B-149169, JUN. 27, 1962

B-149169: Jun 27, 1962

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PAUL DAILY: REFERENCE IS MADE TO YOUR LETTER OF JUNE 1. AMONG THE ACCESSORIES WAS THE FOLLOWING: "1. PROSPECTIVE BIDDERS WERE ADVISED UNDER ITEM 17 THAT THE QUANTITIES LISTED THEREIN WERE APPROXIMATE. YOUR BID AS TO ITEM 17 WAS ACCEPTED ON JANUARY 22. PROVIDED THAT THE ITEM IN QUESTION WAS OFFERED "AS IS" AND "WHERE IS" AND THAT THE DESCRIPTION WAS BASED ON THE BEST AVAILABLE INFORMATION. BIDDERS WERE WARNED UNDER PARAGRAPH 8 THAT NO ADJUSTMENT FOR VARIATION IN QUANTITY OR WEIGHT WOULD BE MADE WHERE PROPERTY IS SOLD ON A "PRICE FOR THE LOT" BASIS. "MATERIAL WAS PACKED IN TWO CARTONS BOTH MARKED 36044P005. 4 EACH WERE 36044P005. 650 EACH WERE 531491P005. "36044P005 IS A CHROME RING. 531491P005 IS A PLAIN CAST IRON RING.

B-149169, JUN. 27, 1962

TO MR. PAUL DAILY:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 1, 1962, REQUESTING REVIEW OF SETTLEMENT DATED MAY 24, 1962, WHICH DISALLOWED YOUR CLAIM IN THE AMOUNT OF $127.33 FOR PARTIAL REFUND OF A AMOUNT PAID BY YOU FOR SURPLUS PROPERTY PURCHASED FROM THE DEPARTMENT OF THE AIR FORCE, KELLY AIR FORCE BASE, TEXAS, UNDER CONTRACT NO. (41-608) S-62-1244.

IT APPEARS THAT IN RESPONSE TO INVITATION NO. 41-608-S-62-35 ISSUED BY THE CONSOLIDATED SURPLUS SALES OFFICE, KELLY AIR FORCE BASE, TEXAS, YOU SUBMITTED A BID OFFERING TO PURCHASE ONE LOT OF ENGINE ACCESSORIES DESCRIBED UNDER ITEM 17 FOR THE LUMP-SUM PRICE OF $403.67. AMONG THE ACCESSORIES WAS THE FOLLOWING: "1,364 EA RING, PISTON, MFR CONTINENTAL MOTORS CORP, P/N 44P005.' PROSPECTIVE BIDDERS WERE ADVISED UNDER ITEM 17 THAT THE QUANTITIES LISTED THEREIN WERE APPROXIMATE. YOUR BID AS TO ITEM 17 WAS ACCEPTED ON JANUARY 22, 1962.

PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS, MADE A PART OF THE CONTRACT, PROVIDED THAT THE ITEM IN QUESTION WAS OFFERED "AS IS" AND "WHERE IS" AND THAT THE DESCRIPTION WAS BASED ON THE BEST AVAILABLE INFORMATION, BUT THAT THE GOVERNMENT MADE NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE QUANTITY, DESCRIPTION, ET CETERA. ALSO, BIDDERS WERE WARNED UNDER PARAGRAPH 8 THAT NO ADJUSTMENT FOR VARIATION IN QUANTITY OR WEIGHT WOULD BE MADE WHERE PROPERTY IS SOLD ON A "PRICE FOR THE LOT" BASIS.

BY LETTER DATED JANUARY 31, 1962, YOU ADVISED THE CONTRACTING OFFICER AS FOLLOWS:

"ITEM 17 LISTS 1,364 EA RING, PISTON, MFR CONTINENTAL MOTORS CORP, P/N 36044P005.

"MATERIAL WAS PACKED IN TWO CARTONS BOTH MARKED 36044P005. ONE CARTON CONTAINED 710 EACH 36044P005. THE SECOND CARTON CONTAINED 654 RINGS; 4 EACH WERE 36044P005; 650 EACH WERE 531491P005.

"36044P005 IS A CHROME RING; 531491P005 IS A PLAIN CAST IRON RING. COMMERCIALLY THE 36044P005 IS AVAILABLE AT .81 CENTS; 531491P005 IS AVAILABLE AT .27 CENTS.

"BID PRICE WAS .296 EACH BASED ON 1,364 OF THE 36044P005.

"PROPER VALUATION FOR MERCHANDISE RECEIVED WOULD BE .296 FOR 714 EACH 36044P005, A TOTAL OF $211.34 AND .10 CENTS EACH FOR THE 650 EACH 531491P005, A TOTAL OF 65.00

$276.34

"THE CONTRACT PRICE WAS $403.67. IN VIEW OF THE MISIDENTIFICATION AND INCORRECT CARTON MARKING, I HEREWITH REQUEST A REFUND ALLOWANCE OF $127.33 THE DIFFERENCE BETWEEN THE CONTRACT PRICE AND THE FAIR VALUE OF THE MERCHANDISE DELIVERED.

"THE AMOUNT OF THE NEXT HIGH BID ON THIS ITEM WAS $58 PLUS. "* ITEM 17 LISTED SEVERAL OTHER UNITS IN SMALL QUANTITIES IN WHICH I HAD NO INTEREST. MY PRICE BID WAS BASED ON THE 1364 EACH PISTON RINGS PART NUMBER LISTED IN SALES CATALOG.'

YOUR CLAIM WAS TRANSMITTED TO THIS OFFICE BY THE DEPARTMENT OF THE AIR FORCE FOR DIRECT SETTLEMENT AND WAS DISALLOWED BY THE SETTLEMENT OF MAY 24, 1962, FOR THE REASONS SET OUT THEREIN.

IN YOUR LETTER REQUESTING REVIEW YOU STATE THAT THE BOX CONTAINING THE CAST IRON RINGS WAS IN A LOWER BIN AND COULD NOT BE REMOVED FOR INSPECTION BECAUSE IT WAS SURROUNDED BY MATERIAL THAT COULD NOT BE MOVED; THAT INSPECTION OF THE OTHER BOX OF RINGS WAS NEITHER CASUAL NOR PERFUNCTORY; THAT THE BOX THAT COULD BE EXAMINED WAS THOROUGHLY CHECKED BOTH AS TO CORRECTNESS OF PART NUMBER, CONDITION OF MATERIAL, AND COUNT; AND THAT THE BOX THAT COULD NOT BE EXAMINED, WHICH CONTAINED THE CAST IRON RINGS, WAS MARKED IDENTICALLY AS THE ONE EXAMINED AND THAT IT WAS REASONABLE TO EXPECT THAT IT, TOO, WOULD BE CORRECT AS TO COUNT AND CHARACTER. YOU CONTEND THAT IN ALL EQUITY AND JUSTICE YOUR CLAIM SHOULD BE ALLOWED.

IT MAY BE STATED THAT THIS OFFICE IS WITHOUT AUTHORITY TO DETERMINE CLAIMS BY OR AGAINST THE UNITED STATES SOLELY ON THE BASIS OF EQUITABLE OR MORAL CONSIDERATION. ITS JURISDICTION IS RESTRICTED TO THE CONSIDERATION AND DETERMINATION OF SUCH MATTERS IN ACCORDANCE WITH THE APPLICABLE LAW OR UNDER THE TERMS OF A VALID AGREEMENT EXECUTED PURSUANT TO LAW.

THERE IS NO EVIDENCE IN THE RECORD OF ANY BAD FAITH ON THE PART OF THE GOVERNMENT. IT DOES NOT APPEAR THAT THE DISPOSAL OFFICER KNEW THAT ONE OF THE BOXES IN QUESTION CONTAINED CAST IRON PISTON RINGS. THE DESCRIPTION IN THE INVITATION FOR ITEM 17 WAS BASED ON THE "BEST AVAILABLE INFORMATION"--- AS STATED IN THE INVITATION--- HAVING BEEN TAKEN FROM THE AGENCY'S DISPOSAL RECORDS. UNDER THE CONDITIONS OF SALE THE GOVERNMENT IS ONLY OBLIGATED TO ACT IN GODD FAITH, AND THIS IT DID. SEE DADOURIAN EXPORT CORPORATION V. UNITED STATES, 291 F.2D 178; M. SAMUEL AND SONS V. UNITED STATES, 61 CT.CL. 373, 381; 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.

AS POINTED OUT ABOVE, THE PISTON RINGS WERE OFFERED FOR SALE "AS IS" AND "WHERE IS" WITHOUT GUARANTY OR WARRANTY AS TO QUALITY OR DESCRIPTION AND THE SALE WAS DESIGNATED AS ONE FOR "LOT.' YOUR BID FOR THE ITEM WAS MADE AND ACCEPTED ON THESE TERMS. HENCE, IT CANNOT BE SAID THAT THE GOVERNMENT IN ANY WAY BREACHED THE TERMS OR CONDITIONS OF THE SALE OR THAT THERE WAS A MISREPRESENTATION OF THE PISTON RINGS BY THE GOVERNMENT AS TO THE QUALITY OR DESCRIPTION. THIS CONCLUSION IS IN ACCORDANCE WITH ESTABLISHED PRINCIPLES OF LAW APPLICABLE TO SIMILAR SITUATIONS. LYNCH V. CURFMAN, 65 MINN. 170, 68 N.W. 5, 7; AND WILLISTON ON SALES (2D ED.), SECTION 213. IS PROPER TO STATE THAT EVEN IF ONLY 714 CHROME PISTON RINGS WERE RECEIVED BY YOU AND NO CAST IRON PISTON RINGS WERE INCLUDED IN THE DELIVERY THE LAW IS EQUALLY APPLICABLE IN THE SITUATION HERE. IN THE CASE OF LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, WHEREIN IT WAS UNSUCCESSFULLY CONTENDED THAT THE UNITED STATES WAS LIABLE IN DAMAGES FOR A SHORTAGE IN DELIVERY OF SPECIFIED LOTS OF SCRAP IRON AND STEEL WHICH HAD BEEN OFFERED FOR SALE IN A SCHEDULE SHOWING THE VARIOUS FORTS WHERE THE SCRAP IRON WAS ACCUMULATED AND THE APPROXIMATE WEIGHTS AT EACH LOCATION AND WHICH HAD BEEN PURCHASED "AS IS" FOR A STIPULATED LUMP SUM PRICE, THE COURT STATED AT PAGE 92:

"* * * THE NAMING OF QUANTITIES CANNOT BE REGARDED AS IN THE NATURE OF A WARRANTY, BUT AS AN ESTIMATE OF THE PROBABLE AMOUNTS IN REFERENCE TO WHICH GOOD FAITH ONLY COULD BE REQUIRED OF THE PARTY MAKING IT.'

ACCORDINGLY, IN THE LIGHT OF THE FOREGOING, THE SETTLEMENT OF MAY 24, 1962, IS SUSTAINED.