B-150462, JAN. 4, 1963

B-150462: Jan 4, 1963

Additional Materials:

Contact:

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

 

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

ITEM NO. 16 OF THE SALES INVITATION WAS DESCRIBED AS "SCRAP X-RAY FILM. IT IS REPORTED THAT ON FEBRUARY 20. YOU ADVISED THE CONTRACTING OFFICER BY TELEPHONE THAT ONLY A SMALL PERCENTAGE OF ITEM NO. 16 WAS X-RAY FILM. 340 POUNDS RECEIVED ON THE ITEM WERE SCRAP X-RAY FILM AND THE REMAINDER WAS POLAROID AND PHOTOGRAPHIC PAPER WHICH IS OF LESS VALUE. AN INSPECTION OF THE MATERIAL IN QUESTION WAS MADE AT YOUR LOCATION AT DETROIT. SAMPLES OF THE MATERIAL WERE SENT BACK TO THE DEPOT AND WERE EXAMINED BY THE SUPERVISOR. IN EACH CASE HE DETERMINED THAT THE ITEM CONCERNED WAS X-RAY FILM ALTHOUGH THE SAMPLE EXHIBITS WERE OF DIFFERENT TYPES AND SIZES. IT IS FURTHER REPORTED THAT THE ITEM DESCRIPTION WAS DETERMINED BY CHECKING THE FEDERAL STOCK NUMBERS AND SPECIFICATIONS MARKED ON THE CONTAINERS WITH PERSONNEL FROM THE MEDICAL SUPPLY DIVISION AND THE MEDICAL SECTION AT THE DEPOT.

B-150462, JAN. 4, 1963

TO ALBERT ACAN X-RAY SOLUTIONS, INC.:

WE REFER TO YOUR LETTER OF DECEMBER 5, 1962, IN WHICH YOU REQUEST REVIEW OF THE SETTLEMENT CERTIFICATE OF NOVEMBER 21, 1962, ISSUED BY OUR CLAIMS DIVISION. THE SETTLEMENT DISALLOWED YOUR CLAIM FOR $453.37 (INCLUDING FREIGHT), ON ITEM NO. 16, UNDER SALES INVITATION NO. 04-513 S-62-49, ISSUED BY SHARPE CONSOLIDATED SURPLUS SALES OFFICE, SHARPE GENERAL DEPOT, LATHROP, CALIFORNIA, ON DECEMBER 22, 1961.

ITEM NO. 16 OF THE SALES INVITATION WAS DESCRIBED AS "SCRAP X-RAY FILM, MUTILATED. NOT TO BE USED AS ORIGINALLY INTENDED. QUANTITY - 1 LOT.' JANUARY 22, 1962, YOU RECEIVED AWARD OF ITEM NO. 16 AT YOUR BID PRICE OF $329.94. UPON PAYMENT OF THAT AMOUNT YOU REMOVED THE MATERIAL. IT IS REPORTED THAT ON FEBRUARY 20, 1962, YOU ADVISED THE CONTRACTING OFFICER BY TELEPHONE THAT ONLY A SMALL PERCENTAGE OF ITEM NO. 16 WAS X-RAY FILM. LETTER OF FEBRUARY 22, 1962, YOU ALLEGED THAT ONLY A FEW HUNDRED POUNDS OF 2,340 POUNDS RECEIVED ON THE ITEM WERE SCRAP X-RAY FILM AND THE REMAINDER WAS POLAROID AND PHOTOGRAPHIC PAPER WHICH IS OF LESS VALUE.

ON FEBRUARY 28, 1962, AN INSPECTION OF THE MATERIAL IN QUESTION WAS MADE AT YOUR LOCATION AT DETROIT, MICHIGAN, BY A GOVERNMENT REPRESENTATIVE. SAMPLES OF THE MATERIAL WERE SENT BACK TO THE DEPOT AND WERE EXAMINED BY THE SUPERVISOR, MEDICAL MAINTENANCE. IN EACH CASE HE DETERMINED THAT THE ITEM CONCERNED WAS X-RAY FILM ALTHOUGH THE SAMPLE EXHIBITS WERE OF DIFFERENT TYPES AND SIZES. IT IS FURTHER REPORTED THAT THE ITEM DESCRIPTION WAS DETERMINED BY CHECKING THE FEDERAL STOCK NUMBERS AND SPECIFICATIONS MARKED ON THE CONTAINERS WITH PERSONNEL FROM THE MEDICAL SUPPLY DIVISION AND THE MEDICAL SECTION AT THE DEPOT, AND THAT THESE SOURCES IDENTIFIED THE MATERIAL AS X-RAY FILM.

YOU CLAIM $284.19 OF THE PURCHASE PRICE OF $329.94 AS A PARTIAL REFUND ON THE MATERIAL YOU WISH TO RETURN TO THE GOVERNMENT, PLUS FREIGHT OF $169.18. THIS CLAIM WAS DISALLOWED BY OUR CLAIMS DIVISION ON THE BASIS THAT UNDER ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT (THE "AS IS - WHERE IS" CLAUSE) YOU ASSUMED ALL RISK AS TO THE CHARACTER OR CONDITION OF THE MATERIAL SOLD, AND THE RECORD DID NOT SHOW THAT THE GOVERNMENT EXERCISED ANY BAD FAITH IN THE TRANSACTION.

IN YOUR REQUEST FOR REVIEW YOU STATE THAT THE MATERIAL YOU RECEIVED WAS NOT X-RAY FILM AND COULD NOT BE CONSTRUED AS SUCH. YOU SAY THAT YOU DID NOT DEEM IT NECESSARY TO INSPECT THE MATERIAL SINCE IT WAS CLEARLY DESCRIBED AS X-RAY FILM. YOU CONTEND THAT THE GOVERNMENT WAS AT FAULT FOR DESCRIBING THE ITEM AS X-RAY FILM WHEN THAT WAS NOT THE CASE.

ARTICLE 2 OF THE CONTRACT, MENTIONED ABOVE, PROVIDES AS FOLLOWS:

"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.'

AS WAS INDICATED BY OUR CLAIMS DIVISION, IN THIS TYPE OF SALE THE GOVERNMENT IS ATTEMPTING TO DISPOSE OF QUANTITIES OF SURPLUS MATERIALS WITH A MINIMUM OF RISK ON ITS PART. SINCE PROSPECTIVE BUYERS ARE TO ASSUME MOST OF THE RISKS ATTENDANT TO THE SALE, THEY ARE MADE AWARE IN THE INVITATION THAT THEY SHOULD INSPECT THE PROPERTY TO BE SOLD. IT HAS CONSISTENTLY BEEN HELD BY THE COURTS THAT THE PURCHASER OF GOVERNMENT SURPLUS IS BOUND BY THE PROVISIONS OF A DISCLAIMER OF WARRANTY CLAUSE SUCH AS IS CONTAINED IN THE SUBJECT CONTRACT. SEE DADOURIAN EXPORT CORP. V. UNITED STATES, 29 1 F.2D 178.

WHILE IT HAS BEEN SUGGESTED THAT A PURCHASER WOULD NOT BE HELD LIABLE UNDER THE CONTRACT DESPITE THE "AS IS - WHERE IS" CLAUSE WHERE THERE IS A "RIDICULOUS DISCREPANCY" BETWEEN THE GOODS TENDERED AND THE GOODS DESCRIBED, SUCH AS THE CASE OF "ORDERING APPLES AND GETTING ORANGES" (41 COMP. GEN. 185, 188, AND THE COURT CASES CITED THEREIN) WE DO NOT FIND SUCH A DISCREPANCY IN THIS CASE. GOVERNMENT PERSONNEL AFTER ACTUAL INSPECTION OF THE PROPERTY IN QUESTION HAVE CONCLUDED THAT ALL THE MATERIAL YOU RECEIVED IS PROPERLY CLASSIFIED AS X-RAY FILM. YOU DISAGREE, BUT HAVE FURNISHED NOTHING TO OVERCOME THE PRESUMPTION OF CORRECTNESS OF THE ADMINISTRATIVE DETERMINATION. EVEN IF THE MATERIAL MAY NOT RIGHTLY BE CLASSIFIED AS X-RAY FILM THE DISCREPANCY BETWEEN THE INVITATION DESCRIPTION AND THE ACTUAL MATERIAL DELIVERED DOES NOT AMOUNT TO A "RIDICULOUS DISCREPANCY.' IN THIS CONNECTION, SEE DADOURIAN EXPORT CORP., SUPRA, WHERE NETS TENDERED FOR DELIVERY WERE NOT ALL MADE OF MANILA ROPE AS STATED IN THE INVITATION BUT WERE COMPOSED IN PART OF FIBER ROPE NETS. THE COURT HELD THAT THE PURCHASER WAS NOT ENTITLED TO RESCISSION OR TO AN ADJUSTMENT IN PRICE.

FOR THE REASONS STATED, WE SUSTAIN THE DISALLOWANCE OF YOUR CLAIM FOR $453.37.