B-149226, JUL. 12, 1962

B-149226: Jul 12, 1962

Additional Materials:

Contact:

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

 

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

IN WHICH THERE WAS DISALLOWED YOUR CLAIM FOR $417.70. WHICH WAS DESCRIBED IN THE INVITATION AS FOLLOWS: "LATHE. WERE ALSO RECEIVED ON THAT ITEM. WAS ACCEPTED ON JULY 10. WAS MADE TO YOU ON CONTRACT NO. THAT THE LATHE DELIVERED TO YOU WAS MANUFACTURED IN 1924 AND NOT IN 1942 AS ADVERTISED IN THE BID INVITATION AND. WAS NOT THE SAME LATHE PURCHASED BY YOU. THE YEAR SHOULD HAVE BEEN SHOWN AS 1924. IN WHICH CASE YOU WOULD NOT HAVE BID ON THE ITEM AT ALL. ON THE GROUND THAT THE INVITATION DESCRIPTION FOR THE LATHE COVERED BY ITEM NO. 12 WAS ERRONEOUS AND MISLEADING. YOUR CLAIM WAS FORWARDED. WAS DISALLOWED FOR THE REASONS SET FORTH IN CLAIMS DIVISION SETTLEMENT DATED NOVEMBER 2. THE QUESTION TO BE CONSIDERED IN THE SETTLEMENT OF THE CLAIM IS WHETHER THE GOVERNMENT DID OR DID NOT WARRANT THE PROPERTY SOLD.

B-149226, JUL. 12, 1962

TO FACTORY EQUIPMENT COMPANY:

YOUR LETTER OF MAY 28, 1962, REQUESTED REVIEW OF OUR CLAIMS DIVISION SETTLEMENT DATED NOVEMBER 2, 1961, IN WHICH THERE WAS DISALLOWED YOUR CLAIM FOR $417.70, PLUS FREIGHT CHARGES OF $183.40, IN CONNECTION WITH YOUR PURCHASE OF ITEM NO. 12 ON SALES CONTRACT NO. N63067-5926 AWARDED JULY 10, 1961.

BY SALES INVITATION NO. B-214-61-63067 ISSUED MAY 31, 1961, THE U.S. CONSOLIDATED SURPLUS SALES OFFICE, NAVAL SUPPLY CENTER, NORFOLK, VIRGINIA, SOLICITED BIDS--- OPENING DATE JUNE 27, 1961--- FOR THE PURCHASE FROM THE GOVERNMENT OF 145 ITEMS OF MISCELLANEOUS SURPLUS PROPERTY AS LISTED AND DESCRIBED THEREIN.

YOU SUBMITTED A BID OF $677.70 ON ITEM NO. 12, HERE INVOLVED, WHICH WAS DESCRIBED IN THE INVITATION AS FOLLOWS:

"LATHE, ENGINE, TOOL ROOM, HEAVY DUTY GEARED HEAD, REGULAR TYPE - 3416 MODEL 12 SPEED SER: 25849 YR. -42 I.D. 165-300890 DIMENSIONS: 190 INCHES BY 76 INCHES. CAPACITIES: 14 INCH SWING OVER CARRIAGE, 24 INCH SWING OVER BED, 78 INCH CENTER DIAMETER. EQUIPPED WITH: TAPER TTACHMENT; (1) 4 JAW CHUCK 22 INCH DIAMETER MOTOR DATA: WESTINGHOUSE. SER: 4499279. HP 7 1/2 CURRENT DC, VOLTS 230, SHUNT WOUND, RPM 850. DRIVE: GEAR REMARKS: USED. USABLE WITH REPAIRS. POOR CONDITION. WT. 10,000 LBS. TOTAL ACQUISITION COST: $3,203.06. QUANTITY: 1 INCH.

TWELVE OTHER BIDS, RANGING FROM $654 TO $134, WERE ALSO RECEIVED ON THAT ITEM. YOUR BID, BEING THE HIGHEST, WAS ACCEPTED ON JULY 10, 1961, AND AWARD OF ITEM NO. 12, TOGETHER WITH ITEM NO. 44, WAS MADE TO YOU ON CONTRACT NO. N63067-5926.

UPON RECEIPT OF THE LATHE YOU ADVISED THE CONTRACTING OFFICER, IN A LETTER DATED AUGUST 9, 1961, THAT THE LATHE DELIVERED TO YOU WAS MANUFACTURED IN 1924 AND NOT IN 1942 AS ADVERTISED IN THE BID INVITATION AND, THEREFORE, WAS NOT THE SAME LATHE PURCHASED BY YOU. YOU STATED ALSO THAT YOU RELIED FULLY ON THE YEAR OF MANUFACTURE, "1942," AS SHOWN IN THE BID INVITATION, BUT THE YEAR SHOULD HAVE BEEN SHOWN AS 1924, IN WHICH CASE YOU WOULD NOT HAVE BID ON THE ITEM AT ALL. YOU ALLEGED THAT THE LATHE CAN BE DISPOSED OF ONLY AS SCRAP AND SALVAGE OF A VALUE OF $260. YOU REQUESTED AN ADJUSTMENT IN THE CONTRACT PRICE BY WAY OF REFUND OF $417.70 AND FREIGHT CHARGES OF $183.40, ON THE GROUND THAT THE INVITATION DESCRIPTION FOR THE LATHE COVERED BY ITEM NO. 12 WAS ERRONEOUS AND MISLEADING.

YOUR CLAIM WAS FORWARDED, THROUGH ADMINISTRATIVE CHANNELS, TO OUR OFFICE FOR SETTLEMENT, AND WAS DISALLOWED FOR THE REASONS SET FORTH IN CLAIMS DIVISION SETTLEMENT DATED NOVEMBER 2, 1961. THE QUESTION TO BE CONSIDERED IN THE SETTLEMENT OF THE CLAIM IS WHETHER THE GOVERNMENT DID OR DID NOT WARRANT THE PROPERTY SOLD.

THE BID INVITATION CONTAINED ON PAGE 10 THE USUAL GENERAL SALE TERMS AND CONDITIONS APPLICABLE TO THE SALE OF GOVERNMENT-OWNED SURPLUS AND SCRAP PROPERTY. THESE TERMS AND CONDITIONS WERE AGREED TO BY YOU UPON THE SUBMISSION OF YOUR BID AND WERE INCORPORATED IN AND BECAME A MATERIAL PART OF SALES CONTRACT NO. N6307-5926. THE PROVISIONS OF THAT DOCUMENT PERTINENT TO YOUR CLAIM ARE 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 OF 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.'

THE COURTS MANY TIMES HAVE CONSIDERED SUCH CONTRACT STIPULATIONS IN CASES INVOLVING THE SALE OF GOVERNMENT-OWNED GOODS, AND HAVE HELD CONSISTENTLY THAT SUCH PROVISIONS CONSTITUTE AN EXPRESS DISCLAIMER OF WARRANTY. LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, 92; W. E. HEDGER CO., INC., V. UNITED STATES, 52 F2D 31, CERTIORARI DENIED, 284 U.S. 676; TRIED CORPORATION V. UNITED STATES, 63 CT.CL. 151. THESE CASES AND OTHER CONCLUDE THAT UNDER SUCH PROVISIONS BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT, ANY WARRANTIES WHATEVER. IN THE CASE OF OVERSEAS NAVIGATION CORPORATION V. UNITED STATES, 131 CT.CL. 70, THE COURT OF CLAIMS HELD THAT THE TERMS OF THE SALES CONTRACT UNDER CONSIDERATION, INCLUDING ITS "AS IS, WHERE IS" PROVISIONS, SPOKE FOR THEMSELVES AND THE PLAINTIFF WAS LEGALLY BOUND BY THEM.

THE EFFECT OF "THE BEST AVAILABLE INFORMATION" CLAUSE WAS CONSIDERED IN THE CASE OF WESTERN NON-FERROUS METALS CORP. V. UNITED STATES, 192 F.SUPP. 774. IN REGARD TO THE ABOVE CONTRACT CLAUSE THE COURT STATED AT PAGE 774, AS FOLLOWS:

"/1) THE CONTRACTUAL PROVISION UPON WHICH PLAINTIFF STAKES ITS CLAIM STATES THAT "THE DESCRIPTION IS BASED UPON THE BEST AVAILABLE INFORMATION.' WHEN READ IN THE CONTEXT OF THE UNEQUIVOCAL LANGUAGE IN WHICH IT IS SET, IT IS CLEAR THAT IT WOULD BE ERRONEOUS TO INTERPRET THE PROVISIONS AS OBLIGATING DEFENDANT TO MAKE ANY EFFORTS WHATEVER TO OBTAIN RELIABLE INFORMATION, OR TO INTERPRET IT AS A WARRANTY THAT THE INFORMATION SUPPLIED IS THE BEST INFORMATION THAT CAN BE OBTAINED. THE REASONABLE AND APPARENT INTERPRETATION IS THAT DEFENDANT REPRESENTS ONLY THAT IT POSSESSES NO INFORMATION BETTER THAN THAT WHICH IS OFFERED. GOOD FAITH IS ALL THAT IS REQUIRED. STANDARD MAGNESIUM CORPORATION V. UNITED STATES, 10 CIR; 1957, 241 F.2D 677. AND PLAINTIFF HAS EXPRESSLY DISCLAIMED ANY INTENTION OF IMPUTING BAD FAITH TO DEFENDANT. IN SUMMARY, THERE IS NOTHING IN THE LANGUAGE OF THIS CONTRACT TO DISTINGUISH ITS MEANING FROM THAT OF SIMILAR LANGUAGE WHICH HAS BEEN DESCRIBED AS APPLYING THE RULE OF CAVEAT EMPTOR TO THE FURTHEST POSSIBLE LIMITS, AND UPON WHICH DEFENDANT HAS PREVAILED IN SITUATIONS SIMILAR TO THIS. * * *"

THERE IS NOTHING IN THE RECORD TO INDICATE BAD FAITH ON THE PART OF THE CONTRACTING OFFICER OR ANY OF HIS REPRESENTATIVES IN CONNECTION WITH THE INSTANT SALE. WHILE THE RECORD INDICATES THAT THERE IS NO DISPUTE THAT THE LATHE HERE IN QUESTION WAS NOT MANUFACTURED IN 1942, AS STATED IN THE BID INVITATION DESCRIPTION BUT WAS MADE IN EITHER 1924 OR 1925, AS ALLEGED BY YOU, IT IS NOT SHOWN THAT THE CONTRACTING OFFICER KNEW THAT THE LATHE IN ITEM NO. 12 WAS DIFFERENT THAN THAT DESCRIBED IN THE BID INVITATION. THE DESCRIPTION IN THE BID INVITATION FOR ITEM NO. 12 WAS BASED ON THE "BEST AVAILABLE INFORMATION" AVAILABLE TO THE CONTRACTING OFFICER--- AS STATED IN THE INVITATION--- HAVING BEEN TAKEN FROM THE INFORMATION ON THE TURN-IN DOCUMENT FURNISHED BY THE PROPERTY HOLDING ACTIVITY REQUESTING SALE OF THE ITEM. 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, SUPRA; LUMBRAZO V. WOODRUFF, 175 N.E. 525; AND UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, AFFIRMED 253 F.2D 956. THERE IS NO BASIS, THEREFORE, FOR GRANTING ANY RELIEF ON THE GROUND THAT THE PROPERTY IN QUESTION WAS MISDESCRIBED IN THE BID INVITATION.

FURTHERMORE, THE EVIDENCE ESTABLISHES THAT THE PROPERTY DELIVERED TO YOU WAS THE SAME PROPERTY DISPLAYED FOR INSPECTION AS ITEM NO. 12. HAD YOU MADE SUCH AN EXAMINATION BEFORE SUBMITTING YOUR BID, AS YOU WERE CAUTIONED TO DO, YOU WOULD HAVE DISCOVERED THE CONDITION OF THE PROPERTY OF WHICH YOU NOW COMPLAIN.

THE LAW IS CLEAR THAT WHERE SURPLUS PROPERTY IS OFFERED FOR SALE BY THE GOVERNMENT ON AN "AS S" 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 SUBSEQUENTLY 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. AMERICAN SANITARY RAG CO. V. UNITED STATES, 161 F.SUPP. 414; PAXTON MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463; KRUPP V. FEDERAL HOUSING ADMINISTRATION. 185 F.SUPP. 638.

IN THESE CIRCUMSTANCES, THERE IS NO LEGAL BASIS FOR ALLOWING YOU ANY RELIEF AS TO ITEM NO. 12 ON SALES CONTRACT NO. N63067-5926, AND SETTLEMENT DATED NOVEMBER 2, 1961, IS SUSTAINED.