B-155506, NOV. 10, 1964

B-155506: Nov 10, 1964

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IT STATED THAT THE PROPERTY WAS OFFERED FOR SALE ON AN "AS IS" "WHERE IS" BASIS WITH NO WARRANTY. YOU WERE AWARDED ITEM NO. 17. 10 OF THE PLATES WERE RELEASED TO A CARRIER FOR DELIVERY TO TWO OF YOUR CUSTOMERS. THE REMAINING PLATES WERE FORWARDED TO YOU. THEREAFTER YOU CONTACTED THE SALES CONTRACTING OFFICER BY TELEPHONE AND COMPLAINED THAT ONE OF THE PLATES RECEIVED BY YOU WAS CRACKED AND OF NO USE TO YOU. THAT HE REPORTED THE PLATESWERE IN GOOD CONDITION BUT HE WAS UNABLE TO ADVISE THE CONDITION OF THE PLATES THAT WERE AT THE BOTTOM OF THE PILES IN WHICH THEY WERE STACKED. THAT A CUSTOMER WHO BOUGHT FOUR OF THE PLATES FROM YOU AFTER INSPECTING THEM AT THE DISPOSAL SITE INFORMED YOU THAT ONE OF THE PLATES IN THE LOT SEEN BY HIM WAS CRACKED.

B-155506, NOV. 10, 1964

TO J. A. CUNNINGHAM EQUIPMENT, INC.:

YOUR LETTER OF OCTOBER 23, 1964, REQUESTS RECONSIDERATION OF OUR SETTLEMENT OF OCTOBER 19, WHICH DISALLOWED YOUR CLAIM FOR ADJUSTMENT OF THE PRICE PAID BY YOU FOR CERTAIN SURPLUS GOVERNMENT PROPERTY SOLD BY THE DEFENSE SURPLUS SALES OFFICE, FORT HOLABIRD, BALTIMORE, MARYLAND, UNDER INVITATION NO. 15-S-64-79, DATED FEBRUARY 28, 1964.

THE INVITATION URGED BIDDERS TO INSPECT THE PROPERTY BEFORE SUBMITTING THEIR BIDS. IN ADDITION, IT STATED THAT THE PROPERTY WAS OFFERED FOR SALE ON AN "AS IS" "WHERE IS" BASIS WITH NO WARRANTY, EXPRESS OR IMPLIED, AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE OR DESCRIPTION, OR FITNESS FOR ANY USE.

ON MARCH 25, YOU WERE AWARDED ITEM NO. 17, DESCRIBED AS 26 CAST IRON BED PLATES IN GOOD USED CONDITION (LOCATED AT THE UNITED STATES NAVAL ACADEMY, ANNAPOLIS, MARYLAND) AT YOUR BID PRICE OF $2,627.00. PURSUANT TO YOUR AUTHORIZATION, 10 OF THE PLATES WERE RELEASED TO A CARRIER FOR DELIVERY TO TWO OF YOUR CUSTOMERS, AND THE REMAINING PLATES WERE FORWARDED TO YOU. THEREAFTER YOU CONTACTED THE SALES CONTRACTING OFFICER BY TELEPHONE AND COMPLAINED THAT ONE OF THE PLATES RECEIVED BY YOU WAS CRACKED AND OF NO USE TO YOU.

BY LETTER DATED MAY 18, YOU FILED CLAIM WITH OUR OFFICE FOR EITHER A FULL REFUND OF $101.04 FOR THE CRACKED PLATE, OR PARTIAL REFUND OF $81.04 ALLOWING FOR SALE OF THE PLATE BY YOU AS SCRAP FOR $20.00. IN YOUR LETTER YOU STATED THAT YOUR REPRESENTATIVE HAD INSPECTED THE PROPERTY BEFORE YOU SUBMITTED YOUR BID; THAT HE HAD BEEN INSTRUCTED TO LOOK FOR CRACKS; AND THAT HE REPORTED THE PLATESWERE IN GOOD CONDITION BUT HE WAS UNABLE TO ADVISE THE CONDITION OF THE PLATES THAT WERE AT THE BOTTOM OF THE PILES IN WHICH THEY WERE STACKED. YOU ALSO STATED, HOWEVER, THAT A CUSTOMER WHO BOUGHT FOUR OF THE PLATES FROM YOU AFTER INSPECTING THEM AT THE DISPOSAL SITE INFORMED YOU THAT ONE OF THE PLATES IN THE LOT SEEN BY HIM WAS CRACKED.

OUR SETTLEMENT DISALLOWING YOUR CLAIM CALLED YOUR ATTENTION TO THE EXPRESS DISCLAIMER OF WARRANTY AND TO THE FACT THAT THERE WAS NO EVIDENCE OF BAD FAITH ON THE PART OF THE GOVERNMENT, THE SALES DESCRIPTION HAVING BEEN PREPARED FROM THE BEST AVAILABLE INFORMATION IN THE GOVERNMENT PROPERTY RECORDS AND THERE BEING NO EVIDENCE THAT THE CONTRACTING OFFICE WAS AWARE THAT ONE OF THE PLATES MIGHT HAVE BEEN CRACKED. IN YOUR LETTER OF OCTOBER 23, HOWEVER, YOU INFER THAT THE CRACKED PLATE WAS HIDDEN UNDER THE OTHER PLATES.

IN A REPORT DATED JUNE 3, FROM THE SUPERINTENDENT OF THE UNITED STATES NAVAL ACADEMY, ANNAPOLIS, MARYLAND, IT IS STATED THAT THE BAD PLATES SHIPPED TO YOU WERE THOSE DESCRIBED IN THE INVITATION. IT IS FURTHER STATED THAT THE PLATES WERE NOT MOVED PRIOR TO PICK UP IN YOUR TRUCK AND THAT THEY WERE IN THE SAME CONDITION AT THAT TIME AS WHEN THEY WERE RECEIVED FOR STORAGE.

REGARDING THE DAMAGED PLATE, STORAGE PERSONNEL AT THE NAVAL ACADEMY REPORT THAT THE PLATES WERE STACKED IN PILES OF TWO OR THREE AND THAT THE DAMAGED PLATE WAS ON TOP OF ONE OF THE STACKS. ALSO, IT IS REPORTED, WHILE A CURSORY OBSERVATION MIGHT NOT HAVE REVEALED THE CRACK, WHICH COULD HAVE BEEN MISTAKEN FOR A SCRATCH OR SCORED PLACE ON THE SURFACE OF THE PLATE, A DETAILED INSPECTION WOULD HAVE REVEALED THAT THE PLATE WAS CRACKED.

WHILE ORDINARILY IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION THERE IS AN IMPLIED WARRANTY THAT THE PROPERTY WILL CORRESPOND TO THE DESCRIPTION, NO SUCH WARRANTY MAY BE IMPLIED WHERE, AS HERE, THE SALES CONTRACT CONTAINS AN EXPRESS DISCLAIMER OF WARRANTY. THE PURPOSE AND EFFECT OF THE DISCLAIMER OF WARRANTY PROVISIONS ARE TO IMPOSE ALL RISKS OF MISTAKE UPON THE PURCHASER. ALSO, SUCH PROVISIONS PRECLUDE A SUIT FOR DAMAGES ON THE THEORY OF MUTUAL MISTAKE. UNITED STATES V. HATHAWAY, 242 F.2D 897; AMERICAN SANITARY RAG CO. V. UNITED STATES, 142 CT.CL. 293.

FURTHERMORE, UNDER CONTRACTS SUCH AS THESE, THE BIDDER IS REQUIRED TO MAKE AN EFFECTUAL INSPECTION. THEREFORE, EVEN THOUGH ADEQUATE OR THOROUGH INSPECTION BE IMPRACTICAL, OR EVEN IMPOSSIBLE, IN THE ABSENCE OF BAD FAITH OR FRAUD ON THE PART OF THE GOVERNMENT, A BIDDER, BY SUBMITTING A BID, ASSUMES ANY LOSS WHICH MIGHT RESULT FROM A VARIANCE BETWEEN THE PROPERTY DESCRIBED IN THE INVITATION AND THE PROPERTY DELIVERED. PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463 (1959); ALLOWS CHEMICAL CORP. V. UNITED STATES, 324 F.2D 509.

FROM THE FOREGOING, IT IS APPARENT THAT WHETHER OR NOT INSPECTION WOULD HAVE DISCLOSED THE DEFECTIVE PLATE, YOU ASSUMED THE RISK OF MISDESCRIPTION. IN THE ABSENCE OF ANY INDICATION THAT THE PLATES DELIVERED TO YOU WERE NOT THE SAME AS THOSE OFFERED FOR INSPECTION AND SALE, THERE IS NO BASIS TO GRANT YOU RELIEF BECAUSE A PORTION OF THE PROPERTY DELIVERED WAS NOT IN THE CONDITION INDICATED IN THE SALES DESCRIPTION.