B-145231, APR. 4, 1961

B-145231, APR. 4, 1961

TO THE ACE SURPLUS ENGINES AND PARTS COMPANY:

REFERENCE IS MADE TO YOUR ATTORNEYS' LETTERS OF JANUARY 13 AND MARCH 17, 1961, REQUESTING REVIEW OF GENERAL ACCOUNTING OFFICE SETTLEMENT DATED DECEMBER 16, 1959, WHICH DISALLOWED YOUR CLAIM IN THE AMOUNT OF $2,350.70 FOR PARTIAL REFUND OF AN AMOUNT PAID BY YOU FOR ROCKER ARM ASSEMBLIES PURCHASED FROM THE REDISTRIBUTION AND MARKETING DIVISION, CONTRACTING BRANCH, KELLY AIR FORCE BASE, SAN ANTONIO, TEXAS, UNDER INVITATION NO. 41- 608-S-59-59, DATED APRIL 17, 1959.

BY THE INVITATION, BIDS WERE SOLICITED ON 151 ITEMS OF SURPLUS GOVERNMENT PROPERTY. ITEMS NOS. 34, 43 AND 44 COVERED 1,588 UNITS, 2,532 UNITS AND 2,898 UNITS, RESPECTIVELY, DESCRIBED AS OLLOWS:

"34. ROCKER ARM ASSY, W/BEARING, P/N 0235-59940, RECONDITIONED, APPL. MODEL R-985 SERIES AIRCRAFT ENGINE USED, APPEARS GOOD CODE 28B, EST. GROSS WT. 1500 BOXED, TAILGATED, LINE 7 TOT. ACQ. COST $11,195.40"

"43. ROCKER ARM ASSY. WITH BEARING, RECONDITIONED, P/N 0235-59940 APPL. TO MODEL R985 AIRCRAFT ENGINE USED, APPEARS GOOD CODE 28B, EST. GROSS WT. 2,500 NO. BOXED, TAILGATED, LINE 8 TOT.ACQ. COST $17,850.60"

"44. ROCKER ARM ASSY, WITH BEARING, RECONDITIONED, P/N 0235-59940 APPL. TO MODEL R985 AIRCRAFT ENGINE USED, APPEARS FAIR, MIN.REP.REQ. CODE 28B, EST. GROSS WT. 2850 NO.BOXED, TAILGATED, LINE 8 TOT.ACQ. COST $20,430.90"

IN RESPONSE TO THE INVITATION, YOU SUBMITTED A BID ON SEVERAL ITEMS, INCLUDING A BID OF $1.10 PER UNIT ON ITEMS NOS. 34, 43 AND 44. IT APPEARS THAT YOU MADE A CASUAL INSPECTION OF THE PROPERTY BEFORE SUBMITTING YOUR BID, INSPECTING ONLY ONE OPENED BOX. ON MAY 15, 1959, AWARD WAS MADE TO YOU ON FOUR ITEMS, INCLUDING ITEMS NOS. 34, 43 AND 44 (CONTRACT NO. (41- 608/S-59-875).

IN YOUR LETTER DATED JUNE 6, 1959, CONFIRMING A TELEPHONE CONVERSATION OF JUNE 3, YOU STATED THAT 2,137 UNITS DID NOT INCLUDE BEARINGS AND YOU REQUESTED THAT EITHER BEARINGS BE FURNISHED OR THAT YOUR MONEY BE REFUNDED SINCE YOUR BID WAS BASED ON THE BEARINGS ALONE. A SUBSEQUENT INSPECTION BY A REPRESENTATIVE OF THE CONTRACTING OFFICE CONFIRMED YOUR STATEMENT THAT APPROXIMATELY 2,137 UNITS DID NOT INCLUDE BEARINGS.

PARAGRAPHS 1 AND 2 OF GENERAL SALE TERMS AND CONDITIONS INCLUDED IN THE INVITATION PROVIDED:

"1. INSPECTION.--- BIDDERS ARE INVITED AND URGED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING BIDS. PROPERTY WILL BE AVAILABLE FOR INSPECTION AT THE PLACES AND TIMES SPECIFIED IN THE INVITATION. THE GOVERNMENT WILL NOT BE OBLIGED TO FURNISH ANY LABOR FOR SUCH PURPOSE. NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING.

"2. CONDITION OF PROPERTY.--- ALL PROPERTY LISTED HEREIN IS OFFERED FOR SALE "AS IS" AND ,WHERE IS," AND WITHOUT RECOURSE AGAINST THE GOVERNMENT. IF IT IS PROVIDED HEREIN THAT THE GOVERNMENT SHALL LOAD, THEN "WHERE IS" MEANS F.O.B. CONVEYANCE AT THE POINT SPECIFIED IN THE INVITATION. 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.'

IT IS DIFFICULT TO PERCEIVE HOW CLEARER OR MORE EXPLICIT LANGUAGE COULD HAVE BEEN USED TO APPRISE ALL PROSPECTIVE BIDDERS THAT THEY WERE CONTRACTING FOR THE PURCHASE OF LISTED MATERIALS AT THEIR OWN RISK. THE COURTS HAVE HELD REPEATEDLY THAT SUCH PROVISIONS CONSTITUTE AN EXPRESS DISCLAIMER OF WARRANTY. MAGUIRE AND COMPANY V. UNITED STATES, 273 U.S. 67; LUMBRAZO V. WOODRUFF, 175 N.E. 525; W.E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED, 284 U.S. 676. SEE, ALSO, LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, WHEREIN AN AGENT FOR THE GOVERNMENT LISTED FOR SALE CERTAIN ITEMS OF JUNK LOCATED AT SEVERAL FORTS, SETTING FORTH THE WEIGHTS AND KINDS OF EACH ITEM. ALTHOUGH THE QUANTITIES ACTUALLY WERE ONLY APPROXIMATELY ONE-HALF OF THOSE SHOWN IN THE ADVERTISEMENT, THE PLAINTIFFS WERE HELD NOT TO HAVE ANY CAUSE OF ACTION SINCE, AS STATED BY THE SUPREME COURT, THE MENTIONING OF THE QUANTITIES "CANNOT BE REGARDED AS IN THE NATURE OF A WARRANTY, BUT MERELY AN ESTIMATE OF THE PROBABLE AMOUNTS IN REFERENCE TO WHICH GOOD FAITH ONLY COULD BE REQUIRED OF THE PARTY MAKING IT.'

THOSE CASES AND OTHERS TOO NUMEROUS TO MENTION CONCLUDE THAT, UNDER SUCH CIRCUMSTANCES, BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT ANY WARRANTIES WHATEVER. 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 THE 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.

PARAGRAPH 8 OF GENERAL SALE TERMS AND CONDITIONS, REFERRED TO IN YOUR ATTORNEYS' LETTER, PROVIDES:

"8. ADJUSTMENT FOR VARIATION IN QUANTITY OR WEIGHT.---

"ANY VARIATION BETWEEN THE QUANTITY OR WEIGHT LISTED FOR ANY ITEM AND THE QUANTITY OR WEIGHT OF SUCH ITEM TENDERED OR DELIVERED TO THE PURCHASER WILL BE ADJUSTED ON THE BASIS OF THE UNIT PRICE QUOTED FOR SUCH ITEM; BUT NO ADJUSTMENT FOR SUCH VARIATION WILL BE MADE WHERE AN AWARD IS MADE ON A "PRICE FOR THE LOT" BASIS.'

THE SALE INVOLVED IN THE INSTANT MATTER WAS IN REALITY A SALE BY LOT AND NOT A SALE BY QUANTITY. THEREFORE, THERE IS NO PROPER BASIS FOR "ADJUSTMENT FOR VARIATION IN QUANTITY OR EIGHT" SUCH AS PROVIDED FOR BY PARAGRAPH 8 ABOVE QUOTED. YOU RECEIVED THE ACTUAL PROPERTY WHICH WAS SEGREGATED AND DISPLAYED FOR SALE AS ITEMS NOS. 34, 43 AND 44 AND THE APPARENT FACT THAT SOME UNITS WERE NOT AS DESCRIBED IN THE INVITATION IS IMMATERIAL IN VIEW OF THE SPECIFIC DISCLAIMER OF WARRANTY EXPRESSED IN PARAGRAPH 2 OF GENERAL SALE TERMS AND CONDITIONS ABOVE QUOTED. IN THIS CONNECTION IT IS TO BE OBSERVED THAT PROVISIONS SIMILAR TO OR IDENTICAL WITH THE QUOTED PARAGRAPHS 2 AND 8 WERE INVOLVED IN THE NUMEROUS DECISIONS OF THE COURTS AND THIS OFFICE, ABOVE REFERRED TO, WHEREIN PURCHASERS OF SURPLUS PROPERTY WERE HELD NOT ENTITLED TO RECOVER.

THE INVITATION INVOLVED IN MILLER HARNESS CO. V. UNITED STATES, 241 F.2D 781, INCLUDED PROVISIONS SIMILAR TO OR IDENTICAL WITH THOSE INVOLVED IN THE INSTANT MATTER. THE PLAINTIFF SUBMITTED A BID ON AN ITEM DESCRIBED AS 2,762 "SETS" OF PARTS FOR THE MCCLELLAN CAVALRY SADDLE, EXPECTING THAT THE SETS WOULD INCLUDE STIRRUP STRAPS AND STIRRUP IRONS. IN FACT, NO SUCH STRAPS AND IRONS WERE INCLUDED, ALTHOUGH A REPRESENTATIVE OF THE GOVERNMENT HAD STATED ORALLY THAT THEY WERE INCLUDED. THE COURT DENIED RELIEF ON EITHER TORT OR CONTRACT. IN THE COURT'S OPINION IT IS STATED:

"* * * A CURSORY AND PERFUNCTORY EXAMINATION OF A SMALL PART OF THE GOODS OFFERED UNDER AN ,INVITATION" SO LIMITED AND CIRCUMSCRIBED BY CONDITIONS AND WARNINGS IS PLAINLY INSUFFICIENT TO WARRANT ANY RECOVERY WHATEVER. HERE THERE WAS NO SALE BY DESCRIPTION, AND THE BUYER TOOK THE RISK THAT THE ALREADY IDENTIFIED BOXES DID NOT CONTAIN WHAT HE HOPED WAS IN THEM.'

NO LEGAL RESPONSIBILITY WOULD ATTACH TO THE GOVERNMENT IN THE ABSENCE OF A SHOWING OF BAD FAITH ON THE PART OF THE DISPOSAL OFFICER OR HIS AGENTS. LIPSHITZ AND COHEN V. UNITED STATES, SUPRA. THERE IS NOTHING IN THE RECORD TO ESTABLISH THAT THE CONTRACTING OFFICER OR HIS AGENTS ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE TRANSACTION.

FOR THE REASONS ABOVE SET OUT, THE SETTLEMENT OF DECEMBER 16, 1959, DISALLOWING YOUR CLAIM, APPEARS CORRECT AND HEREBY IS SUSTAINED.