B-141098, DEC. 16, 1959

B-141098, DEC. 16, 1959

TO WILLIAM FROST COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 23, 1959, REQUESTING RECONSIDERATION OF OUR DECISION OF NOVEMBER 19, 1959, SUSTAINING THE SETTLEMENT OF OCTOBER 12, 1959, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF $524, REPRESENTING AN ADJUSTED PRICE ON 20,960 POUNDS OF SCRAP ZINC INGOTS PURCHASED FROM THE DEPARTMENT OF THE NAVY, NAVAL SUPPLY CENTER, NORFOLK, VIRGINIA, UNDER CONTRACT NO. N189S-46374A (S), DATED JULY 16, 1959.

IT WAS STATED IN OUR DECISION OF NOVEMBER 19, 1959, THAT NO LEGAL RESPONSIBILITY WOULD ATTACH TO THE GOVERNMENT AS A RESULT OF THE SALE IN QUESTION IN THE ABSENCE OF A SHOWING OF BAD FAITH ON THE PART OF THE DISPOSAL OFFICER. YOU STATED IN YOUR LETTER OF NOVEMBER 23, 1959, THAT THERE MANIFESTLY WAS EVIDENCE OF BAD FAITH IN OFFERING THE LOT AS SCRAP ZINC INGOTS DERIVED FROM THE MELTING OF LITHOGRAPH PLATES AND SHIPPING INGOTS DERIVED FROM THE MELTING OF DIE CAST.

WE ASSUME THAT EVERY DISPOSAL OFFICER BELIEVES IN THE ACCURACY OF HIS DESCRIPTION OF PROPERTY TO BE SOLD. IF HE KNEW OR HAD REASON FOR BELIEVING THAT IT WAS NOT ACCURATE, THERE COULD WELL BE QUESTION OF BAD FAITH WHICH MIGHT JUSTIFY AVOIDANCE OF THE CONTRACT.

THE RECORD DISCLOSES THAT THE DESCRIPTION OF THE INGOTS WAS BASED UPON THE INFORMATION FURNISHED THE SUPERVISOR, NAVAL SUPPLY CENTER SALVAGE YARD. IT APPEARS THAT THE CONTRACTING OFFICER ACTUALLY HAD NO MORE PERSONAL KNOWLEDGE OF THE TRUE FACTS THAN YOU, BUT BY THE EXPRESS TERMS OF THE OFFERING ALL OF THE RISKS AS TO THE ACCURACY OF THE DESCRIPTION WERE ACCEPTED BY YOU WHEN YOU BID, AND WERE IMPOSED UPON YOU BY THE ACCEPTANCE OF YOUR OFFER. IN DISPOSING OF SURPLUS MATERIAL 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. IN THE CASE OF OVERSEAS NAVIGATION CORPORATION V. UNITED STATES, 131 C.CLS. 70, THE COURT HELD THAT THE TERMS OF THE SALE CONTRACT THEN UNDER CONSIDERATION INCLUDING ITS "AS IS, WHERE IS" PROVISIONS, SPOKE FOR THEMSELVES AND THE PLAINTIFF WAS LEGALLY BOUND BY THEM. THERE WAS AN EXPRESS DISCLAIMER OF ANY WARRANTY THAT THE INGOTS WERE AS DESCRIBED. THE MERE FACT THAT THE GOVERNMENT WAS HONESTLY MISTAKEN ABOUT THE DESCRIPTION OF THE INGOTS DOES NOT ENTITLE YOU TO RELIEF. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525, A.L.R. 1017; AND HOOVER V. UTAH NURSERY COMPANY, 7 F.2D 270.