B-156831, JUN. 8, 1965

B-156831, JUN. 8, 1965

TO GORDON ENTERPRISES:

YOUR LETTER OF MAY 13, 1965, STATES YOUR DESIRE TO FILE A CLAIM WITH THE ARMED SERVICES BOARD OF CONTRACT APPEALS FOR ADJUSTMENT OF THE PRICE PAID BY YOU FOR CERTAIN SURPLUS GOVERNMENT PROPERTY PURCHASED UNDER INVITATION FOR BIDS NO. 44-S-65-2, ISSUED JUNE 12, 1964, BY THE DEFENSE SURPLUS SALES OFFICE, DEFENSE LOGISTICS SERVICES CENTER, DEFENSE SUPPLY AGENCY, OAKLAND, CALIFORNIA. THE BASIS OF YOUR CLAIM, AS SUBMITTED TO OUR CLAIMS DIVISION THROUGH THE DEFENSE LOGISTICS SERVICE CENTER, IS THAT THE PROPERTY WAS MISDESCRIBED BY THE GOVERNMENT, IN THAT THE WEIGHT DELIVERED WAS FAR LESS THAN THE ESTIMATED WEIGHT REFLECTED IN THE INVITATION.

THE REGULATIONS WHICH GOVERN THE DISPOSAL AND SALE OF SURPLUS GOVERNMENT PROPERTY BY THE DEPARTMENT OF DEFENSE ARE PUBLISHED IN DEFENSE SUPPLY AGENCY MANUAL 4160.1, DEFENSE DISPOSAL MANUAL. PARAGRAPH B, CHAPTER X, OF THE MANUAL PROVIDES THAT THE DISPUTES CLAUSE INCORPORATED IN SALES CONTRACTS (WHICH PERMITS APPEAL TO THE ARMED SERVICES BOARD OF CONTRACT APPEALS FROM THE DECISION OF THE SALES CONTRACTING OFFICER) IS NOT APPLICABLE WHERE THE PROPERTY HAS BEEN MISDESCRIBED BUT RELIEF CANNOT BE GRANTED BECAUSE OF THE DISCLAIMER OF WARRANTY IN THE SALES CONTRACT. PARAGRAPH C, CHAPTER X, PROVIDES THAT CLAIMS INVOLVING A DOUBTFUL QUESTION OF LAW OR A QUESTION OF FACT NOT COGNIZABLE UNDER THE DISPUTES ARTICLE SHALL BE FORWARDED THROUGH DESIGNATED CHANNELS TO THE GENERAL ACCOUNTING OFFICE, CLAIMS DIVISION.

SINCE YOUR CLAIM INVOLVES THE APPLICATION OF THE DISCLAIMER OF WARRANTY IN YOUR SALES CONTRACT TO AN ALLEGED MISDESCRIPTION OF THE PROPERTY PURCHASED BY YOU, THE DISPUTES CLAUSE DOES NOT APPEAR TO BE APPLICABLE. THEREFORE, THE CLAIM WAS PROPERLY FORWARDED TO OUR CLAIMS DIVISION BY THE SALES CONTRACTING OFFICER, AND THE APPEALS PROCEDURE PROVIDED BY THE DISPUTES CLAUSE DOES NOT APPLY TO THE ACTION OF OUR OFFICE. IF YOU FEEL THAT THERE IS ANY STRICTLY FACTUAL BASIS FOR A CLAIM UNDER THE CONTRACT OF SALE TO WHICH THE DISPUTES CLAUSE WOULD APPLY, YOU SHOULD OBTAIN A DECISION THEREON FROM THE CONTRACTING OFFICER. HOWEVER, SO FAR AS OUR OFFICE IS CONCERNED, YOUR LETTER OF MAY 13 WILL BE REGARDED AS A REQUEST FOR RECONSIDERATION OF THE SETTLEMENT ACTION OF OUR CLAIMS DIVISION.

THE PROPERTY IN QUESTION WAS DESCRIBED IN THE INVITATION AS FOLLOWS:

TABLE

"104. PHOTOGRAPHIC EQUIPMENT CONSISTS OF ROLLER

ASSEMBLES, DRUMS, WHEELS, DEVELOPERS, PLATES,

FILM, SHUTTLES, SPRINGS, MOUNTINGS, BALLS AND

OTHER ITEMS. APPROXIMATELY 9,175 PIECES.

ACQ. COST: $18,365.34 (C-67) UNUSED AND USED---

GOOD TO FAIR, EST. WT. 8,000 LBS. CUBE 200. NOT

PACKED FOR SHIPMENT.

QUANTITY--- 1 LOT"

BID OPENING WAS HELD ON JULY 2, 1964, AS PRESCRIBED IN THE INVITATION. BY NOTICE OF AWARD DATED JULY 8, YOU WERE AWARDED ITEM NO. 104 ON THE BASIS OF YOUR HIGH BID OF $334 SUBMITTED ON JUNE 29, 1964. ON JULY 16, AFTER PAYMENT OF THE FULL PURCHASE PRICE, THE PROPERTY WAS RELEASED TO YOUR AGENT. BY LETTER DATED AUGUST 6, YOU NOTIFIED THE SALES CONTRACTING OFFICER THAT THE WEIGHT OF THE PROPERTY WAS BUT 720 POUNDS. THEREFORE, YOU REQUESTED THAT YOU BE PERMITTED EITHER TO RETURN THE PROPERTY TO THE SALES ACTIVITY OR TO RECEIVE AN ADJUSTMENT OF THE PURCHASE PRICE.

INVESTIGATION BY THE SALES ACTIVITY DISCLOSED THAT YOU HAD NOT INSPECTED THE PROPERTY BEFORE BIDDING, AS URGED BY THE INVITATION. WHILE THE ESTIMATED WEIGHT WAS OVERSTATED, THE 8,000-POUND FIGURE USED BY THE SALES PERSONNEL WHO PREPARED THE ITEM DESCRIPTION WAS BASED ON A TURN-IN DOCUMENT SHOWING A WEIGHT OF 7,356 POUNDS FOR THE PROPERTY. IN ADDITION, THE RECORDS SHOWED THAT THE 99 LINE ITEMS OF PROPERTY CONTAINED IN ITEM NO. 104, CONSISTING OF APPROXIMATELY 9,175 PIECES, WERE NOT MODIFIED OR ALTERED IN ANY WAY AFTER HAVING BEEN SET UP FOR DISPLAY AND SALE AND WERE ALL LOADED ON YOUR AGENT'S TRUCK (GENE HODGE TRUCKING COMPANY) AND SIGNED FOR BY ONE LLOYD GIBSON.

THE PERTINENT PROVISIONS OF THE SALES CONTRACT READ 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 NO. 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.

"8. ADJUSTMENT FOR VARIATION IN QUANTITY OR WEIGHT. WHEN PROPERTY IS SOLD ON A "UNIT PRICE" BASIS, THE GOVERNMENT RESERVES THE RIGHT TO VARY THE QUANTITY OR WEIGHT DELIVERED BY 10 PERCENT FROM THE QUANTITY OR WEIGHT LISTED IN INVITATION; AND THE PURCHASER AGREES TO ACCEPT DELIVERY OF ANY QUANTITY OR WEIGHT WITHIN THESE LIMITS. THE PURCHASE PRICE WILL BE ADJUSTED UPWARDS OR DOWNWARDS IN ACCORDANCE WITH THE UNIT PRICE AND ON THE BASIS OF THE QUANTITY OR WEIGHT ACTUALLY DELIVERED. NO ADJUSTMENT FOR VARIATION WILL BE MADE WHERE PROPERTY IS SOLD ON A "PRICE FOR THE LOT" BASIS.'

SINCE ITEM 104 WAS SOLD BY LOT, ADJUSTMENT OF THE PURCHASE PRICE BECAUSE OF A WEIGHT VARIANCE IS NOT AUTHORIZED UNDER THE TERMS OF ARTICLE 8 OF THE GENERAL SALE TERMS AND CONDITIONS QUOTED ABOVE.

WITH RESPECT TO ARTICLES 1 AND 2, SUCH PROVISIONS SERVED AS NOTICE TO PROSPECTIVE PURCHASERS THAT THE PROPERTY OFFERED FOR SALE MIGHT NOT CONFORM TO THE SALES DESCRIPTION. IN SUCH CIRCUMSTANCES, IT HAS BEEN HELD THAT THE BIDDER, BY SUBMITTING A BID, ASSUMES ALL RISK OF MISDESCRIPTION. ALL THAT IS REQUIRED OF THE PARTY RESPONSIBLE FOR THE DESCRIPTION IS GOOD FAITH. LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90; UNITED STATES V. HATHAWAY, 9 CIR., 1957, 242 F.2D 897; TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151. FURTHERMORE, THE FAILURE OF A PURCHASER TO INSPECT PROPERTY OFFERED FOR SALE HAS BEEN REGARDED AS AN ADDITIONAL REASON FOR DENIAL OF RELIEF WHERE THE PROPERTY DOES NOT CONFORM TO THE PURCHASER'S EXPECTATIONS. TRIAD CORPORATION V. UNITED STATES, SUPRA.

AS FOR THE GOVERNMENT'S WEIGHT ESTIMATE OF APPROXIMATELY 8,000 POUNDS, SUCH FIGURE WAS NOT A REPRESENTATION AND CANNOT BE REGARDED AS IN THE NATURE OF A WARRANTY. IT WAS MERELY AN ESTIMATE OF THE PROBABLE WEIGHT. THEREFORE, THE ESTIMATE HAVING BEEN BASED ON THE BEST AVAILABLE INFORMATION, THE TURN-IN DOCUMENT, SHOWING A WEIGHT OF 7,356 POUNDS FOR THE PROPERTY IN QUESTION, WITHOUT NOTICE OR KNOWLEDGE ON THE PART OF THE SALES PERSONNEL WHO PREPARED THE SALES DESCRIPTION THAT SUCH FIGURE MIGHT BE IN ERROR, IT IS CLEAR THAT THERE WAS NO LACK OF GOOD FAITH ON THE PART OF THE GOVERNMENT. STANDARD MAGNESIUM CORP. V. UNITED STATES, 241 F.2D 677; WESTERN NON-FERROUS METALS CORP. V. UNITED STATES, 192 F.SUPP. 774 (1961). ACCORDINGLY, THERE IS NO BASIS TO GRANT YOU RELIEF BECAUSE OF THE WEIGHT VARIANCE.

FOR THE REASONS STATED, THE SETTLEMENT OF OUR CLAIMS DIVISION IS SUSTAINED.