B-152876, JUN. 23, 1964

B-152876, JUN. 23, 1964

TO UNIVERSUM INTERNATIONAL CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 30, 1964, TRANSMITTED HERE BY DEFENSE LOGISTICS CENTER LETTER DATED MAY 15, 1964, REQUESTING RECONSIDERATION OF THAT PART OF OUR SETTLEMENT OF DECEMBER 3, 1963, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF BID DEPOSIT MADE IN CONNECTION WITH INVITATION NO. 13-S-64-5, CONTRACT NO. DSA-13-S-767, DATED AUGUST 12, 1963. IN YOUR LETTER YOU TAKE ISSUE WITH THE DISALLOWANCE OF YOUR CLAIM ON THE BASIS THAT THE GOVERNMENT MISDESCRIBED AND MISREPRESENTED THE SURPLUS PROPERTY ON WHICH YOU MADE YOUR BID.

THE RECORD SHOWS THAT IN RESPONSE TO INVITATION NO. 13-S-64-5, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, CHAMBERSBURG, PENNSYLVANIA, YOU SUBMITTED A BID OFFERING TO PURCHASE ITEM 125, DESCRIBED AS A "REGULATOR ASSEMBLY GENERATOR VOLTAGE. MFG.AUTOCAR.PT.NO. VRV 3071A FOR DIAMOND-T, 4 TON, CARGO AND DUMP TRUCKS, IN THE QUANTITY OF 204 AT A UNIT PRICE OF $7.32, OR FOR AN AGGREGATE TOTAL PRICE OF $1,493.28. AWARD WAS MADE TO YOU ON THE BASIS OF YOUR HIGH SPOT BID. BY TELEGRAM OF AUGUST 7, 1963, YOU REQUESTED THE DEFENSE SURPLUS SALES OFFICE TO CANCEL YOUR BID ON ITEM 125 ON THE BASIS OF ERROR IN DESCRIPTION. IN THIS CONNECTION, IT IS TO BE NOTED THAT YOU DID NOT INSPECT THE SURPLUS PROPERTY INVOLVED BEFORE MAKING YOUR BID. YOUR CLAIM FOR REFUND OF BID DEPOSIT MADE IN CONNECTION WITH INVITATION NO. 13-S-64-5, WHICH CULMINATED IN CONTRACT NO. DSA-13-S-767, DATED AUGUST 12, 1963, WAS FORWARDED TO OUR CLAIMS DIVISION FOR SETTLEMENT BY THE DEFENSE LOGISTICS SERVICE CENTER. AS INDICATED IN THE SETTLEMENT OF DECEMBER 3, 1963, YOUR CLAIM FOR REFUND OF TOTAL BID DEPOSIT WAS DISALLOWED ON THE GROUND GENERALLY THAT THE PROPERTY INVOLVED WAS OFFERED FOR SALE ON AN "AS IS," "WHERE IS" BASIS AND WITHOUT EXPRESS OR IMPLIED WARRANTY OR GUARANTY OF ANY KIND.

IN YOUR CURRENT REQUEST FOR REVIEW YOU AVER THAT THE PROPERTY ON WHICH YOU BID UNDER ITEM 125 WAS MISDESCRIBED IN TWO RESPECTS, NAMELY, THAT IT WAS DESCRIBED AS A REGULATOR ASSEMBLY, GENERATOR VOLTAGE, WHEREAS IT IS A COIL ASSEMBLY, AND ALSO THAT THE PART NUMBER GIVEN WAS VRV 3071A, WHEREAS IT SHOULD HAVE BEEN LISTED AS VRY 3071A. ALSO, YOU STATE THAT ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS DOES NOT APPLY TO YOUR CLAIM SINCE YOU SAY THAT THE RULE THERE STATED APPLIED ONLY TO CONDITION AND LOCATION OF THE PROPERTY. YOU ALSO CONTEND THAT THE PRINCIPLE OF CAVEAT EMPTOR CANNOT LEAD TO THE CONSEQUENCE THAT A BIDDER MUST ACCEPT A PROPERTY DIFFERENT FROM THE ONE SPECIFIED AND OFFERED.

UNDER ARTICLE 1 OF THE GENERAL SALE TERMS AND CONDITIONS BIDDERS WERE INVITED, URGED AND CAUTIONED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING A BID. RESPECTING YOUR STATEMENT OF OPINION THAT ARTICLE 2 ONLY APPLIES TO CONDITION AND LOCATION OF THE PROPERTY, YOU ARE ADVISED THAT ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS CLEARLY PROVIDES THAT THE GOVERNMENT MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE OR DESCRIPTION OF ANY OF THE PROPERTY. SUCH EXPRESS DISCLAIMER OF WARRANTY VITIATES ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT ARISE OUT OF A SALES TRANSACTION. SEE W. E. HEDGER CO. V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; UNITED STATES V. KELLY, 112 F.SUPP. 831; MAGUIRE AND COMPANY V. UNITED STATES, 273 U.S. 67 AND LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90. WHILE THERE MAY HAVE BEEN A MISPRINT IN THE CATALOG NUMBER REFERRING TO THE UNIT INVOLVED IN THE "VRV" RATHER THAN "VRY" WAS USED IN THE CATALOG DESCRIPTION, SUCH FACTOR WAS BASED ON THE MANUFACTURER'S LABEL ON THE BOXES CARRYING THE CATALOG NUMBER VRV-3071A, AND THE SELLING ACTIVITY SHOULD NOT BE CHARGED WITH BED FAITH OR MISREPRESENTATION WHERE THE ERROR COULD HAVE BEEN DISCOVERED BY YOU BY INSPECTION PRIOR TO BIDDING.

REGARDING SUCH INSPECTION ASPECTS OF THE CASE, YOUR RESPONSIBILITIES AS A BIDDER APPEAR TO BE CLEARLY SET FORTH IN PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463. IT WAS HELD IN THIS CASE THAT NOTWITHSTANDING THE DIFFICULTIES ATTENDANT UPON AN INSPECTION IT IS INCUMBENT UPON THE BIDDER TO MAKE THE KIND OF AN INSPECTION THAT IS EFFECTUAL. IN THE ABSENCE OF A THOROUGH INSPECTION OF THE PROPERTY, IT MUST BE PRESUMED THAT A 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 LEGAL MAXIM CAVEAT EMPTOR REFERRED TO IN THE DISALLOWANCE SUMMARIZES THE RULE THAT THE PURCHASER OF AN ARTICLE MUST EXAMINE, JUDGE AND TEST IT FOR HIMSELF BEING BOUND TO DISCOVER ANY OBVIOUS DEFECTS OR IMPERFECTIONS. AS STATED IN THE DISALLOWANCE, WHERE THE PROPERTY IS SOLD ON AN "AS IS" AND "WHERE IS" BASIS, WITHOUT WARRANTY OR GUARANTY--- IN THE ABSENCE OF BAD FAITH, FRAUD OR MISREPRESENTATION--- THE TRANSACTION IS CLOSED WHEN THE GOODS ARE SO SOLD. THERE IS NOTHING IN THE RECORD BEFORE US TO INDICATE BAD FAITH ON THE PART OF THE SALES CONTRACTING OFFICER OR ANY REPRESENTATIVE OF THE GOVERNMENT IN CONNECTION WITH THE TRANSACTION.