B-155100, SEP. 17, 1964

B-155100: Sep 17, 1964

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LYLE: REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 1. INCLUDED IN THE DESCRIPTION WAS THE FOLLOWING STATEMENT: TABLE "* * * THE FOLLOWING PROPERTY DESCRIPTION IS PROVIDED FOR INFORMATIONAL PURPOSES AND IS NOT GUARANTEED BY THE GOVERNMENT: NAVY/AIR FORCE GROUP NO. 41 PROBABLE SPECIFICATIONS: STELLITE 31 (HS31) NOMINAL CHEMICAL COMPOSITION: NICKEL. 55 PERCENT" THE INVITATION WHICH WAS ON STANDARD FORM 114 CONTAINED THE USUAL DISCLAIMER OF WARRANTY CLAUSE. IT CONTAINED UNDER THE HEADING "GENERAL INFORMATION AND INSTRUCTIONS" THE FOLLOWING ADMONITION: "THE BIDDERS ARE CAUTIONED THAT THE PROPERTY BEING OFFERED FOR SALE UNDER THIS INVITATION FOR BID IS SOLD "AS IS. " "WHERE IS. THE SPECIAL CONDITION ENTITLED "GUARANTEED DESCRIPTIONS" BEING USED BY CERTAIN DEFENSE SURPLUS SALES OFFICES IS NOT PART OF THIS INVITATION FOR BID.'.

B-155100, SEP. 17, 1964

TO THE VICE ADMIRAL JOSEPH M. LYLE:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 1, 1964, FROM THE ASSISTANT COUNSEL, IN REGARD TO A PROTEST BY THE DREIFUS STEEL CORP. AGAINST THE REJECTION OF ITS BID SUBMITTED IN RESPONSE TO INVITATION FORBIDS NO. 16-S- 65-4 ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, NEWPORT, RHODE ISLAND, ON JUNE 25, 1964.

THE INVITATION OFFERED FOR SALE VARIOUS ITEMS OF PROPERTY, INCLUDING ITEM 90 WHICH COVERED AN ESTIMATED 6,300 POUNDS OF HIGH TEMPERATURE ALLOY SCRAP CONSISTING OF JET AIRCRAFT ENGINE BLADES. INCLUDED IN THE DESCRIPTION WAS THE FOLLOWING STATEMENT:

TABLE

"* * * THE FOLLOWING PROPERTY DESCRIPTION IS PROVIDED FOR INFORMATIONAL PURPOSES AND IS NOT GUARANTEED BY THE GOVERNMENT:

NAVY/AIR FORCE GROUP NO. 41 PROBABLE SPECIFICATIONS:

STELLITE 31 (HS31)

NOMINAL CHEMICAL COMPOSITION:

NICKEL, 10 PERCENT

COBALT, 55 PERCENT"

THE INVITATION WHICH WAS ON STANDARD FORM 114 CONTAINED THE USUAL DISCLAIMER OF WARRANTY CLAUSE. ALSO, IT CONTAINED UNDER THE HEADING "GENERAL INFORMATION AND INSTRUCTIONS" THE FOLLOWING ADMONITION:

"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.'

NINE BIDS ON ITEM 90 WERE RECEIVED. THE HIGHEST BID WAS THAT SUBMITTED BY THE DREIFUS STEEL CORP., WHICH WAS IN THE AMOUNT OF $1.01179 PER POUND. ITS LETTER OF JULY 10, 1964, TRANSMITTING ITS SIGNED BID FORM, CONTAINED A TYPEWRITTEN STATEMENT THAT "MATERIAL SHALL CONFORM TO DESCRIPTION IN OFFERING.'

THE CONTRACTING OFFICER HAS MADE A DETERMINATION THAT THE BID OF DREIFUS WAS QUALIFIED IN THAT THE QUOTED STATEMENT IN ITS LETTER OF JULY 10 MUST BE CONSIDERED AS A PART OF ITS BID, THAT THE STATEMENT IN EFFECT MODIFIES THE DISCLAIMER OF WARRANTY CLAUSE, AND THAT ITS BID WAS NONRESPONSIVE TO THE INVITATION.

THE ATTORNEYS FOR DREIFUS CONTEND THAT IT IS ENTITLED TO THE AWARD OF A CONTRACT FOR ITEM 90 BECAUSE ITS BID WAS RESPONSIVE TO THE INVITATION. SUPPORT OF THIS CONTENTION THE ATTORNEYS STATE THAT THE SENTENCE "MATERIAL SHALL CONFORM TO DESCRIPTION IN OFFERING" WAS NOT INTENDED TO CONSTITUTE AN EXPRESS OR IMPLIED WARRANTY OF ANY NATURE AND THAT DREIFUS WAS MERELY ATTEMPTING TO CLARIFY THE SITUATION BY INDICATING THAT IT WAS BUYING 6,300 POUNDS OF ALLOY SCRAP "AS IS" OR "AS DESCRIBED.' ALSO, IT IS STATED THAT AT BEST THE INVOLVED SENTENCE IS AMBIGUOUS AND AN AMBIGUOUS BID IS RESPONSIVE WHEN THE INTERPRETATION PLACED ON IT BY THE BIDDER IS REASONABLE. IT IS STATED FURTHER THAT EVEN IF THE SENTENCE IS "OBJECTIONABLE" IT SHOULD BE DELETED SINCE IT DOES NOT GO TO THE SUBSTANCE OF THE BID, OR IN OTHER WORDS, IT IS NOT A MATERIAL FACTOR BECAUSE IT DOES NOT AFFECT THE PRICE, QUALITY OR QUANTITY OF THE ARTICLES OFFERED FOR SALE.

IF THE DREIFUS BID WAS TO BE ACCEPTED, ITS STATEMENT THAT "MATERIAL SHALL CONFORM TO DESCRIPTION IN OFFERING" WOULD BE REQUIRED TO BE TAKEN INTO CONSIDERATION IN DETERMINING THE GOVERNMENT'S LIABILITY TO DELIVER GOODS CONFORMING TO THE SPECIFICATIONS. UNDER THE DISCLAIMER OF WARRANTY CLAUSE, IF ANY OF THE OTHER BIDS IS ACCEPTED THE PROPERTY OFFERED BY THE GOVERNMENT COULD VARY IN DESCRIPTION TO SOME EXTENT FROM THAT SET OUT IN THE INVITATION FOR BIDS AND THE SUCCESSFUL BIDDER WOULD BE OBLIGED TO ACCEPT THE PROPERTY SOLD. IN THIS REGARD BIDDERS WERE WARNED THAT THE SPECIAL CONDITION ENTITLED "GUARANTEED DESCRIPTIONS" BEING USED BY CERTAIN SALES OFFICES WAS NOT A PART OF THE INSTANT INVITATION. IT IS ONLY REASONABLE TO ASSUME THAT THE DREIFUS STATEMENT WAS INTENDED TO MEAN EXACTLY WHAT IT SAYS AND TO PERMIT THE BIDDER TO EXPLAIN OR CLARIFY IT AFTER ALL BIDS HAVE BEEN OPENED WOULD BE IMPROPER. AS WAS STATED IN OUR DECISION OF JUNE 19, 1964, B-152853, 43 COMP. GEN. - , IN THE CASE OF PRIVATE PARTIES, AN AMBIGUOUS OFFER MAY OF COURSE BE CLARIFIED OR EVEN CHANGED BY FURTHER COMMUNICATIONS BUT IN THE CASE OF THE GOVERNMENT WE BELIEVE THAT IT WOULD BE UNFAIR TO OTHER BIDDERS TO PERMIT A BIDDER WHICH CREATED AN AMBIGUITY TO CLARIFY ITS BID ON A MATTER WHICH, AS HERE, MUST BE REGARDED AS GOING TO THE SUBSTANCE OF THE BID. THE STATEMENT INVOLVED MUST BE REGARDED AS A MATERIAL FACTOR SINCE DREIFUS WAS IN A POSITION TO OFFER A HIGHER PRICE IF THE GOVERNMENT IN EFFECT GUARANTEED THE DESCRIPTION BY ACCEPTING ITS (DREIFUS) STATEMENT WHEREAS ANOTHER BIDDER, IF SUCCESSFUL IN BEING AWARDED A CONTRACT, MIGHT BE OBLIGED TO ACCEPT THE ALLOY SCRAP LESS VALUABLE BECAUSE OF DIFFERENT METALLIC CONTENT THAN ADVERTISED AND THEREFORE WOULD NOT BE IN AS FAVORABLE A POSITION IN SUBMITTING A HIGH BID AND OBTAINING AN AWARD.

IN VIEW OF THE FOREGOING WE AGREE WITH THE DETERMINATION THAT THE BID OF DREIFUS WAS NOT RESPONSIVE TO THE INVITATION AND SHOULD BE REJECTED.