B-134085, NOV. 8, 1957

B-134085: Nov 8, 1957

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JACOB SHANNON AND COMPANY: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 4. WHICH WAS DESCRIBED AS BEING "BAGS. THAT YOU HAD APPARENTLY RECEIVED THE WRONG LOT SINCE THE BAGS RECEIVED MEASURED 3 INCHES BY 5 INCHES AND DO NOT HAVE DRAW STRINGS. THE DISPOSAL OFFICER ADVISED YOU THAT THE DESCRIPTION OF THE CLOTH BAGS WAS BASED ON GOVERNMENT PROPERTY RECORDS AND MARKINGS ON THE CONTAINERS AND WAS. DESCRIBED FOR WHAT IT WAS BELIEVED IT TO BE. THAT IF YOU STILL FELT THAT YOU WERE ENTITLED TO RELIEF IN THE MATTER. WHICH WAS DISALLOWED BY THE SETTLEMENT OF OCTOBER 2. YOU ALSO CONTEND THAT YOU ARE NOT REQUIRED TO COMPLETE A PHYSICAL INSPECTION OF THE PROPERTY BEFORE PURCHASING. WHILE IT IS TRUE.

B-134085, NOV. 8, 1957

TO J. JACOB SHANNON AND COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 4, 1957, REQUESTING REVIEW OF SETTLEMENT DATED OCTOBER 2, 1957, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF $76.87, PAID FOR A QUANTITY OF CLOTH BAGS PURCHASED FROM THE DEPARTMENT OF THE ARMY UNDER UNNUMBERED SALES CONTRACT DATED JANUARY 14, 1957.

IT APPEARS THAT IN RESPONSE TO INVITATION NO. 25-044-S-57-10, ISSUED BY THE PROPERTY DISPOSAL BRANCH, SIOUX ORDNANCE DEPOT, SIDNEY, NEBRASKA, YOU SUBMITTED A BID OFFERING TO PURCHASE ITEM 4 BY LOT FOR $76.87, WHICH WAS DESCRIBED AS BEING "BAGS, CLOTH, 5 INCHES BY 9 INCHES WITH DRAW STRING, 14400 EACH.' AFTER AWARD OF THE CONTRACT AND DELIVERY OF THE MATERIAL, YOU NOTIFIED THE DISPOSAL AGENCY BY LETTER DATED FEBRUARY 8, 1957, THAT YOU HAD APPARENTLY RECEIVED THE WRONG LOT SINCE THE BAGS RECEIVED MEASURED 3 INCHES BY 5 INCHES AND DO NOT HAVE DRAW STRINGS. YOU REQUESTED THAT THE CORRECT LOT CONSISTING OF 14,400 BAGS, 5 INCHES BY 9 INCHES WITH DRAW STRINGS BE SHIPPED TO YOU. BY LETTER DATED MAY 17, 1957, THE DISPOSAL OFFICER ADVISED YOU THAT THE DESCRIPTION OF THE CLOTH BAGS WAS BASED ON GOVERNMENT PROPERTY RECORDS AND MARKINGS ON THE CONTAINERS AND WAS, THEREFORE, DESCRIBED FOR WHAT IT WAS BELIEVED IT TO BE; THAT IN VIEW OF THE GENERAL TERMS AND CONDITIONS OF THE CONTRACT, WHICH INCLUDE THE STANDARD DISCLAIMER OF WARRANTY CLAUSE, THE BEST AVAILABLE DESCRIPTION CLAUSE, AND THE CAUTION TO INSPECT CLAUSE, NO BASIS EXISTS FOR GRANTING RELIEF TO YOU; AND THAT IF YOU STILL FELT THAT YOU WERE ENTITLED TO RELIEF IN THE MATTER, YOU COULD ADDRESS YOUR REQUEST FOR RELIEF TO THE GENERAL ACCOUNTING OFFICE. BY LETTER OF MAY 22, 1957,YOU FILED A CLAIM WITH OUR OFFICE FOR REFUND OF THE PURCHASE PRICE OF $76.87, WHICH WAS DISALLOWED BY THE SETTLEMENT OF OCTOBER 2, 1957.

YOUR REQUEST FOR REVIEW APPEARS TO BE BASED ON THE QUESTION AS TO WHETHER THE GOVERNMENT ACTED IN GOOD FAITH IN THIS TRANSACTION. YOU ALSO CONTEND THAT YOU ARE NOT REQUIRED TO COMPLETE A PHYSICAL INSPECTION OF THE PROPERTY BEFORE PURCHASING, STATING IN THAT REGARD THAT "A BID IN THE AMOUNT OF $76.87 HARDLY WARRANTS TRANSPORTATION AND TIME COSTS FOR A TRIP TO NEBRASKA FROM PHILADELPHIA.'

WHILE IT IS TRUE, OF COURSE, THAT YOU ARE UNDER NO OBLIGATION EITHER TO INSPECT THE PROPERTY OR TO BID ON IT, YOUR BID AND THE SALE, NEVERTHELESS, WERE SUBJECT TO THE PROVISIONS OF THE GENERAL SALE TERMS AND CONDITIONS, PARAGRAPHS 1 AND 2 OF WHICH 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 SAMPLE.'

THE ADMINISTRATIVE AGENCY HAS REPORTED THAT THE DESCRIPTION OF THE PROPERTY WAS BASED ON THE BEST INFORMATION AVAILABLE TO IT AND THE PROPERTY WAS SOLD FOR WHAT THE GOVERNMENT BELIEVED IT TO BE. UNDER THE CONDITIONS OF THE SALE THE GOVERNMENT WAS ONLY OBLIGED TO ACT IN GOOD FAITH, AND THIS IT DID.

THE COURTS, MANY TIMES, HAVE CONSIDERED CONTRACT STIPULATIONS, SUCH AS CONTAINED IN PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS, IN CASES INVOLVING THE SALE OF GOVERNMENT-OWNED SURPLUS GOODS, AND HAVE HELD CONSISTENTLY THAT SUCH PROVISIONS CONSTITUTE AN EXPRESS DISCLAIMER OF WARRANTY, PRECLUDING ANY CLAIM FOR NONCONFORMITY OF THE GOODS WITH THE DESCRIPTIONS. SEE W. E. HEDGER CO. V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED, 284 U.S. 676; LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90; TRIAD CORP. V. UNITED STATES, 63 C.CLS. 151; SILBERSTEIN AND SON V. UNITED STATES, 69 C.CLS. 412. THESE CASES AND OTHERS CONCLUDE THAT UNDER SUCH PROVISIONS 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 IGNORANT OF THE 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. SEE 36 COMP. GEN. 612.

IT APPEARS FROM THE RECORD THAT YOU DID NOT INSPECT THE CLOTH BAGS PRIOR TO THE SUBMISSION OF YOUR BID. THE LAW IS CLEAR THAT WHERE SURPLUS MATERIALS ARE OFFERED FOR SALE BY THE GOVERNMENT ON AN "AS IS" BASIS, WITHOUT WARRANTY OR GUARANTY OF ANY KIND, A BIDDER WHO FAILS TO TAKE ADVANTAGE OF AN OPPORTUNITY TO INSPECT CANNOT SUBSEQUENTLY RECOVER ON THE GROUNDS THAT THE MATERIALS ARE OF AN INFERIOR QUALITY, OR THAT THEY WERE SOMETHING OTHER THAN WHAT HE THOUGHT HE WAS BUYING. THE UNITED STATES COURT OF CLAIMS AND THE SUPREME COURT OF THE UNITED STATES HAVE RENDERED NUMEROUS DECISIONS IN WHICH THESE PRINCIPLES ARE ASSERTED. SEE M. SAMUEL AND SONS V. UNITED STATES, 61 C.CLS. 373; S. BRODY V. UNITED STATES, 64 C.CLS. 538; SACHS MERCANTILE CO. V. UNITED STATES, 78 C.CLS. 801; MOTTRAM V. UNITED STATES, 271 U.S. 15; MAGUIRE AND CO. V. UNITED STATES, 273 U.S. 67. SEE, ALSO, 29 COMP. GEN. 310; AND 32 ID. 181.