B-139676, JUL. 7, 1959

B-139676: Jul 7, 1959

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TO THE MARVIN COMPANY: REFERENCE IS MADE TO YOUR LETTER OF APRIL 30. THAT THE MATERIAL OFFERED FOR SALE UNDER ITEMS 18 AND 19 WAS PACKED IN 11 BOXES. 10 OF WHICH WERE MARKED "QUAN. 60 EA.'. THE 11TH BOX WAS MARKED "QUAN. 27 EA.'. IT WAS DISCOVERED UPON OPENING THEM THAT THE BOXES MARKED "QUAN. 60 EA.'. ACTUALLY CONTAINED 40 BEARINGS AND THAT THE 11TH BOX WAS PROPERLY MARKED "QUAN. 27 EA. " AND THAT WHILE YOU REALIZE THAT THIS WAS A "BY LOT" PURCHASE. IT IS CUSTOMARY TO CHECK ONE BOX AND ACCEPT THE GOVERNMENT- MARKED QUANTITY ON THE BALANCE. YOU STATED THAT THERE WAS A SHORTAGE OF 200 BEARINGS AT ?7014 EACH IN THE TWO LOTS COVERING ITEMS 18 AND 19. UNDER THE CONTRACT YOU WERE AWARDED ITEMS 18 AND 19 OF THE INVITATION FOR BIDS ON A "PRICE FOR THE LOT" BASIS.

B-139676, JUL. 7, 1959

TO THE MARVIN COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 30, 1959, REQUESTING REVIEW OF THE SETTLEMENT DATED APRIL 27, 1959, WHICH DISALLOWED YOUR CLAIM FOR $140.28 ALLEGED TO BE DUE AS A PARTIAL REFUND FOR TWO LOTS OF BEARINGS PURCHASED FROM THE GOVERNMENT UNDER SALES CONTRACT NO. (40 604/S-58-333.

YOU STATE IN YOUR LETTER OF JUNE 4, 1958, TO THE CONTRACTING OFFICER, THAT THE MATERIAL OFFERED FOR SALE UNDER ITEMS 18 AND 19 WAS PACKED IN 11 BOXES, 10 OF WHICH WERE MARKED "QUAN. 60 EA.' AND THE 11TH BOX WAS MARKED "QUAN. 27 EA.' YOU ALLEGE THAT WHEN YOU RECEIVED THESE BOXES, IT WAS DISCOVERED UPON OPENING THEM THAT THE BOXES MARKED "QUAN. 60 EA.' ACTUALLY CONTAINED 40 BEARINGS AND THAT THE 11TH BOX WAS PROPERLY MARKED "QUAN. 27 EA.; " AND THAT WHILE YOU REALIZE THAT THIS WAS A "BY LOT" PURCHASE, IT IS CUSTOMARY TO CHECK ONE BOX AND ACCEPT THE GOVERNMENT- MARKED QUANTITY ON THE BALANCE. IN A LETTER DATED DECEMBER 11, 1958, TO THE CONTRACTING OFFICER, YOU STATED THAT THERE WAS A SHORTAGE OF 200 BEARINGS AT ?7014 EACH IN THE TWO LOTS COVERING ITEMS 18 AND 19.

UNDER THE CONTRACT YOU WERE AWARDED ITEMS 18 AND 19 OF THE INVITATION FOR BIDS ON A "PRICE FOR THE LOT" BASIS. PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT PROVIDED THAT THE PROPERTY WAS OFFERED "AS IS" AND "WHERE IS" AND THAT THE DESCRIPTION WAS BASED ON THE BEST AVAILABLE INFORMATION, BUT THAT THE GOVERNMENT MADE NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO QUANTITY OR WEIGHT. ALSO, THE BIDDERS WERE WARNED, UNDER PARAGRAPH 8, THAT IN THE EVENT OF 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, NO ADJUSTMENT FOR SUCH VARIATION WOULD BE MADE WHERE AN AWARD WAS MADE ON A "PRICE FOR THE LOT" BASIS.

IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND OUR OFFICE THAT AN EXPRESS DISCLAIMER OF WARRANTY--- AS HERE--- VITIATES ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT ARISE OUT OF A SALES TRANSACTION. SEE W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; UNITED STATES V. KELLY, 112 F.SUPP. 831; AND TRIAD CORPORATION V. UNITED STATES, 63 C.CLS. 151. TO ILLUSTRATE, THE CASE OF MAGUIRE AND COMPANY V. UNITED STATES, 273 U.S. 67, INVOLVED AN ,AS IS" SALE OF CLOTH BY THE GOVERNMENT UNDER AN INVITATION WHICH GAVE THE WEIGHT PER YARD OF THE MATERIALS. IT TURNED OUT THAT THE MATERIALS DID NOT CONFORM TO THE SPECIFIED WEIGHT. IN DENYING THE PLAINTIFF RECOVERY, THE UNITED STATES SUPREME COURT HELD THAT THE GIVEN WEIGHT COULD NOT BE CONSIDERED AS A WARRANTY UNDER THE ADVERTISED TERMS OF THE SALE. ALSO, IN LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, AN AGENT FOR THE GOVERNMENT LISTED FOR SALE CERTAIN ITEMS OF JUNK AT SEVERAL LOCATIONS, SETTING FORTH THE WEIGHTS AND KINDS OF EACH. ALTHOUGH THE QUANTITIES TURNED OUT TO BE MUCH LESS THAN 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 AS AN ESTIMATE OF THE PROBABLE AMOUNTS IN REFERENCE TO WHICH GOOD FAITH ONLY COULD BE REQUIRED OF THE PARTY MAKING IT.' THE FACT THAT THE GOVERNMENT AND YOU MAY HAVE BEEN MISTAKEN AS TO THE NUMBER OF THE BEARINGS IN THE CASES MARKED "QUAN. 60 EA.' DOES NOT ENTITLE YOU TO RELIEF SINCE THE COURTS HAVE HELD THAT THE DISCLAIMER OF WARRANTY CLAUSES EMPLOYED IN GOVERNMENT CONTRACTS SUCH AS HERE INVOLVED PRECLUDE RECOVERY ON THE THEORY OF MUTUAL MISTAKE. SEE AMERICAN SANITARY RAG CO. V. UNITED STATES, C.CLS. NO. 161-57, DECIDED MAY 7, 1958, AND CASES CITED THEREIN.

IN VIEW OF THE FOREGOING, THERE EXISTS NO LEGAL BASIS FOR MAKING AN ADJUSTMENT OF THE CONTRACT PRICE BASED UPON A SHORTAGE OF THE ITEMS INVOLVED UNLESS IT CAN BE SHOWN THAT THE REPRESENTATIVES OF THE GOVERNMENT DID NOT ACT IN GOOD FAITH. FROM THE EVIDENCE PRESENTED THERE IS NO REASONABLE BASIS FOR CONCLUDING THAT THE REPRESENTATIVES OF THE GOVERNMENT DID NOT ACT IN GOOD FAITH.