B-154941, SEP. 1, 1964

B-154941: Sep 1, 1964

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INC.: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 5. YOU WERE THE HIGH BIDDER FOR ITEM 64 UNDER IFB 16-S-64-47 ISSUED BY THE DEFENSE SURPLUS SALES OFFICE. WERE AWARDED CONTRACT NO. ITEM 64 WAS DESCRIBED IN THE INVITATION AS 4 DRUMS OF CYCLOHEXANONE LOCATED AT THE LORING AIR FORCE BASE. THE DESCRIPTION WAS PREPARED FOR THE SALES ACTIVITY BY THE HOLDING ACTIVITY FROM THE TURN-IN DOCUMENT. WITHOUT ANY REASON FOR SUSPECTING THAT THE LISTING WAS NOT CORRECT. ALL 4 DRUMS COMPRISING ITEM 64 WERE RECEIVED BY YOU AND THE BID PRICE PAID. YOU ADVISED THE SALES ACTIVITY THAT THE 4 DRUMS HAD BEEN RECEIVED AND IT WAS DISCOVERED THAT ONE DRUM WAS NOT CYCLOHEXANONE. EXPLAINS THAT THE DISCREPANCY WAS NOTED BECAUSE THE CYCLOHEXANONE WAS A .

B-154941, SEP. 1, 1964

TO BARCLAY CHEMICAL COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 5, 1964, REQUESTING RECONSIDERATION OF OUR SETTLEMENT OF JULY 13, 1964, DISALLOWING YOUR CLAIM FOR $94.53.

YOU WERE THE HIGH BIDDER FOR ITEM 64 UNDER IFB 16-S-64-47 ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, NEWPORT, RHODE ISLAND, AND WERE AWARDED CONTRACT NO. DSA 16-S-3645. ITEM 64 WAS DESCRIBED IN THE INVITATION AS 4 DRUMS OF CYCLOHEXANONE LOCATED AT THE LORING AIR FORCE BASE, LIMESTONE, MAINE. THE DESCRIPTION WAS PREPARED FOR THE SALES ACTIVITY BY THE HOLDING ACTIVITY FROM THE TURN-IN DOCUMENT, WITHOUT PHYSICAL INSPECTION OF THE CONTENTS OF THE DRUMS, AND WITHOUT ANY REASON FOR SUSPECTING THAT THE LISTING WAS NOT CORRECT. ALL 4 DRUMS COMPRISING ITEM 64 WERE RECEIVED BY YOU AND THE BID PRICE PAID. THE RECORD INDICATES THAT AT NO TIME PRIOR TO AWARD OF THIS CONTRACT DID YOU INSPECT ITEM 64.

BY TELEPHONE AND LETTER ON FEBRUARY 3, 1964, YOU ADVISED THE SALES ACTIVITY THAT THE 4 DRUMS HAD BEEN RECEIVED AND IT WAS DISCOVERED THAT ONE DRUM WAS NOT CYCLOHEXANONE. YOUR LETTER OF FEBRUARY 7, 1964, EXPLAINS THAT THE DISCREPANCY WAS NOTED BECAUSE THE CYCLOHEXANONE WAS A ,WATER- WHITE MATERIAL" AND THE "DRUM OF WHICH WE ARE COMPLAINING, IS YELLOW, AND A HEAVIER DUCT," ALSO, THAT YOU EXPECT REIMBURSEMENT FOR THE COST OF THAT DRUM IN THE BID AMOUNT OF $78.63 AND THE FREIGHT COST OF $15.90, FOR A TOTAL OF $94.53. AFTER YOUR COMPLAINT WAS RECEIVED, AN INVESTIGATION WAS MADE BY THE SALES ACTIVITY AND IT WAS DETERMINED BY CHEMICAL ANALYSIS THAT ONE DRUM CONTAINED ETHYLENE GLYCOL.

YOU CONTEND THAT YOU FULLY UNDERSTAND THE MEANING OF THE TERM "AS IS--- WHERE IS" USED IN THE INVITATION AND RELIED ON IN OUR CLAIMS DIVISION SETTLEMENT, AND THAT IT APPLIES TO THE QUALITY OF THE MATERIAL AND TO A SPECIFIC MATERIAL; THAT YOU ACCEPTED THE DESCRIPTION OF 4 DRUMS OF CYCLOHEXANONE WITH THE FULL UNDERSTANDING THAT YOU WOULD RECEIVE SAME WITHOUT ANY WARRANTY AS TO QUALITY, AND THAT YOUR CLAIM IS BASED ON THE FACT THAT THE DRUM OF "SOME OTHER MATERIAL" DOES NOT COME WITHIN THE DESCRIPTION.

IT IS WORTH NOTING THAT OUR CLAIMS DIVISION SETTLEMENT WAS ALSO BASED ON THE PROVISIONS OF THE INVITATION REGARDING INSPECTION AND YOUR FAILURE TO MAKE AN INSPECTION AS CAUTIONED AND URGED TO DO.

PARAGRAPHS 1 AND 2 OF THE GENERAL SALE TERMS AND CONDITIONS ON PAGE 11 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 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 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.'

THE FIRST PARAGRAPH ON THE INSIDE COVER OF THE INVITATION UNDER GENERAL INFORMATION AND INSTRUCTIONS PROVIDED:

"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 CONSISTENTLY BEEN HELD BY THE COURTS AND OUR OFFICE THAT, IN THE ABSENCE OF BAD FAITH, SUCH EXPRESS DISCLAIMERS OF WARRANTY, WHICH SPECIFICALLY REFER TO THE KIND AND CHARACTER OF THE PROPERTY--- AND ARE NOT LIMITED TO ITS QUALITY AS STATED BY YOU--- VITIATE ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT BE IMPLIED FROM A SALES TRANSACTION. LUMBRAZO V. WOODWARD, ET AL. 175 N.E. 525; W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151; AND I. SHAPIRO AND COMPANY V. UNITED STATES, 66 CT.CL. 424. YOU DO NOT ALLEGE, AND THERE IS NOTHING IN THE RECORD TO INDICATE, BAD FAITH ON THE PART OF ANY OF THE GOVERNMENT EMPLOYEES CONCERNED WITH THE TRANSACTION. THE FACT THAT A VARIANCE EXISTED BETWEEN THE DESCRIPTION AND THE ITEMS ACTUALLY DELIVERED MAY BE ATTRIBUTED TO NOTHING MORE THAN AN HONEST ERROR WHICH IS COVERED BY THE DISCLAIMERS OF WARRANTY PREVIOUSLY REFERRED TO.

MOREOVER, PARAGRAPH 1 OF THE GENERAL SALE TERMS AND CONDITIONS NOT ONLY INVITED YOU, AS A BIDDER, TO INSPECT THE PROPERTY BEFORE SUBMITTING YOUR BID BUT EXPRESSLY URGED AND CAUTIONED YOU TO DO SO. THEREFORE, THERE IS APPLICABLE HERE THE RULE ESTABLISHED BY OUR DECISIONS AND COURT CASES THAT WHERE A BIDDER FAILS TO MAKE AN INSPECTION UNDER SUCH A CONTRACT OF SALE-- - WHETHER SUCH FAILURE WAS DUE TO THE BIDDER'S OPINION THAT INSPECTION WAS NOT NECESSARY OR WHETHER THE INSPECTION WAS IMPRACTICAL, IF NOT IMPOSSIBLE --- THE BIDDER HAS ELECTED TO ASSUME THE RISK OF A VARIANCE BETWEEN THE DESCRIPTION OF THE PROPERTY IN THE INVITATION AND THE PROPERTY ACTUALLY DELIVERED. THE BIDDER'S RESPONSIBILITY IN THIS CONNECTION WAS CLEARLY SET FORTH IN THE CASE OF PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463, WHEREIN IT WAS HELD THAT, NOTWITHSTANDING THE DIFFICULTIES ATTENDANT UPON AN INSPECTION, IT IS INCUMBENT UPON THE BIDDER TO MAKE THE KIND OF INSPECTION THAT IS EFFECTUAL. THE PROPERTY DELIVERED TO YOU WAS THE SAME PROPERTY WHICH HAD BEEN MADE AVAILABLE FOR INSPECTION. IF, AS YOU ALLEGE, ONE OF THE DRUMS DID NOT CONTAIN CYCLOHEXANONE, THERE CAN BE NO DOUBT THAT AN INSPECTION OF THE CONTENTS OF THE DRUMS BEFORE SUBMITTING YOUR BID WOULD HAVE REVEALED SUCH DISCREPANCY JUST AS READILY AS IT DID AFTER AWARD HAD BEEN MADE.