B-147011, SEP. 20, 1961

B-147011, SEP. 20, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER (FR-20 (RH:MW) 7240 (A) ( DATED AUGUST 18, 1961, WITH ENCLOSURES, FROM THE ASSISTANT DIRECTOR, ACCOUNTS RECEIVABLE AND CLAIMS DIVISION, U.S. NAVY REGIONAL ACCOUNTS OFFICE, REQUESTING A DECISION ON A CLAIM FOR RELIEF MADE BY ATLAS MACHINE AND IRON WORKS, INC., ARLINGTON, VIRGINIA, BECAUSE OF ALLEGED MISREPRESENTATION IN THE ADVERTISED DESCRIPTION OF THE MATERIAL UNDER ITEM NO. 9 OF BID INVITATION NO. B-34-61-63066, WHICH ITEM WAS SOLD TO IT ON CONTRACT NO. N63066S-755.

ON FEBRUARY 16, 1961, CONSOLIDATED SURPLUS SALES OFFICE, NEWPORT, RHODE ISLAND, BY THE CITED INVITATION SOLICITED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF 70 ITEMS OF MACHINE TOOLS AND EQUIPMENT SURPLUS TO ITS NEEDS. AMONG THE ITEMS LISTED FOR SALE WAS ITEM NO. 9, HERE INVOLVED, WHICH WAS DESCRIBED IN THE INVITATION AS FOLLOWS:

"LATHE, AMERICAN TOOL WORKS, WA 6387, ENGINE, SUPER PRODUCTIVE, MODEL HIGH DUTY. CAPACITY: SWING 30 INCHES, CC 84 INCHES, SWING O/BED 35 INCHES, SWING O/CROSS SLIDE 20 INCHES, SPINDLE ID 3 INCHES, SPINDLE SPEEDS 9-400. MOTORS: GE, 20 HP, 220/440 V, AC, 3 PHASE, 60 CYCLE, 1760 RPM, TYPE K, FRAME 364. GE, 3/4 HP, 220/440 V, AC 3 PHASE, 60 CYCLE, 3450 RPM, TYPE K, FRAME 678. EQUIPMENT: 1-15 INCHES BUILT 1942, SERIAL NO. 68344, FLOOR SPACE 17 FEET L BY W BY 7 FEET H, CONDITION USED. ESTIMATED WEIGHT - 23,800 LBS. ESTIMATED ACQUISITION COST: $11,920.00. CONDITION: USED, VERY GOOD. QUANTITY: 1 EACH"

IN RESPONSE TO THE INVITATION A BID OF $4,479 ON ITEM NO. 9, TOGETHER WITH A BID DEPOSIT CHECK OF $896, WAS RECEIVED FROM ATLAS MACHINE AND IRON WORKS, INC. ELEVEN OTHER BIDS, RANGING FROM $3,730 TO $212.12, WERE ALSO RECEIVED ON THAT ITEM. THE ATLAS BID, BEING THE HIGHEST, WAS ACCEPTED ON MARCH 14, 1961, RESULTING IN THE AWARD TO THE CORPORATION OF THE LATHE IN ITEM NO. 9 AT $4,479 ON CONTRACT NO. N63066S-755.

THE RECORD SHOWS THAT SUBSEQUENT TO THE AWARD OF THE CONTRACT THE BID DEPOSIT CHECK OF $896 WAS RETURNED INADVERTENTLY TO THE PURCHASER AND ALTHOUGH SUBSEQUENTLY REQUESTED TO RETURN THE DEPOSIT TO THE CONTRACTING OFFICER, ATLAS MACHINE AND IRON WORKS, INC., REFUSED TO DO SO. THE MATERIAL SOLD TO IT UNDER ITEM NO. 9 IS REPORTED TO BE STILL IN THE POSSESSION OF THE GOVERNMENT.

THE RECORD FURTHER SHOWS THAT THE PURCHASER IN LETTER OF MARCH 20, 1961, TO THE CONTRACTING OFFICER, ALLEGED THAT INSPECTION OF THE MATERIAL SUBSEQUENT TO AWARD DISCLOSED THAT THE LATHE TENDERED IT FOR DELIVERY UNDER THE SALE CONTRACT WAS NOT AS ADVERTISED, THAT IT WAS DEFECTIVE AND WAS IN ONLY FAIR CONDITION. THE CONTRACTOR STATED THAT ITS BID WAS SUBMITTED ON THE BASIS OF THE PHOTOGRAPHS ACCOMPANYING THE BID INVITATION AND ON THE STATEMENT AS TO THE CONDITION "VERY GOOD" APPEARING IN THE DESCRIPTION OF THE ITEM IN THE INVITATION, AND NOT AS THE RESULT OF AN INSPECTION. THE PURCHASER STATED ALSO THAT THE GENERAL APPEARANCE OF THE MACHINE IS FAR FROM WHAT THE PHOTOGRAPHS INFERRED; THAT EITHER THE PHOTOGRAPHS SUBMITTED WERE TAKEN AT AN EARLIER TIME OR THEY HAD BEEN TOUCHED UP; AND THAT AN HONEST APPRAISAL OF THIS MACHINE SHOULD HAVE BEEN STATED AS "FAIR CONDITION, REPAIRS REQUIRED.' THE PURCHASER LISTED TEN DEFECTS IN THE LATHE TENDERED IT AND STATED THAT IT WOULD BE WILLING TO ACCEPT THE MACHINE IF ALL THE DEFECTS WERE CORRECTED.

THE SALES CONTRACTING OFFICER IN LETTER DATED MARCH 31, 1961, ADVISED ATLAS MACHINE AND IRON WORKS, INC., THAT THE LATHE TENDERED IT MET THE INVITATION DESCRIPTION AS TO CONDITION, FORM AND SHAPE; THAT THE AWARD OF ITEM NO. 9 ON CONTRACT NO. N63066S-755, THEREFORE, COULD NOT BE CANCELED; AND THAT THE FULL PURCHASE PRICE OF THE MACHINE SHOULD BE PAID IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE CONTRACT OR ELSE THE CORPORATION WOULD BE HELD IN DEFAULT. THE CORPORATION WAS ADVISED BY THE CONTRACTING OFFICER IN LETTER DATED MAY 5, 1961, THAT ON THE BASIS OF A REPORT FROM THE ORDNANCE CORPS, WATERTOWN ARSENAL, THE HOLDING ACTIVITY OF THE MACHINE INVOLVED, THERE WAS NO SUBSTANCE TO ITS ALLEGATION OF DEFECTS IN THE LATHE, AND EACH DEFECT AS ALLEGED BY IT WAS CATEGORICALLY DENIED.

UNDER THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT ALL PROSPECTIVE BIDDERS WERE PUT ON NOTICE AND URGED TO INSPECT THE PROPERTY PRIOR TO SUBMITTING A BID AS THE PROPERTY WAS BEING SOLD ,AS IS" AND "WHERE IS," WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, AS TO ITS CONDITION, INCLUDING DESCRIPTION, KIND, CHARACTER, QUALITY, OR FITNESS FOR ANY USE OR PURPOSE.

THE RECORD INDICATES THAT THERE WAS NO ERROR IN THE DESCRIPTION OF THE PROPERTY IN ITEM NO. 9 OF INVITATION NO. B-34-61-63066, NOR DOES THE RECORD SUBSTANTIATE CLAIMANT'S ALLEGATION OF MISREPRESENTATION BY THE GOVERNMENT OF THE PROPERTY SINCE THE PROPERTY TENDERED TO THE PURCHASER IS THE IDENTICAL PROPERTY AS ADVERTISED IN THE INVITATION. NEITHER IS THERE ANYTHING IN THE RECORD TO WARRANT THE CONCLUSION THAT THE CONTRACTING OFFICER OR ANY OTHER GOVERNMENT PERSONNEL ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE SALE TRANSACTION. THE ACCEPTANCE OF THE BID OF ATLAS MACHINE AND IRON WORKS, INC., IN THESE CIRCUMSTANCES, CONSUMMATED A VALID AND BINDING CONTRACT, WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO.

MOREOVER, ATLAS MADE NO INSPECTION OF THE MACHINE INVOLVED PRIOR TO THE SUBMISSION OF ITS BID AS IT WAS URGED AND CAUTIONED TO DO. HAD IT DONE SO IT WOULD HAVE BEEN AWARE OF THE CONDITION OF THE PROPERTY OF WHICH IT NOW COMPLAINS. THE LAW IS CLEAR THAT WHERE SURPLUS MATERIALS ARE OFFERED FOR SALE BY THE GOVERNMENT ON AN "AS IS" AND "WHERE IS" BASIS, WITHOUT A WARRANTY OR GUARANTY OF ANY KIND, AS IN THE INSTANT SALE, A BIDDER WHO FAILS TO TAKE ADVANTAGE OF AN OPPORTUNITY TO INSPECT CANNOT RECOVER ON THE GROUNDS THAT THE MATERIALS ARE OF AN INFERIOR QUALITY OR THAT THEY ARE SOMETHING OTHER THAN WHAT HE THOUGHT HE WAS BUYING. SEE TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151; PAXTON MITCHELL COMPANY V. THE UNITED STATES, 172 F.SUPP. 463; KRUPP V. FEDERAL HOUSING ADMINISTRATION, 185 ID. 638; AND DADOURIAN EXPORT CORPORATION V. UNITED STATES, 291 F.2D 178 (1961).

IN VIEW OF THE FOREGOING, THERE IS NO LEGAL BASIS FOR RELIEVING ATLAS MACHINE AND IRON WORKS, INC., FROM ITS OBLIGATIONS UNDER CONTRACT NO. N63066S-755.