B-140479, DEC. 28, 1959

B-140479, DEC. 28, 1959

TO THE WM. A. SMITH CONTRACTING CO., INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTERS DATED AUGUST 12 AND NOVEMBER 11, 1959, REGARDING YOUR CLAIM FOR RELIEF ON A SALE CONTRACT BASED ON YOUR BID SUBMITTED IN RESPONSE TO INVITATION NO. 59-9 ISSUED APRIL 30, 1959, BY THE ALASKA RAILROAD.

THE INVITATION SOLICITED BIDS--- OPENING DATE MAY 29, 1959--- FOR THE PURCHASE FROM THE GOVERNMENT OF FIVE ITEMS OF SCRAP SALVAGE ROCK CRUSHING EQUIPMENT AS DESCRIBED IN THE INVITATION AND LOCATED AT CLEAR, ALASKA. RESPONSE TO THE INVITATION, YOU SUBMITTED A BID WITH QUOTATIONS ON ALL FIVE ITEMS, SUBJECT TO THE NOTATIONS TYPED THEREON QUALIFYING YOUR BID, AS FOLLOWS:

"BIDDER WILL NOT ACCEPT ITEM NO. 2 WITHOUT ITEM NO. 1.

"BIDDER WILL ACCEPT ITEM NO. 1 ALONE.

"BIDDER WILL NOT ACCEPT ITEMS NOS. 3, 4, AND 5 WITHOUT ITEM NO. 1.'

YOUR BIDS ON ITEMS NOS. 1, 4, AND 5, IN THE RESPECTIVE AMOUNTS OF $6,000, $1,200, AND $800, BEING THE HIGHEST, WERE ACCEPTED BY THE CONTRACTING OFFICER ON MAY 29, 1959, THE SAME DATE BIDS WERE OPENED. YOUR BID DEPOSIT OF $2,500 WAS CREDITED AGAINST THE TOTAL SALE PRICE OF $8,000 LEAVING THE AMOUNT OF $5,500 DUE THE GOVERNMENT, FOR WHICH YOU WERE SENT A BILL OF COLLECTION DATED MAY 29, 1959.

THEREAFTER, ON JUNE 3, 1959, MR. SALM, YOUR AGENT IN ALASKA, WHO PREPARED AND SUBMITTED YOUR BID, VISITED THE ALASKA RAILROAD OFFICE AT ANCHORAGE, ALASKA, AND ADVISED THE CONTRACTING OFFICER THAT HE HAD MISTAKENLY CONFUSED ITEMS NOS. 1 AND 2 IN PREPARING YOUR BID. SUBSEQUENTLY, MR. L. W. HUNCKE, PRESIDENT OF YOUR FIRM, BY LETTER DATED JUNE 5, 1959, ACKNOWLEDGED RECEIPT OF THE BILL OF COLLECTION FOR THE THREE ITEMS AWARDED TO YOU, AND FILED A CLAIM FOR RELIEF UNDER THE CONTRACT ON THE GROUNDS (1) THAT THE AWARD OF ITEMS NOS. 4 AND 5 ONLY WITH ITEM NO. 1 DID NOT CONFORM TO THE QUALIFYING STIPULATION IN YOUR BID THAT "BIDDER WILL NOT ACCEPT ITEMS NOS. 3, 4, AND 5 WITHOUT ITEM NO. 1," AND (2) THAT YOUR BIDS ON ITEMS NOS. 1 AND 2 WERE IN ERROR BECAUSE OF ALLEGEDLY ERRONEOUS INFORMATION GIVEN ORALLY BY A RAILROAD EMPLOYEE TO YOUR AGENT PRIOR TO THE TIME HE PREPARED AND SUBMITTED YOUR BID AND BECAUSE THE EQUIPMENT IN THOSE ITEMS WAS MISDESCRIBED IN THE INVITATION. MR. HUNCKE ALSO CONTENDED THAT THE ERROR IN YOUR BID SHOULD HAVE BEEN APPARENT TO THE CONTRACTING OFFICER AND THAT, SINCE THERE WAS A "TECHNICAL DEFECT HERE," YOUR BID FOR ITEM NO. 1 SHOULD BE ACCEPTED AS YOUR BID FOR ITEM NO. 2 AND YOUR BID FOR ITEM NO. 2 SHOULD BE ACCEPTED AS YOUR BID FOR ITEM NO. 1, CITING PARAGRAPH 3 OF THE GENERAL SALE TERMS AND CONDITIONS WHICH GIVES THE GOVERNMENT THE RIGHT TO WAIVE ANY TECHNICAL DEFECTS IN BIDS. IN REPLY,THE PROPERTY MANAGEMENT OFFICER (CONTRACTING OFFICER) OF THE RAILROAD IN LETTER DATED JUNE 29, 1959, ADVISED YOU THAT IT WAS HIS OPINION THAT YOUR BID CONSTITUTED A FIRM OFFER, AWARDS WERE MADE ON THE BASIS OF THE HIGHEST BIDS RECEIVED AND THEREFORE NO INCORRECT AWARDS WERE MADE, AND YOUR REQUEST WAS DECLINED.

IN A LATER LETTER DATED JULY 22, 1959, TO THE ACTING GENERAL MANAGER OF THE ALASKA RAILROAD AT ANCHORAGE, ALASKA, MR. HUNCKE, REITERATED HIS PREVIOUS ALLEGATIONS AS TO YOUR CLAIM, AND REQUESTED THAT YOUR BID BE CONSIDERED ERRONEOUS AND YOUR BID DEPOSIT BE RETURNED TO YOU AND, IN THE EVENT THIS WAS FOUND TO BE IMPROPER, TO FORWARD THE MATTER TO OUR OFFICE FOR REVIEW AND DECISION. IN YOUR LETTER DATED NOVEMBER 11, 1959, TO OUR OFFICE YOU REQUESTED THAT YOU EITHER BE RELIEVED OF YOUR BID AND YOUR DEPOSIT BE REFUNDED, OR THAT AWARD BE MADE TO YOU OF THE EQUIPMENT ON WHICH YOU THOUGHT YOU WERE BIDDING.

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

IT, THEREFORE, APPEARS THAT THE MATTER FOR CONSIDERATION IS YOUR CLAIM THAT YOU MADE AN ERROR IN YOUR BID AS TO ITEMS NOS. 1 AND 2 BECAUSE THE INVITATION DESCRIPTIONS OF THOSE ITEMS WERE AT VARIANCE WITH THE DESCRIPTIONS IN THE PROPERTY RECORD (SURVEY REPORT NO. 9413) AND, ALSO, BECAUSE OF ERRONEOUS ORAL INFORMATION ALLEGEDLY GIVEN TO YOUR AGENT BY THE ENGINEERING DEPARTMENT OF THE RAILROAD PRIOR TO THE SUBMISSION OF YOUR BID THAT ITEM NO. 1 WAS A "JAW CRUSHER" AND ITEM NO. 2 WAS A "ROLL CRUSHER.'

IT IS THE ESTABLISHED RULE THAT WHEN A BIDDER HAS MADE A MISTAKE AND HIS BID HAS BEEN ACCEPTED HE MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER WAS CHARGED WITH CONSTRUCTIVE NOTICE OF SUCH ERROR SO AS TO MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH. SEE SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; AND OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249.

THE INVITATION STATED THAT THIS WAS A SCRAP SALVAGE SALE, URGED PROSPECTIVE BIDDERS TO INSPECT THE PROPERTY PRIOR TO SUBMITTING THEIR BIDS, AND EXPRESSLY STIPULATED IN PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS (PAGE 2) THAT THE PROPERTY WAS OFFERED FOR SALE "AS IS" WITHOUT ANY WARRANTY, GUARANTY, OR REPRESENTATION WHATEVER AS TO KIND, CHARACTER, DESCRIPTION, OR CONDITION, AND THAT NO CLAIM WOULD BE CONSIDERED FOR ALLOWANCE BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED OR ITS FITNESS FOR USE.

THE COURTS HAVE HELD CONSISTENTLY THAT WHERE, AS HERE, GOVERNMENT SURPLUS PROPERTY IS SOLD "AS IS" AND WITHOUT ANY WARRANTY, GUARANTY, OR REPRESENTATION, NO SUCH WARRANTY MAY BE IMPLIED FROM THE ADVERTISED DESCRIPTION OF THE PROPERTY SOLD, AND, IN THE ABSENCE OF BAD FAITH OR FRAUD ON THE PART OF THE GOVERNMENT, THE PURCHASER BUYS AT HIS OWN RISK. SEE W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED, 284 U.S. 676; I. SHAPIRO AND COMPANY V. UNITED STATES, 66 C.CLS. 424; AND SILBERSTEIN AND SON V. UNITED STATES, 69 C.CLS. 412.

ON PAGE 3 OF THE INVITATION ITEM NO. 1 WAS DESCRIBED AS FOLLOWS:

"CEDAR RAPIDS SECONDARY ROCK CRUSHING UNIT, W/CLIMAX BLUE STREAK ENGINE, MODEL N-4-B, SERIAL NO. 17531, 7404, PROPERTY NO. 10180. UNIT S/N 3648.'

IN NEITHER THE INVITATION NOR THE SURVEY REPORT WAS THE EQUIPMENT DESCRIBED AS A "JAW CRUSHER" OR AS A "ROLL CRUSHER," AND WHILE THE DESCRIPTION OF THE EQUIPMENT COVERED BY ITEM NO. 1 WAS DESCRIBED IN THE SURVEY REPORT AS A "PRIMARY" ROCK CRUSHING UNIT, THE INVITATION WAS CORRECT IN DESCRIBING THE MATERIAL AS A "SECONDARY" ROCK CRUSHING UNIT, AND THE EQUIPMENT TENDERED YOU UNDER THE SALE CONTRACT WAS IN FACT A SECONDARY ROCK CRUSHING MACHINE WHICH CORRESPONDED IN EVERY DETAIL, EXCEPT THE SERIAL NUMBER, WITH THE INVITATION DESCRIPTION OF ITEM NO. 1. THERE IS, THEREFORE, NO BASIS FOR GRANTING ANY RELIEF ON THE GROUND OF A MUTUAL MISTAKE OR THAT THE EQUIPMENT WAS MISDESCRIBED IN THE INVITATION.

WITH REFERENCE TO YOUR CLAIM THAT YOU WERE GIVEN ERRONEOUS ORAL INFORMATION REGARDING THE EQUIPMENT, ATTENTION IS INVITED TO PARAGRAPH 12, VERBAL MODIFICATIONS, OF THE GENERAL SALE TERMS AND CONDITIONS (PAGE 2 OF THE INVITATION), WHICH PROVIDES THAT "ANY ORAL STATEMENT BY ANY REPRESENTATIVE OF THE GOVERNMENT, MODIFYING OR CHANGING ANY CONDITIONS OF THIS CONTRACT, IS AN EXPRESSION OF OPINION ONLY AND CONFERS NO RIGHT UPON THE PURCHASER.' CONSEQUENTLY, THERE WOULD BE NO BASIS FOR ALLOWING ANY RELIEF ON THE GROUND THAT ERRONEOUS ORAL INFORMATION MAY HAVE BEEN GIVEN TO MR. SALM BY A GOVERNMENT REPRESENTATIVE AS ALLEGED. IN THIS CONNECTION, HOWEVER, MR. GRIFFITH, THE ASSISTANT CHIEF ENGINEER OF THE RAILROAD, HAS STATED THAT IN RESPONSE TO A TELEPHONE INQUIRY ON THE MORNING OF THE DAY BIDS WERE TO BE OPENED HE ADVISED MR. SALM THAT HE DID NOT KNOW THE SERIAL NUMBERS ON THE EQUIPMENT IN ITEMS NOS. 1 AND 2, THAT HE HAD NOT SEEN THE EQUIPMENT, THAT THE INFORMATION ON THE SURVEY REPORT WAS NOT NECESSARILY ACCURATE, THAT HE COULD NOT VERIFY THE INFORMATION,AND THAT MR. SALM SHOULD CHECK THE EQUIPMENT HIMSELF BEFORE BIDDING; AND THAT MR. SALM REPLIED THAT AN INSPECTION HAD BEEN MADE OF THE MATERIAL. FACT, BOTH MR. SALM AND MR. HUNCKE HAVE STATED THAT PRIOR TO MAY 29, 1959, WHEN MR. SALM PREPARED AND SUBMITTED YOUR BID, A THOROUGH PHYSICAL INSPECTION OF THE PROPERTY ADVERTISED FOR SALE HAD BEEN MADE BY TWO COMPETENT REPRESENTATIVES OF YOUR FIRM--- INCLUDING THE TAKING OF NOTES AND PHOTOGRAPHS OF THE PROPERTY--- THUS SATISFYING THEMSELVES AS TO THE CONDITION AND UTILITY OF THE PROPERTY.

IT DOES NOT APPEAR THAT ANY ERRONEOUS INFORMATION WAS GIVEN TO MR. SALM BY THE DISPOSAL AGENCY ENGINEER, AS CLAIMED, AND THERE IS NOTHING IN THE RECORD OTHERWISE TO INDICATE THAT THE DISPOSAL OFFICER OR ANY OTHER GOVERNMENT REPRESENTATIVE ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE SALE TRANSACTION. NEITHER IS IT SHOWN THAT THERE WAS ANY MISREPRESENTATION OR FRAUD BY THE GOVERNMENT.

THE RESPONSIBILITY FOR THE PREPARATION OF A BID IS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120. THEREFORE, SINCE YOU WERE ON NOTICE OF THE POSSIBILITY OF AN ERROR IN THE DESCRIPTION CONTAINED IN THE SURVEY REPORT OR THE INVITATION, OR BOTH, AND SINCE YOU HAD AVAILABLE TO YOU THROUGH YOUR OWN INSPECTION INFORMATION AS TO WHAT THE PROPERTY ACTUALLY WAS, YOU SHOULD HAVE REPLIED UPON THAT INFORMATION IN SUBMITTING YOUR BID. NOT HAVING DONE SO, IT MUST BE PRESUMED THAT YOU ASSUMED, IN ACCORDANCE WITH THE CLEAR AND UNAMBIGUOUS TERMS OF THE SALE, THE RISK THAT THE PROPERTY WAS WHAT YOU THOUGHT IT TO BE.

ACCORDINGLY, THERE IS NO LEGAL BASIS FOR GRANTING ANY RELIEF ON THE SALE CONTRACT AWARDED PURSUANT TO YOUR BID IN RESPONSE TO INVITATION NO. 59-9.