B-144275, NOV. 3, 1960

B-144275, NOV. 3, 1960

TO L. GOLDSTEIN'S SONS, INC.:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 5, 1960, REQUESTING REVIEW OF GENERAL ACCOUNTING OFFICE SETTLEMENT DATED SEPTEMBER 28, 1960, WHICH DISALLOWED YOUR CLAIM IN THE AMOUNT OF $208 FOR PARTIAL REFUND OF AN AMOUNT PAID BY YOU FOR SURPLUS PROPERTY PURCHASED FROM THE U.S. NAVAL SUPPLY DEPOT, MECHANICSBURG, PENNSYLVANIA, UNDER CONTRACT NO. N407S-9861 DATED JANUARY 19, 1960.

BY INVITATION NO. B-30-60-407 DATED DECEMBER 29, 1959, BIDS WERE SOLICITED ON VARIOUS ITEMS OF SURPLUS GOVERNMENT PROPERTY, INCLUDING ITEM NO. 16 WHICH COVERED 104 WHEELS FOR LANDING GEAR. THE PROPERTY WAS OFFERED FOR SALE ON AN "AS IS" AND "WHERE IS" BASIS AND IN PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS THE GOVERNMENT STATED THAT THE DESCRIPTION WAS BASED ON THE BEST AVAILABLE INFORMATION BUT DISCLAIMED ALL WARRANTIES "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. PARAGRAPH 1 OF THE GENERAL SALE TERMS AND CONDITIONS URGED BIDDERS TO INSPECT THE PROPERTY BEFORE BIDDING THEREON AND CAUTIONED THEM THAT IN NO CASE WOULD FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM AGAINST THE GOVERNMENT. YOU STATE THAT YOU INSPECTED THE ONE WHEEL WHICH WAS EXPOSED FOR INSPECTION AND WHICH CONTAINED ONLY A STEEL BEARING OR BUSHING AND THAT YOU WERE ADVISED BY A REPRESENTATIVE OF THE GOVERNMENT THAT ALL OTHER WHEELS--- WHICH WERE IN BOXES AT THE TIME OF YOUR INSPECTION--- WERE SIMILAR TO THE ONE INSPECTED, BUT THAT UPON OPENING THE BOXES AFTER DELIVERY YOU FOUND THAT THERE WAS ATTACHED TO EACH WHEEL A STEEL BRAKE DRUM, THE REMOVAL OF WHICH BY TORCHES CAUSED YOU EXTRA LABOR AND LOSS OF METAL.

YOUR CLAIM WAS TRANSMITTED TO THIS OFFICE BY THE DEPARTMENT OF THE NAVY FOR DIRECT SETTLEMENT AND WAS DISALLOWED BY THE SETTLEMENT OF SEPTEMBER 28, 1960, FOR THE REASONS SET OUT THEREIN. IN YOUR LETTER OF OCTOBER 5, 1960, YOU CONCEDE THAT THE SETTLEMENT WAS LEGALLY CORRECT BUT YOU CONTEND THAT THE CLAIM SHOULD BE ALLOWED ON MORAL GROUNDS SINCE YOU WAIVED COMPLETE INSPECTION OF THE PROPERTY IN ORDER TO SAVE TIME AND EXPENSE FOR THE NAVY.

IT MAY BE STATED THAT THIS OFFICE IS WITHOUT AUTHORITY TO DETERMINE CLAIMS BY OR AGAINST THE UNITED STATES SOLELY ON THE BASIS OF EQUITABLE OR MORAL CONSIDERATIONS. ITS JURISDICTION IS RESTRICTED TO THE CONSIDERATION AND DETERMINATION OF SUCH MATTERS IN ACCORDANCE WITH THE APPLICABLE LAW OR UNDER THE TERMS OF A VALID AGREEMENT EXECUTED PURSUANT TO LAW.

IN DISPOSING OF SURPLUS MATERIALS, THE GOVERNMENT IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY, IS NOT AWARE OF THE CONDITION OR THE QUANTITY OF GOODS IT SELLS. THAT FACT IS MADE KNOWN TO ALL BIDDERS BY THE TERMS OF THE CONTRACT, WHEREBY THE PARTIES AGREE THAT THE RISK AS TO THE CONDITION AND THE QUANTITY OF THE MATERIAL SOLD IS ASSUMED BY THE PURCHASER AS ONE OF THE ELEMENTS OF THE BARGAIN. SEE 36 COMP. GEN. 612; KRUPP V. FEDERAL HOUSING ADMINISTRATION, 185 F.SUPP. 638.

FOR THE REASONS ABOVE SET OUT, THE SETTLEMENT OF SEPTEMBER 28, 1960, DISALLOWING YOUR CLAIM, APPEARS TO BE CORRECT AND HEREBY IS SUSTAINED.