B-142037, MAY 18, 1960

B-142037, MAY 18, 1960

TO S. A. GOLD CO.

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 25, 1960, REQUESTING RECONSIDERATION OF OUR DECISION OF APRIL 6, 1960, B-142037, WHEREIN THE SECRETARY OF THE ARMY WAS INFORMED THAT THERE IS NO LEGAL BASIS FOR REFUND TO YOU OF ANY PART OF THE PURCHASE PRICE OF ITEM 29 ON SPOT BID SALE NO. 41-117-S-60-16.

THE BASIC REASON IN OUR DECISION FOR DENYING YOU RELIEF WAS THAT UNDER THE TERMS OF THE CONTRACT (PARAGRAPHS 1 AND 2 OF THE GENERAL SALE TERMS AND CONDITIONS) THE PARTIES AGREED THAT ANY RISK AS TO THE DESCRIPTION OF THE MATERIAL SOLD, OR FROM THE FAILURE TO INSPECT MATERIAL BEFORE THE SALE WAS CONSUMMATED, WAS ASSUMED BY YOU AS ONE OF THE ELEMENTS OF THE BARGAIN.

YOU CONTEND THAT THE CONTRACTING OFFICER'S STATEMENT IN OUR DECISION OF APRIL 6, 1960, TO THE EFFECT THAT THE BOXES "WE OPENED FOR INSPECTION DID NOT CONTAIN ANY MANUFACTURER'S PART NUMBER" IS INCORRECT FOR THE REASON THAT ALL PARTS RECEIVED BY YOU WERE STAMPED "216-B 55.' YOU ALSO CONTEND THAT THE PART NUMBER "216-B-55" IS THE MANUFACTURER'S PART NUMBER AND NOT AN OLD ORDNANCE NUMBER AS ALLEGED BY THE CONTRACTING OFFICER. ASSUMING THAT THE REFERRED-TO STATEMENTS MADE BY YOU ARE CORRECT, SUCH STATEMENTS CANNOT BE ACCEPTED AS ALTERING THE LEGAL STATUS OF THE MATTER AS SET FORTH IN OUR DECISION OF APRIL 6, 1960.

WE HAVE REVIEWED THE CASE CAREFULLY AND WE FIND NO LEGAL BASIS FOR A CONCLUSION DIFFERENT FROM THAT REACHED IN OUR DECISION OF APRIL 6, 1960. REGARDING INSPECTION OF THE MATERIAL, IT SEEMS CLEAR THAT HAD A REPRESENTATIVE OF YOUR FIRM INSPECTED THE BLADES BEFORE SUBMITTING A BID THE DISPARITY BETWEEN THE ADVERTISED PART NUMBER AND THE NUMBER STAMPED ON THE BLADES WOULD HAVE BEEN APPARENT. HOWEVER THAT MAY BE, THE EXPRESS DISCLAIMER OF WARRANTY PROVISIONS OF THE CONTRACT WOULD PRECLUDE ANY ADJUSTMENT OF THE CONTRACT PRICE. IN THE CASE OF OVERSEAS NAVIGATION CORPORATION V. UNITED STATES, 131 C.CLS. 70, THE COURT HELD THAT THE TERMS OF THE SALES CONTRACT THERE UNDER CONSIDERATION, INCLUDING ITS "AS IS, WHERE IS" PROVISIONS, SPOKE FOR THEMSELVES AND THE PURCHASER WAS LEGALLY BOUND BY THEM.

THE SUPREME COURT HAS CLEARLY STATED THE PRINCIPLE THAT IN THESE CASES THE ONLY OBLIGATION OF THE GOVERNMENT IS TO ACT IN GOOD FAITH. LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90; MAGUIRE AND COMPANY V. UNITED STATES, 273 U.S. 67. IN OUR NUMEROUS DECISIONS ON COMPLAINTS RECEIVED FROM PURCHASERS OF GOVERNMENT SURPLUS PROPERTY, WE HAVE CONSISTENTLY APPLIED THAT CRITERION.

IN THE CIRCUMSTANCES, THERE BEING NO INDICATION THAT THE SUBJECT SALE WAS CONDUCTED IN OTHER THAN GOOD FAITH, WE HAVE NO ALTERNATIVE BUT TO AFFIRM OUR DECISION OF APRIL 6, 1960.