B-136852, JUL. 31, 1958

B-136852, JUL. 31, 1958

TO MUTUAL TRUCK PARTS CO., INC.:

REFERENCE IS MADE TO YOUR LETTER OF JULY 7, 1958, REQUESTING REVIEW OF OUR SETTLEMENT OF JUNE 16, 1958, WHICH DISALLOWED YOUR CLAIM FOR SHORTAGES ARISING OUT OF SPOT BID SALE NO. 36-005-S-58-5 HELD AT LETTERKENNY ORDNANCE DEPOT ON NOVEMBER 7, 1957.

THE RECORD SHOWS THAT YOU WERE AWARDED ON THE BASIS OF YOUR LOT PRICE BID CERTAIN LOTS OF SURPLUS PROPERTY CONSISTING OF VARIOUS ITEMS OF ENGINES, TRANSFER CASE ASSEMBLIES, TRANSMISSION CASE ASSEMBLIES, AND STARTER MOTORS FOR A TOTAL PURCHASE PRICE OF $64,022.27. AFTER PAYMENT OF THE PURCHASE PRICE AND DELIVERY OF THE ITEMS TO YOU, YOU ALLEGED SHORTAGES IN THAT THE NUMBER OF UNITS COMPRISING THE LOTS PURCHASED WERE LESS THAN THOSE SET FORTH IN THE SALE DESCRIPTION OF THE ANNOUNCEMENT.

YOU STATE THAT WHILE A PHYSICAL INSPECTION AND COUNT WAS MADE BY YOU, IT WAS IMPOSSIBLE TO ACCURATELY CHECK ALL ITEMS ESPECIALLY SINCE NO ASSISTANCE WAS GIVEN IN THAT RESPECT BY THE GOVERNMENT. ALSO, YOU CONTEND, IN EFFECT, THAT IF A CERTAIN QUANTITY OF ITEMS ARE OFFERED FOR SALE, AND ARE BID UPON, ANY RESULTING SHORTAGE SHOULD BE ADJUSTED.

THE SALES ANNOUNCEMENT CLEARLY STATED AND REITERATED THAT THE SALE WAS ON AN "AS IS, WHERE IS" BASIS, WITHOUT ANY RECOURSE AGAINST THE GOVERNMENT, AND THAT THE GOVERNMENT MADE NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO QUANTITY, ETC. THE QUANTITIES INDICATED WERE ,APPROXIMATE" ONLY WITHOUT ANY GUARANTEE THAT THE AMOUNT OR NUMBER INDICATED WERE AVAILABLE OR WOULD BE DELIVERED. FURTHERMORE, WHILE ARTICLE 8 OF THE ANNOUNCEMENT PROVIDED FOR PRICE ADJUSTMENT FOR VARIATION IN QUANTITY HAD THE CONTRACT BEEN LET ON A "UNIT PRICE" BASIS, SUCH ARTICLE SPECIFICALLY PROVIDED THAT "NO ADJUSTMENT FOR SUCH VARIATION WILL BE MADE WHERE AN AWARD IS MADE ON A "PRICE FOR THE LOT" BASIS.' WHILE IT IS FURTHER CONTENDED THAT THE PROPERTY DISPOSAL OFFICER ASSURED EVERYONE IN ATTENDANCE AT THE SALE THAT TO THE BEST OF HIS KNOWLEDGE THE QUANTITIES WERE IN ACCORDANCE WITH THOSE ADVERTISED, ARTICLE 12 OF THE ANNOUNCEMENT PROVIDED THAT ORAL STATEMENTS OF GOVERNMENT REPRESENTATIVES CONSTITUTE EXPRESSIONS OF OPINION WHICH CONFER NO RIGHT UPON THE PURCHASER.

IT IS DIFFICULT TO PERCEIVE HOW CLEARER OR MORE EXPLICIT LANGUAGE COULD HAVE BEEN USED TO APPRISE ALL PURCHASERS THAT THEY WERE BUYING AT THEIR OWN RISK. IN CASES SUBSTANTIALLY SIMILAR TO THE ONE HERE INVOLVED, THE COURTS HAVE CONSISTENTLY HELD THAT NO RELIEF COULD BE AFFORDED PURCHASERS OF SURPLUS OR SCRAP MATERIAL WHERE THE GOVERNMENT EXPRESSLY DISCLAIMS WARRANTY OF THE MATERIAL. SEE, FOR EXAMPLE, MILLER HARNESS CO. V. UNITED STATES, 241 F.2D 781; STANDARD MAGNESIUM CORP. V. UNITED STATES, ID . 677, AND LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90.

THOSE CASES AND OTHERS TOO NUMEROUS TO MENTION CONCLUDE THAT, IN SUCH CIRCUMSTANCES, PURCHASERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT ANY WARRANTIES WHATEVER. IN DISPOSING OF SURPLUS PROPERTY THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE OR BUSINESS AND FREQUENTLY IS UNAWARE OF THE QUANTITY, QUALITY, AND CONDITION OF THE GOODS IT SELLS. THAT FACT IS MADE KNOWN TO ALL BIDDERS BY THE "AS IS" TERMS OF THE CONTRACT WHEREBY PARTIES AGREE THAT THE RISK AS TO QUANTITY AND CONDITION OF THE MATERIAL SOLD IS ASSUMED BY THE PURCHASER AS ONE OF THE ELEMENTS OF THE BARGAIN. SEE 36 COMP. GEN. 612. NOTWITHSTANDING THE FACT THAT THE ACTUAL QUANTITY MAY NOT HAVE CONFORMED TO THE APPROXIMATE AMOUNT DESCRIBED IN THE ANNOUNCEMENT, THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE PROPERTY DISPOSAL OFFICER OR HIS AGENTS ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE ENTIRE TRANSACTION.