B-124929, JUN. 9, 1960

B-124929, JUN. 9, 1960

TO THE FORTNER BROS.-MIDWEST CORP.:

REFERENCE IS MADE TO A LETTER DATED MAY 23, 1960, FROM R. G. DE QUEVEDO, ATTORNEY, REQUESTING ON YOUR BEHALF RECONSIDERATION OF OUR DECISION OF OCTOBER 13, 1955, WHICH SUSTAINED THE SETTLEMENT OF JULY 13, 1955, DISALLOWING YOUR CLAIM FOR $3,290, ALLEGED TO BE DUE AS A PARTIAL REFUND OF THE AMOUNT PAID FOR SURPLUS REFRIGERATORS PURCHASED FROM THE DEPARTMENT OF THE NAVY UNDER CONTRACT NO. N665S-20607, DATED DECEMBER 31, 1954.

THE REQUEST FOR REVIEW IS BASED PRIMARILY ON THE CONTENTION THAT A THOROUGH INSPECTION OF THE REFRIGERATORS WAS IMPRACTICAL, IF NOT IMPOSSIBLE, AND THAT THE DESCRIPTION OF THE REFRIGERATORS AS UNUSED WAS NOT IN ACCORDANCE WITH THE BEST INFORMATION AVAILABLE.

WITH RESPECT TO THE CONTENTION THAT PRACTICAL INSPECTION OF THE REFRIGERATORS BY THE PURCHASER WAS IMPOSSIBLE, ARTICLE 1 OF THE GENERAL SALE TERMS AND CONDITIONS PROVIDES THAT "IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING.' OUR OFFICE CONSISTENTLY HAS HELD THAT WHERE A BIDDER WHO IS COMPLETELY APPRISED OF SUCH AN EXPRESS INSPECTION RESTRICTION IN THE INVITATION, AS WELL AS HAVING FULL KNOWLEDGE OF THE DISCLAIMER OF WARRANTY CLAUSE, SUBMITS A BID, EITHER WITHOUT MAKING ANY INSPECTION OR WITHOUT MAKING AN ADEQUATE OR THOROUGH INSPECTION EVEN THOUGH THE LATTER CIRCUMSTANCE IS DUE TO THE INSPECTION BEING IMPRACTICABLE IF NOT IMPOSSIBLE, IT MUST BE CONCLUDED THAT THE BIDDER ELECTED TO ASSUME ANY RISK WHICH MIGHT EXIST BY REASON OF A VARIANCE BETWEEN THE DESCRIPTION OF THE PROPERTY IN THE INVITATION AND THE PROPERTY ACTUALLY DELIVERED. WAS STATED BY THE COURT IN THE CASE OF PAXTON MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463, IT IS INCUMBENT UPON A BIDDER TO MAKE THE SORT OF INSPECTION THAT IS EFFECTUAL.

THE PROPERTY DISPOSAL OFFICER STATED THAT THE BEST INFORMATION AVAILABLE TO HIM INDICATED THAT THE REFRIGERATORS IN QUESTION WERE UNUSED AND IN FAIR CONDITION. IT APPEARS THAT THE CONTRACTING OFFICER ACTUALLY HAD NO MORE PERSONAL KNOWLEDGE OF THE TRUE FACTS THAN YOU, BUT BY THE EXPRESS TERMS OF THE OFFERING ALL OF THE RISKS AS TO THE ACCURACY OF THE DESCRIPTION WERE IMPOSED UPON YOU AND WERE ACCEPTED BY YOU WHEN YOU BID. IN DISPOSING OF SURPLUS MATERIAL THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS IGNORANT OF THE CONDITION OF THE GOODS IT SELLS. THAT FACT IS MADE KNOWN TO ALL BIDDERS BY THE "AS IS" TERMS OF THE CONTRACT, WHEREBY THE PARTIES AGREE THAT THE RISK AS TO THE CONDITION OF THE MATERIAL SOLD IS ASSUMED BY THE PURCHASER AS ONE OF THE ELEMENTS OF THE BARGAIN. IN THE CASE OF OVERSEAS NAVIGATION CORPORATION V. UNITED STATES, 131 C.CLS. 70, THE COURT HELD THAT THE TERMS OF THE SALE CONTRACT THEN UNDER CONSIDERATION, INCLUDING ITS "AS IS, WHERE IS" PROVISIONS, SPOKE FOR THEMSELVES AND THE PLAINTIFF WAS LEGALLY BOUND BY THEM. THERE WAS AN EXPRESS DISCLAIMER OF ANY WARRANTY THAT THE REFRIGERATORS WERE AS DESCRIBED. THE MERE FACT THAT THE GOVERNMENT WAS HONESTLY MISTAKEN ABOUT THE DESCRIPTION OF THE REFRIGERATORS DOES NOT ENTITLE YOU TO RELIEF. SEE LUMBRAZO V. WOODRUFF, 175 N.W. 525, A.L.R. 017; AND HOOVER V. UTAH NURSERY COMPANY, 7 F.2D 270.