B-154168, MAY 27, 1964

B-154168: May 27, 1964

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ITEMS NOS. 61 AND 62 WERE DESCRIBED IN THE INVITATION AS GENERATOR SETS. YOU WERE AWARDED CONTRACT NO. ULTIMATELY DECLINED TO ACCEPT DELIVERY ON THE BASIS THAT THE ITEMS WERE ERRONEOUSLY DESCRIBED. IN THAT SEVERAL PARTS WERE MISSING. YOU SAY THAT THE DESCRIPTION SHOULD HAVE BEEN SET FORTH AS: "USED. THE DESCRIPTION OF THE PROPERTY AT THE HOLDING ACTIVITY WAS BASED ON THE TURN-IN DOCUMENT AND AN AIR FORCE STOCK LIST WHICH SHOWED THE ACQUISITION COST TO BE $3. A VISUAL INSPECTION WAS MADE. FROM WHICH IT WAS DETERMINED THAT THE ITEMS WERE USED AND IN FAIR CONDITION. THE DESCRIPTION WAS GIVEN IN BAD FAITH OF CARELESSNESS AND CONSTITUTES A GROSS MISREPRESENTATION. THE BIDDER IS INVITED. PROPERTY WILL BE AVAILABLE FOR INSPECTION AT THE PLACES AND TIMES SPECIFIED IN THE INVITATION.

B-154168, MAY 27, 1964

TO MR. ROBERT L. RODMAN:

WE REFER TO YOUR LETTER OF APRIL 29, 1964, CONCERNING OUR SETTLEMENT DATED APRIL 24, 1964, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF THE AMOUNT OF $105.40, REPRESENTING A TWENTY PERCENT BID DEPOSIT ON THE PURCHASE PRICE OF ITEMS NOS. 61 AND 62 SOLD UNDER SALES INVITATION NO. 44-S-64-47, ISSUED SEPTEMBER 19, 1963, BY THE DEFENSE SURPLUS SALES OFFICE, NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA.

ITEMS NOS. 61 AND 62 WERE DESCRIBED IN THE INVITATION AS GENERATOR SETS, WITH AN ACQUISITION COST OF $3,500 EACH, IN "USED-FAIR" CONDITION. ON THE BASIS OF YOUR HIGH BIDS OF $276 ON ITEM NO. 61 AND $251 ON ITEM NO. 62, WHICH YOU SUBMITTED WITHOUT INSPECTION OF THE PROPERTY, YOU WERE AWARDED CONTRACT NO. DSA 44-S-4252 ON OCTOBER 16, 1963.

SHORTLY AFTER AWARD, YOU REQUESTED RELEASE FROM YOUR CONTRACT OBLIGATION AND RETURN OF YOUR BID DEPOSIT ON THE BASIS THAT THE ACQUISITION COSTS OF $3,500 LISTED FOR THE TWO ITEMS VARIED GREATLY FROM THE STATED ACQUISITION COSTS OF $50 AND $1,400 FOR SIMILAR ITEMS IN ANOTHER SALE CATALOG, INVITATION NO. 44-S-64-60, ISSUED LATER BY THE SAME SURPLUS SALES OFFICE. HOWEVER, YOU SUBSEQUENTLY TRAVELED TO THE DISPOSAL ACTIVITY, INSPECTED THE ITEMS, AND ULTIMATELY DECLINED TO ACCEPT DELIVERY ON THE BASIS THAT THE ITEMS WERE ERRONEOUSLY DESCRIBED, IN THAT SEVERAL PARTS WERE MISSING. YOU SAY THAT THE DESCRIPTION SHOULD HAVE BEEN SET FORTH AS: "USED, POOR, PARTS MISSING, MAJOR REPAIRS REQUIRED.'

THE DESCRIPTION OF THE PROPERTY AT THE HOLDING ACTIVITY WAS BASED ON THE TURN-IN DOCUMENT AND AN AIR FORCE STOCK LIST WHICH SHOWED THE ACQUISITION COST TO BE $3,500. ADDITIONALLY, A VISUAL INSPECTION WAS MADE, FROM WHICH IT WAS DETERMINED THAT THE ITEMS WERE USED AND IN FAIR CONDITION.

YOU CONTEND THAT TO DESCRIBE THE PROPERTY AS "USED-FAIR" MAY NOT BE FRAUDULENT, BUT THE DESCRIPTION WAS GIVEN IN BAD FAITH OF CARELESSNESS AND CONSTITUTES A GROSS MISREPRESENTATION. ALSO, YOUR REQUEST THAT WE MAKE AN INSPECTION OF THE PROPERTY TO ASCERTAIN THE ACCURACY OF YOUR COMPLAINT.

PARAGRAPHS 1 AND 2 OF THE GENERAL SALE TERMS AND CONDITIONS ON PAGE 9 OF THE INVITATION PROVIDED:

"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 THE BID AFTER OPENING.

"2. CONDITION AND LOCATION OF PROPERTY. UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THE INVITATION, ALL PROPERLY 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.'

PARAGRAPH 1 OF THE GENERAL INFORMATION AND INSTRUCTIONS ON PAGE 13 OF THE INVITATION PROVIDED:

"1. DISCLAIMER OF WARRANTY. THE BIDDERS ARE CAUTIONED THAT THE PROPERTY BEING OFFERED FOR SALE UNDER THIS INVITATION FOR BID IS SOLD "AS IS," "WHERE IS," WITH NO WARRANTY EXPRESSED OR IMPLIED AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE, OR DESCRIPTION. THE SPECIAL CONDITION ENTITLED "GUARANTEED DESCRIPTIONS" BEING USED BY CERTAIN DEFENSE SURPLUS SALES OFFICES IS NOT PART OF THIS INVITATION FOR BID.'

UNDER SUCH PROVISIONS, IT HAS BEEN HELD THAT IN THE ABSENCE OF BAD FAITH OR FRAUD, BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT ANY WARRANTIES WHATEVER, THE PURPOSE AND EFFECT OF THE PROVISIONS BEING TO IMPOSE ALL RISKS OF MISTAKE UPON THE BUYER. UNITED STATES V. HATHAWAY, 242 F.2D 897 (1957); AMERICAN SANITARY RAG CO. V. UNITED STATES, 142 CT.CL. 293 (1958). FURTHERMORE, A BIDDER WHO FAILS TO INSPECT, EVEN THOUGH ADEQUATE OR THOROUGH INSPECTION IS IMPRACTICABLE, IF NOT IMPOSSIBLE, ASSUMES ANY LOSS WHICH MIGHT RESULT FROM A VARIANCE BETWEEN THE DESCRIPTION OF THE PROPERTY IN THE INVITATION AND THE PROPERTY DELIVERED. PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463 (1959).

THERE IS NOTHING IN THE RECORD, NOR DO YOU PRESENT ANY EVIDENCE, TO INDICATE THAT THE GOVERNMENT AGENTS ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE SALES TRANSACTION. THE SALES DESCRIPTION WAS BASED ON THE BEST INFORMATION AVAILABLE TO THE SALES OFFICE. ACCORDINGLY, YOUR ALLEGATION THAT THE DESCRIPTION WAS GIVEN IN BAD FAITH OR CARELESSNESS AND CONSTITUTES A GROSS MISREPRESENTATION IS NOT SUPPORTED BY THE RECORD.

AS TO YOUR REQUEST THAT WE INSPECT THE PROPERTY TO ASCERTAIN THE ACCURACY OF YOUR COMPLAINT, IT SHOULD BE POINTED OUT THAT THE BURDEN OF ESTABLISHING THE FACTS AND LAW NECESSARY TO CHARGE THE UNITED STATES WITH LIABILITY ON A CLAIM RESTS WITH THE CLAIMANT. SEE 18 COMP. GEN. 980. THE RECORD INDICATES THAT A DIFFERENCE OF OPINION EXISTS BETWEEN YOU AND THE DEFENSE SURPLUS SALES OFFICE AS TO THE GENERAL PHYSICAL CONDITION OF THE GENERATOR SETS. IN VIEW OF THE FACT THAT SUCH DIFFERENCE OF OPINION RELATES, AT MOST, TO A VARIANCE IN DESCRIPTION UPON WHICH ALL WARRANTIES WERE DISCLAIMED, NO USEFUL PURPOSE WOULD BE SERVED BY A PERSONAL INSPECTION OF THE EQUIPMENT BY REPRESENTATIVES OF OUR OFFICE SINCE, EVEN IF YOUR OPINION ON THE MATTER WERE CORRECT, THE APPLICABLE PRINCIPLES OF LAW, AND THE CONCLUSION RESULTING THEREFROM, WOULD REMAIN UNCHANGED.

IN THE CIRCUMSTANCES, THE ACCEPTANCE OF YOUR BID RESULTED IN A VALID AND BINDING CONTRACT. ACCORDINGLY, THE SETTLEMENT OF APRIL 24, 1964, IS SUSTAINED.

IN REPLY TO YOUR QUESTION AS TO ANY FURTHER PROCEDURE WHICH MAY BE FOLLOWED REGARDING YOUR CLAIM, YOU ARE ADVISED THAT THE DECISIONS OF THIS OFFICE ARE WITHOUT PREJUDICE TO ANY JUDICIAL REMEDY WHICH CLAIMANTS MAY ELECT TO SEEK.