B-136274, JUN. 10, 1958

B-136274: Jun 10, 1958

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TO DRYDEN MACHINERY CO.: REFERENCE IS MADE TO YOUR LETTER OF MAY 10. YOUR BID WAS ACCOMPANIED BY A BID DEPOSIT IN THE SUM OF $300. YOUR BID WAS ACCEPTED AND AWARD MADE TO YOU ON NOVEMBER 6. YOU STATE THAT THE MATERIAL WAS STORED IN A DARK PLACE AND SINCE ONLY THE TOP OF THE BOX WAS OPEN. IT WAS IMPOSSIBLE TO SEE WHETHER THE MATERIAL WAS AS DESCRIBED OR NOT. THAT YOU ARE WILLING TO RETURN THE MACHINE INTACT AS YOU RECEIVED IT FOR A REFUND AND WAIVE ALL OTHER LOSSES YOU MIGHT HAVE SUFFERED AS A RESULT OF THE CONTRACT. - 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 TIME SPECIFIED IN THE INVITATION.

B-136274, JUN. 10, 1958

TO DRYDEN MACHINERY CO.:

REFERENCE IS MADE TO YOUR LETTER OF MAY 10, 1958, REQUESTING REVIEW OF OUR SETTLEMENT DATED MAY 7, 1958, WHICH DISALLOWED YOUR CLAIM REPRESENTING A PARTIAL REFUND OF AN AMOUNT DEPOSITED FOR THE PURCHASE OF GOVERNMENT- OWNED SURPLUS PROPERTY UNDER SALES CONTRACT NO. N207 15847, DATED NOVEMBER 6, 1957.

IN RESPONSE TO INVITATION NO. B-52-58-207, DATED OCTOBER 16, 1957, ISSUED BY THE SUPPLY OFFICER, UNITED STATES NAVAL AIR STATION, JACKSONVILLE, FLORIDA, YOU SUBMITTED A BID DATED OCTOBER 26, 1957, OFFERING TO PURCHASE, AMONG OTHER THINGS, ONE SURFACE GRINDER, ITEM 6, FOR THE PRICE OF $812.75. YOUR BID WAS ACCOMPANIED BY A BID DEPOSIT IN THE SUM OF $300. YOUR BID WAS ACCEPTED AND AWARD MADE TO YOU ON NOVEMBER 6, 1957, THEREBY CONSUMMATING A VALID AND BINDING CONTRACT. AFTER MAKING PAYMENT OF THE BALANCE DUE AND DELIVERY OF ITEM 6 TO YOU, YOU CHARGED THAT THE GOVERNMENT HAD NOT DELIVERED THE ITEM DESCRIBED IN THE INVITATION.

YOU NOW CONTEND THAT YOU DID NOT RECEIVE CERTAIN ATTACHMENTS FOR THE MACHINE DESCRIBED AS ITEM 6; AND THAT YOU SOLICITED DEALERS OF USED MACHINE TOOLS AND FOUND THAT $460 WOULD COVER THE COST OF SECOND HAND ATTACHMENTS IN USABLE CONDITION TO REPLACE THE MISSING ATTACHMENTS. ALSO, YOU STATE THAT THE MATERIAL WAS STORED IN A DARK PLACE AND SINCE ONLY THE TOP OF THE BOX WAS OPEN, IT WAS IMPOSSIBLE TO SEE WHETHER THE MATERIAL WAS AS DESCRIBED OR NOT, AND THAT YOU ARE WILLING TO RETURN THE MACHINE INTACT AS YOU RECEIVED IT FOR A REFUND AND WAIVE ALL OTHER LOSSES YOU MIGHT HAVE SUFFERED AS A RESULT OF THE CONTRACT.

PARAGRAPHS 1 AND 2 OF THE GENERAL SALE TERMS AND CONDITIONS, MADE PART OF THE CONTRACT, READ AS FOLLOWS:

"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 TIME SPECIFIED IN THE INVITATION. THE GOVERNMENT WILL NOT BE OBLIGED TO FURNISH ANY LABOR FOR SUCH PURPOSES. 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 LEAD, 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 OF 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.'

WITH REGARD TO PARAGRAPH ONE OF THE TERMS AND CONDITIONS OF THE CONTRACT IT APPEARS THAT YOUR REPRESENTATIVE MADE A PARTIAL INSPECTION ONLY OF THE MACHINE AND ATTACHMENTS PRIOR TO THE BID OPENING BUT IT IS REPORTED BY THE CONTRACTING OFFICER THAT THE MACHINE INSPECTED AS ITEM 6 WAS DELIVERED TO YOU. ALSO, IT IS REPORTED THAT THE MACHINE HERE INVOLVED "WAS PACKED IN ONE BOX WHICH HAD THE TOP REMOVED FOR INSPECTION PURPOSES.' DISCREPANCIES WERE REPORTED UNTIL AFTER REMOVAL OF THE MATERIAL FROM THE NAVAL AIR STATION, JACKSONVILLE, FLORIDA. INASMUCH AS YOUR REPRESENTATIVE FAILED TO MAKE A FULL AND COMPLETE INSPECTION OF THE MATERIAL AND DETECT THE ALLEGED DISCREPANCIES UNTIL AFTER THE REMOVAL OF THE MATERIAL SUCH FAILURE WOULD INDICATE NEGLIGENCE ON HIS PART IN PERFORMING HIS INSPECTION DUTIES.

IN CONSTRUING PARAGRAPH TWO OF THE CONTRACT IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND BY OUR OFFICE THAT SUCH A PROVISION CONSTITUTES AN EXPRESS DISCLAIMER OF WARRANTY AND NO WARRANTY MAY BE IMPLIED. SEE LUMBRAZO V. WOODRULL, 175 N.E. 525 AND W. E. HEDGER V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676. THOSE CASES, ALSO INVOLVING A VARIANCE IN THE CONDITION OF THE PROPERTY WITH THAT OF 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 WHATSOEVER. IN DISPOSING OF SURPLUS PROPERTY THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS UNAWARE OF THE QUALITY OR CONDITION OF THE MATERIALS 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 MATERIALS SOLD IS ASSUMED BY THE BUYER AS ONE OF THE ELEMENTS OF THE BARGAIN. THERE IS NO SHOWING THAT THE DISPOSAL OFFICERS WERE AWARE OF THE TRUE NATURE OF THE MATERIAL. IT APPEARS THAT THESE OFFICERS RELIED UPON THEIR STOCK RECORDS, THE BEST EVIDENCE AVAILABLE, IN LISTING THE ITEM IN THE INVITATION. IN OTHER WORDS, 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.

IN VIEW THEREOF AND THE APPLICABLE LAW THERE IS NO LEGAL BASIS UPON WHICH ANY PART OF THE PURCHASE PRICE MAY BE REFUNDED, AND THEREFORE THE SETTLEMENT OF MAY 7, 1958, MUST BE SUSTAINED.