B-147462, MAY 29, 1962

B-147462: May 29, 1962

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

INC.: REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 3. INVITATION FOR BIDS NO. 30-127-S-61-15 WAS ISSUED ON OCTOBER 27. BIDS WERE OPENED ON NOVEMBER 16. YOUR COMPANY WAS DECLARED THE SUCCESSFUL BIDDER ON ITEM 21 OF THE INVITATION WHICH WAS DESCRIBED AS FOLLOWS: "RING SET. COST: $756.60" YOUR COMPANY WAS AWARDED A CONTRACT FOR ITEM 21 ON NOVEMBER 18. YOU ADVISED THE CONTRACTING OFFICER THAT THE MATERIAL RECEIVED WAS RUSTY. ALL SETS SCATTERED AND THAT COUNT AND IDENTIFICATION WAS IMPOSSIBLE. YOU STATED THAT YOU WERE REJECTING THE SHIPMENT AND REQUESTED THAT SOMEONE BE DESIGNATED TO INSPECT THE MATERIAL. REVEALED THAT 75 PERCENT OF THE RINGS WERE IN INDIVIDUAL ENVELOPES WITH MANUFACTURER'S PART NUMBER ON EACH ENVELOPE.

B-147462, MAY 29, 1962

TO MR. I. G. SARGISS, PRESIDENT, PAN AMERICAN AUTO PARTS CO., INC.:

REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 3, 1962, REQUESTING REVIEW OF OUR CLAIMS DIVISION SETTLEMENT DATED DECEMBER 20, 1961, WHICH DISALLOWED YOUR CLAIM FOR $924.22, REPRESENTING THE AMOUNT PAID BY YOU FOR 582 RING SETS.

INVITATION FOR BIDS NO. 30-127-S-61-15 WAS ISSUED ON OCTOBER 27, 1960, BY THE SCHENECTADY CONSOLIDATED SURPLUS SALES OFFICE, SCHENECTADY GENERAL DEPOT, U.S. ARMY. BIDS WERE OPENED ON NOVEMBER 16, 1960, AND YOUR COMPANY WAS DECLARED THE SUCCESSFUL BIDDER ON ITEM 21 OF THE INVITATION WHICH WAS DESCRIBED AS FOLLOWS:

"RING SET, PISTON: AIR BRAKE COMPRESSOR, O.020 IN O/S.

AUTOCAR CO. NO. A1395 AND 25UUA0462S, BENDIX WESTINGHOUSE

NO. 221322, DIAMOND T MOTOR CAR CO. NO. BB9211, INTERNATIONAL

HARVESTER NO. 1378104, WARD LAFRANCE NO. 111719006, WHITE MOTOR

CO. NO. 413827, MACK MFG. NO. 344SB13. (EST. TOTAL

WEIGHT 200 LBS.)

"COND: APPARENTLY UNUSED ACQ. COST: $1.30

TOTAL ACQ. COST: $756.60"

YOUR COMPANY WAS AWARDED A CONTRACT FOR ITEM 21 ON NOVEMBER 18, 1960, AND YOU HAD THE MATERIAL REMOVED FROM THE DEPOT ON DECEMBER 27, 1960. BY A LETTER DATED JANUARY 3, 1961, YOU ADVISED THE CONTRACTING OFFICER THAT THE MATERIAL RECEIVED WAS RUSTY, ALL SETS SCATTERED AND THAT COUNT AND IDENTIFICATION WAS IMPOSSIBLE. YOU STATED THAT YOU WERE REJECTING THE SHIPMENT AND REQUESTED THAT SOMEONE BE DESIGNATED TO INSPECT THE MATERIAL. AN INSPECTION PERFORMED BY THE PROPERTY DISPOSAL OFFICER, FT. TILDEN, REVEALED THAT 75 PERCENT OF THE RINGS WERE IN INDIVIDUAL ENVELOPES WITH MANUFACTURER'S PART NUMBER ON EACH ENVELOPE, AND ENVELOPES WERE LOOSE WITHIN THE WOODEN BOX; 20 PERCENT WERE LOOSE AND UNIDENTIFIABLE; 5 PERCENT WERE PACKED 8 RINGS TO A BOX AND CLEARLY IDENTIFIABLE; AND APPROXIMATELY 10 PERCENT OF THE ENTIRE SHIPMENT SHOWED EVIDENCE OF RUST.

THE RECORD DISCLOSES THAT PRIOR TO THE SUBMISSION OF YOUR BID YOU DID NOT INSPECT THE MATERIAL BID UPON. IT IS REPORTED THAT WHEN THE MATERIAL WAS DISPLAYED FOR SALE IT WAS IN SUCH CONDITION THAT IT COULD BE IDENTIFIED AND SEGREGATED IN SUCH A MANNER AS TO MAKE COMPLETE SETS; THAT DURING THE INSPECTION PERIOD PRESCRIBED, PROSPECTIVE BUYERS TORE OPEN MANY ENVELOPES, THEREBY REDUCING IDENTIFICATION POSSIBILITIES, AND AS A RESULT SUBSTANTIALLY CHANGED THE CONDITION OF THE ITEM FROM THE WAY IT WAS ORIGINALLY DISPLAYED; AND THAT THE CONTENTS OF THE BOX WERE NOT DISTURBED BY GOVERNMENT PERSONNEL WHEN MATERIAL WAS OUTLOADED.

IN YOUR LETTER OF JANUARY 23, 1962, YOU CONTEND THAT THE CONTRACT SHOULD BE RESCINDED BECAUSE YOUR COMPANY RECEIVED UNASSEMBLED PISTON RINGS, RATHER THAN WHAT WAS ERRONEOUSLY DESCRIBED IN ITEM 21 AS RING SETS, AND WAS NOT EQUIPPED TO ASSEMBLE THE SEPARATE PARTS INTO SETS.

THE INVITATION FOR BIDS (PAGE 1, INSTRUCTION TO BIDDERS) URGED ALL BIDDERS TO REVIEW THE GENERAL SALE TERMS AND CONDITIONS ON PAGE 3 OF THE INVITATION. CONDITIONS 1 AND 2 OF THE GENERAL SALE TERMS AND CONDITIONS PROVIDE AS FOLLOWS:

"1.INSPECTION. THE BIDDER IS INVITED, URGED, AND CAUTIONED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING A BID. PROPERTY WILL BE AVAILABLE FOR INSPECTION AT THE PLACES AND TIMES SPECIFIED IN THE INVITATION. IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR THE WITHDRAWAL OF A BID AFTER OPENING.

"2. CONDITION AND LOCATION OF PROPERTY. UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THE INVITATION, ALL PROPERTY LISTED THEREIN IS OFFERED FOR SALE "AS IS" AND "WHERE IS.' IF IT IS PROVIDED THEREIN THAT THE GOVERNMENT SHALL LOAD, THEN "WHERE IS" MEANS F.O.B. CONVEYANCE AT THE POINT SPECIFIED IN THE INVITATION. THE DESCRIPTION IS BASED ON THE BEST AVAILABLE INFORMATION. HOWEVER, THE GOVERNMENT MAKES NO WARRANTY, EXPRESS 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. EXCEPT AS PROVIDED IN CONDITIONS NO. 8 AND 10, NO REQUEST FOR ADJUSTMENT IN PRICE OR FOR RESCISSION OF THE SALE WILL BE CONSIDERED. THIS IS NOT A SALE BY SAMPLE.' CONDITION 8 DEALS WITH "ADJUSTMENT FOR VARIATION IN QUANTITY OR WEIGHT" WHEN PROPERTY IS SOLD ON A UNIT PRICE BASIS. CONDITION 10 DEALS WITH "RISK OF LOSS" AFTER THE NOTICE OF AWARD HAS BEEN MAILED. NEITHER CONDITION IS PERTINENT TO THE MATTER BEFORE US.

THE COURTS HAVE DRAWN A DISTINCTION BETWEEN A SALE OF GOVERNMENT SURPLUS PROPERTY AND AN ORDINARY SALE OF SOME VALUABLE COMMODITY BY A COMMERCIAL VENDOR. KRUPP V. FEDERAL HOUSING ADMINISTRATION, 185 F.SUPP. 638. IN DISPOSING OF SURPLUS PROPERTY THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE. AS WAS NOTED BY ONE COURT IN A RECENT CASE, WHEN THE GOVERNMENT SELLS SURPLUS GOODS IT IS TRYING TO DISPOSE OF A VAST MISCELLANY OF USED AND UNUSED PROPERTY IN AN EFFORT, SO FAR AS POSSIBLE, TO MINIMIZE ITS LOSS. SURPLUS SALES ARE PROCESSED ON A MASS QUANTITY BASIS BY GOVERNMENT PERSONNEL WHO SELDOM IF EVER HAVE ANY EXPERTISE IN THE PARTICULAR ITEMS WHICH COME TO THEIR WAREHOUSES AND DEPOTS. BUYERS OF SUCH SURPLUS PROPERTY KNOW PERFECTLY WELL THAT THERE IS ALWAYS THE CHANCE OF BUYING PROPERTY THAT MAY TURN OUT TO BE OF LITTLE VALUE, OR MAY DEVELOP INTO A GREAT BARGAIN WITH A HUGE WINDFALL OF PROFIT. ACCORDINGLY, THE GOVERNMENT VERY PROPERLY PROTECTS ITSELF BY FORMULATING ITS CONTRACTS SO AS TO SHIFT THE RISK FROM ITSELF TO THE BUYER. DADOURIAN EXPORT CORPORATION V. UNITED STATES, 291 F.2D 178, 182.

WHEN THE GOVERNMENT AGENCY DISPOSING OF SURPLUS PROPERTY MAKES IT CLEAR, AS IN THE PRESENT CASE, THAT IT IS MAKING THE SALE ONLY ON THE BASIS THAT IT MAKES NO WARRANTY OR REPRESENTATION AS TO THE PROPERTY, THAT THE PROPERTY IS BEING SOLD ON AN "AS IS" AND "WHERE IS" BASIS, AND THAT THE PURCHASER IS TO TAKE THE PROPERTY AT HIS OWN RISK, WITH DUE OPPORTUNITY FOR INSPECTION BEING AFFORDED HIM, SUCH A CONTRACT IS STRICTLY INTERPRETED IN FAVOR OF THE GOVERNMENT. KRUPP V. FEDERAL HOUSING ADMINISTRATION, SUPRA. WHEN SURPLUS PROPERTY IS SOLD ON THESE TERMS THERE IS NO IMPLIED WARRANTY THAT THE DESCRIPTION GIVEN IS CORRECT AND THE SUCCESSFUL BIDDER CANNOT ESCAPE LIABILITY UNDER A CONTRACT NOR IS HE ENTITLED TO REFUND OF MONEY PAID FOR PROPERTY BECAUSE IT DOES NOT FULLY ANSWER THE DESCRIPTION GIVEN. LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90; MOTTRAM V. UNITED STATES, 271 U.S. 15; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151; AND YANKEE EXPORT AND TRADING CO. V. UNITED STATES, 72 CT.CL. 258. IN VARIOUS COURT DECISIONS INVOLVING SALES OF GOVERNMENT SURPLUS PROPERTY, AS IN THE TRIAD CORPORATION CASE, ABOVE, THE BUYER'S FAILURE TO INSPECT THE PROPERTY OFFERED FOR SALE HAS BEEN REGARDED AS AN ADDITIONAL REASON FOR DENYING RELIEF IF THE PROPERTY DOES NOT MEET HIS EXPECTATIONS. SEE ALSO THE FOLLOWING STATEMENT APPEARING AT PAGE 640 OF THE KRUPP CASE, SUPRA:

"/2) * * * THE PURCHASER WHO RELIES ON INFORMATION FURNISHED HIM BY THE GOVERNMENT UNDER THOSE CONDITIONS (I.E., SALE ON "AS IS" BASIS) 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. FEDERAL CROP INSURANCE CORP. V. MERRILL, 332 U.S. 380, 383, 385 * * * MAGUIRE AND COMPANY V. UNITED STATES, 273 U.S. 67 * * * LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90 * * * SHAPPIRIO V. GOLDBERG, 192 U.S. 232, 241, 242 * * * UNITED STATES V. HATHAWAY, 9 CIR., 242 F.2D 897; UNITED STATES V. WEISHROD, 7 CIR., 202 F.2D 629, 633; UNITED STATES V. SILVERTON, 1 CIR; 200 F.2D 824.

"/3) PLAINTIFFS CONTEND THAT THE RULE OF THESE CASES SHOULD NOT APPLY IN THE CASE OF THE FHA BECAUSE IT IS ACTUALLY ENGAGED IN REAL ESTATE TRANSACTIONS ON A LARGE SCALE AND ITS AGENTS POSSESS AN EXPERT KNOWLEDGE OF PROPERTY OF THE TYPE INVOLVED HERE. IT IS TRUE THAT IN MANY CASES INVOLVING DISPOSAL OF SURPLUS PROPERTY, THE COURTS HAVE RELIED IN PART ON THE FACT THAT THE GOVERNMENT DID NOT POSSESS THE SAME EXPERT KNOWLEDGE OF THE PROPERTY AND THE MARKET INVOLVED AS DID THE BUYER. BUT THIS IS NOT THE FUNDAMENTAL REASON FOR THE RULE OF THE CASES ABOVE CITED. AS POINTED OUT IN FEDERAL CROP INSURANCE CORP. V. MERRILL, SUPRA, THE BASIC REASON IS THAT THE GOVERNMENT, EVEN WHEN IT ENGAGED THROUGH ONE OF ITS AGENCIES IN BUSINESS OF THE TYPE ORDINARILY CONDUCTED BY PRIVATE ENTERPRISE, IS STILL NOT TO BE TREATED AS A PRIVATE LITIGANT, AND IS ENTITLED TO A STRICT CONSTRUCTION IN ITS FAVOR OF CONDITIONS IMPOSED TO PROTECT THE PUBLIC TREASURY.'

THE COURTS HAVE GENERALLY RECOGNIZED THREE GROUNDS FOR RELIEF IN SURPLUS SALES BY THE GOVERNMENT IN THOSE SITUATIONS WHERE IT IS FOUND THAT THE GOODS DELIVERED DO NOT CORRESPOND TO THE DESCRIPTION IN THE INVITATION. THE FIRST GROUND FOR RELIEF IS WHERE THERE IS A SHOWING OF BAD FAITH OR FRAUD ON THE PART OF GOVERNMENT OFFICIALS IN SETTING OUT THE DESCRIPTION OF THE ARTICLES TO BE SOLD. SECONDLY, RELIEF IS GRANTED WHERE IT CAN BE SHOWN THAT THE DISCREPANCY BETWEEN THE DETAILS OF THE INVITATION AS TO THE ARTICLES TO BE SOLD AND THE ARTICLES ACTUALLY TENDERED BY THE GOVERNMENT IS SO GREAT THAT IT AMOUNTS TO WHAT WAS STATED IN STANDARD MAGNESIUM CORPORATION V. UNITED STATES (241 F.2D 677), AS A "RIDICULOUS DISCREPANCY" OR AS A "CASE OF ORDERING APPLES AND GETTING ORANGES.' THE THIRD GROUND FOR RELIEF IS REPRESENTED BY THE DECISION IN UNITED STATES V. BLAKE, 161 F.SUPP. 76, 80, 81, AND WHICH WAS STATED BY THE COURT AS FOLLOWS:

"/4,5) * * * WHERE PROPERTY IS SOLD ON AN "AS IS--- WHERE IS" BASIS, AND THE SELLER URGES AND RECOMMENDS THAT THE PROSPECTIVE PURCHASER INSPECT IT, IT BEING WITHIN THE SOLE DOMINION OF THE SELLER AND AVAILABLE FOR INSPECTION ONLY WITH HIS ACQUIESCENCE, IT IS THE OPINION OF THIS COURT THAT THE SELLER, IN ACCEPTING AN OFFER BASED UPON SUCH INSPECTION, IMPLIEDLY WARRANTS THAT THE PROPERTY SOLD WILL NOT SUBSTANTIALLY AND MATERIALLY DIFFER IN CHARACTER FROM THE PROPERTY INSPECTED EXCEPT WHERE SUCH DIFFERENCE RESULTS FROM QUALITIES INHERENT IN THE PROPERTY AT THE TIME OF INSPECTION, THE SELLER IMPLIEDLY WARRANTS THAT THE PROPERTY DELIVERED UNDER THE LATER FORMED CONTRACT WILL BE "AS IS" OR MORE ACCURATELY "AS WAS" AT THE TIME OF INSPECTION. IF THE PROPERTY DELIVERED IS SUBSTANTIALLY ALTERED FROM ITS CHARACTER AT THE TIME OF INSPECTION, THE PURCHASER, BECAUSE OF THE BREACH OF WARRANTY, IS ENTITLED TO AN ADJUSTMENT, OR, IN THE CASE OF GROSS ALTERATIONS, RESCISSION.'

WITH REGARD TO THE FIRST GROUND ABOVE STATED THE RECORD BEFORE US DISCLOSES NO EVIDENCE OF BAD FAITH ON THE PART OF THE GOVERNMENT OFFICIALS DRAWING THE INVITATION. NOR IS BAD FAITH ALLEGED. ON THE CONTRARY, AS STATED PREVIOUSLY, THE MIXED CONDITION OF THE PISTON RINGS AT THE TIME OF DELIVERY TO YOU WAS THE RESULT OF ACTION BY PROSPECTIVE BIDDERS IN RUMMAGING THROUGH THE RINGS WHEN ON DISPLAY FOR INSPECTION.

AS TO THE SECOND GROUND ABOVE MENTIONED, IT IS TRUE THAT THE INVITATION DESCRIBED ITEM 21 IN TERMS OF PISTON RING "SETS" WHILE THE RINGS DELIVERED TO YOU WERE SUBSTANTIALLY MIXED AND SCATTERED. HOWEVER, WE DO NOT THINK THAT THE DISCREPANCY BETWEEN THE INVITATION DESCRIPTION AND THE DELIVERED PISTON RINGS WAS SUCH THAT IT COULD BE LABELED "RIDICULOUS" OR AMOUNTED TO A "CASE OF ORDERING APPLES AND GETTING ORANGES.' SEE THE DADOURIAN EXPORT CORPORATION CASE, SUPRA, WHERE THE COURT REFUSED RELIEF TO A PURCHASER WHO HAD BID ON NETS ADVERTISED AS CARGO NETS MADE OF MANILA ROPE, BUT WHICH WERE, IN FACT, SAVE ALL NETS ONLY A PORTION OF WHICH WERE MADE OF MANILA ROPE. THE COURT NOTED:

"* * * NOR DO WE THINK THE FACT THAT NOT ALL OF THE NETS WERE MANILA GOES TO THE IDENTITY OR THE EXISTENCE OF THE SUBJECT MATTER OF THE CONTRACT. WE BELIEVE THE SUBJECT MATTER OF THE CONTRACT WAS NETS OR NETS USED IN SHIPPING. THE WORD MANILA WAS MERELY DESCRIPTIVE. * * *"

LIKEWISE, IT CANNOT BE SAID THAT THE WORD "SETS" GOES TO THE IDENTITY OR THE EXISTENCE OF THE SUBJECT MATTER OF THE CONTRACT. THE SUBJECT MATTER OF THE CONTRACT IS PISTON RINGS AND THE WORD ,SETS" WAS MERELY DESCRIPTIVE. FURTHERMORE, IT SHOULD BE NOTED THAT THE DADOURIAN EXPORT CORPORATION CASE PRESENTS A GREATER DEGREE OF DISPARITY THAN THAT WHICH IS PRESENT IN THE CASE BEFORE US. THERE THE NETS TENDERED FOR DELIVERY DIFFERED FROM THE INVITATION DESCRIPTION NOT ONLY WITH RESPECT TO THE MATERIAL OF WHICH SOME OF THE NETS WERE MADE BUT, ALSO, WITH RESPECT TO THEIR FUNCTIONAL USE.

TURNING NOW TO THE DECISION IN UNITED STATES V. BLAKE, SUPRA, THE RULE SET FORTH THEREIN IS EXPRESSLY BASED ON INSPECTION, AND RELIANCE ON SUCH INSPECTION, BY THE PURCHASER. THE FACTS OF THE BLAKE CASE MAY BE STATED BRIEFLY AS FOLLOWS: THE GOVERNMENT ADVERTISED FOR SALE A QUANTITY OF ROPE OF ASSORTED SIZES AND LENGTHS PILED ON A LARGE STEEL BARGE WITH A FLAT DECK HAVING NEITHER ROOF NOR SIDES; THE DEFENDANT PURCHASER, PRIOR TO THE SUBMISSION OF HIS BID, MADE AN INSPECTION OF THE ROPE AND FOUND IT IN A RELATIVELY DRY CONDITION; APPROXIMATELY ONE MONTH LATER WHEN DELIVERIES OF THE ROPE BEGAN THE DEFENDANT AGAIN INSPECTED THE ROPE AND FOUND IT TO BE SATURATED WITH WATER WHEREUPON HE DECLINED TO TAKE DELIVERY OF THE BALANCE OF THE ROPE; THE GOVERNMENT SUBSEQUENTLY SOLD THE ROPE AT A PRICE LOWER THAN THAT SUBMITTED BY THE DEFENDANT AND SUED TO RECOVER THE DIFFERENCE. THE COURT DISMISSED THE ACTION HOLDING THAT THE GOVERNMENT BREACHED THE CONTRACT BY REFUSING TO MAKE AN ADJUSTMENT UNDER THE CONTRACT. IN ANSWER TO THE GOVERNMENT'S CONTENTION THAT ARTICLE 2 OF THE GENERAL SALES TERMS AND CONDITIONS ("AS IS" AND "WHERE IS" CLAUSE) OF THE CONTRACT NEGATIVED THE IMPLIED WARRANTY (PREVIOUSLY QUOTED ABOVE) THE COURT REASONED AS FOLLOWS:

"/6) * * * THE COURT BELIEVES THIS CONTENTION TO BE MISCONCEIVED. ARTICLE 2 RENDERS IMMATERIAL ONLY THE FOLLOWING: THE FAILURE OF THE ROPE TO CORRESPOND WITH (1) A STANDARD AS ESTABLISHED BY THE PLAINTIFF'S EXPRESS OR IMPLIED REPRESENTATIONS; (2) A STANDARD ESTABLISHED BY SAMPLE; (3) A STANDARD CONCEIVED AND EXPECTED BY THE PURCHASER. THE DEFENDANT'S CLAIM IS OUTSIDE THESE CATEGORIES; HE DOES NOT URGE THE ROPE'S FAILURE TO COMPLY WITH STANDARDS ESTABLISHED BY PLAINTIFF'S EXPRESS OR IMPLIED REPRESENTATIONS; NOR ITS FAILURE TO CORRESPOND WITH A STANDARD ESTABLISHED BY SAMPLE (FOR HE EXAMINED, NOT A SAMPLE, BUT SUBSTANTIALLY THE ENTIRE QUANTITY OF ROPE); NOR ITS FAILURE TO MEASURE UP TO QUALITIES WHICH HE CONCEIVED IT TO HAVE. RATHER THAN THE ROPE'S FAILURE TO HAVE THE QUALITIES REPRESENTED BY THE FOREGOING STANDARDS, THE CRUX OF THE DEFENDANT'S COMPLAINT IS THAT THE ROPE FAILED TO HAVE THE SAME QUALITIES WHICH IT ACTUALLY POSSESSED AT THE TIME OF INSPECTION; IT WAS NO LONGER THE THING BARGAINED FOR. THAT THE ALTERATION MAY POSSIBLY HAVE CAUSED THE PROPERTY TO FAIL TO COME UP TO AN EXPECTED STANDARD IS IMMATERIAL. SUCH A FAILURE IS COLLATERAL; IT MAY EXIST WHETHER OR NOT THERE HAS BEEN AN ACTUAL CHANGE IN THE QUALITIES OF THE PROPERTY. THAT SUCH A FAILURE AND AN ACTUAL ALTERATION CO-EXIST DOES NOT MEAN THAT THE FORMER SO EMBRACES THE LATTER AS TO DESTROY ITS SEPARATE EXISTENCE AND RESULTING BREACH OF WARRANTY. THIS BEING TRUE, IT IS APPARENT THAT THE WARRANTY THAT THE PROPERTY WOULD BE SUBSTANTIALLY "AS WAS" AT THE TIME OF INSPECTION WAS IN NO WAY NEGATIVED BY THE NTRACT.'

IT IS CLEAR FROM THE COURT'S LANGUAGE THAT THE PURCHASER WAS ENTITLED TO RELIEF ON THE BASIS THAT THE PROPERTY DELIVERED WAS NOT THE PROPERTY BARGAINED FOR AS ESTABLISHED BY THE PURCHASER'S INSPECTION. THE PURCHASER BY INSPECTING DID EVERYTHING THAT HE COULD DO TO PROTECT HIMSELF AND WAS NOT RELYING ON "A STANDARD CONCEIVED AND EXPECTED BY THE PURCHASER" BUT ON THE CONDITION OF THE PROPERTY AS REVEALED BY HIS INSPECTION. THIS BEING THE CASE, THE DISCLAIMER OF WARRANTIES CLAUSE HAD NO APPLICATION. IN THE PRESENT CASE, SINCE YOU DID NOT INSPECT THE PISTON RINGS AS URGED BY THE INVITATION FOR BIDS PRIOR TO THE SUBMISSION OF YOUR BID, IT IS APPARENT THAT YOU WERE RELYING EITHER ON THE DESCRIPTION CONTAINED IN THE INVITATION (OR AS THE COURT STATES IT: A STANDARD AS ESTABLISHED BY THE GOVERNMENT'S EXPRESS OR IMPLIED REPRESENTATIONS), OR ON A STANDARD CONCEIVED AND EXPECTED BY YOU. THIS BEING THE CASE, YOUR FAILURE TO INSPECT WAS AT YOUR OWN PERIL. PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463.

WE ARE NOT UNMINDFUL THAT ON THE FACTS PRESENT IN THE INSTANT CASE, IT COULD BE ARGUED THAT INSPECTION OF THE PISTON RINGS WOULD HAVE SERVED NO USEFUL PURPOSE BECAUSE THE RINGS WERE SCATTERED AND MIXED DURING THE INSPECTION PERIOD. HOWEVER, SUCH AN ARGUMENT WOULD DEPEND UPON AN ASSUMPTION THAT YOU WOULD HAVE INSPECTED THE RINGS AT AN EARLY POINT OF THE INSPECTION PERIOD BEFORE OTHER BIDDERS HAD THE OPPORTUNITY TO MIX OR SCATTER THEM. THERE IS NOTHING IN THE RECORD BEFORE US WHICH WOULD INDICATE THAT SUCH AN ASSUMPTION IS ANY MORE REASONABLE THAN AN ASSUMPTION THAT YOU WOULD HAVE INSPECTED AT A LATER TIME DURING THE INSPECTION PERIOD IN WHICH CASE, HAD THAT BEEN DONE, YOU WOULD HAVE DISCOVERED THE CONDITION OF THE RINGS AND WOULD HAVE EITHER NOT BID OR WOULD HAVE BID A MUCH LOWER PRICE. IT SHOULD ALSO BE NOTED THAT EVEN HAD YOU INSPECTED AT AN EARLY DATE IN THE INSPECTION PERIOD, THE RULE OF THE BLAKE CASE WOULD HAVE BEEN FOR APPLICATION AND YOU WOULD HAVE BEEN ENTITLED TO RELY ON THE CONDITION OF THE RINGS "AS WAS" AT THE TIME OF INSPECTION. IN ANY CASE, HOWEVER, WE THINK THIS ASPECT OF THE CASE IS HIGHLY CONJECTURAL AND CANNOT BE THE BASIS FOR A DETERMINATION OF SUBSTANTIVE RIGHTS. TO HOLD OTHERWISE WOULD BE TO RELIEVE A BIDDER OF HIS OMISSION IN FAILING TO INSPECT WHILE, AT THE SAME TIME, IMPOSING A WARRANTOR'S LIABILITY ON THE GOVERNMENT--- A LIABILITY WHICH, AS IT HAD EVERY RIGHT TO DO, THE GOVERNMENT HAD EXPRESSLY DISCLAIMED.

ACCORDINGLY, WE FIND NO LEGAL BASIS UPON WHICH YOUR CLAIM MAY BE ALLOWED AND THE CLAIMS DIVISION SETTLEMENT DATED DECEMBER 20, 1961, MUST BE, AND IS, SUSTAINED.