B-136173, JUN. 25, 1958

B-136173, JUN. 25, 1958

TO GORDON ENTERPRISES:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 25, 1958, IN WHICH YOU REQUEST THAT THE MATTER OF YOUR CLAIM PERTAINING TO SPOT BID SALE 18 001-S -57-26 BY THE ABERDEEN PROVING GROUND, MARYLAND, BE REOPENED BECAUSE YOU WISH TO AMEND YOUR CLAIM AND PRESENT ADDITIONAL FACTS IN SUPPORT THEREOF. IN EFFECT, YOU REQUEST REVIEW OF OUR SETTLEMENT DATED APRIL 15, 1958, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF $122--- THE AMOUNT PAID BY YOU FOR ITEM NO. A-126 OF THE REFERRED-TO SPOT BID SALE -- ON THE GROUND THAT THE MATERIAL AWARDED AND DELIVERED TO YOU UNDER THIS ITEM IS SO GROSSLY DIFFERENT THAN YOU WERE LED TO BELIEVE WAS BEING OFFERED.

BY SPOT BID SALES ANNOUNCEMENT, ABERDEEN PROVING GROUND, MARYLAND, INVITED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF 69 ITEMS OF SURPLUS PROPERTY LISTED IN THE ACCOMPANYING CATALOG (18-001-S-57-26) TO BE SOLD ON MAY 2, 1957, AT 10 A.M., EDT, AT THE PROVING GROUND. BIDDERS WERE ADVISED THAT BIDS WOULD BE RECEIVED SUBJECT TO ALL THE TERMS AND CONDITIONS SET FORTH ON PAGES 2, 3, AND 4 OF THE SALES ANNOUNCEMENT, AND THAT THESE TERMS AND CONDITIONS CONSTITUTED PART OF THE CONTRACT OF SALE BETWEEN THE GOVERNMENT AND THE PURCHASER FOR ANY OF THE ITEMS.

BY VARIOUS PROVISIONS IN THE SPOT BID SALES ANNOUNCEMENT BIDDERS WERE PLACED ON NOTICE TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING BIDS AND WERE CHARGED WITH THE DUTY OF SEEING WHAT THEY WERE BUYING BEFORE THEY BOUGHT. THEY WERE ADVISED THAT THE PROPERTY OFFERED FOR SALE MIGHT BE INSPECTED FROM APRIL 17 THROUGH 10 A.M. MAY 2, 1957, MONDAY THROUGH FRIDAY. PARAGRAPH 1 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT PROVIDED THAT IN NO CASE WOULD FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR WITHDRAWAL OF A BID AFTER OPENING. PARAGRAPH 2 OF THAT DOCUMENT PROVIDED, IN PERTINENT PART, AS FOLLOWS:

"ALL PROPERTY LISTED HEREIN IS OFFERED FOR SALE "AS IS" AND "WHERE IS," AND WITHOUT RECOURSE AGAINST THE GOVERNMENT. * * * THE DESCRIPTION IS BASED ON THE BEST AVAILABLE INFORMATION, BUT 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 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; THIS IS NOT A SALE BY SAMPLE.'

THE COURTS MANY TIMES HAVE CONSIDERED SUCH CONTRACT STIPULATIONS IN CASES INVOLVING THE SALE OF GOVERNMENT-OWNED SURPLUS GOODS AND HAVE HELD CONSISTENTLY THAT SUCH LANGUAGE CONSTITUTES AN EXPRESS DISCLAIMER OF WARRANTY. SEE LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, 92; M. SAMUEL AND SONS V. UNITED STATES, 61 C.CLS. 373, 381; TRIAD CORPORATION V. UNITED STATES, 63 C.CLS. 151; S. BRODY V. UNITED STATES, 64 C.CLS. 538; I. SHAPIRO AND CO. V. UNITED STATES, 66 C.CLS. 424, 428; AND SILBERSTEIN AND SON V. UNITED STATES, 69 C.CLS. 412.

IN RESPONSE TO THE BID INVITATION YOU SUBMITTED, AMONG OTHERS, A BID ON ITEM A-126 IN THE AMOUNT OF $110 FOR THE PURCHASE OF ONE LOT OF MATERIAL DESCRIBED IN THE CATALOG (PAGE 21) AS ,FILM MAGAZINES, 1000 FT. CAP., F/MITCHELL CAMERA 4 EA USND TOTAL ACQ COST $300," AND BY TELETYPE DATED MAY 1, 1957, TO THE PROPERTY DISPOSAL OFFICE, ABERDEEN PROVING GROUND, YOU MODIFIED YOUR ORIGINAL BID ON THAT ITEM TO $122. YOUR MODIFIED BID OF $122 WAS ACCEPTED AND THE SALE OF ITEM A-126 WAS AWARDED TO YOU. PAYMENT IN FULL WAS MADE BY YOU ON MAY 21, 1957.

THE RECORD SHOWS THAT IMMEDIATELY UPON RECEIPT OF THE PROPERTY YOU ADVISED THE CONTRACTING OFFICER THAT THERE WAS A MISTAKE IN THE CATALOG DESCRIPTION FOR ITEM A-126 AS THE MATERIAL RECEIVED WAS NOT AS DESCRIBED. BY LETTER DATED JULY 23, 1957, TO THE GENERAL ACCOUNTING OFFICE YOU FILED A CLAIM FOR REFUND OF $122, THE PURCHASE PRICE OF THE MATERIAL, ALLEGING THAT THE MATERIAL RECEIVED WAS GROSSLY DIFFERENT THAN THAT REPRESENTED FOR SALE. YOU PROPOSED TO ASSUME TRANSPORTATION COSTS BOTH WAYS AND RETURN THE MATERIAL TO ABERDEEN PROVING GROUND, MARYLAND. YOUR CLAIM WAS DISALLOWED BY GENERAL ACCOUNTING OFFICE SETTLEMENT CERTIFICATE DATED APRIL 15, 1958, IN VIEW OF THE DISCLAIMER OF WARRANTY PROVISION IN THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT. IN YOUR LETTER OF APRIL 25, 1958, YOU STATE THAT THE CONTRACTING OFFICER HIMSELF, IN TWO CONVERSATIONS, GAVE YOU AN INSPECTION REPORT ON THE MAGAZINES AND ADVISED THAT THEY WERE ,MITCHELL MAGAZINES.' YOU ALSO STATE THAT HAD YOU KNOWN THE MAGAZINES OFFERED FOR SALE UNDER ITEM A-126 WERE "HOUSTON MAGAZINES" YOU WOULD HAVE BID $7.50 EACH ON THE TOTAL QUANTITY OF FOUR, OR A TOTAL OF $30, INSTEAD OF $30.50 EACH YOU BID ON THE LISTED MITCHELL MAGAZINES. YOU NOW DESIRE TO KEEP THE "HOUSTON MAGAZINES," AND REQUEST REFUND OF THE DIFFERENCE BETWEEN $30.50 AND $7.50 EACH, OR $92 FOR THE FOUR MAGAZINES UNDER ITEM A-126.

IN THE FINDINGS OF FACT PERTAINING TO THE SALE TRANSACTION, THE CONTRACTING OFFICER STATES THAT THE MATERIAL WAS INCORRECTLY DESCRIBED ON THE TURN-IN DOCUMENT FROM THE USING AGENCY WHEN THE MATERIAL WAS TRANSFERRED TO THE ABERDEEN PROVING GROUND FOR DISPOSAL. WHILE IT IS ADMITTED THAT AN ERROR WAS MADE IN THE DESCRIPTIVE MATTER OF ITEM A 126 OF THE SPOT BID INVITATION, SUCH ADMISSION, HOWEVER, WITHOUT MORE, MAY NOT BE ACCEPTED AS RENDERING INAPPLICABLE THE EXPRESS TERMS AND CONDITIONS OF THE SALE TO WHICH YOU AGREED.

WHILE ORDINARILY IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION THERE IS AN IMPLIED WARRANTY THAT THE PROPERTY WILL CORRESPOND WITH THE DESCRIPTION --- AND THIS APPEARS TO BE THE BASIS OF YOUR CLAIM--- NO SUCH WARRANTY, HOWEVER, MAY BE IMPLIED WHERE, AS HERE, THE SALES CONTRACT CONTAINS AN EXPRESS DISCLAIMER. MOREOVER, THE GOVERNMENT IN DISPOSING OF ITS SURPLUS PROPERTY IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS IGNORANT OF THE TRUE DESCRIPTION OF THE GOODS IT SELLS. LUMBRAZO V. WOODRUFF, 175 N.E. 525; UNITED STATES V. KELLY, 112 F.SUPP. 831; I. SHAPIRO AND COMPANY V. UNITED STATES, 66 C.CLS. 424; AND MAGUIRE AND CO. V. UNITED STATES, 273 U.S. 67. THESE CASES AND OTHERS CONCLUDE THAT UNDER SUCH PROVISIONS, IN THE ABSENCE OF BAD FAITH OR FRAUD, BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT ANY WARRANTIES WHATEVER. ALSO, THE COURTS HAVE HELD THAT AN EXPRESS DISCLAIMER OF WARRANTY AS USED IN SURPLUS PROPERTY SALES BY THE GOVERNMENT PRECLUDES A SUIT FOR DAMAGES ON THE THEORY OF MUTUAL MISTAKE. UNITED STATES V. HATHAWAY, 242 F.2D 897, AND AMERICAN SANITARY RAG COMPANY V. UNITED STATES, C.CLS. NO. 161-57, DECIDED MAY 7, 1958.

THERE IS NO EVIDENCE IN THE RECORD OF WILLFUL MISREPRESENTATION OR OF BAD FAITH ON THE PART OF THE GOVERNMENT. IT DOES NOT APPEAR THAT THE OFFICER IN CHARGE OF THE SALE KNEW THAT THE MATERIAL WAS NOT AS DESCRIBED. THE DESCRIPTION IN THE BID INVITATION FOR ITEM A-126 WAS BASED ON THE "BEST AVAILABLE INFORMATION"--- AS STATED IN THE INVITATION--- HAVING BEEN TAKEN FROM THE DISPOSAL AGENCY RECORDS. THE MATERIAL WAS SOLD FOR WHAT THE GOVERNMENT THOUGHT IT TO BE AND AS STATED IN STANDARD MAGNESIUM CORPORATION V. UNITED STATES, 241 F.2D 677, 679,"THERE WAS, BY NO MEANS, A RIDICULOUS DISCREPANCY BETWEEN THE GOODS TENDERED AND THE GOODS DESCRIBED; "THIS IS NOT A CASE OF ORDERING APPLES AND GETTING ORANGES.'" YOUR BID OF $122 WAS NOT OUT OF LINE WITH THE OTHER TWO BIDS OF $64 AND $72.93 RECEIVED ON ITEM A 126, CONSIDERING THIS WAS A SALE OF SURPLUS PROPERTY AND THE ESTIMATED ACQUISITION COST OF THE MATERIAL WAS STATED TO BE $300. UNDER THE CONDITIONS OF THE SALE THE GOVERNMENT WAS ONLY OBLIGED TO ACT IN GOOD FAITH, AND THIS IT DID. SEE LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, 92; TRIAD CORPORATION V. UNITED STATES, 63 C.CLS. 151, 156; MAGUIRE AND CO. V. UNITED STATES, 273 U.S. 67; AND LUMBRAZO V. WOODRUFF, SUPRA.

FURTHERMORE, THE RECORD INDICATES THAT YOU DID NOT INSPECT THE MATERIAL COVERED BY ITEM A-126 PRIOR TO SUBMITTING YOUR BID, BUT APPARENTLY RELIED UPON ORAL STATEMENTS OF THE CONTRACTING OFFICER WITH REFERENCE THERETO, ALLEGEDLY MADE IN CONVERSATIONS WITH HIM, THAT THE MAGAZINES WERE ,MITCHELL MAGAZINES.' THIS ALLEGATION AS TO THE STATEMENTS OF THE CONTRACTING OFFICER IS NOT BORNE OUT BY HIM IN HIS FINDINGS OF FACT. HOWEVER, EVEN IF IT WERE A FACT THAT HE GAVE YOU SUCH INFORMATION, IT COULD NOT FORM THE BASIS FOR RELIEVING YOU OF YOUR RESPONSIBILITY UNDER THE TERMS OF THE SALE CONTRACT TO INSPECT THE MATERIAL AND ASCERTAIN FOR YOURSELF THE TRUE CONDITION OF THE MATERIAL BEING OFFERED FOR SALE, INCLUDING THE DESCRIPTION OF THE PROPERTY IN DETAIL. HAD YOU AVAILED YOURSELF OF THE OPPORTUNITY TO INSPECT--- WHICH WAS CONTINUALLY OPEN TO YOU UNTIL THE TIME OF SUBMITTING YOUR BID--- YOU COULD HAVE DETERMINED FOR YOURSELF PRIOR TO BIDDING THE EXACT TYPE OF PROPERTY OFFERED FOR SALE UNDER ITEM A-126. IT DOES NOT APPEAR THAT YOU WERE PREVENTED BY ANY ACT OF THE GOVERNMENT FROM INSPECTING THE PROPERTY. YOU, OF COURSE, WERE UNDER NO OBLIGATION TO EITHER INSPECT THE PROPERTY OR TO BID ON IT, BUT HAVING SUBMITTED A BID WHICH WAS ACCEPTED YOU WERE SUBJECT TO ALL THE TERMS AND CONDITIONS OF THE CONTRACT, INCLUDING THOSE OF THE GENERAL SALE TERMS AND CONDITIONS CONTAINED THEREIN.

IN THIS REGARD, THE LAW IS CLEAR THAT WHERE SURPLUS MATERIALS ARE OFFERED FOR SALE BY THE GOVERNMENT ON AN "AS IS" BASIS WITHOUT WARRANTY OR GUARANTY OF ANY KIND, A BIDDER WHO FAILS TO TAKE ADVANTAGE OF AN OPPORTUNITY TO INSPECT CANNOT SUBSEQUENTLY RECOVER ON THE GROUND THAT THE MATERIALS ARE SOMETHING OTHER THAN WHAT HE THOUGHT HE WAS BUYING. IN THE TRIAD CORPORATION CASE, SUPRA, AT PAGE 156, THE COURT SAID:

"IF PLAINTIFF NEGLECTED TO EMBRACE THE OPPORTUNITY OFFERED IT TO INSPECT AND PURCHASED THE PROPERTY WITHOUT DOING SO, WITH NOTICE THAT IT BOUGHT AT ITS OWN RISK, IT CREATED BY ITS OWN NEGLIGENCE THE SITUATION FROM WHICH IT NOW SEEKS RELIEF.'

SEE ALSO MAGUIRE AND CO. V. UNITED STATES, 273 U.S. 67.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE APPEARS TO BE NO LEGAL BASIS FOR AUTHORIZING A REFUND OF THE PURCHASE PRICE, OR FOR AUTHORIZING ANY ADJUSTMENT WHATSOEVER IN THE PRICE FIXED IN THE CONTRACT FOR THE MATERIAL INVOLVED.