B-142091, MAR. 11, 1960

B-142091, MAR. 11, 1960

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 18, 1960, WITH ENCLOSURES, FROM THE OFFICE OF THE QUARTERMASTER GENERAL, WRITTEN ON BEHALF OF THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), CONCERNING A REQUEST BY THE DIMES METAL COMPANY, FORT WORTH, TEXAS, FOR AN ADJUSTMENT UNDER SALE CONTRACT NO. O.I. 60-11, CONSISTING OF THE ACCEPTANCE ON AUGUST 12, 1959, OF THAT COMPANY'S BID IN THE AMOUNT OF $379.79 ON A LOT OF MISCELLANEOUS SURPLUS REPAIR PARTS FOR COMBAT VEHICLES, ADVERTISED FOR SALE UNDER ITEM NO. 9 OF INVITATION FOR BIDS NO. 16-027-S-60-1, ISSUED JULY 21, 1959, BY THE PROPERTY DISPOSAL OFFICE AT FORT POLK, LOUISIANA.

UNDER THE TERMS OF THE INVITATION FOR BIDS, THE GOVERNMENT ADVERTISED FOR SALE 56 ITEMS OF SURPLUS PROPERTY AND IN SEVERAL CASES PROVIDED FOR A PRICE QUOTATION ON THE BASIS OF USING A SINGLE LOT OF MATERIAL AS THE UNIT OF MEASURE. THUS, THE QUANTITY FOR ITEM NO. 9 WAS SHOWN TO BE ONE LOT AND IT WAS DESCRIBED AS CONSISTING OF APPROXIMATELY 28,545 ITEMS HAVING A TOTAL ACQUISITION COST OF $5,644.08. THERE WAS INCLUDED IN THE DESCRIPTION OF THE LOT A LISTING OF OVER 40 VARIOUS TYPES OF REPAIR PARTS FOR COMBAT VEHICLES, AND IT WAS INDICATED THAT THE LOT WOULD ALSO INCLUDE ABOUT 50 OTHER SIMILAR TYPES OF REPAIR PARTS.

THE INVITATION WAS MADE SUBJECT TO THE GENERAL SALE TERMS AND CONDITIONS AS SET FORTH AT PAGE 2 OF THE INVITATION, BID, AND ACCEPTANCE FORM. SUCH TERMS AND CONDITIONS INCLUDED THE PROVISION THAT "IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING; " THE PROVISION THAT "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 THE PROVISION, WITH RESPECT TO ADJUSTMENT FOR VARIATION IN QUANTITY OR WEIGHT, THAT "NO ADJUSTMENT FOR SUCH VARIATION WILL BE MADE WHERE AN AWARD IS MADE ON A "PRICE FOR THE LOT" BASIS.'

THERE IS NOTHING IN THE INVITATION TO SHOW THAT BIDDERS WERE TO BE FURNISHED INFORMATION FROM INVENTORY RECORDS RELATING TO ANY LOT OF MATERIAL OFFERED FOR SALE. HOWEVER, IT APPEARS THAT THERE WAS MADE AVAILABLE TO EACH BIDDER A DETAILED LIST OF THE ARTICLES BELIEVED TO HAVE BEEN INCLUDED IN ITEM NO. 9 OF THE INVITATION, SHOWING THAT QUANTITY FOR EACH ITEM AND THE APPLICABLE STOCK NUMBER. THE RECORD SHOWS THAT PAGE 11 OF SUCH LIST INCLUDED AN ITEMIZATION OF FOUR ENGINES, STOCK NO. G740-2590- 699-9016.

IN A LETTER DATED AUGUST 21, 1959, THE CONTRACTOR ALLEGED THAT THE STOCK NUMBER HAD BEEN CHECKED TO BE A "JEEP" ENGINE, COMPLETE FROM FAN TO FLYWHEEL; THAT THE LOT OF MATERIAL HAD BEEN INSPECTED AND IT WAS TAKEN FOR GRANTED THAT THE ENGINES WERE IN THE BOX PALLETS; BUT THAT THE FOUR ENGINES HAD NOT BEEN DELIVERED. THE OPINION WAS EXPRESSED IN SAID LETTER THAT THE ENGINES SHOULD BE MADE AVAILABLE OR THAT PROPER RESTITUTION BE MADE. IN A LETTER OF JANUARY 7, 1960, THE CONTRACTOR ADVISED THE PROPERTY DISPOSAL OFFICER THAT ONE OF ITS REPRESENTATIVES HAD MADE AN INDEPENDENT CHECK OF THE STOCK NUMBER WITH A FIRM IN DALLAS, TEXAS, WHICH WAS RECOGNIZED AS THE LARGEST GOVERNMENT SURPLUS DEALER IN THE AREA.

IT HAS BEEN REPORTED THAT THE MATERIAL INCLUDED IN THE LOT OF MATERIAL OFFERED FOR SALE UNDER ITEM NO. 9 OF THE INVITATION FOR BIDS WAS DISPLAYED IN THREE BOX PALLETS, SIZE 48 INCHES BY 48 INCHES BY 48 INCHES, AND THAT THESE PALLETS WERE INSUFFICIENT FOR STORING FOUR "JEEP" ENGINES, TOGETHER WITH APPROXIMATELY 28,541 REPAIR PARTS OF THE TYPES REFERRED TO IN THE GENERAL DESCRIPTION OF THE LOT. IT HAS ALSO BEEN REPORTED THAT STOCK NO. G740-2590-699-9016 DOES NOT COVER AN ENGINE OF ANY TYPE BUT COVERS A CABLE USED BETWEEN THE ENGINE AND THE TRANSMISSION OF A COMBAT VEHICLE. IT WAS EXPLAINED THAT THE LISTS FURNISHED TO BIDDERS WERE BASED UPON RECORD INFORMATION AND THAT THE SHIPPING DOCUMENTS USED THE WORD "ENGINE" WITHOUT ELABORATION IN DESCRIBING THE FOUR ARTICLES HERE INVOLVED.

WHILE CONCEDING THAT THE DESCRIPTION IN THE LIST WAS ERRONEOUS, THE OFFICE OF THE QUARTERMASTER GENERAL HAS INDICATED AS ITS OPINION THAT THE CONTRACTOR WAS NOT MISLED BY THE DESCRIPTION AND THAT IT IS HIGHLY UNLIKELY THAT A BIDDER WHO WENT TO THE TROUBLE OF INSPECTING THE LOT WOULD NOT HAVE INSPECTED THE ENGINES WHICH WOULD HAVE BEEN THE MOST VALUABLE PART OF THE LOT IF INCLUDED THEREIN. ALSO, IT HAS BEEN SUGGESTED IN THE ADMINISTRATIVE REPORT THAT THE BID PRICE OF $379.79, REPRESENTING ONLY 6.7 PERCENT OF THE STATED ACQUISITION COST, IS NOT SO UNREASONABLY HIGH FOR THE ITEMS ACTUALLY SOLD AS TO BE UNCONSCIONABLE.

THERE HAS BEEN NO INDICATION THAT ANY SHORTAGE IN THE LOT OF MATERIAL DESCRIBED IN ITEM NO. 9 OF THE INVITATION FOR BIDS DEVELOPED AFTER THE CONTRACTOR INSPECTED THE PROPERTY. MOREOVER, THE GOVERNMENT DOES NOT APPEAR TO HAVE OFFERED FOR SALE UNDER ITEM NO. 9 ANYTHING MORE THAN ESTIMATED NUMBER OF MISCELLANEOUS SURPLUS REPAIR PARTS FOR COMBAT VEHICLES, WHICH WOULD NOT ORDINARILY INCLUDE ENGINES OF ANY KIND. NOR DOES IT APPEAR THAT THE FURNISHING OF INVENTORY LISTS TO BIDDERS WAS INTENDED IN ANY MANNER TO MODIFY THE TERMS OF THE INVITATION SO AS TO CONSTITUTE A GUARANTEE THAT EVERY ITEM LISTED WAS INCLUDED IN THE PARTICULAR LOT. THE SALE WAS MADE ON A ,PRICE FOR THE LOT" BASIS, WITHOUT WARRANTY OF THE DESCRIPTION, AND IT IS OUR OPINION THAT THE VALIDITY OF THE CONTRACT COULD NOT BE QUESTIONED EVEN IF STOCK NO. G740-2590-699-9016 COVERED A ,JEEP" ENGINE, INSTEAD OF A TRANSMISSION CABLE. IT WAS THE CONTRACTOR'S RESPONSIBILITY TO MAKE AN ADEQUATE INSPECTION OF THE LOT AND ITS FAILURE TO DO SO CANNOT BE CONSIDERED A REASONABLE BASIS FOR THE MAKING OF ANY ADJUSTMENT IN THE MATTER. SEE PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463.

ACCORDINGLY, YOU ARE ADVISED THAT THE CONTRACTOR IS NOT ENTITLED TO A DELIVERY OF ADDITIONAL PROPERTY UNDER THE CONTRACT OR TO ANY ADJUSTMENT IN THE CONTRACT PRICE.

THE ENCLOSURES OF THE LETTER DATED FEBRUARY 18, 1960, ARE RETURNED HEREWITH.