B-156832, JUN. 22, 1965

B-156832: Jun 22, 1965

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LTD.: REFERENCE IS MADE TO YOUR LETTER OF MAY 10. YOU ASK THAT IF YOUR CLAIM IS NOT FOR ALLOWANCE. WHICH WAS DESCRIBED IN THE FOLLOWING MANNER: CHART "2 CONE AND ROLLERS: CONDITION CODE: N-2. 566 WAS ACCEPTED ON APRIL 13. YOU WERE AWARDED ITEM 2 OF THE CONTRACT (UNNUMBERED/. WAS OF UNITED STATES OF AMERICA ORIGIN. YOU WERE DECLARED IN DEFAULT ON THE CONTRACT UNDER CONDITIONS 4 AND 7 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE INVITATION. YOU WERE ASSESSED LIQUIDATED DAMAGES BASED ON 20 PERCENT ($513.20) OF THE CONTRACT PRICE IN ACCORDANCE WITH CONDITION 7. YOUR CLAIM FOR REFUND OF THE $513.20 WAS BASED ON THE PREMISE THAT THE GOVERNMENT MISDESCRIBED AND MISREPRESENTED THE SUPRLUS PROPERTY IN QUESTION BY NOT IDENTIFYING IT TO BE OF JAPANESE MANUFACTURE.

B-156832, JUN. 22, 1965

TO C. RAMON AND COMPANY, LTD.:

REFERENCE IS MADE TO YOUR LETTER OF MAY 10, 1965, REQUESTING RECONSIDERATION OF OUR CLAIMS DIVISION SETTLEMENT OF FEBRUARY 10, 1965, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF $513.20, REPRESENTING LIQUIDATED DAMAGES PAID BY YOU IN CONNECTION WITH INVITATION FOR BIDS NO. 92-557-S-64 -77, DATED FEBRUARY 24, 1964. IN YOUR LETTER YOU TAKE ISSUE WITH THE DISALLOWANCE OF YOUR CLAIM ON THE BASIS THAT THE GOVERNMENT MISDESCRIBED AND MISREPRESENTED THE SURPLUS PROPERTY ON WHICH YOU MADE YOUR BID, AND YOU ASK THAT IF YOUR CLAIM IS NOT FOR ALLOWANCE, THAT YOU BE ABLE TO SECURE THE SURPLUS PROPERTY IN QUESTION BY NOW PAYING THE BALANCE OF THE PRICE YOU ORIGINALLY BID.

THE RECORD SHOWS THAT IN RESPONSE TO INVITATION FOR BIDS NO. 92-557 S-64- 77, ISSUED BY THE DIRECTOR OF PROPERTY DISPOSAL, HEADQUARTERS, UNITED STATES ARMY DEPOT, HONSHU, JAPAN, YOU SUBMITTED A BID OFFERING TO PURCHASE ITEM 2, WHICH WAS DESCRIBED IN THE FOLLOWING MANNER:

CHART

"2 CONE AND ROLLERS:

CONDITION CODE: N-2--- UNUSED.

ESTIMATED WEIGHT: 5.2 SHORT TONS, PACKED IN WOOD BOXES.

ESTIMATED ACQUISITION COST: $12,368.00.

"/3110-100-3537) (NSK-24780) TAPERED ROLLER BEARING, SINGLE

ROW, RETAINER TYPE, STRAIGHT BORE, NORMAL ANGLE, SI NO. 2

TOLERANCES, 1.6250 INCH BORE DIAMETER, 0.9063 INCH

LENGTH, 0.141 INCH RADIUS. FOR FRONT AND REAR AXLE

DIFFERENTIAL, USED ON G503, G740 AND G758 TRUCKS AND G789

TRAILERS. APPROXIMATELY 11,668 EACH.

"LOCATION CODE: R/S 1226-64. L/N 651-64 AREA 7-D. (1) "

YOUR BID IN THE AMOUNT OF $2,566 WAS ACCEPTED ON APRIL 13, 1964, AND YOU WERE AWARDED ITEM 2 OF THE CONTRACT (UNNUMBERED/--- OFF IDENTIFICATION 6004. THEREAFTER, BY YOUR LETTER DATED APRIL 20, 1964, TO THE SELLING ACTIVITY, YOU REQUESTED CANCELLATION OF THE CONTRACT ON THE BASIS THAT YOU BID WITH THE UNDERSTANDING THAT ITEM 2, DESCRIBED ABOVE, WAS OF UNITED STATES OF AMERICA ORIGIN, WHEREAS AFTER AWARD YOU DISCOVERED THE ITEM TO BE OF JAPANESE MANUFACTURE. AFTER SUBSEQUENT CORRESPONDENCE, AND YOUR FAILURE TO PAY FOR AND REMOVE THE AWARDED ITEMS, YOU WERE DECLARED IN DEFAULT ON THE CONTRACT UNDER CONDITIONS 4 AND 7 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE INVITATION. YOU WERE ASSESSED LIQUIDATED DAMAGES BASED ON 20 PERCENT ($513.20) OF THE CONTRACT PRICE IN ACCORDANCE WITH CONDITION 7, WHICH AMOUNT YOU PAID WITH YOUR LETTER OF JULY 3, 1964. YOUR CLAIM FOR REFUND OF THE $513.20 WAS BASED ON THE PREMISE THAT THE GOVERNMENT MISDESCRIBED AND MISREPRESENTED THE SUPRLUS PROPERTY IN QUESTION BY NOT IDENTIFYING IT TO BE OF JAPANESE MANUFACTURE, THUS LEADING YOU TO BELIEVE THAT IT WAS MANUFACTURED IN THE UNITED STATES OF AMERICA. IN THIS CONNECTION, IT IS TO BE NOTED THAT YOU DID NOT INSPECT THE SURPLUS PROPERTY INVOLVED BEFORE MAKING YOUR BID. YOU CLAIM FOR REFUND WAS DISALLOWED BY OUR CLAIMS DIVISION SETTLEMENT OF FEBRUARY 10, 1965, ON THE GROUND GENERALLY THAT THE PROPERTY INVOLVED WAS OFFERED FOR SALE ON AN ,AS IS," "WHERE IS" BASIS AND WITHOUT EXPRESS OR IMPLIED WARRANTY OF ANY KIND.

IN YOUR CURRENT REQUEST FOR REVIEW YOU AGAIN CONTEND THAT ITEM 2 WAS MISDESCRIBED IN THAT IT WAS NOT DESCRIBED AS "MADE IN JAPAN," THUS LEADING YOU TO BELIEVE THAT IT WAS OF UNITED STATES OF AMERICA ORIGIN. IN THIS RESPECT, THE RECORD SHOWS THAT IN CONNECTION WITH ITEMS 1 AND 3 OF THE INVITATION, COVERING SIMILAR TYPE BEARINGS, THE NUMERICAL DESCRIPTIONS (TIM-24780) AND (GM-187360) RESPECTIVELY, IDENTIFY THE MANUFACTURERS AS TIMKINS AND GENERAL MOTORS AND ITEM 2 (NSK-24780) IDENTIFIES THE PROPERTY AS HAVING BEEN MANUFACTURED BY NIPPON SEIKO KARSHA OF JAPAN. YOU HAVE STATED THAT YOU CONSTRUED SUCH DESCRIPTION AS HAVING BEEN A TYPOGRAPHICAL ERROR IN DESCRIBING THE GOODS, SINCE OTHER SIMILAR ITEMS WERE OF UNITED STATES OF AMERICA ORIGIN.

UNDER ARTICLE 1 OF THE GENERAL SALE TERMS AND CONDITIONS BIDDERS WERE INVITED, URGED AND CAUTIONED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING A BID. MOREOVER, ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS CLEARLY PROVIDES THAT THE GOVERNMENT MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE OR DESCRIPTION OF ANY OF THE PROPERTY. SUCH EXPRESS DISCLAIMER OF WARRANTY VITIATES ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT ARISE OUT OF A SALES TRANSACTION. SEE W. E. HEDGER CO. V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; UNITED STATES V. KELLY, 112 F.SUPP. 831; MAGUIRE AND COMPANY V. UNITED STATES, 273 U.S. 67 AND LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90. IT IS ADMINISTRATIVELY REPORTED THAT HAD YOU INSPECTED THE PROPERTY IN QUESTION, YOU WOULD HAVE SEEN ON EACH BOX IN WHICH THE CONES AND ROLLERS WERE PACKED "MANUFACTURED BY NIPPON SEIKO KK.'

REGARDING SUCH INSPECTION ASPECTS OF THE CASE, YOUR RESPONSIBILITIES AS A BIDDER APPEAR TO BE CLEARLY SET FORTH IN PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463. IT WAS HELD IN THIS CASE THAT NOTWITHSTANDING THE DIFFICULTIES ATTENDANT UPON AN INSPECTION, IT IS INCUMBENT UPON THE BIDDER TO MAKE THE KIND OF AN INSPECTION THAT IS EFFECTUAL. 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.

IN THE ABSENCE OF BAD FAITH ON THE PART OF GOVERNMENT OFFICIALS IN SETTING OUT THE DESCRIPTION OF THE ARTICLES TO BE SOLD, THE PURCHASER OF SURPLUS PROPERTY UNDER A CONTRACT CONTAINING THE USUAL DISCLAIMER OF WARRANTY PROVISION IS BOUND BY THAT PROVISION UNLESS THE DISCREPANCY BETWEEN THE DETAILS IN THE INVITATION AS TO THE ARTICLES ACTUALLY TENDERED BY THE GOVERNMENT IS SO GREAT THAT IT AMOUNTS TO A RIDICULOUS DISCREPANCY OR A "CASE OF ORDERING APPLES AND GETTING ORANGES.' STANDARD MAGNESIUM CORPORATION V. UNITED STATES, 241 F.2D 677. NO SUCH DISCREPANCY IS PRESENT IN YOUR CASE, AND WE SEE NO LEGAL BASIS FOR REFUNDING THE LIQUIDATED DAMAGES PAID BY YOU UPON DEFAULT OF THE CONTRACT.

CONCERNING YOUR QUERY AS TO WHETHER YOU MIGHT BE ABLE TO SECURE THE SURPLUS PROPERTY IN QUESTION BY NOW PAYING THE BALANCE OF THE PRICE YOU ORIGINALLY BID, WE INVITE YOUR ATTENTION TO THE LETTER OF MAY 11, 1964, TO YOU, FROM THE PROPERTY DISPOSAL (CONTRACTING) OFFICER IN WHICH YOU WERE ADVISED THAT UNLESS YOUR DEFAULT WAS CURED BY MAY 26, 1964, "YOU SHALL LOSE ALL RIGHT, TITLE, AND INTEREST WHICH YOU MIGHT OTHERWISE HAVE ACQUIRED IN AND TO THE PROPERTY AS TO WHICH THE DEFAULT HAS OCCURRED, AND ACTION WILL BE TAKEN TO RETAIN (OR COLLECT), AS LIQUIDATED DAMAGES, A SUM EQUAL TO 20 PERCENT OF THE PURCHASE PRICE OF SUCH PROPERTY.' ON SUCH BASIS, IT APPEARS THAT YOU HAVE LOST ANY RIGHT, TITLE, OR INTEREST YOU MAY HAVE HAD IN THE SUBJECT PROPERTY BEFORE YOUR DEFAULT, AND WE SEE NO BASIS FOR NOW REINSTATING THE DEFAULTED CONTRACT.