B-144401, DEC. 2, 1960

B-144401: Dec 2, 1960

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LEACH MACHINERY CO: REFERENCE IS MADE TO YOUR LETTERS DATED OCTOBER 25. WHICH ITEM WAS DESCRIBED IN THE INVITATION AS FOLLOWS: TABLE "MILLING MACHINE. (PARTS HAVE BEEN REMOVED.). THE REQUEST FOR REVIEW APPEARS TO BE BASED ON YOUR CONTENTION THAT BECAUSE "CERTAIN PARTS" WERE MISSING THE MACHINE DELIVERED TO YOU WAS NOT AS REPRESENTED IN THE INVITATION. IN SUCH A CLAIM THE PRINCIPAL ISSUE TO BE CONSIDERED IS WHETHER THE GOVERNMENT DID OR DID NOT WARRANT THE PROPERTY. IN THIS REGARD YOUR ATTENTION IS AGAIN DIRECTED TO PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS ON PAGE 2 OF THE BID INVITATION. WHEREIN IT IS EXPRESSLY PROVIDED THAT ALL PROPERTY LISTED IS OFFERED FOR SALE "AS IS" AND "WHERE IS.

B-144401, DEC. 2, 1960

TO H. LEACH MACHINERY CO:

REFERENCE IS MADE TO YOUR LETTERS DATED OCTOBER 25, NOVEMBER 9 AND 17, 1960, REQUESTING REVIEW OF OUR SETTLEMENT DATED OCTOBER 21, 1960, WHICH DISALLOWED, FOR THE REASONS STATED THEREIN, YOUR CLAIM UNDER CONTRACT NO. N171S-20944A FOR REFUND OF THE FULL CONTRACT PRICE OF $977, OR DELIVERY TO YOU OF THE MACHINE AS ADVERTISED.

IN RESPONSE TO SALES INVITATION NO. B-60-60-171 ISSUED MARCH 28, 1960, BY THE U.S. NAVAL WEAPONS PLANT, SUPPLY DEPARTMENT, WASHINGTON, D.C., SOLICITING BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF 43 ITEMS OF SURPLUS PROPERTY, YOU SUBMITTED A BID ON TWO OF THE ADVERTISED ITEMS, INCLUDING ITEM NO. 34 HERE IN QUESTION, WHICH ITEM WAS DESCRIBED IN THE INVITATION AS FOLLOWS:

TABLE

"MILLING MACHINE, VAN NORMAN,

COMBINATION HORIZONTAL AND VERTICAL,

SERIAL NO. 5686, CAPACITY 13 INCHES BY 58 INCHES

TABLE SIZE, EQUIPPED WITH 2 AND 5 HP

220/440 VOLT D.C. MOTOR,

NAVY ID.NO. 171-5304.

CONDITION: USED, REPAIRS REQUIRED,

POOR. (PARTS HAVE BEEN

REMOVED.)

COST $8,934.77 1 EA.'

THE REQUEST FOR REVIEW APPEARS TO BE BASED ON YOUR CONTENTION THAT BECAUSE "CERTAIN PARTS" WERE MISSING THE MACHINE DELIVERED TO YOU WAS NOT AS REPRESENTED IN THE INVITATION. YOU STATE THAT ,AN ASSEMBLY" CAN NOT BE CONSIDERED A "MISSING PART" OF THE VAN NORMAN MILLING MACHINE.

IN SUCH A CLAIM THE PRINCIPAL ISSUE TO BE CONSIDERED IS WHETHER THE GOVERNMENT DID OR DID NOT WARRANT THE PROPERTY. IN THIS REGARD YOUR ATTENTION IS AGAIN DIRECTED TO PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS ON PAGE 2 OF THE BID INVITATION, WHEREIN IT IS EXPRESSLY PROVIDED THAT ALL PROPERTY LISTED IS OFFERED FOR SALE "AS IS" AND "WHERE IS," AND WITHOUT RECOURSE AGAINST THE GOVERNMENT; THAT THE GOVERNMENT MAKES NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO KIND, CHARACTER, QUALITY, DESCRIPTION, ETC., OF ANY OF THE PROPERTY, OR ITS FITNESS FOR ANY USE OR PURPOSE; AND THAT 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.

IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND OUR OFFICE THAT SUCH CONTRACT PROVISIONS CONSTITUTE AN EXPRESS DISCLAIMER OF WARRANTY AND, IN THE ABSENCE OF A SHOWING OF BAD FAITH, VITIATE ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT ARISE OUT OF A SALE TRANSACTION. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525; W.E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151.

IN THE INSTANT CASE, THE RECORD SHOWS THAT THE SPECIFIC MATERIAL OFFERED FOR SALE UNDER ITEM NO. 34 WAS DELIVERED TO YOU. FURTHERMORE, THE DESCRIPTION STATED THAT THE CONDITION OF THE MACHINE WAS "USED, REPAIRS REQUIRED, POOR. (PARTS HAVE BEEN REMOVED.)" SUCH DESCRIPTION SHOULD HAVE PUT BIDDERS ON NOTICE THAT THE CONDITION OF THE PROPERTY WAS QUESTIONABLE. THEREFORE, IT CANNOT BE CONCLUDED THAT THE DESCRIPTION IN THE INVITATION WAS EITHER ERRONEOUS OR MISLEADING. ACCORDINGLY, AND AS THE RECORD DOES NOT INDICATE OTHERWISE, BAD FAITH MAY NOT BE IMPUTED TO THE GOVERNMENT IN THE TRANSACTION.

REGARDING YOUR STATEMENT AS TO THE IMPRACTICABILITY OF MAKING AN INSPECTION OF THE PROPERTY PRIOR TO SUBMITTING YOUR BID, PARAGRAPH 1 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE BID INVITATION ALSO PROVIDED THAT "IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING.' IN THE CASE OF AMERICAN SANITARY RAG CO. V. UNITED STATES, 161 F.SUPP. 414, CONCERNING A SALE OF SURPLUS PROPERTY WHICH WAS DESCRIBED IN THE INVITATION AS "APPARENTLY UNUSED, IN GOOD CONDITION," WHERE THE CONTRACT ALSO CONTAINED THE SAME PROVISIONS OF PARAGRAPHS 1 AND 2 REFERRED TO ABOVE, THE COURT HELD THAT THE RISK AS TO THE ACTUAL CONDITION OF THE PROPERTY WAS PLACED SQUARELY UPON THE PURCHASER. THE BIDDER'S RESPONSIBILITIES IN THIS CONNECTION ALSO APPEAR TO BE CLEARLY SET FORTH IN THE RECENT CASE OF PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463, WHERE, AS IN THIS CASE, THE BIDDER MADE NO INSPECTION. IN THAT CASE IT WAS HELD THAT A BIDDER FAILS TO INSPECT AT HIS PERIL AND THAT HAD PLAINTIFF MADE AN INSPECTION BEFORE SUBMITTING ITS BID AS IT DID AFTERWARDS IT COULD HAVE DISCOVERED THE CONDITION OF THE PROPERTY OF WHICH IT COMPLAINED. SEE ALSO THE RECENT CASE OF KRUPP V. FEDERAL HOUSING ADMINISTRATION, 185 F.SUPP. 638 (JULY 18, 1960), WHERE IN THE U.S. DISTRICT COURT OF MASSACHUSETTS, IN SIMILAR CIRCUMSTANCES, STATED THAT THE PURCHASER WHO RELIES ON INFORMATION FURNISHED HIM BY THE GOVERNMENT AND FAILS TO INSPECT OR DOES NOT FULLY INSPECT DOES SO AT HIS OWN RISK, AND EVEN IF HE MAKES A BAD BARGAIN BECAUSE OF DEFECTS IN THE PROPERTY WHICH EVEN A REASONABLY CAREFUL INSPECTION WOULD NOT DISCLOSE, THE RISK OF LOSS STILL FALLS ON HIM; AND THAT IF HE IS MISLED BY HIS RELIANCE ON ANY STATEMENT OF THE SELLER AS TO THE PROPERTY THIS IS THE RISK WHICH HE KNEW OR SHOULD HAVE KNOWN HE WAS TAKING BECAUSE THE PROSPECTUS CLEARLY WARNED HIM THAT THE SALE WAS BEING MADE ON THOSE TERMS.

IN VIEW OF THE FOREGOING, THERE IS NO LEGAL BASIS FOR GRANTING ANY RELIEF UNDER CONTRACT NO. N171S-20944A, AND OUR SETTLEMENT DATED OCTOBER 21, 1960, IS SUSTAINED.