B-155803, FEB. 24, 1965

B-155803, FEB. 24, 1965

TO J. S. BETTS COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 2, 1964, REQUESTING RECONSIDERATION OF OUR SETTLEMENT OF OCTOBER 27, 1964, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF $526.88 REPRESENTING ASSESSMENT OF LIQUIDATED DAMAGES ARISING OUT OF THE TERMINATION OF CONTRACT NO. DSA 21-3042.

ITEMS 23 AND 24 WERE ADVERTISED AS APPROXIMATELY 200 UNITS OF ELECTRONIC SCRAP, CONTAMINATED, 37,000 POUNDS, ESTIMATED NET WEIGHT 24,200 POUNDS, BIDS TO BE SUBMITTED ON A PER POUND BASIS. YOU STATE YOU FIGURED YOUR BID AT $0.0356 PER POUND FOR THE 200 UNITS AT THE GROSS WEIGHT OF 37,000 POUNDS WHICH MADE EACH UNIT WORTH APPROXIMATELY $6.50. THE RECORD INDICATES THAT NO PRIOR INSPECTION OF THE PROPERTY WAS MADE. HOWEVER, WHEN YOU CALLED TO PICK UP SOME OF THE UNITS, YOU ALLEGEDLY DISCOVERED OR ESTIMATED THAT THE TOTAL WEIGHT OF EACH ITEM WOULD BE OVER 60,000 POUNDS, THEREBY INCREASING THE UNIT PRICE TO APPROXIMATELY $10.50. SUBSEQUENT CORRESPONDENCE BETWEEN YOUR COMPANY AND THE ADMINISTRATIVE OFFICE DISCLOSES THAT YOU ELECTED TO BE DECLARED IN DEFAULT, WHEREBY 20 PERCENT OF THE PURCHASE PRICE WAS RETAINED BY THE ADMINISTRATIVE OFFICE.

ARTICLES 1 AND 2 OF THE GENERAL SALE TERMS AND CONDITIONS PROVIDED, IN PERTINENT PART, AS FOLLOWS:

"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. * * *"

IN ADDITION THE INVITATION CONTAINED THE FOLLOWING SPECIAL CONDITION HEADED "GUARANTEED DESCRIPTIONS:"

"WITH THE EXCEPTION OF STATED OPINIONS AS TO THE CONDITION OF THE PROPERTY AND ESTIMATES OF WEIGHT AND QUANTITY, AND NOTWITHSTANDING ANY OTHER TERMS AND CONDITIONS OF THIS INVITATION FOR BIDS TO THE CONTRARY, THE GOVERNMENT HEREBY WARRANTS AND GUARANTEES THAT THE PROPERTY TO BE DELIVERED TO THE PURCHASER UNDER ANY CONTRACT RESULTING FROM THIS INVITATION FOR BIDS WILL BE AS DESCRIBED IN THE INVITATION FOR BIDS. * *

IT APPEARS THAT THE GOVERNMENT'S ESTIMATE OF GROSS WEIGHT (37,000 POUNDS) WAS A STATED OPINION AND THEREFORE WOULD NOT FALL WITHIN THE PROVISIONS OF THE SPECIAL CONDITION HEADED "GUARANTEED DESCRIPTIONS.' THIS CASE FALLS WITHIN THE TERMS OF ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS.

THEREFORE, WHILE IT MAY BE THAT YOU ARRIVED AT YOUR BID PRICE ON THE BASIS OF AN EVALUATION OF 200 UNITS OF ELECTRONIC SCRAP, CONTAMINATED, THE INVITATION TO BID CLEARLY STATED THAT BIDS WERE TO BE SUBMITTED ON A "PER POUND" BASIS AND YOUR COMPANY'S BID WAS SUBMITTED ON THAT BASIS AT $0.0356 PER POUND; AND, ALTHOUGH THE GOVERNMENT'S DESCRIPTION IN THE INVITATION MAY HAVE BEEN INCORRECT AS TO THE WEIGHT OF THE MATERIAL, IT DOES NOT APPEAR THAT THE WEIGHT OF ITEMS 23 OR 24 WAS INTENTIONALLY MISSTATED OR THAT THE CONTRACTING OFFICER WAS AWARE AT THE TIME OF ACCEPTANCE OF THE BID THAT THE WEIGHT WAS SO MISSTATED. UNDER THE CONDITIONS OF THE SALE THE GOVERNMENT WAS ONLY OBLIGATED TO ACT IN GOOD FAITH, AND THIS IT DID. SEE LUMBRAZO V. WOODRUFF, 175 M.E. 525; M. SAMUEL AND SONS V. UNITED STATES, 61 CT.CL. 373; S. SILBERSTEIN AND SON, INC. V. UNITED STATES, 69 CT.CL. 373; UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, 684, AFFIRMED 253 F.2D 956; LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, 92.

IT IS INCUMBENT UPON EVERY BIDDER TO INSPECT THE PROPERTY PRIOR TO BIDDING TO ELIMINATE OR DISCOVER ANY ERROR THAT MAY EXIST. SEE PAXTON MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463. IN THE ABSENCE OF A THOROUGH INSPECTION OF THE PROPERTY, IT MUST BE PRESUMED THAT 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.

UNDER THE LEGAL MAXIM CAVEAT EMPTOR THE PURCHASER OF AN ARTICLE MUST EXAMINE, JUDGE AND TEST IT FOR HIMSELF, BEING BOUND TO DISCOVER ANY OBVIOUS DEFECTS OR IMPERFECTIONS. WHERE PROPERTY IS SOLD ON AN "AS IS" AND "WHERE IS" BASIS, WITHOUT WARRANTY OR GUARANTY--- IN THE ABSENCE OF BAD FAITH, FRAUD OR MISREPRESENTATION--- THE TRANSACTION IS CLOSED WHEN THE GOODS ARE SOLD. THERE IS NOTHING IN THE RECORD BEFORE US TO INDICATE BAD FAITH ON THE PART OF THE SALES CONTRACTING OFFICER ..END :