B-132689, AUG. 8, 1957

B-132689: Aug 8, 1957

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TO THE SANDER SUPPLY COMPANY: REFERENCE IS MADE TO YOUR LETTER OF JULY 15. ACCOMPANIED BY A BID DEPOSIT OF $314 WAS ACCEPTED OCTOBER 16. AWARD WAS MADE TO YOU. YOU CONTEND THAT THE DOUGH TROUGHS WERE IMPROPERLY ADVERTISED AS STAINLESS STEEL WHEN ACTUALLY THEY WERE MADE OF STEEL. NO CLAIM WILL BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT OR FOR RESCISSION OF THE SALE BASED UPON THE FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED: THIS IS NOT A SALE BY SAMPLE.'. SUCH LANGUAGE WHICH SPECIFICALLY PROVIDES THAT NO WARRANTIES OR GUARANTIES ARE MADE BY THE GOVERNMENT. WHILE ORDINARILY IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION THERE IS AN IMPLIED WARRANTY THAT THE PROPERTY OFFERED FOR SALE WILL CORRESPOND WITH THE DESCRIPTION.

B-132689, AUG. 8, 1957

TO THE SANDER SUPPLY COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JULY 15, 1957, REQUESTING RECONSIDERATION OF OUR SETTLEMENT DATED JULY 11, 1957, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF THE AMOUNT OF $490 PAID BY YOU FOR CERTAIN SURPLUS MATERIAL PURCHASED FROM THE DEPARTMENT OF THE NAVY, CHERRY POINT, NORTH CAROLINA, UNDER ITEMS 38 AND 39 OF CONTRACT NO. N146S 2938 DATED OCTOBER 16, 1956.

THE RECORD SHOWS THAT IN RESPONSE TO INVITATION NO. B-10-57-146 DATED SEPTEMBER 17, 1956, YOU SUBMITTED AN UNDATED BID OFFERING TO PURCHASE, AMONG OTHER ITEMS, ITEMS 38 AND 39 DESCRIBED AS DOUGH TROUGHS, INSIDE STAINLESS STEEL, OUTSIDE WHITE ENAMEL FINISH, AT THE UNIT PRICE OF $60 EACH FOR EIGHT TROUGHS UNDER ITEM 38 AND $35 EACH FOR TWO TROUGHS UNDER ITEM 39, OR FOR A TOTAL CONSIDERATION OF $550 FOR BOTH ITEMS. THE BID, ACCOMPANIED BY A BID DEPOSIT OF $314 WAS ACCEPTED OCTOBER 16, 1956, AND AWARD WAS MADE TO YOU. AFTER PAYMENT OF THE FULL PURCHASE PRICE AND DELIVERY OF THE TROUGHS TO YOU, YOU CLAIMED A REFUND OF THE PURCHASE PRICE LESS THE ALLEGED ACTUAL VALUE OF THE DOUGH TROUGHS.

YOU CONTEND THAT THE DOUGH TROUGHS WERE IMPROPERLY ADVERTISED AS STAINLESS STEEL WHEN ACTUALLY THEY WERE MADE OF STEEL.

AS POINTED OUT IN THE SETTLEMENT OF JULY 11, 1957, PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS PROVIDES THAT THE GOVERNMENT---

"* * * MAKES NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESS 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 THE FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED: THIS IS NOT A SALE BY SAMPLE.'

SUCH LANGUAGE WHICH SPECIFICALLY PROVIDES THAT NO WARRANTIES OR GUARANTIES ARE MADE BY THE GOVERNMENT, CONSTITUTES AN EXPRESS DISCLAIMER OF WARRANTY. WHILE ORDINARILY IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION THERE IS AN IMPLIED WARRANTY THAT THE PROPERTY OFFERED FOR SALE WILL CORRESPOND WITH THE DESCRIPTION, NO SUCH WARRANTY MAY BE IMPLIED WHERE THERE IS AN EXPRESS DISCLAIMER OF WARRANTY, AS IN THIS CASE. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED, 284 U.S. 676; AND I. SHAPIRO AND COMPANY V. UNITED STATES, 66 C.CLS. 424.

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 PROPERTY 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 SOLD IS ASSUMED BY THE PURCHASER AS ONE OF THE ELEMENTS OF THE BARGAIN. NOTWITHSTANDING THE FACT THAT THE CONDITION OF THE SURPLUS PROPERTY 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 MERE FACT THAT THE GOVERNMENT WAS MISTAKEN ABOUT THE QUALITY OF THE STEEL CONTAINED IN THE DOUGH TROUGHS DOES NOT ENTITLE YOU TO RELIEF.

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 UNIFORMALLY 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, 269 U.S. 90. WHILE THOSE DECISIONS 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.