B-153223, FEB. 26, 1964

B-153223: Feb 26, 1964

Additional Materials:

Contact:

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

 

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

NATHANIEL DREAZEN: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 10. WHICH WAS ISSUED BY THE DEFENSE SURPLUS SALES OFFICE. WHICH WAS THE HIGHEST BID RECEIVED FOR THESE FOUR ITEMS. WAS ACCEPTED BY THE SALES OFFICE ON APRIL 25. PAYMENT IN FULL SUBSEQUENTLY WAS MADE BY YOU. UPON INSPECTION OF THE SHIPMENT YOU ADVISED THE PROPERTY DISPOSAL OFFICER OF THE TOBYHANNA ARMY DEPOT THAT THE PROPERTY COVERED BY ITEM NO. 9 WAS NOT COMPLETELY IN AGREEMENT WITH THE PARTICULAR IBM CARD ADVERTISED FOR THAT ITEM. 980 M UNITS WERE IBM TABULATING CARDS NO. 8063-63 WHICH YOU CONTEND ARE OLD AND BRITTLE AND ARE UNUSABLE AS TABULATING CARDS. CLAIM IS MADE FOR $1. YOU CONTEND THAT SINCE YOUR CLAIM IS NOT BASED ON THE FULL 2.

B-153223, FEB. 26, 1964

TO MR. NATHANIEL DREAZEN:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 10, 1963, IN REGARD TO OUR SETTLEMENT OF OCTOBER 31, 1963, DISALLOWING YOUR CLAIM FOR $1,048.71 UNDER DEFENSE SUPPLY AGENCY CONTRACT NO. DSA-14-S-1440, DATED APRIL 25, 1963.

IN RESPONSE TO INVITATION NO. 14-S-63-77, DATED APRIL 2, 1963, WHICH WAS ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, FORT DIX, NEW JERSEY, YOU SUBMITTED A BID DATED APRIL 19, 1963, OFFERING TO PURCHASE ITEMS NOS. 6, 8, 9 AND 10, COVERING VARIOUS QUANTITIES OF SURPLUS IBM TABULATING CARDS LOCATED AT THE TOBYHANNA ARMY DEPOT, AT THE UNIT PRICES SET FORTH THEREIN. YOUR BID, WHICH WAS THE HIGHEST BID RECEIVED FOR THESE FOUR ITEMS, WAS ACCEPTED BY THE SALES OFFICE ON APRIL 25, 1963, THEREBY CONSUMMATING CONTRACT NO. DSA-14-S-1440, PAYMENT IN FULL SUBSEQUENTLY WAS MADE BY YOU, AND THE TABULATING CARDS SHIPPED TO YOUR CHICAGO ADDRESS. UPON INSPECTION OF THE SHIPMENT YOU ADVISED THE PROPERTY DISPOSAL OFFICER OF THE TOBYHANNA ARMY DEPOT THAT THE PROPERTY COVERED BY ITEM NO. 9 WAS NOT COMPLETELY IN AGREEMENT WITH THE PARTICULAR IBM CARD ADVERTISED FOR THAT ITEM. YOU ALLEGE THAT INSTEAD OF RECEIVING THE 2,720 M UNITS OF IBM TABULATING CARD NO. 436150, AS ADVERTISED FOR ITEM NO. 9, YOU RECEIVED ONLY 740 M UNITS OF THIS PARTICULAR CARD AND THAT THE BALANCE OF 1,980 M UNITS WERE IBM TABULATING CARDS NO. 8063-63 WHICH YOU CONTEND ARE OLD AND BRITTLE AND ARE UNUSABLE AS TABULATING CARDS. IN VIEW OF THIS, CLAIM IS MADE FOR $1,048.71, WHICH INCLUDES A REFUND OF THE PURCHASE PRICE OF $813.78--- 1,980 M UNITS AT YOUR UNIT BID PRICE OF $0.411--- PLUS $184.93 FREIGHT CHARGES, AND $50 HANDLING AND STORAGE COSTS.

IN YOUR LETTER DATED DECEMBER 10, 1963, YOU CONTEND THAT SINCE YOUR CLAIM IS NOT BASED ON THE FULL 2,720 M UNITS ADVERTISED UNDER ITEM NO. 9 BUT RATHER ON ONLY THE 1,980 M UNITS THAT DID NOT CONFORM TO THE DESCRIPTION OF THE IBM TABULATING CARD NO. 436150 SHOWN ON THE INVITATION, THE DOCTRINE OF "BUYER BEWARE" DOES NOT APPLY.

IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND OUR OFFICE THAT, IN THE ABSENCE OF BAD FAITH, SUCH AN EXPRESS DISCLAIMER OF WARRANTY AS THAT SET FORTH IN CONTRACT NO. DSA-14-S-1440, AND REFERRED TO IN THE 3RD PARAGRAPH OF OUR SETTLEMENT DATED OCTOBER 31, 1963, VITIATES ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT ARISE OUT OF A SALES TRANSACTION. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER CO. V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; TRIAD CORPORATION B. UNITED STATES, 63 CT.CL. 151; AND I. SHAPIRO AND CO. V. UNITED STATES, 66 CT.CL. 424. THERE IS NOTHING IN THE RECORD BEFORE US TO INDICATE BAD FAITH ON THE PART OF THE SALES CONTRACTING OFFICER IN CONNECTION WITH THE TRANSACTION. THE BASIC PRODUCT ADVERTISED FOR SALE UNDER ITEM NO. 9 WAS AN IBM TABULATING CARD AND THAT IS EXACTLY WHAT WAS SOLD TO YOU.

MOREOVER, NO MERIT MAY BE ACCORDED YOUR CONTENTION THAT SINCE YOUR CLAIM IS BASED ON ONLY THE PARTIAL QUANTITY OF 1,980 M UNITS, RATHER THAN THE FULL 2,720 M UNITS COVERED BY ITEM NO. 9, THAT THE DISCLAIMER OF WARRANTY CLAUSE DOES NOT APPLY. OBVIOUSLY SUCH A PROVISION DISCLAIMS ALL WARRANTY AS TO EITHER THE TOTAL NUMBER OF UNITS SET FORTH UNDER A GIVEN ITEM OR ANY PART THEREOF. TO MAKE INAPPLICABLE THE TERMS OF SUCH A DISCLAIMER CLAUSE MERELY BECAUSE THERE EXISTED IN A GIVEN CASE A DISCREPANCY IN ONLY SOME PART OR NUMBER OF A PARTICULAR ITEM WOULD, OF COURSE, DEFEAT THE VERY PURPOSE FOR WHICH THE CLAUSE WAS INTENDED AND THE NUMEROUS COURT CASES INVOLVING SALES CONTRACTS CONTAINING SUCH CLAUSES SHOW CLEARLY THE FOLLY OF SUCH AN INTERPRETATION.

REGARDING THE INSPECTION ASPECTS OF THE CASE, YOUR RESPONSIBILITIES AS A BIDDER IN THIS CONNECTION APPEAR TO BE CLEARLY SET FORTH IN PAXTON- MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463. IT WAS HELD IN THIS CASE THAT NOTWITHSTANDING THE DIFFICULTIES ATTENDANT UPON AN INSPECTION, IT IS INCUMBENT UPON THE BIDDER TO MAKE THE KIND OF AN INSPECTION THAT IS EFFECTUAL. WHETHER OR NOT YOU EXPERIENCED ANY ACTUAL DIFFICULTIES IN THE INSPECTION REPORTED TO HAVE BEEN MADE BY YOU WOULD APPEAR TO BE IMMATERIAL SINCE OUR OFFICE CONSISTENTLY HAS HELD THAT WHERE A BIDDER SUBMITS A BID WITHOUT MAKING SUCH A THOROUGH INSPECTION AS WOULD COMPLETELY PROTECT ITSELF AS TO THE EXACT IDENTITY, QUALITY, ETC., OF THE PROPERTY BEING OFFERED FOR SALE, IT MUST BE PRESUMED THAT SUCH A BIDDER HAS ELECTED TO ASSUME ANY RISK WHICH MIGHT EXIST BY REASON OF A VARIANCE BETWEEN THE DESCRIPTION OF THE PROPERTY SET FORTH IN THE INVITATION AND THE PROPERTY ACTUALLY DELIVERED.