B-173680, DEC 10, 1971

B-173680: Dec 10, 1971

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THE IFB UNDER WHICH THE SALE WAS CONSUMMATED INCLUDED THE PROVISION THAT THE DESCRIPTION OF THE PROPERTY IS BASED ON THE BEST INFORMATION AVAILABLE TO THE SALES OFFICE. WERE NOT MET. THE VALIDITY OF WHICH SHOULD HAVE BEEN QUESTIONABLE TO HIM BECAUSE THEY WERE NO LONGER COMPONENTS OF A FUNCTIONING AIRCRAFT. IT WAS UNREASONABLE FOR THE INVITATION WRITER TO IGNORE THE TURN-IN DOCUMENT SHOWING A TOTAL WEIGHT OF 92. THE INVITATION FOR BIDS (IFB) UNDER WHICH THE SALE WAS CONSUMMATED INCORPORATED BY REFERENCE THE "GENERAL SALE TERMS AND CONDITIONS" OF THE DEFENSE LOGISTICS SERVICES CENTER FORM 436. THE FORMER PROVISION SPECIFIES THAT PROPERTY LISTED IN THE IFB IS OFFERED "AS IS" AND "WHERE IS. " THAT THE DESCRIPTION OF THE PROPERTY IS BASED ON THE BEST INFORMATION AVAILABLE TO THE SALES OFFICE.

B-173680, DEC 10, 1971

CONTRACTS - SURPLUS SALE - DESCRIPTION OF ITEMS - BEST AVAILABLE INFORMATION DECISION CONCERNING REQUEST BY ARTKO CORPORATION (FORMERLY AERO-TECH, INC.) FOR RECISSION OF THAT PART OF A SURPLUS-SALES CONTRACT COVERING FORTY-THREE OBSOLETE AIRCRAFT FUEL TANKS, PURCHASED AT THE DEFENSE SURPLUS SALES OFFICE, FORT WORTH, TEXAS. THE IFB UNDER WHICH THE SALE WAS CONSUMMATED INCLUDED THE PROVISION THAT THE DESCRIPTION OF THE PROPERTY IS BASED ON THE BEST INFORMATION AVAILABLE TO THE SALES OFFICE. HOWEVER, THE STANDARDS BY WHICH DESCRIPTIONS OF SURPLUS PROPERTY SHOULD BE MEASURED, AS SET OUT IN 50 COMP. GEN. 28, 30 (1970), WERE NOT MET. HERE, THE ADMITTEDLY INEXPERIENCED WRITER, INSTEAD OF USING THE TURN-IN DOCUMENT PREPARED AT THE USING INSTALLATION, BASED HIS DESCRIPTION ON MARKINGS ON THE FUEL TANKS, THE VALIDITY OF WHICH SHOULD HAVE BEEN QUESTIONABLE TO HIM BECAUSE THEY WERE NO LONGER COMPONENTS OF A FUNCTIONING AIRCRAFT. IT WAS UNREASONABLE FOR THE INVITATION WRITER TO IGNORE THE TURN-IN DOCUMENT SHOWING A TOTAL WEIGHT OF 92,526 POUNDS FOR THE TANKS AND TO RELY INSTEAD ON THE STENCILED WEIGHTS ON THE TANKS TOTALING 398,750 POUNDS, A 400 PERCENT DISCREPANCY. ACCORDINGLY, THAT PORTION OF THE CONTRACT COVERING THE FUEL TANKS SHOULD BE RESCINDED.

TO GENERAL WALLACE H. ROBINSON:

WE REFER TO LETTER DSAH-G OF SEPTEMBER 9, 1971, FROM THE ASSISTANT COUNSEL, HEADQUARTERS, CAMERON STATION, TRANSMITTING A REPORT ON THE REQUEST BY ARTKO CORPORATION (ARTKO, FORMERLY AERO-TECH, INC.) FOR RESCISSION OF THAT PART OF CONTRACT NO. 37-0179-024 PERTAINING TO THE SALE OF FORTY-THREE OBSOLETE AIRCRAFT FUEL TANKS BY THE DEFENSE SURPLUS SALES OFFICE (DSSO), FORT WORTH, TEXAS.

THE INVITATION FOR BIDS (IFB) UNDER WHICH THE SALE WAS CONSUMMATED INCORPORATED BY REFERENCE THE "GENERAL SALE TERMS AND CONDITIONS" OF THE DEFENSE LOGISTICS SERVICES CENTER FORM 436, REVISED (MARCH, 1969), "SALE BY REFERENCE," INCLUDING PARAGRAPH NO. 2, "CONDITION AND LOCATION OF PROPERTY," AND PARAGRAPH NO. 27, "GUARANTEED DESCRIPTIONS." THE FORMER PROVISION SPECIFIES THAT PROPERTY LISTED IN THE IFB IS OFFERED "AS IS" AND "WHERE IS," THAT THE DESCRIPTION OF THE PROPERTY IS BASED ON THE BEST INFORMATION AVAILABLE TO THE SALES OFFICE, AND THAT THE GOVERNMENT MAKES NO WARRANTY OF THE QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE, DESCRIPTION, OR FITNESS FOR ANY PURPOSE OF ANY OF THE PROPERTY. THE SECOND PROVISION WARRANTS THAT PROPERTY SOLD WILL BE "AS DESCRIBED" IN THE IFB, BUT SPECIFICALLY DENIES WARRANTY OF THE ACCURACY OF ESTIMATES OF TOTAL WEIGHT AND ESTIMATES OF THE WEIGHT OF PROPERTY SOLD BY THE UNIT.

ARTKO SUBMITTED THE HIGHEST BID ON ITEMS 141 THROUGH 158 OF THE IFB ADVERTISING FORTY-THREE AIRCRAFT FUEL TANKS BY THE UNIT. THE DESCRIPTIONS OF THE TANKS INCLUDED ESTIMATED WEIGHTS OF 7,500 TO 10,000 POUNDS PER UNIT. ARTKO'S BID WAS BASED UPON THE DESCRIPTION IN THE IFB, BUT A REPRESENTATIVE OF THE COMPANY HAD ALSO INSPECTED THE TANKS AT LITTLE ROCK AIR FORCE BASE, ARKANSAS. NO FACILITIES WERE AVAILABLE AT THE SITE FOR WEIGHING THE TANKS WHICH ARTKO PROPOSED TO USE A ALUMINUM SCRAP METAL.

ON AUGUST 5, 1970, ARTKO REMOVED ONE OF THE TANKS FOR WHICH THE WEIGHT WAS ESTIMATED TO BE 10,000 POUNDS AND DISCOVERED THAT ITS ACTUAL WEIGHT WAS 3,200 POUNDS. IN A LETTER OF AUGUST 7, 1970, ARTKO SUBMITTED A CLAIM FOR CANCELLATION OF ITS BID ON THE GROUNDS THAT IN BIDDING IT RELIED UPON THE WEIGHTS GIVEN IN THE IFB, ALTHOUGH THE ACTUAL AVERAGE WEIGHT OF EACH TANK WAS APPROXIMATELY 2,700 POUNDS. DSSO DENIED THIS CLAIM ON THE GROUNDS THAT WARRANTY OF ESTIMATED WEIGHTS WAS SPECIFICALLY EXCLUDED FROM THE SALES CONTRACT AND THAT ARTKO PURCHASED THE SURPLUS PROPERTY AT ITS OWN RISK "AS IS" AND "WHERE IS."

ARTKO THEN SUBMITTED ITS LETTER OF JULY 22, 1971, TO OUR OFFICE REQUESTING THAT ITS PARTIAL PAYMENT BE RETURNED AND THAT THE CONTRACT BE RESCINDED.

THE PROPERTY DISPOSAL OFFICER WHO WROTE THE PROPERTY DESCRIPTIONS PREPARED THE FOLLOWING STATEMENT OF AUGUST 31, 1970, IN EXPLANATION OF THE FIGURES USED IN THE DESCRIPTION OF THE FUEL TANKS:

"ON 8 APRIL 1970, I *** PREPARED PROPERTY LIST NUMBER FR4860-70-17 CONSISTING OF 7 PROPERTY SHEETS. ITEMS 1 THROUGH 17 CONSISTED OF 43 EACH, B-58 AIRCRAFT FUEL TANKS. WHEN PREPARING THESE LISTINGS, I USED THE WEIGHTS STAMPED ON THE SIDE OF REPRESENTATIVE TANKS; MEASURED THE LENGTH, AND DIAMETER AS NEARLY AS POSSIBLE WITH A TAPE MEASURE. SINCE I WAS NOT FAMILIAR WITH THIS TYPE FUEL TANK, (THEY WERE UNLOADED, WITH HEAVY EQUIPMENT) THE WEIGHT INDICATED SEEMED TO BE CORRECT. I WAS NOT AWARE THAT A BALLAST WEIGHT OF KIRK-SITE METAL WAS INCLUDED IN THE TOTAL WEIGHT STAMPED ON THE SIDES OF THE TANKS, AND HAD BEEN REMOVED FROM THE TANKS PRIOR TO OFFERING FOR SALE. THE WEIGHTS STENCILED ON THE PROPERTY VARIED SOME, THEREFORE, THE ADVERTISED WEIGHT REPRESENTED ROUNDED NUMBERS WHICH I FELT WOULD BE CLOSE ENOUGH FOR SALES PURPOSE. THE TURN-IN DOCUMENT WAS USED SOLELY FOR THE PURPOSE OF DETERMINING ACQUISITION COST. I MADE NO FURTHER REVIEW OF WEIGHT OR OTHER INFORMATION IN THE WRITE-UP OF THE ITEMS."

THE "TURN-IN" DOCUMENTS REFERRED TO IN THE STATEMENT REPRESENTED THE TRANSFER OF PROPERTY FROM THE USING INSTALLATION TO THE HOLDING ACTIVITY AND PROVIDED THE ORIGINAL COST, THE TOTAL WEIGHT, AND THE WEIGHT PER UNIT OF THE TANKS. THE SALES CONTRACTING OFFICER, ALTHOUGH HE RECOMMENDS DENIAL OF THE CLAIM, CONCLUDES IN THE ADMINISTRATIVE REPORT THAT THE DISPARITY BETWEEN THE DOCUMENTS AND THE STENCILED MARKINGS COULD HAVE BEEN BEST RESOLVED BY ACTUALLY WEIGHING THE TANKS.

IN ITS ADMINISTRATIVE REPORT DSSO EXPLAINS FURTHER THAT THE DESCRIPTION WRITER, WITHOUT TECHNICAL KNOWLEDGE OF THIS TYPE OF EQUIPMENT, REASONED THAT WEIGHT MARKINGS STENCILED ON THE SIDES OF THE TANKS WERE VERY LIKELY TO BE ACCURATE ON ACCOUNT OF THE IMPORTANCE OF WEIGHT DISTRIBUTION FOR THE EFFECTIVENESS AND SAFETY OF FLIGHT. THEREFORE HE DESCRIBED THE TANKS AS WEIGHING 7,500 TO 10,000 POUNDS ACCORDING TO THE STENCILED MARKINGS. DSSO ARGUES THAT THE DISPOSAL OFFICER PROPERLY GAVE PREFERENCE TO THE STENCILED WEIGHTS BECAUSE THE ACCURACY OF THE WEIGHT OF SUCH COMPONENTS IS IMPORTANT FOR THE SAFETY OF AIRCRAFT AND THEREFORE SHOULD REASONABLY BE PRESUMED TO BE ACCURATE.

IN A RECENT DECISION, 50 COMP. GEN. 28, 30 (1970), OUR OFFICE SUMMARIZED IN THE FOLLOWING LANGUAGE THE STANDARD BY WHICH DESCRIPTIONS OF SURPLUS PROPERTY SHOULD BE MEASURED:

"WE THINK THE RULE TO BE DERIVED FROM THE FOREGOING CASES IS THAT THE HOLDING ACTIVITY WHICH INCLUDES THE PROPERTY DISPOSAL OFFICER, SHOULD BE HELD TO THE USE OF THE BEST INFORMATION AVAILABLE TO IT. WHERE THE INFORMATION IS CONTRADICTORY OR INCONSISTENT THE HOLDING ACTIVITY HAS A DUTY TO SELECT THE DESCRIPTIVE INFORMATION TO BE USED ON SOME REASONABLE BASIS. HOWEVER, WHERE THE DESCRIPTION OF THE ITEM AVAILABLE TO THE HOLDING ACTIVITY IS NOT INTERNALLY INCONSISTENT, IT HAS A RIGHT TO RELY ON THE ACCURACY OF THE INFORMATION. WHERE NO INFORMATION IS AVAILABLE, THE HOLDING ACTIVITY HAS A DUTY TO DEVELOP A DESCRIPTION OF THE PROPERTY ON A REASONABLE BASIS TAKING INTO CONSIDERATION THE CIRCUMSTANCES AND THE EFFORT JUSTIFIED IN RELATION TO THE PROBABLE VALUE. ERRORS IN JUDGMENT OR TYPOGRAPHICAL ERRORS BY THE HOLDING ACTIVITY WOULD NOT PER SE VIOLATE THE STANDARD. WE BELIEVE THAT OUR HOLDINGS ON THE POINT ARE CONSISTENT WITH THIS RULE."

FOR REASONS SET OUT BELOW, WE CONCLUDE THAT THIS STANDARD WAS NOT MET IN THE PREPARATION OF THE INSTANT PROPERTY DESCRIPTION. IN THIS REGARD, THE ADMITTEDLY INEXPERIENCED WRITER, INSTEAD OF USING THE TURN IN DOCUMENT PREPARED BY PERSONS IN THE USING INSTALLATION PRESUMABLY MORE FAMILIAR WITH THE EQUIPMENT, BASED HIS DESCRIPTION ON MARKINGS, THE VALIDITY OF WHICH SHOULD HAVE BEEN QUESTIONABLE TO HIM BECAUSE THEY WERE NO LONGER COMPONENTS OF A FUNCTIONING AIRCRAFT.

WITH RESPECT TO THE DUTY OF THE PROPERTY DISPOSAL OFFICER TO USE THE BEST AVAILABLE INFORMATION WHERE A DECISION IS MADE TO USE A DESCRIPTION OTHER THAN THE ONE CONTAINED IN THE TURN-IN DOCUMENT, THE FOLLOWING STATEMENT WAS MADE IN A PREVIOUS DECISION OF OUR OFFICE B 151239, MAY 31, 1963:

" *** WE BELIEVE THAT WHERE THE CONDITION OF SURPLUS PROPERTY IS CHANGED FROM THAT SHOWN ON THE TURN-IN DOCUMENT BY A DISPOSAL OFFICER BY REASON OF THE RECEIPT OF ADDITIONAL INFORMATION OR ON THE BASIS OF HIS OWN INSPECTION OF THE PROPERTY THE DISPOSAL OFFICER OR SUCH OTHER PERSON AUTHORIZING THE CHANGE, OWES THE DUTY OF CAREFULLY EVALUATING ALL CIRCUMSTANCES ASSOCIATED WITH THE CONDITION OF THE PROPERTY TO INSURE THAT THE CHANGE IS BASED ON THE BEST AVAILABLE INFORMATION, AND THIS IS PARTICULARLY TRUE WHERE, AS HERE, THE CHANGE IN THE DESCRIPTION INDICATES THE PROPERTY BEING IN A BETTER CONDITION. *** "

IN OUR OPINION, IT WAS UNREASONABLE FOR THE INVITATION WRITER TO IGNORE THE TURN-IN DOCUMENTS SHOWING A TOTAL WEIGHT OF 92,526 POUNDS FOR THE TANKS AND TO RELY ON THE STENCILED WEIGHTS ON THE TANKS TOTALING 398,750 POUNDS, 400 PERCENT MORE THAN THE TOTAL WEIGHT INDICATED IN THE TURN-IN DOCUMENTS, RATHER THAN THE WEIGHTS SET OUT IN THE TURN-IN DOCUMENT WITHOUT FIRST ATTEMPTING TO RESOLVE THE DISCREPANCY BETWEEN THE TWO. WE THEREFORE CONCLUDE THAT THE BEST AVAILABLE INFORMATION WAS NOT USED IN PREPARING THE DESCRIPTION FOR THIS SURPLUS SALE. ACCORDINGLY, THAT PART OF THE CONTRACT PERTAINING TO THE 43 FUEL TANKS SHOULD BE RESCINDED AND ARTKO SHOULD BE ALLOWED TO RETURN AT GOVERNMENT EXPENSE THE TANK REMOVED BY IT. FURTHER, THE PRICE PAID FOR THE TANK AND THE DEPOSIT BEING RETAINED FOR FAILURE TO TAKE DELIVERY OF THE REMAINING TANKS SHOULD BE REFUNDED.