B-124387, AUG. 2, 1955

B-124387, AUG. 2, 1955

TO RICE ASSOCIATES, INC.:

REFERENCE IS MADE TO YOUR LETTER OF MAY 6, 1955, REQUESTING REVIEW OF SETTLEMENT DATED APRIL 27, 1955, WHICH DISALLOWED YOUR CLAIM IN THE AMOUNT OF $3,938.76, REPRESENTING THE ALLEGED LOSS ON LITHOGRAPHIC PLATES PURCHASED UNDER CONTRACT NO. N189S-4962A/S).

IN RESPONSE TO INVITATION NO. B-87-55 ISSUED BY THE NAVAL SUPPLY CENTER, DEPARTMENT OF THE NAVY, NORFOLK, VIRGINIA, YOU SUBMITTED A BID DATED OCTOBER 28, 1954, OFFERING TO PURCHASE, AMONG OTHER THINGS,ITEM 8439, CONSISTING OF 97,560 LITHOGRAPHIC ZINC PLATES AT $0.046 EACH, OR FOR A TOTAL PRICE OF $4,487.76. THE BID, ACCOMPANIED BY A BID DEPOSIT IN THE SUM OF $2,000, WAS ACCEPTED AND AWARD WAS MADE TO YOU, THEREBY CONSUMMATING A VALID AND BINDING CONTRACT BETWEEN THE PARTIES. AFTER PAYMENT OF THE PURCHASE PRICE AND DELIVERY OF THE PLATES TO YOU, YOU CLAIMED A REFUND OF A PART OF THE PURCHASE PRICE.

YOUR REQUEST FOR REVIEW OF THE DISALLOWANCE OF YOUR CLAIM APPEARS TO BE BASED PRIMARILY UPON THE CONTENTION THAT THE MATERIAL DID NOT MEET THE STANDARD EXPECTED AND WAS NOT SUITABLE FOR THE USE INTENDED SINCE THE PLATES WERE REPRESENTED AS NEW AND IN EXCELLENT CONDITION WHEN IN FACT THEY ONLY HAD SCRAP VALUE.

PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS PROVIDES THAT THE DESCRIPTION IS BASED UPON THE BEST AVAILABLE INFORMATION, BUT THAT THE GOVERNMENT MAKES NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE OR DESCRIPTION OF ANY OF THE PROPERTY, OR ITS FITNESS FOR ANY USE OR PURPOSE, AND THAT NO CLAIM WILL BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT OR FOR RESCISSION OF THE SALE BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED SINCE THIS IS NOT A SALE BY SAMPLE.

WITH REGARD TO THE DISCLAIMER AS TO THE DESCRIPTION OF THE PROPERTY OFFERED FOR SALE, IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND BY OUR OFFICE THAT, IN THE ABSENCE OF BAD FAITH OR WHERE IT IS NOT SHOWN THAT THE PROPERTY SOLD WAS OTHER THAN THAT ADVERTISED FOR SALE UNDER A CONTRACT CONTAINING, AS IN THE INSTANT CASE, THE USUAL "AS IS" PROVISION, THE SPECIFIC LANGUAGE OF SUCH A PROVISION CONSTITUTES AN EXPRESS DISCLAIMER OF WARRANTY AND, THEREFORE, NO WARRANTY MAY BE IMPLIED. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; TRIAD CORPORATION V. UNITED STATES, 63 C.CLS. 151; AND I, SHAPIRO AND COMPANY V. UNITED STATES, 66 C.CLS. 424. THERE IS NOTHING IN THE RECORD TO SHOW OR TO INDICATE, AND NEITHER DO YOU ALLEGE, THAT BAD FAITH MAY BE ATTRIBUTED TO THE GOVERNMENT IN THE TRANSACTION.

EQUALLY IMPORTANT IN SUCH A CASE IS THE FACT THAT YOU ADMIT THAT YOU DID NOT MAKE AN INSPECTION OF THE PLATES OFFERED FOR SALE PRIOR TO THE SUBMISSION OF YOUR BID. PARAGRAPH 1 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE INVITATION NOT ONLY INVITED BUT URGED BIDDERS TO INSPECT THE MATERIALS PRIOR TO SUBMITTING BIDS. IT PROVIDED THAT "IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING.' CONSEQUENTLY, UNDER SUCH A PROVISION IT REASONABLY MAY BE CONCLUDED THAT A BIDDER WHO FAILS TO INSPECT ASSUMES ANY RISK WHICH MIGHT EXIST BY REASON OF A VARIANCE BETWEEN THE DESCRIPTION OF THE PROPERTY IN THE INVITATION AND PROPERTY ACTUALLY SOLD. YOU CONTEND THAT THERE WAS NO WAY THAT YOU COULD GET A SAMPLE OF THIS MATERIAL AND PLACE IT IN ACTUAL OPERATION TO FIND OUT IF IT WOULD DO THE REQUIRED WORK. ALSO, YOU STATE THAT EVEN IF A VISUAL INSPECTION WOULD HAVE BEEN PERMITTED IT WOULD HAVE BEEN AT MOST SUPERFICIAL AND A FULL PHYSICAL INSPECTION WAS IMPOSSIBLE. IF YOU WERE NOT WILLING TO ASSUME THE RISK OF WHETHER THE PROPERTY CONFORMED TO THE DESCRIPTION SET FORTH IN THE INVITATION, YOU SHOULD NOT HAVE SUBMITTED SUCH A BID.

IT IS REALIZED THAT THE RESULTS IN THIS CLASS OF CASES MAY APPEAR HARSH BUT THE GOVERNMENT HAS USED THE PLAINEST AND CLEAREST LANGUAGE POSSIBLE TO ADVISE PROSPECTIVE BIDDERS THAT IN SURPLUS SALES THE PRINCIPLE OF CAVEAT EMPTOR WILL APPLY RIGIDLY.