B-136272, JUL. 10, 1958

B-136272: Jul 10, 1958

Additional Materials:

Contact:

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

 

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

TO STANLEY NOVAK COMPANY: REFERENCE IS MADE TO YOUR LETTERS OF MAY 15. WHICH WAS ISSUED BY THE UNITED STATES NAVAL SUPPLY DEPOT. WAS ACCEPTED AS TO ITEMS 19. YOU ADVISED THE CONTRACTING OFFICER THAT IT WAS ABSOLUTELY IMPOSSIBLE FOR YOU TO ACCEPT DELIVERY OF THE TWO LOTS OF SHOES COVERED BY ITEMS 19 AND 20 SINCE YOU HAD SOLD THESE LOTS OF SHOES TO ANOTHER FIRM WITH THE COMPREHENSION THAT "VARIOUS WIDTHS. THAT YOUR REQUEST FOR REFUND OF YOUR BID DEPOSIT ON ITEMS 19 AND 20 WAS NOT JUSTIFIED. YOU WERE ALSO ADVISED THAT IF YOU DID NOT INTEND TO ACCEPT DELIVERY OF ITEM 19 AND 20. WHICH WAS DISALLOWED BY SETTLEMENT OF MAY 13. YOUR BASIC CONTENTIONS IN SUPPORT OF YOUR REQUEST FOR REVIEW OF THE SETTLEMENT APPEAR TO BE THAT SINCE THE CONTRACTING OFFICER HAD ORALLY ADVISED YOU PRIOR TO THE SUBMISSION OF YOUR BID THAT "VARIOUS WIDTHS" OF SHOES WERE AVAILABLE UNDER ITEMS 19 AND 20 AND SINCE AT THE TIME OF INSPECTION OF THE SHOES.

B-136272, JUL. 10, 1958

TO STANLEY NOVAK COMPANY:

REFERENCE IS MADE TO YOUR LETTERS OF MAY 15, JUNE 6, AND JUNE 24, 1958, REQUESTING REVIEW OF SETTLEMENT DATED MAY 13, 1958, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF $3,288.14, REPRESENTING THE MAJOR PORTION OF THE BID DEPOSIT THAT ACCOMPANIED YOUR BID OF MARCH 19, 1958, UNDER SALES INVITATION NO. B-39-58-138, WHICH HAS BEEN WITHHELD BY THE DEPARTMENT OF THE NAVY BECAUSE OF YOUR DEFAULT UNDER CONTRACT NO. N138A-8261 IN REGARD TO ITEMS 19 AND 20 THEREOF.

IN RESPONSE TO THE INVITATION, WHICH WAS ISSUED BY THE UNITED STATES NAVAL SUPPLY DEPOT, BAYONNE, NEW JERSEY, YOU SUBMITTED A BID OFFERING TO PURCHASE VARIOUS ARTICLES AT CERTAIN SPECIFIED PRICES, INCLUDING THE FOLLOWING:

CHART

QUANTITY PRICE "ITEM DESCRIPTION AND (NUMBER UNIT BID TOTAL PRICE BID NO. LOCATION OF PROPERTY OF UNITS) OF PER DOLLARS CENTS

MEASURE UNIT ------------------------- ---------------------------------- ------------ 19. SHOES, WOMEN-S, PUMPS, 3,463 PRS. $1.481 $5,128.70USA WHITE, LEATHER, SIZES

U FROM 3 TO 11, VARIOUS

WIDTHS.

ACQ. COST: $18,721.80 20 SHOES, WOMEN'S PUMPS, 4,771 PRS. $2.371 $11,312.04" USA BLACK LEATHER, SIZES

U FROM 3 TO 11-1/2,

VARIOUS WIDTHS.

ACQ. COST: $22,785.25

YOUR BID, ACCOMPANIED BY A BID DEPOSIT OF $3,710, WAS ACCEPTED AS TO ITEMS 19, 20, AND OTHER ITEMS ON MARCH 24, 1958.

BY LETTER DATED APRIL 2, 1958, YOU ADVISED THE CONTRACTING OFFICER THAT IT WAS ABSOLUTELY IMPOSSIBLE FOR YOU TO ACCEPT DELIVERY OF THE TWO LOTS OF SHOES COVERED BY ITEMS 19 AND 20 SINCE YOU HAD SOLD THESE LOTS OF SHOES TO ANOTHER FIRM WITH THE COMPREHENSION THAT "VARIOUS WIDTHS," AS USED IN THE DESCRIPTION OF THESE ITEMS IN THE INVITATION, MEANT "A, AA, AAA, AAAA, B, C AND D WIDTHS," BUT THAT SUBSEQUENTLY YOU DISCOVERED THAT NOT A SINGLE CARTON OF THE SHOES CONTAINED ANY ,B, C OR D WIDTHS.' YOU REQUESTED THAT ITEMS 19 AND 20 OF THE CONTRACT BE CANCELED WITHOUT LIABILITY TO YOU AND THAT YOU BE REFUNDED YOUR BID DEPOSIT OF $3,288.14 ON THESE ITEMS. REPLY THE CONTRACTING OFFICER ADVISED YOU BY LETTER DATED APRIL 7, 1958, THAT YOUR REQUEST FOR REFUND OF YOUR BID DEPOSIT ON ITEMS 19 AND 20 WAS NOT JUSTIFIED, IN VIEW OF THE PROVISIONS OF PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS AND THE FACT THAT YOU HAD MADE AN INSPECTION OF THE SHOES PRIOR TO SUBMITTING A BID THEREON. YOU WERE ALSO ADVISED THAT IF YOU DID NOT INTEND TO ACCEPT DELIVERY OF ITEM 19 AND 20, 20 PERCENT OF THE PURCHASE PRICE OF THOSE ITEMS, OR $3,288.14, WOULD BE RETAINED BY THE GOVERNMENT AS LIQUIDATED DAMAGES IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 18 OF THE GENERAL SALE TERMS AND CONDITIONS. SUBSEQUENTLY, YOU FILED A CLAIM WITH OUR OFFICE THROUGH THE ADMINISTRATIVE OFFICE FOR REFUND OF THE AMOUNT RETAINED FROM YOUR BID DEPOSIT AS LIQUIDATED DAMAGES, WHICH WAS DISALLOWED BY SETTLEMENT OF MAY 13, 1958.

YOUR BASIC CONTENTIONS IN SUPPORT OF YOUR REQUEST FOR REVIEW OF THE SETTLEMENT APPEAR TO BE THAT SINCE THE CONTRACTING OFFICER HAD ORALLY ADVISED YOU PRIOR TO THE SUBMISSION OF YOUR BID THAT "VARIOUS WIDTHS" OF SHOES WERE AVAILABLE UNDER ITEMS 19 AND 20 AND SINCE AT THE TIME OF INSPECTION OF THE SHOES, THE STENCILING ON ONLY HALF OF THE CARTONS WAS VISIBLE, YOU HAD A RIGHT TO ASSUME FROM THE CONTRACTING OFFICER'S STATEMENT THAT SOME "B, C AND D WIDTHS" WERE ALSO INCLUDED IN THE TWO LOTS OF SHOES.

THE GENERAL SALE TERMS AND CONDITIONS MADE A PART OF THE AGREEMENT PROVIDED THAT THE MATERIALS LISTED WERE OFFERED WITH THE FOLLOWING RESERVATIONS--- QUOTING FROM PARAGRAPH 2---

"ALL PROPERTY LISTED HEREIN IS OFFERED FOR SALE "AS IS" AND "WHERE IS," AND WITHOUT RECOURSE AGAINST THE GOVERNMENT. * * * 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.'

IT HAS BEEN HELD BY THE COURTS THAT THE ABOVE LANGUAGE CONSTITUTES AN EXPRESS DISCLAIMER OF WARRANTY; THAT THERE IS ESPECIALLY FOR APPLICATION THE PRINCIPLE THAT THE PURCHASER BUYS ENTIRELY AT HIS OWN RISK; AND THAT RECOVERY CANNOT BE HAD AGAINST THE VENDOR ON THE GROUND THAT THE PURCHASER WAS MISTAKEN AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE OR DESCRIPTION OF THE PROPERTY, OR ITS FITNESS FOR ANY USE OR PURPOSE. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. MADGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; N. SAMUEL AND SONS V. UNITED STATES, 61 C.CLS. 373; TRIAD CORPORATION V. UNITED STATES 63 C.CLS. 151; S. BRADY V. UNITED STATES, 64 C.CLS. 538; I. SHAPIRO AND COMPANY, V. UNITED STATES, 66 C.CLS. 424; SACHS MERCANTILE CO. V. UNITED STATES, 78 C.CLS. 801; LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90; AND MAGUIRE COMPANY V. UNITED STATES, 273 U.S. 67. IN THE CASE OF OVERSEAS NAVIGATION CORPORATION V. UNITED STATES, 131 C.CLS. 70, THE COURT OF CLAIMS HELD THAT THE TERMS OF THE SALES CONTRACT THERE UNDER CONSIDERATION, INCLUDING ITS "AS IS, WHERE IS" PROVISIONS, SPOKE FOR THEMSELVES AND THE PLAINTIFF WAS LEGALLY BOUND BY THEM.

IT DOES NOT APPEAR THAT YOU WERE PREVENTED BY ANY ACT OF THE GOVERNMENT FROM MAKING A COMPLETE INSPECTION OF THE CARTONS OF SHOES OFFERED FOR SALE UNDER ITEMS 19 AND 20, AND HAD YOU AVAILED YOURSELF OF THAT OPPORTUNITY WHICH CONTINUALLY WAS OPEN TO YOU UNTIL THE TIME OF THE SUBMISSION OF YOUR BID, YOU COULD HAVE DETERMINED THE EXACT WIDTHS OF THE SHOES OFFERED FOR SALE UNDER THOSE ITEMS PRIOR TO BIDDING THEREON. YOU, OF COURSE, WERE UNDER NO OBLIGATION EITHER TO INSPECT THE PROPERTY OR TO BID ON IT, BUT HAVING SUBMITTED A BID WHICH WAS ACCEPTED, YOU WERE SUBJECT TO THE PROVISIONS OF THE CONTRACT INCLUDING THOSE OF THE GENERAL SALE TERMS AND CONDITIONS CONTAINED THEREIN.

IN THE CIRCUMSTANCES, YOU CANNOT NOW CHARGE THE GOVERNMENT WITH THE CONSEQUENCES OF YOUR OWN FAILURE TO MAKE A FULL INSPECTION OF THE SHOES OFFERED FOR SALE UNDER ITEMS 18 AND 19. THUS, THE MATTER FALLS SQUARELY WITHIN THE PRINCIPLE OF LAW ANNOUNCED BY THE UNITED STATES COURT OF CLAIMS IN THE CASE OF S. SILBERSTEIN AND SON, INC. V. UNITED STATES, 69 C.CLS. 412, WHEREIN IT WAS STATED ON PAGES 417 AND 418, THAT:

"THIS COURT HAS REPEATEDLY HELD THAT IN CASE OF A SALE OF SURPLUS GOVERNMENT PROPERTY, SUCH AS WAS MADE HERE, WHERE THE ADVERTISED TERMS OF THE SALE ARE THAT THE PROPERTY IS SOLD "AS IS" AND ,WHERE IS," AND WHEREIN IT IS A CONDITION OF SALE THAT NO CLAIMS WILL BE CONSIDERED ON ACCOUNT OF QUALITY, WEIGHT, OR CONDITION OF GOODS SOLD, OR FOR ANY OTHER CAUSE EXCEPT FOR SHORTAGE IN DELIVERY, A RECOVERY CAN NOT BE HAD AGAINST THE GOVERNMENT ON ANY GROUNDS OTHER THAN A SHORTAGE IN DELIVERY OF THE PROPERTY SOLD. TRIAD CORP. V. UNITED STATES, 63 C.CLS. 151, S. BRADY V. UNITED STATES, 64 C.CLS. 538.

"NO QUESTION OF MISREPRESENTATION OR FRAUD IS RAISED BY THE PLAINTIFF. IT PURCHASED THE BLANKETS AT ITS OWN RISK, AFTER BEING OFFERED THE FULLEST OPPORTUNITY TO INSPECT THEM. THERE WAS NO SHORTAGE IN DELIVERY, AND WHATEVER ERRORS, IF ANY, CREPT IN WHILE THE BLANKETS WERE BEING BALED CAN NOT BE CHARGED AGAINST THE GOVERNMENT, WHO ACTED IN THE UTMOST GOOD FAITH. IT DID NOT IN ANY WAY INSURE OR WARRANT THE CONDITIONS OF THE GOODS SOLD. THE PLAINTIFF IN COMMON WITH ALL OTHER BIDDERS AT THE SALE WAS URGED TO MAKE INVESTIGATION PRIOR TO THE SALE OF THE GOODS, AND HAD THE PRIVILEGE OF PERSONALLY INSPECTING ALL OF THE BLANKETS OFFERED FOR SALE BEFORE SUBMITTING ITS BID. THE GOVERNMENT IS NOT RESPONSIBLE IF THE PLAINTIFF FAILED TO MAKE A FULL INSPECTION AND ACQUAINT ITSELF WITH THE EXACT CONDITION OF ALL BLANKETS PURCHASED. PANAMA V. UNITED STATES, 63 C.CLS. 283.'

THE CONTRACTING OFFICER STATES THAT THE STENCILS IN APPROXIMATELY HALF THE CARTONS WERE VISIBLE, AND ALL SHOWED WIDTHS RANGING FROM A TO AAAAAA AND THAT EACH CARTON IS OF A REASONABLE SIZE AND WEIGHT SO THAT FULL INSPECTION WAS FEASIBLE IF A BIDDER WISHED TO SPEND THE NECESSARY TIME. ALSO, HE STATED THAT YOU, HAVING SEEN AT THE TIME OF INSPECTION THAT APPROXIMATELY HALF OF THE CARTONS WERE IN THE A WIDTHS, HAD NO BASIS FOR ASSUMING THAT THE BALANCE WERE IN B, C AND D WIDTHS. THERE IS NO EVIDENCE IN THE RECORD OF BAD FAITH ON THE PART OF THE GOVERNMENT IN DESCRIBING THE MATERIAL. AS A MATTER OF FACT, THE GOVERNMENT SOLD TO YOU EXACTLY THE MATERIAL WHICH IT ADVERTISED FOR SALE, NAMELY, "VARIOUS WIDTHS OF SHOES.' THE DISCREPANCY, IF ANY, BETWEEN THE GOODS TENDERED AND THE GOODS DESCRIBED IS NOT SUCH AS WOULD WARRANT YOU TO RESCIND THE SALE. SEE STANDARD MAGNESIUM CORPORATION V. UNITED STATES, 241 F.2D 67, 679.

THE FACT THAT POSSIBLY THE SHOES MIGHT MORE ACCURATELY HAVE BEEN DESCRIBED AS BEING IN "VARIOUS A WIDTHS" RATHER THAN "VARIOUS WIDTHS" IN THE FORMER INVITATION, AND THAT THEY ARE NOW OFFERED FOR RESALE AND DESCRIBED AS BEING IN "VARIOUS A WIDTHS," IS NOT MATERIAL TO THE ISSUE HERE INVOLVED, AND THEREFORE AFFORDS NO LEGAL BASIS FOR RESCINDING YOUR CONTRACT. OUR OFFICE IS NOT AUTHORIZED TO WAIVE STRICT LEGAL RIGHTS OF THE GOVERNMENT OR TO GRANT RELIEF ON ANY BASIS OTHER THAN THE LAW AS DECLARED BY THE CONGRESS AND THE COURTS.