B-149002, JUN. 13, 1962

B-149002, JUN. 13, 1962

TO PACIFIC AIR MOTIVE CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MAY 17, 1962, IN REGARD TO OUR SETTLEMENT OF APRIL 5, 1962, DISALLOWING YOUR CLAIM FOR A REFUND OF $1,495.50 REPRESENTING THE PRICE PAID BY YOU FOR THREE CRANKSHAFTS UNDER CONTRACT NO. N63072-1207, DATED SEPTEMBER 18, 1961.

IN RESPONSE TO SALE INVITATION NO. B-25-62-63072 ISSUED ON AUGUST 21, 1961, BY THE NAVY CONSOLIDATED SURPLUS SALES OFFICE, FLORIDA AREA, YOU SUBMITTED A BID OFFERING TO PURCHASE ITEM NO. 21 COVERING THREE AIRCRAFT ENGINE CRANKSHAFTS, PN PW-195193, USED, FAIR CONDITION, AT $498.50 EACH, OR FOR A TOTAL PRICE OF $1,495.50. YOUR BID BEING THE HIGHEST BID RECEIVED FOR THE ITEM--- SEVEN OTHERS RANGED FROM $277.57 TO $0.75 EACH--- WAS ACCEPTED BY THE SURPLUS SALES OFFICE ON SEPTEMBER 18, 1961, THEREBY CONSUMMATING CONTRACT NO. N63072-1207. PAYMENT IN FULL WAS MADE BY YOU FOR THE PROPERTY AND SHIPMENT CONSEQUENTLY MADE TO YOU. BY LETTER DATED NOVEMBER 20, 1961, YOU ADVISED THE SURPLUS SALES OFFICE THAT AFTER RECEIPT OF THE PROPERTY YOU DISCOVERED THAT INSTEAD OF THE THREE PART NO. 195193 CRANKSHAFTS SHOWN ON THE INVITATION FOR ITEM NO. 21, YOU HAD RECEIVED THREE PART NO. 59284 CRANKSHAFTS. THE RECEIPT BY YOU OF THESE CRANKSHAFTS, WHICH YOU STATE ARE OF NO VALUE TO YOU, IS THE BASIS OF YOUR CLAIM FOR A REFUND OF THE FULL PURCHASE PRICE OF $1,495.50 AND, IN YOUR LETTER OF MAY 17, 1962, SEEKING A REVIEW OF OUR SETTLEMENT OF APRIL 5, 1962, YOU ALSO REFER TO THE CRANKSHAFTS AS BEING NOTHING BUT SCRAP AND TO THE FACT THAT IT WAS IMPRACTICABLE FOR YOU TO MAKE AN INSPECTION.

THE PRINCIPAL QUESTION IN CASES OF THIS KIND IS WHETHER THE GOVERNMENT DID OR DID NOT WARRANT THE PROPERTY SOLD. IN THIS REGARD, YOUR ATTENTION IS DIRECTED TO ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF INVITATION NO. B-25-62-63072 WHEREIN IT IS EXPRESSLY PROVIDED THAT THE GOVERNMENT MAKES NO WARRANTY, EXPRESS OR IMPLIED AS TO KIND, CHARACTER, ETC., OR AS TO THE DESCRIPTION OF ANY OF THE PROPERTY OFFERED FOR SALE OR ITS FITNESS FOR ANY USE OR PURPOSE. IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND OUR OFFICE THAT, IN THE ABSENCE OF BAD FAITH, SUCH AN EXPRESS DISCLAIMER OF WARRANTY, WHICH SPECIFICALLY REFERS TO THE KIND OF PROPERTY AS WELL AS TO ITS FITNESS FOR ANY USE OR PURPOSE, VITIATES ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT ARISE OUT OF A SALES TRANSACTION. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER COMPANY, V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151; AND I. SHAPIRO AND COMPANY V. UNITED STATES, 66 CT.CL. 424.

MOREOVER, ARTICLE 1 OF THE GENERAL SALE TERMS AND CONDITIONS NOT ONLY INVITED YOU, AS A BIDDER, TO INSPECT THE PROPERTY BEFORE SUBMITTING YOUR BID BUT EXPRESSLY URGED AND CAUTIONED YOU TO DO SO. THE ARTICLE ALSO INCLUDED A CONDITION WHICH PROVIDES THAT "IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR THE WITHDRAWAL OF A BID AFTER OPENING.' THEREFORE, THERE APPEARS TO BE APPLICABLE HERE THE RULE ESTABLISHED BY THE DECISIONS OF OUR OFFICE THAT WHERE A BIDDER FAILS TO MAKE AN INSPECTION UNDER SUCH A CONTRACT OF SALE--- WHETHER SUCH FAILURE WAS DUE TO THE BIDDER'S OPINION THAT INSPECTION WAS NOT NECESSARY OR WHETHER THE INSPECTION WAS IMPRACTICAL, IF NOT IMPOSSIBLE- - THE BIDDER HAS ELECTED TO ASSUME ANY RISK WHICH MIGHT EXIST BY REASON OF A VARIANCE BETWEEN THE DESCRIPTION OF THE PROPERTY SET FORTH IN THE INVITATION AND THE PROPERTY ACTUALLY DELIVERED. THE BIDDER'S RESPONSIBILITIES IN THIS CONNECTION APPEAR TO BE CLEARLY SET FORTH IN PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463, WHEREIN IT WAS HELD THAT, NOTWITHSTANDING THE DIFFICULTIES ATTENDANT UPON AN INSPECTION, IT IS INCUMBENT UPON THE BIDDER TO MAKE THE SORT OF INSPECTION THAT IS EFFECTUAL. THERE CAN BE NO DOUBT THAT HAD AN INSPECTION OF THE CRANKSHAFTS BEEN MADE BY YOU BEFORE SUBMITTING YOUR BID THAT YOU WOULD HAVE READILY DETECTED THE DISCREPANCIES TO WHICH YOU NOW REFER SINCE YOU ADVISE IN YOUR LETTER DATED MAY 17, 1962, THAT ,EVEN THE MOST CASUAL INVESTIGATION WOULD HAVE REVEALED THESE SHAFTS SHOULD HAVE BEEN SENT TO THE SCRAP DISPOSAL AREA.'