B-147932, MAY 22, 1962

B-147932, MAY 22, 1962

TO EDW. L. SIBLEY MFG. CO., INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 12, 1962, IN THE NATURE OF A REQUEST FOR RECONSIDERATION OF THE ACTION TAKEN BY OUR OFFICE DISALLOWING YOUR CLAIM FOR REIMBURSEMENT OF $103.84 BY REASON OF ALLEGED MISDESCRIPTION IN THE BID INVITATION OF CERTAIN MATERIAL PURCHASED BY YOU FROM THE GOVERNMENT UNDER ITEM NO. 26 ON NAVY SALES CONTRACT NO. N63066S- 2043 DATED JUNE 21, 1961.

THE FACTS AND CIRCUMSTANCES OF THIS PARTICULAR SALES TRANSACTION WERE CLEARLY SET FORTH IN OUR CLAIMS DIVISION CERTIFICATE OF SETTLEMENT DATED DECEMBER 28, 1961, DISALLOWING THE CLAIM AND IN OUR DECISION OF JANUARY 23, 1962, AFFIRMING THAT ACTION, AND WILL NOT BE REPEATED HERE.

YOUR REQUEST FOR RECONSIDERATION APPEARS TO BE BASED ON YOUR CONTENTION THAT THE MATERIAL SOLD TO YOU AS ITEM NO. 26 WAS NOT PURCHASED AS "TOOL STEEL," AS STATED IN THE INVITATION DESCRIPTION, AND THAT "THOSE RESPONSIBLE FOR FURNISHING SUCH DESCRIPTION WOULD NOT USE ORDINARY DISGRESSION IN TAGGING AND IDENTIFYING THE MATERIAL AS SUCH. THIS IS ENTIRELY INCONSISTENT WITH THE PROCEDURES OF INVENTORY CONTROL EMPLOYED BY GOVERNMENT CONTRACTING AGENCIES.'

IN THIS CONNECTION, YOUR ATTENTION IS AGAIN INVITED TO THE GENERAL SALE TERMS AND CONDITIONS OF THE BID INVITATION WHICH ARE APPLICABLE TO THE USUAL SALE OF GOVERNMENT-OWNED PROPERTY. THESE TERMS AND CONDITIONS WERE AGREED TO BY YOU UPON THE SUBMISSION OF YOUR BID AND WERE INCORPORATED IN AND BECAME A MATERIAL PART OF CONTRACT NO. N63066S 2043. THE PROVISIONS OF THAT DOCUMENT PERTINENT TO YOUR CLAIM ARE AS FOLLOWS:

"1. INSPECTION. THE BIDDER IS INVITED, URGED, AND CAUTIONED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING A BID. PROPERTY WILL BE AVAILABLE FOR INSPECTION AT THE PLACES AND TIMES SPECIFIED IN THE INVITATION. IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR THE WITHDRAWAL OF A BID AFTER OPENING.

"2. CONDITION AND LOCATION OF PROPERTY. UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THE INVITATION, ALL PROPERTY LISTED THEREIN IS OFFERED FOR SALE "AS IS" AND "WHERE IS.' IF IT IS PROVIDED THEREIN 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. HOWEVER, THE GOVERNMENT MAKES NO WARRANTY, EXPRESS 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. EXCEPT AS PROVIDED IN CONDITIONS NOS. 8 AND 10, NO REQUEST FOR ADJUSTMENT IN PRICE OR FOR RESCISSION OF THE SALE WILL BE CONSIDERED. THIS IS NOT A SALE BY SAMPLE.'

THE COURTS MANY TIMES HAVE CONSIDERED SUCH CONTRACT STIPULATIONS INCASES INVOLVING THE SALE OF GOVERNMENT-OWNED GOODS, AND HAVE HELD CONSISTENTLY THAT SUCH PROVISIONS CONSTRUED AN EXPRESS DISCLAIMER OF WARRANTY. LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90, 92; W.E. HEDGER CO., INC., V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED, 284 U.S. 676; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151. THESE CASES AND OTHERS CONCLUDE THAT UNDER SUCH PROVISIONS BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT, ANY WARRANTIES WHATEVER. IN THE CASE OF OVERSEAS NAVIGATION CORPORATION V. UNITED STATES, 131 CT.CL. 70, THE COURT OF CLAIMS HELD THAT THE TERMS OF THE SALES CONTRACT THERE UNDER CONSIDERATION, INCLUDING ITS "AS IS, WHERE IS" PROVISIONS, SPOKE FOR THEMSELVES AND THE PLAINTIFF WAS LEGALLY BOUND BY THEM.

THE EFFECT OF "THE BEST AVAILABLE INFORMATION" CLAUSE WAS CONSIDERED IN THE CASE OF WESTERN NON-FERROUS METALS CORP. V. UNITED STATES, 192 F.SUPP. 774. WITH REGARD THERETO THE COURT STATED AT PAGE 774, AS FOLLOWS:

" (1) THE CONTRACTUAL PROVISION UPON WHICH PLAINTIFF STAKES ITS CLAIM STATES THAT "THE DESCRIPTION IS BASED UPON THE BEST AVAILABLE INFORMATION.' WHEN READ IN THE CONTEXT OF THE UNEQUIVOCAL LANGUAGE IN WHICH IT IS SET, IT IS CLEAR THAT IT WOULD BE ERRONEOUS TO INTERPRET THE PROVISION AS OBLIGATING DEFENDANT TO MAKE ANY EFFORTS WHATEVER TO OBTAIN RELIABLE INFORMATION, OR TO INTERPRET IT AS A WARRANTY THAT THE INFORMATION SUPPLIED IS THE BEST INFORMATION THAT CAN BE OBTAINED. THE REASONABLE AND APPARENT INTERPRETATION IS THAT DEFENDANT REPRESENTS ONLY THAT IT POSSESSES NO INFORMATION BETTER THAN THAT WHICH IS OFFERED. GOOD FAITH IS ALL THAT IS REQUIRED. STANDARD MAGNESIUM CORPORATION V. UNITED STATES, 10 CIR., 1957, 241 F.2D 677. AND PLAINTIFF HAS EXPRESSLY DISCLAIMED ANY INTENTION OF IMPUTING BAD FAITH TO DEFENDANT. IN SUMMARY, THERE IS NOTHING IN THE LANGUAGE OF THIS CONTRACT TO DISTINGUISH ITS MEANING FROM THAT OF SIMILAR LANGUAGE WHICH HAS BEEN DESCRIBED AS APPLYING THE RULE OF CAVEAT EMPTOR TO THE FURTHEST POSSIBLE LIMITS, AND UPON WHICH DEFENDANT HAS PREVAILED IN SITUATIONS SIMILAR TO THIS. * * *"

THERE IS NOTHING IN THE RECORD TO INDICATE BAD FAITH ON THE PART OF THE CONTRACTING OFFICER OR ANY OF HIS REPRESENTATIVES IN CONNECTION WITH THE INSTANT SALE. NEITHER IS IT SHOWN THAT THE CONTRACTING OFFICER KNEW THAT ANY OF THE MATERIAL IN ITEM NO. 26 WAS DIFFERENT THAN THAT DESCRIBED IN THE BID INVITATION. THE DESCRIPTION IN THE BID INVITATION FOR ITEM NO. 26 WAS BASED ON THE "BEST AVAILABLE INFORMATION"--- AS STATED IN THE INVITATION--- HAVING BEEN TAKEN FROM THE INFORMATION FURNISHED BY THE PROPERTY HOLDING ACTIVITY REQUESTING SALE OF THE ITEM. 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, SUPRA; LUMBRAZO V. WOODRUFF, 175 N.E. 525; AND UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, AFFIRMED 253 F.2D 956. THERE IS NO BASIS, THEREFORE, FOR GRANTING ANY RELIEF ON THE GROUND THAT THE PROPERTY IN QUESTION WAS MISDESCRIBED IN THE BID INVITATION.

FURTHERMORE, THE EVIDENCE ESTABLISHES THAT THE PROPERTY DELIVERED TO YOU WAS THE SAME PROPERTY DISPLAYED FOR INSPECTION AS ITEM NO. 26. HAD YOU MADE SUCH AN EXAMINATION, AS YOU WERE CAUTIONED TO DO BEFORE SUBMITTING YOUR BID, AS YOU DID AFTERWARDS YOU COULD HAVE DISCOVERED THE CONDITION OF THE PROPERTY OF WHICH YOU NOW COMPLAIN.

THE LAW IS CLEAR THAT WHERE SURPLUS PROPERTY IS OFFERED FOR SALE BY THE GOVERNMENT ON AN "AS S" AND "WHERE IS" BASIS, WITHOUT A WARRANTY OR GUARANTY OF ANY KIND, AS IN THE INSTANT SALE, A BIDDER WHO FAILS TO TAKE ADVANTAGE OF AN OPPORTUNITY TO INSPECT CANNOT SUBSEQUENTLY RECOVER ON THE GROUNDS THAT THE MATERIALS ARE OF AN INFERIOR QUALITY OR THAT THEY ARE SOMETHING OTHER THAN WHAT HE THOUGHT HE WAS BUYING. IN THE CASE OF AMERICAN SANITARY RAG CO. V. UNITED STATES, 161 F.SUPP. 414, CONCERNING A SALE OF SURPLUS PROPERTY UNDER SIMILAR CONDITIONS, THE COURT HELD THAT THE RISK AS TO THE ACTUAL CONDITION OF THE PROPERTY WAS PLACED SQUARELY UPON THE PURCHASER. THE BIDDER'S RESPONSIBILITIES ALSO APPEAR TO BE CLEARLY SET FORTH IN THE CASE OF PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463, WHERE IT WAS STATED THAT A BIDDER FAILS TO INSPECT AT HIS PERIL, AND THAT PLAINTIFF WAS REQUIRED TO MAKE THE SORT OF INSPECTION THAT WAS EFFECTUAL. ALSO, IN THE RECENT CASE OF KRUPP V. FEDERAL HOUSING ADMINISTRATION, 185 F.SUPP. 638, THE COURT HELD THAT THE PURCHASER WHO RELIES ON INFORMATION FURNISHED HIM BY THE GOVERNMENT AND FAILS TO INSPECT OR DOES NOT FULLY INSPECT DOES SO AT HIS OWN RISK, AND EVEN IF HE MAKES A BAD BARGAIN BECAUSE OF DEFECTS IN THE PROPERTY WHICH EVEN A REASONABLY CAREFUL INSPECTION WOULD NOT DISCLOSE, THE RISK OF LOSS STILL FALLS ON HIM; AND, THAT IF HE IS MISLED BY HIS RELIANCE ON ANY STATEMENT OF THE SELLER AS TO THE PROPERTY, THIS IS THE RISK WHICH HE KNEW OR SHOULD HAVE KNOWN HE WAS TAKING BECAUSE THE PROSPECTUS CLEARLY WARNED HIM THAT THE SALE WAS BEING MADE ON THOSE TERMS. SEE ALSO TRIAD CORPORATION V. UNITED STATES, SUPRA; DADOURIAN EXPORT CORPORATION V. UNITED STATES, 291 F.2D 178 (1961) AND M. BERGER CO. V. UNITED STATES, 199 F.SUPP. 22 (1961).

CONSEQUENTLY, AND SINCE YOU HAVE FURNISHED NO NEW FACTS OR EVIDENCE NOT ALREADY CONSIDERED IN CONNECTION WITH YOUR CLAIM, OUR PREVIOUS DECISION, WHICH SUSTAINED THE DISALLOWANCE OF YOUR CLAIM IS AFFIRMED.