEET MARINE FORCE, CAMP PENDLETON, CALIFORNIA, UNDER CONTRACT OF SALE NO. N681-614, DATED OCTOBER 11, 1956.

BY INVITATION NO. B-16-57, ISSUED SEPTEMBER 14, 1956, THE SALES OFFICES OF THE FLEET MARINE FORCE, CAMP PENDLETON, CALIFORNIA, OFFERED FOR SALE CERTAIN QUANTITIES OF SURPLUS MATERIALS, INCLUDING ITEMS NOS. 55 AND 56, CONSISTING OF 14,000 AND 928 SLEEPING BAGS, RESPECTIVELY, DESCRIBED AS "UNUSED, GOOD CONDITION.' THE PROPERTY WAS OFFERED FOR SALE ON AN "AS IS," "WHERE S" BASIS, AND IN ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS, THE GOVERNMENT DISCLAIMED ALL WARRANTIES,"EXPRESSED OR IMPLIED," AS TO KIND, CHARACTER, "DESCRIPTION," OR FITNESS OF THE PROPERTY FOR ITS INTENDED USE. BIDS FOR THE SLEEPING BAGS WERE RESTRICTED TO A MINIMUM OF 100 EACH, OR MULTIPLES THEREOF, THUS MAKING THE SALE ONE BY QUANTITY, AND NOT BY LOT. ARTICLE 1 OF THE GENERAL SALE TERMS URGED THE BIDDERS TO INSPECT THE PROPERTY BEFORE BIDDING THEREON, AND CAUTIONED THEM THAT IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM AGAINST THE GOVERNMENT.

ON OCTOBER 11, 1956, THE NELSON SALES COMPANY WAS AWARDED THE ENTIRE QUANTITY OF 14,000 SLEEPING BAGS OFFERED UNDER ITEM NO. 55, AND 918 UNITS UNDER ITEM NO. 56, UPON THE BASIS OF ITS BID PRICE ON THOSE ITEMS OF $1.5688 EACH. THE CONTRACTOR MADE AN INSPECTION OF CERTAIN OF THE ITEMS ON DISPLAY AT CAMP PENDLETON PRIOR TO BIDDING ON ITEMS NOS. 55 AND 56, AND APPARENTLY FOUND THEM TO BE "UNUSED" OR NOW, AS ADVERTISED. HOWEVER, UPON DELIVERY OF THE ITEMS TO VARIOUS DESTINATIONS, A SHORTAGE OF 51 SLEEPING BAGS WAS DISCOVERED, FOR WHICH AN ADJUSTMENT OF $80.01 IS AUTHORIZED UNDER ARTICLE 21 OF THE GENERAL SALE TERMS AND CONDITIONS, AND IT WAS ALSO FOUND THAT APPROXIMATELY 65 PERCENT OF THE DELIVERED ITEMS CONSISTED OF USED SLEEPING BAGS, INSTEAD OF ,UNUSED," AS ADVERTISED.

THEREAFTER, THE PURCHASER FILED CLAIM FOR $6,547.69, BASED UPON AN ALLEGED SHORTAGE OF 51 UNITS, AND A DETERMINED VALUATION, UPON RESALE OF THE USED ITEMS, OF ONLY $0.86 EACH. HOWEVER, UPON THE BASIS ASSERTED, THE CORRECT AMOUNT APPEARS TO BE $6,547.10, COMPUTED AS FOLLOWS:

TABLE

51 TIMES $1.5688 EQUALS $ 80.01 9,124

TIMES .7088 EQUALS 6,467.09

TOTALS $6,547.10 BOTH THE CONTRACTING OFFICER AND THE COMMANDANT OF THE MARINE CORPS HAVE REPORTED FAVORABLY ON THE INSTANT CLAIM. THE REQUESTED ADJUSTMENT IN THE PURCHASER'S BID PRICE WOULD NOT RENDER IT DISPROPORTIONATE TO THE AMOUNTS OF THE OTHER BIDS RECEIVED ON THESE ITEMS.

DESPITE THE EXPRESS DISCLAIMER BY THE GOVERNMENT OF ANY WARRANTY AS TO THE "DESCRIPTION" OF THE ITEMS OF THE SALE, THE LAW NEVERTHELESS RECOGNIZES A DISTINCTION BETWEEN SALES BY LOT, AND SALES OF PARTICULAR QUANTITIES TO BE TAKEN FROM A LARGER STOCK, SO THAT, AS HERE, THE PARTICULAR UNITS PURCHASED CANNOT BE SPECIFICALLY IDENTIFIED AT THE TIME THE SALE IS MADE. SEE B-130448, FEBRUARY 4, 1957 (36 COMP. GEN. 572), TO YOU. IN THIS SITUATION, THE LANGUAGE OF THE DESCRIPTION HAS BEEN HELD TO RELATE MORE TO THE IDENTITY OF THE ITEMS THAN TO A DESCRIPTION OF THEIR CONDITION, AND THERE IS IMPOSED UPON THE SELLER IN SUCH CASES THE UNEQUIVOCAL OBLIGATION TO DELIVER ITEMS WHICH CONFORM TO THE PROVISIONS OF THE CONTRACT IDENTIFYING THE SUBJECT MATTER. THIS RULE SEEMS PARTICULARLY APPROPRIATE WHERE SUCH ITEMS AS MATTRESSES, SLEEPING BAGS AND RELATED COMMODITIES ARE OFFERED FOR SALE, WHICH IN SOME JURISDICTIONS CANNOT BE RESOLD UNTIL THEY HAVE BEEN COMPLETELY STERILIZED.

FURTHERMORE, CONSIDERING THE FACT THAT THE INSTANT PURCHASER COULD NOT HAVE ASCERTAINED THE TRUE CONDITION OF THESE SLEEPING BAGS BY SUCH AN INSPECTION AS WAS REASONABLY CONTEMPLATED WITH RESPECT TO ITEMS NOS. 55 AND 56 OF THIS INVITATION, IT BEING REPORTED THAT INSPECTION OF APPROXIMATELY 20 PERCENT OF THE ITEMS FAILED TO DISCLOSE ANY USED ONES, YOU ARE ADVISED THAT WE WOULD INTERPOSE NO OBJECTION TO AN APPROPRIATE ADJUSTMENT OF THE CONTRACT PRICE TO COMPENSATE THE PURCHASER FOR THE NOTED DEFICIENCIES IN THE DELIVERED ITEMS.