B-145791, JUN. 23, 1961

B-145791, JUN. 23, 1961

TO SHELLY COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 27, 1961, REQUESTING REVIEW OF OUR CLAIMS DIVISION SETTLEMENT DATED APRIL 20, 1961, WHICH DISALLOWED YOUR CLAIM FOR $6,570.72, REPRESENTING THE AMOUNT PAID BY YOU FOR 169 DRILLS UNDER ITEM NO. 5616 OF ANY CONTRACT NO. N63067 1110.

BY SALES INVITATION NO. B-73-61-63067, THE U.S. CONSOLIDATED SURPLUS SALES OFFICE, NAVAL SUPPLY CENTER, NORFOLK, VIRGINIA, SOLICITED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF CERTAIN MISCELLANEOUS SURPLUS PROPERTY. IN RESPONSE THERETO YOU SUBMITTED A BID WITH QUOTATIONS ON A NUMBER OF THE ADVERTISED ITEMS. YOUR BID AS TO ITEM NO. 5616, HERE IN QUESTION, AT $38.88 EACH, BEING THE HIGHEST BID RECEIVED ON THAT ITEM, WAS ACCEPTED WITH OTHERS AND AWARDED TO YOU ON CONTRACT NO. 63067 1110. THE MATERIAL IN ITEM NO. 5616 WAS DESCRIBED IN THE INVITATION AS FOLLOWS:

"DRILLS, TAPER SHANK, NR. 5 SHANK, OD 2 1/2 INCH, OVER-ALL LENGTH 19 1/2 INCH, STEEL, HIGH SPEED, MFR: CHICAGO-LATROBE TWIST DRILL WORKS AND OTHERS. UNUSED. TOTAL ACQUISITION COST: $16,750.00 QUANTITY - 335 EA. PACKED FOR SHIPMENT.'

UPON PAYMENT OF THE PURCHASE PRICE AND DELIVERY OF THE MATERIALS, YOU ADVISED THE DISPOSAL OFFICE BY LETTER DATED DECEMBER 14, 1960, THAT 166 OF THE DRILLS IN ITEM NO. 5616 RECEIVED BY YOU WERE FOUND TO BE "ABSOLUTELY NEW" BUT 169 DID NOT CORRESPOND WITH THE BID INVITATION DESCRIPTION OR WITH THE SAMPLES INSPECTED BY YOU AS THEY WERE FOUND TO BE "USED AND PRACTICALLY WORTHLESS.' IN LETTER DATED FEBRUARY 4, 1961, TO THE DISPOSAL AGENCY, YOU REQUESTED THAT YOU BE AUTHORIZED TO RETURN THE 169 DRILLS AT YOUR EXPENSE AND RECEIVE A REFUND OF THE PURCHASE PRICE OF $38,88 EACH, A TOTAL OF $6,570.72.

UNDER DATE OF MARCH 27, 1961, THE U.S. NAVY REGIONAL ACCOUNTS OFFICE REFERRED YOUR CLAIM TO OUR CLAIMS DIVISION FOR DIRECT SETTLEMENT. INDICATED IN THE SETTLEMENT OF APRIL 20, 1961, YOUR CLAIM WAS DISALLOWED GENERALLY ON THE GROUND THAT THE PROPERTY WAS OFFERED FOR SALE ON AN "AS IS" BASIS AND WITHOUT AN EXPRESS OR IMPLIED WARRANTY OR GUARANTY OF ANY KIND.

IN YOUR LETTER OF APRIL 27, 1961, REQUESTING REVIEW OF OUR ACTION IN DISALLOWING YOUR CLAIM, YOU REITERATE YOUR ALLEGATION THAT A QUANTITY OF THE MATERIAL DELIVERED TO YOU UNDER THE CONTRACT DIFFERED FROM THE DESCRIPTION THEREOF AS SHOWN IN THE BID INVITATION FOR ITEM NO. 5616, BUT YOU PRESENT NO INFORMATION OR DATA ADDITIONAL TO THAT ALREADY CONSIDERED BY OUR OFFICE. FURTHERMORE, YOU NOW STATE THAT YOU DEFINITELY DID NOT RELY ON THE DESCRIPTION ALONE IN SUBMITTING YOUR BID BUT THAT YOU PERSONALLY INSPECTED THE MATERIAL IN FOUR OPEN CASES OF THESE DRILLS AVAILABLE TO BUYERS FOR INSPECTION.

UNDER ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE SALE, WHICH YOU AGREED TO WHEN YOU SUBMITTED YOUR BID ON ITEM NO. 5616, ALL PROPERTY WAS OFFERED FOR SALE "AS IS" AND "WHERE IS," WITHOUT EXPRESS OR IMPLIED GUARANTY OR WARRANTY OF ANY KIND, INCLUDING THE CONDITION AND DESCRIPTION OF THE PROPERTY, AND IT WAS ALSO STATED IN THAT ARTICLE THAT "THIS IS NOT A SALE BY SAMPLE.'

IT IS EVIDENT, THEREFORE, THAT YOU HAD ACTUAL NOTICE OF THE FACT THAT THIS WAS NOT A SALE BY SAMPLE AND THAT THE GOVERNMENT'S DESCRIPTION OF THE PROPERTY BEING SOLD UNDER ITEM NO. 5616 WAS NOTHING MORE THAN A MERE STATEMENT OF OPINION. MOREOVER, WHILE THE DESCRIPTION OF THE PROPERTY IN QUESTION MAY NOT HAVE BEEN ENTIRELY ACCURATE, YOU DO NOT ALLEGE AND THERE IS NOTHING IN THE RECORD TO INDICATE THAT IT WAS INTENTIONALLY MISDESCRIBED IN THE BID INVITATION, OR THAT THE GOVERNMENT AGENTS ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE SALES TRANSACTION. THE FACTS IN THIS CASE ARE SIMILAR TO THOSE CONSIDERED IN TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 141, WHEREIN THE COURT REJECTED THE PLAINTIFF'S CLAIM ON THE BASIS THAT A CERTAIN NUMBER OF SURPLUS SADDLES DESCRIBED AS UNUSED WERE LATER FOUND TO HAVE BEEN USED AND RECONDITIONED. SEE PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463. IN THE CIRCUMSTANCES, THEREFORE, YOU ARE NOT ENTITLED TO AN ADJUSTMENT IN THE SALES PRICE ON THE BASIS OF MISDESCRIPTION OF THE PROPERTY.

WE REALIZE THAT THE RESULTS IN SUCH CASES MAY SOMETIMES SEEM HARSH, BUT THE GOVERNMENT HAS USED THE PLAINEST AND CLEAREST LANGUAGE POSSIBLE TO ADVISE PROSPECTIVE BIDDERS THAT IN THESE SURPLUS SALES THE PRINCIPLE OF CAVEAT EMPTOR WILL APPLY RIGIDLY. YOUR ALLEGATION THAT YOU WERE DENIED THE OPPORTUNITY TO MAKE A COMPLETE INSPECTION, PRIOR TO SUBMITTING YOUR BID, OF THE ENTIRE LOT OF DRILLS OFFERED UNDER ITEM NO. 5616 IN NO WAY MAY BE ACCEPTED AS AFFECTING OUR CONCLUSION THAT YOU ARE NOT ENTITLED TO RELIEF BECAUSE THE MATERIAL PURCHASED AND ACTUALLY DELIVERED TO YOU VARIED FROM THE DESCRIPTION OF THE PROPERTY IN THE BID INVITATION. IF YOU WERE NOT WILLING TO ASSUME THE RISK OF SUCH VARIANCE, YOU SHOULD NOT HAVE SUBMITTED A BID ON THE PROPERTY WITHOUT THE BENEFIT OF A COMPLETE INSPECTION THEREOF. IT MUST, THEREFORE, BE PRESUMED THAT YOU ASSUMED SUCH RISK WHEN YOU SUBMITTED YOUR BID.

IN VIEW OF THE FOREGOING, THERE IS NO LEGAL BASIS FOR AUTHORIZING A REFUND OF ANY PART OF THE PURCHASE PRICE OF ITEM NO. 5616 ON CONTRACT NO. N63067-1110. ACCORDINGLY, THE SETTLEMENT OF APRIL 20, 1961, IS SUSTAINED.