B-133524, OCT. 7, 1957

B-133524, OCT. 7, 1957

TO THE RADIO DEALERS SUPPLY COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 13, 1957, REQUESTING RECONSIDERATION OF GENERAL ACCOUNTING OFFICE SETTLEMENT DATED AUGUST 1, 1957, WHICH DISALLOWED YOUR CLAIM IN THE AMOUNT OF $164 FOR PARTIAL REFUND OF AN AMOUNT PAID BY YOU FOR SURPLUS PROPERTY PURCHASED FROM THE UNITED STATES NAVAL GUN FACTORY, WASHINGTON, D.C., UNDER CONTRACT NO. N171S- 12333A, DATED MARCH 6, 1957.

BY INVITATION NO. B-31-57-171, DATED FEBRUARY 4, 1957, BIDS--- TO BE OPENED MARCH 4, 1957--- WERE SOLICITED ON VARIOUS ITEMS OF SURPLUS GOVERNMENT PROPERTY, THE PROPERTY INCLUDED IN ITEM NO. 13 (CONSISTING OF 31 SPECIFIED TYPES) BEING DESCRIBED AS:

"ELECTRONIC MATERIAL, IN FOLLOWING APPROXIMATE QUANTITIES:

"CONDITION: UNUSED, FAIR

"TOTAL COST $13,002.24.'

IN RESPONSE TO THE INVITATION, YOU SUBMITTED A BID OF $356 ON ITEM NO. 13 AS "AMOUNT BID FOR THE LOT.' THE OTHER BIDS RECEIVED ON THIS ITEM WERE IN AMOUNTS RANGING FROM $13.07 TO $326.26. ON MARCH 6, 1957, AWARD WAS MADE TO YOU AS THE HIGHEST BIDDER ON ITEM NO. 13 AND YOU COMPLETED PAYMENT OF THE AMOUNT OF YOUR BID ($356).

IN YOUR LETTER OF APRIL 16, 1957, TO THE CONTRACTING OFFICER, YOU STATED THAT, AS COMPARED WITH THE ARTICLES LISTED IN ITEM NO. 13 OF THE INVITATION, THERE WERE THE FOLLOWING SHORTAGES IN THE PROPERTY DELIVERED TO YOU:

TABLE

121 FUSES

2 PRESSURE GAGES

10 HAND KEYS

48 HEAD SETS

67 MISCELLANEOUS LAMPS

67 METERS

4 MOTORS

3 RECORDERS

THEREFORE, YOU REQUESTED THAT THE PROPERTY BE LOCATED AND SENT TO YOU OR THAT A REFUND OF $164 BE MADE. THE CONTRACTING OFFICER ADVISED YOU BY LETTER DATED APRIL 22, 1957, THAT THE ENTIRE QUANTITY, AS DISPLAYED, WAS DELIVERED TO YOU. UNDER DATE OF JUNE 25, 1957, THE MATTER WAS TRANSMITTED BY THE DEPARTMENT OF THE NAVY TO OUR OFFICE FOR DETERMINATION AND BY THE SETTLEMENT DATED AUGUST 1, 1957, YOUR CLAIM WAS DISALLOWED FOR THE REASONS SET OUT THEREIN.

PARAGRAPHS 1 AND 2 OF GENERAL SALES TERMS AND CONDITIONS INCLUDED IN THE INVITATION PROVIDE:

"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, THEN "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 EXAMPLE.'

PARAGRAPH 20 OF THE ADDITIONAL PROVISIONS PROVIDES:

"20. ADJUSTMENT FOR VARIATION IN QUANTITY: 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 WILL BE ADJUSTED ON THE BASIS OF THE UNIT PRICE QUOTED FOR SUCH ITEMS; BUT NO ADJUSTMENT FOR SUCH VARIATION WILL BE MADE WHEN AN AWARD IS MADE ON A "PRICE OF THE LOT" BASIS. WHEN PROPERTY IS SOLD ON A UNIT PRICE BASIS, THE GOVERNMENT RESERVES THE RIGHT TO VARY THE QUANTITY TENDERED OR DELIVERED TO THE PURCHASER BY 10 PERCENT. IF THE GOVERNMENT TENDERS OR DELIVERS A QUANTITY UP TO 10 PERCENT IN EXCESS OF THAT STATED IN THE INVITATION TO BID, THE PURCHASER AGREES TO ACCEPT SUCH QUANTITY AND PAY THE GOVERNMENT THEREFOR AT THE UNIT PRICE SET FORTH IN THIS CONTRACT. IF THE GOVERNMENT TENDERS OR DELIVERS A QUANTITY LESS THAN THAT STATED IN THE INVITATION TO BID, THE PURCHASER AGREES TO ACCEPT THE QUANTITY TENDERED OR DELIVERED UNLESS THE VARIATION EXCEEDS 10 PERCENT OF THE QUANTITY STATED IN THE INVITATION TO BID. IN THE EVENT OF A SHORTAGE THE GOVERNMENT WILL REFUND TO THE PURCHASER THE DIFFERENCE BETWEEN THE QUANTITY PAID FOR AND THE QUANTITY DELIVERED, CALCULATED UPON THE BASIS OF THE UNIT PRICES SET FORTH IN THIS CONTRACT.'

ON PAGE 4A OF THE SPECIAL INSTRUCTIONS TO BIDDERS, IT IS STATED:

"ALL QUANTITIES OFFERED ON A "PRICE FOR THE LOT" BASIS ARE APPROXIMATE AND NO ADJUSTMENT FOR VARIATION WILL BE MADE.'

IT IS DIFFICULT TO PERCEIVE HOW CLEARER OR MORE EXPLICIT LANGUAGE COULD HAVE BEEN USED TO APPRISE ALL PROSPECTIVE BIDDERS THAT THEY WERE CONTRACTING FOR THE PURCHASE OF LISTED MATERIALS AT THEIR OWN RISK. THE COURTS HAVE HELD REPEATEDLY THAT SUCH PROVISIONS CONSTITUTE AN EXPRESS DISCLAIMER OF WARRANTY. MAGUIRE AND COMPANY V. UNITED STATES, 273 U.S. 67; LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED, 284 U.S. 676. SEE, ALSO, LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, WHEREIN AN AGENT FOR THE GOVERNMENT LISTED FOR SALE CERTAIN ITEMS OF JUNK LOCATED AT SEVERAL FORTS, SETTING FORTH THE WEIGHTS AND KINDS OF EACH ITEM. ALTHOUGH THE QUANTITIES ACTUALLY WERE ONLY APPROXIMATELY ONE-HALF OF THOSE SHOWN IN THE ADVERTISEMENT, THE PLAINTIFFS WERE HELD NOT TO HAVE ANY CAUSE OF ACTION SINCE, AS STATED BY THE SUPREME COURT, THE MENTIONING OF THE QUANTITIES "CANNOT BE REGARDED AS IN THE NATURE OF A WARRANTY, BUT MERELY AN ESTIMATE OF THE PROBABLE AMOUNTS OF REFERENCE TO WHICH GOOD FAITH ONLY COULD BE REQUIRED OF THE PARTY MAKING IT.'

THOSE CASES AND OTHERS TOO NUMEROUS TO MENTION 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 MATERIALS, THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS NOT AWARE OF THE CONDITION OR THE QUANTITY OF THE GOODS IT SELLS. THAT FACT IS MADE KNOWN TO ALL BIDDERS BY THE TERMS OF THE CONTRACT WHEREBY THE PARTIES AGREE THAT THE RISK AS TO THE CONDITION AND THE QUANTITY OF THE MATERIAL SOLD IS ASSUMED BY THE PURCHASER AS ONE OF THE ELEMENTS OF THE BARGAIN. SEE 36 COMP. GEN. 612.

NO LEGAL RESPONSIBILITY WOULD ATTACH TO THE GOVERNMENT IN THE ABSENCE OF A SHOWING OF BAD FAITH ON THE PART OF THE DISPOSAL OFFICER OR HIS AGENTS. LIPSHITZ AND COHEN V. UNITED STATES, SUPRA. THERE IS NOTHING IN THE RECORD TO ESTABLISH THAT THE CONTRACTING OFFICER OR HIS AGENTS ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE TRANSACTION.

ALTHOUGH, AS STATED IN YOUR LETTER, YOUR BID MAY HAVE BEEN COMPUTED ON THE QUANTITIES SET OUT IN THE INVITATION, IT IS TO BE NOTED THAT THE INVITATION SPECIFICALLY REQUESTED BIDS ON ITEM NO. 13 ON THE BASIS OF THE LOT AND YOUR BID WAS SUBMITTED ON THAT BASIS, NO UNIT PRICES BEING STATED OR PERMISSIBLE. AS TO YOUR CONTENTION THAT THE CONTRACT SHOULD BE CONSTRUED TO PERMIT VARIATIONS OF ONLY 10 PERCENT FROM THE LISTED QUANTITIES, ATTENTION IS INVITED TO THE LANGUAGE OF PARAGRAPH 20 OF THE ADDITIONAL PROVISIONS ABOVE QUOTED, WHICH SPECIFICALLY NEGATIVES ANY ADJUSTMENT AS TO QUANTITY OR WEIGHT WHEN AN AWARD IS MADE ON A "PRICE FOR THE LOT" BASIS BUT PROVIDES FOR A MAXIMUM VARIATION OF 10 PERCENT "WHEN PROPERTY IS SOLD ON A UNIT PRICE BASIS.'

FOR THE REASONS ABOVE SET OUT, THE SETTLEMENT OF AUGUST 1, 1957, DISALLOWING YOUR CLAIM, ..END :