B-173776, DEC 7, 1971

B-173776: Dec 7, 1971

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THE CONTRACT STATED THE ITEM WAS TO BE ACCEPTED "AS IS" AND "WHERE IS" AND THAT THE DESCRIPTION WAS BASED ON THE BEST INFORMATION AVAILABLE BUT SPECIFICALLY DISCLAIMED ALL WARRANTIES. THE PURCHASER IS UNDER A DUTY TO INSPECT WHERE THE GOVERNMENT DISCLAIMS ALL WARRANTIES AND IS BOUND UNLESS THE DISCREPANCY BETWEEN THE ARTICLE DESCRIBED AND THE ARTICLE IN ACTUALITY AMOUNTS TO A "RIDICULOUS" DISCREPANCY. THE CONTRACT IS VALID. INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 27. WHEREIN YOUR CLAIM FOR MISSING ACCESSORIES INCLUDED IN ITEM NO. 5 OF AIR FORCE SALE NO. 5 WAS DISALLOWED IN VIEW OF THE GOVERNMENT'S EXPRESS DISCLAIMER OF WARRANTY. WHICH WAS DESCRIBED AS FOLLOWS: "AF544905 COMPRESSOR USED.

B-173776, DEC 7, 1971

CONTRACTS - GOVERNMENT SURPLUS SALES - DISCLAIMER OF WARRANTY DECISION DENYING RELIEF TO CADILLAC MANUFACTURING COMPANY, INC. ON A SALES CONTRACT BETWEEN THEM AND THE AIR FORCE. THE INVITATION STATED THAT THE AIR COMPRESSOR HAD TWO 125 HORSEPOWER MOTORS BUT IT ACTUALLY HAD ONLY ONE. THE CONTRACT STATED THE ITEM WAS TO BE ACCEPTED "AS IS" AND "WHERE IS" AND THAT THE DESCRIPTION WAS BASED ON THE BEST INFORMATION AVAILABLE BUT SPECIFICALLY DISCLAIMED ALL WARRANTIES. THE PURCHASER IS UNDER A DUTY TO INSPECT WHERE THE GOVERNMENT DISCLAIMS ALL WARRANTIES AND IS BOUND UNLESS THE DISCREPANCY BETWEEN THE ARTICLE DESCRIBED AND THE ARTICLE IN ACTUALITY AMOUNTS TO A "RIDICULOUS" DISCREPANCY. HERE THE DISCREPANCY DOES NOT AMOUNT TO "RIDICULOUS"; THEREFORE, THE CONTRACT IS VALID.

TO CADILLAC MACHINERY COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 27, 1971, WITH ENCLOSURES, REQUESTING REVIEW OF OUR SETTLEMENT DATED JULY 21, 1971, WHEREIN YOUR CLAIM FOR MISSING ACCESSORIES INCLUDED IN ITEM NO. 5 OF AIR FORCE SALE NO. 5 WAS DISALLOWED IN VIEW OF THE GOVERNMENT'S EXPRESS DISCLAIMER OF WARRANTY.

IN RESPONSE TO AN INVITATION FOR BIDS ISSUED BY GENERAL ELECTRIC COMPANY (GE), AS AGENT IN AN AIR FORCE PLANT CLEARANCE SALE, YOU SUBMITTED A BID OFFERING TO PURCHASE SALE ITEM NO. 5, WHICH WAS DESCRIBED AS FOLLOWS: "AF544905 COMPRESSOR USED, POOR, REPAIRS REQUIRED." DD FORM 1342, PROPERTY RECORD, WAS USED BY GE IN THE SALE INVITATION TO DESCRIBE THE ITEMS BEING SOLD BECAUSE IT INCLUDED ALL THE AVAILABLE DETAIL DESCRIPTIVE INFORMATION OF THE ITEMS OFFERED FOR SALE AND COULD EASILY BE REPRODUCED. THE DD 1342 FORM USED BY GE TO DESCRIBE THE CHICAGO PNEUMATIC TOOL CO. AIR COMPRESSOR ERRONEOUSLY INDICATED A QUANTITY OF TWO 125 HORSEPOWER ELECTRIC MOTORS WITH THE ITEM RATHER THAN THE SINGLE MOTOR ACTUALLY ATTACHED TO THE COMPRESSOR. IN THIS REGARD, AND MORE IMPORTANTLY, ONLY ONE MOTOR WAS SHOWN WITH THE COMPRESSOR DURING THE INSPECTION PERIOD FOR PROSPECTIVE BIDDERS TO VIEW THE PROPERTY.

ITEM NO. 5 WAS OFFERED FOR SALE ON AN "AS IS" AND "WHERE IS" BASIS AND, IN PARAGRAPH AII) OF THE GENERAL SALE TERMS AND CONDITIONS OF THE INVITATION, GE STATED THAT THE DESCRIPTION WAS BASED ON THE BEST AVAILABLE INFORMATION, BUT DISCLAIMED ALL WARRANTIES AS TO QUALITY, KIND, CHARACTER, QUANTITY, WEIGHT, CONDITION OR DESCRIPTION OF ANY OF THE PROPERTY OR ITS FITNESS FOR ANY USE OR PURPOSES. PARAGRAPH AI) OF THE GENERAL SALES TERMS AND CONDITIONS URGED BIDDERS TO INSPECT THE PROPERTY BEFORE BIDDING THEREON AND CAUTIONED THEM THAT IN NO CASE WOULD FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR THE WITHDRAWAL OF A BID AFTER OPENING. YOUR COMPANY DID NOT INSPECT THE PROPERTY BEFORE BIDDING.

YOUR BID OF $4,108 WAS ACCEPTED FOR ITEM NO. 5 ON OCTOBER 28, 1970. UPON RECEIPT OF THE COMPRESSOR, YOU ADVISED GE IN YOUR LETTER OF NOVEMBER 17, 1970, THAT YOU RECEIVED ONLY ONE MOTOR. YOU REQUESTED IMMEDIATE SHIPMENT OF THE MOTOR OR A CASH REFUND. SUBSEQUENTLY, IN YOUR LETTER OF MAY 19, 1971, YOU FILED A CLAIM FOR "ACCESSORIES ALLEGED TO BE MISSING."

IN YOUR LETTER OF JULY 27, 1971, YOU CONTEND THAT WHEN A GOVERNMENT AGENCY OR ITS AGENT ADVERTISES ON AN "AS IS, WHERE IS" BASIS, THIS DESIGNATION REFERS ONLY TO THE CONDITION OF AN ARTICLE AND IT DOES NOT ABSOLVE THE SELLER WHEN AN ARTICLE THAT IS ADVERTISED IS MISSING. BASICALLY, YOUR ARGUMENT IS THAT YOU DID NOT RECEIVE WHAT WAS ADVERTISED FOR SALE AND PURCHASED BY YOU.

THE SALES OFFICER WAS UNAWARE THAT THE COMPRESSOR WAS OTHER THAN AS DESCRIBED IN THE PROPERTY REPORT, AND, FROM THE RECORD, HE ACTED IN GOOD FAITH IN DESCRIBING THE ITEM IN THE SALE CATALOG. THE ADVERTISED DESCRIPTION OF ITEM NO. 5 WAS BASED ON THE BEST AND SOLE INFORMATION AVAILABLE TO HIM FROM THE TURN-IN DOCUMENTS. SEE 41 COMP. GEN. 185, 189 (1961); B-166611, MAY 15, 1969; B-161469, MAY 26, 1967.

GENERALLY, WHEN GOVERNMENT SURPLUS IS SOLD ON AN "AS IS" AND "WHERE IS" BASIS, WITH THE OPPORTUNITY TO INSPECT EXTENDED TO INTERESTED BIDDERS WITH NO WARRANTY OR GUARANTY, NO IMPLIED WARRANTY EXISTS THAT THE DESCRIPTION GIVEN IS CORRECT AND THE SUCCESSFUL BIDDER CANNOT ESCAPE LIABILITY UNDER A RESULTING CONTRACT, NOR IS HE ENTITLED TO A REFUND OF MONEY PAID FOR PROPERTY BECAUSE IT DOES NOT FULLY CONFORM TO THE DESCRIPTION GIVEN. COMP. GEN. 185, 187 (1961). THE COURTS HAVE HELD THAT A BUYER'S FAILURE TO INSPECT THE PROPERTY OFFERED FOR SALE IS AN ADDITIONAL REASON FOR DENYING RELIEF BECAUSE THE PROPERTY DOES NOT MEET HIS EXPECTATIONS. SEE, FOR EXAMPLE, TRIAD CORP. V UNITED STATES, 63 CT. CL. 151, 156 (1927); 41 COMP. GEN. 185, 187 (1961).

MOREOVER, THE LANGUAGE OF THE SALES CONTRACT PROVIDED THAT THE GOVERNMENT WOULD NOT BEAR THE RESPONSIBILITY OF THE CONSEQUENCES OF THE CONTRACTOR'S FAILURE TO INSPECT. CLEARLY, THE RISK OF ANY DISPARITY BETWEEN THE DESCRIPTION AND THE ITEMS TO BE SOLD IS, BY THE CONTRACT, IMPOSED ON THE PURCHASER. DADOURIAN EXPORT CORP. V UNITED STATES, 291 F.2D 178, 182 (2D CIR. 1961); UNITED STATES V HATHAWAY, 242 F.2D 897, 900 (9TH CIR. 1957).

THE PURCHASER OF SURPLUS PROPERTY UNDER THESE CONDITIONS WHERE THE GOVERNMENT DISCLAIMS ALL WARRANTIES IS BOUND UNLESS THE DISCREPANCY BETWEEN THE DETAILS OF THE INVITATION AS TO THE ARTICLES TO BE SOLD AND THE ARTICLES ACTUALLY TENDERED BY THE GOVERNMENT IS SO GREAT THAT IT AMOUNTS TO A "RIDICULOUS" DISCREPANCY. STANDARD MAGNESIUM CORP. V UNITED STATES, 241 F.2D 677, 679 (10TH CIR. 1957); UNITED STATES V SILVERTON, 200 F.2D 824, 828 (1ST CIR. 1952). HERE, CLAIMANT BID FOR AN AIR COMPRESSOR, WHICH IN FACT HE RECEIVED. THE FACT THAT CERTAIN ACCESSORIES, INCLUDING A SECOND MOTOR, DESCRIBED IN THE INVITATION WERE NOT RECEIVED, IN OUR OPINION, DID NOT RESULT IN A "RIDICULOUS" DISCREPANCY WITHIN THE CONTEMPLATION OF THE ABOVE-CITED CASES.

IN VIEW OF THE FOREGOING, THE SETTLEMENT OF JULY 21, 1971, IS SUSTAINED.