B-146379, AUG. 4, 1961

B-146379: Aug 4, 1961

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TO GREEN SPRING COMPANY: REFERENCE IS MADE TO A LETTER DATED JUNE 26. BIDS WERE SOLICITED FOR THE PURCHASE FROM THE GOVERNMENT OF A NUMBER OF ITEMS OF "OBSOLETE PROPERTY CONSISTING OF SPARE PARTS FOR COMMERCIAL AND NON- COMMERCIAL VEHICLES.'. WAS ACCEPTED AND THAT ITEM WITH OTHERS. WAS AWARDED TO YOU ON CONTRACT NO. THE CONTENTIONS URGED BY YOU AS THE BASIS FOR THE CLAIM HAVE RECEIVED CAREFUL CONSIDERATION AND. NO LEGAL AUTHORITY WAS FOUND FOR THE ALLOWANCE OF YOUR CLAIM. IN REQUESTING REVIEW OF OUR ACTION IN DISALLOWING OUR CLAIM IT IS AGAIN CONTENDED THAT THE MATERIAL DELIVERED TO YOU UNDER ITEM NO. 17 OF THE CONTRACT DIFFERED FROM THE BID INVITATION DESCRIPTION THEREOF. AS WAS STATED IN THE SETTLEMENT CERTIFICATE.

B-146379, AUG. 4, 1961

TO GREEN SPRING COMPANY:

REFERENCE IS MADE TO A LETTER DATED JUNE 26, 1961, FROM WILLIAM MCKEON, ATTORNEY AND COUNSELOR AT LAW, IN THE NATURE OF A REQUEST FOR REVIEW OF OUR CLAIMS DIVISION SETTLEMENT DATED NOVEMBER 16, 1960, WHICH DISALLOWED YOUR CLAIM FOR $17,334.03 IN CONNECTION WITH SALES CONTRACT NO. DA/S) 30- 121-ORD-216 DATED FEBRUARY 8, 1960, AWARDED TO YOU BY THE DEPARTMENT OF THE ARMY, SENECA ORDNANCE DEPOT, ROMULUS, NEW YORK.

BY SALES INVITATION NO. 30-121-S-60-26 DATED JANUARY 14, 1960, BIDS WERE SOLICITED FOR THE PURCHASE FROM THE GOVERNMENT OF A NUMBER OF ITEMS OF "OBSOLETE PROPERTY CONSISTING OF SPARE PARTS FOR COMMERCIAL AND NON- COMMERCIAL VEHICLES.' IN RESPONSE TO THE INVITATION YOU SUBMITTED A BID ON SEVERAL OF THE ADVERTISED ITEMS, INCLUDING A UNIT PRICE QUOTATION OF $12.57 (PER TELEGRAPHIC MODIFICATION) ON ITEM NO. 17, HERE INVOLVED, CONSISTING OF 1,379 SPRINGS, DESCRIBED IN THE INVITATION AS FOLLOWS:

"SPRING, REAR, W/BEARING ASS-Y., NO. IHC-141644H, F/5 TON TRUCKS (G671) UNUSED, TOTAL ACQN. COST $97,633. EST. TOTAL WT. 290,080 LBS.'

YOUR BID ON ITEM NO. 17, BEING THE HIGHEST RECEIVED, WAS ACCEPTED AND THAT ITEM WITH OTHERS, WAS AWARDED TO YOU ON CONTRACT NO. DA/S) 30-121-ORD -216.

THE CONTENTIONS URGED BY YOU AS THE BASIS FOR THE CLAIM HAVE RECEIVED CAREFUL CONSIDERATION AND, FOR THE REASONS SET FORTH IN THE CERTIFICATE OF SETTLEMENT, NO LEGAL AUTHORITY WAS FOUND FOR THE ALLOWANCE OF YOUR CLAIM. IN REQUESTING REVIEW OF OUR ACTION IN DISALLOWING OUR CLAIM IT IS AGAIN CONTENDED THAT THE MATERIAL DELIVERED TO YOU UNDER ITEM NO. 17 OF THE CONTRACT DIFFERED FROM THE BID INVITATION DESCRIPTION THEREOF.

AS WAS STATED IN THE SETTLEMENT CERTIFICATE, THE PRINCIPAL ISSUE TO BE CONSIDERED IN SUCH A CLAIM IS WHETHER THE GOVERNMENT DID OR DID NOT WARRANT THE PROPERTY SOLD. IN THIS REGARD YOUR ATTENTION IS AGAIN DIRECTED TO PARAGRAPH 2, CONDITION OF PROPERTY, OF THE GENERAL SALE TERMS AND CONDITIONS OF THE BID INVITATION (PAGE 2), 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'S DESCRIPTION OF THE PROPERTY IS BASED ON THE BEST AVAILABLE INFORMATION, BUT 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; THIS IS NOT A SALE BY SAMPLE.

THE COURTS MANY TIMES HAVE CONSIDERED SUCH CONTRACT STIPULATIONS IN CASES INVOLVING THE SALE OF GOVERNMENT-OWNED SURPLUS AND SCRAP GOODS AND HAVE HELD CONSISTENTLY THAT SUCH LANGUAGE CONSTITUTES AN EXPRESS DISCLAIMER OF WARRANTY. SEE LIPSHITZ AND COHEN V. UNITED STATES 269 U.S. 90, 92; M. SAMUEL AND SONS, V. UNITED STATES, 61 CT.CL. 373, 381; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151; S. BRODY V. UNITED STATES, 64 CT.CL. 538; I. SHAPIRO AND CO. V. UNITED STATES, 66 CT.CL. 424, 428; AND SILBERSTEIN AND SON V. UNITED STATES, 69 CT.CL. 412. WHILE ORDINARILY IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION THERE IS AN IMPLIED WARRANTY THAT THE PROPERTY WILL CORRESPOND WITH THE DESCRIPTION--- AND THIS APPEARS TO BE THE BASIS OF YOUR CLAIM--- NO SUCH WARRANTY, HOWEVER, MAY BE IMPLIED WHERE, AS HERE, THE SALES CONTRACT CONTAINS AN EXPRESS DISCLAIMER. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525; UNITED STATES V. KELLY, 112 F.SUPP. 831; AND MAGUIRE AND CO. V. UNITED STATES, 273 U.S. 67. THESE CASES AND OTHERS CONCLUDE THAT UNDER SUCH PROVISIONS, IN THE ABSENCE OF BAD FAITH OR FRAUD, BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT ANY WARRANTIES WHATEVER.

THE PROPERTY DISPOSAL OFFICER IN HIS REPORT CONCERNING THE TRANSACTION STATES THAT THE INVITATION DESCRIPTION OF THE SPRINGS WAS TAKEN FROM THE DOCUMENTS THAT RELEASED THE PROPERTY TO THE PROPERTY DISPOSAL BRANCH FOR SALE AND IS SUBSTANTIATED BY STOCK CONTROL RECORDS AND BY A VISUAL INSPECTION MADE ON A PORTION OF THE MATERIAL OFFERED AND SOLD. THEREFORE, IT MUST BE CONCLUDED THAT THE DESCRIPTION OF THE MATERIAL UNDER ITEM NO. 17 OF THE INVITATION WAS BASED ON THE BEST AVAILABLE INFORMATION, AND WAS NEITHER ERRONEOUS NOR MISLEADING. FURTHERMORE, THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE GOVERNMENT AGENTS ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE SALES TRANSACTION. UNDER THE CONDITIONS OF THE SALE THE GOVERNMENT WAS ONLY OBLIGED TO ACT IN GOOD FAITH, AND THIS IT DID. SEE LIPSHITZ AND COHEN V. UNITED STATES AND LUMBRZO V. WOODRUFF, SUPRA; ALSO, UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, AFFIRMED 253 F.2D 956.

REGARDING THE STATEMENT OF YOUR ATTORNEY 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 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, 151 F.SUPP. 414, CONCERNING A SALE OF SURPLUS PROPERTY, 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 CASE OF PAXTON MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463, WHERE IT WAS STATED 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, WHEREIN THE COURT, IN A SIMILAR CASE, HELD 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.

WE REALIZE THAT THE RESULT IN THIS TYPE OF CASE IS SOMETIMES HARSH, BUT IN VIEW OF THE SETTLED LEGAL PRINCIPLES APPLICABLE, AS OUTLINED ABOVE, WE HAVE NO ALTERNATIVE BUT TO CONCLUDE THAT NO LEGAL BASIS EXISTS FOR GRANTING ANY RELIEF AS TO THE MATERIAL IN ITEM NO. 17 ON SALES CONTRACT NO. DA (S) 30-121-ORD-216. ACCORDINGLY, THE SETTLEMENT OF NOVEMBER 16, 1960, IS SUSTAINED.