B-158078, MAY 11, 1966, 45 COMP. GEN. 675

B-158078, MAY 11, 1966, 45 COMP. GEN. 675

SALES - FREIGHT, STORAGE, ETC., CHARGES - FOREIGN EXCESS PROPERTY MISDESCRIBED THE DEMURRAGE AND RELATED COSTS CLAIMED BY A FOREIGN PURCHASER ON A MISDESCRIBED SHIPMENT OF SURPLUS PROPERTY, WHICH CONTAINING EXPLOSIVES WAS STOPPED IN TRANSIT BY ITALIAN CUSTOMS OFFICIALS AND POLICE, MAY NOT BE PAID, THE PROPERTY OFFERED FOR SALE "AS IS" AND "WHERE IS" AND DESCRIBED ON THE BASIS OF THE BEST AVAILABLE INFORMATION, THE GOVERNMENT MADE NO WARRANTY, EXPRESS OR IMPLIED, AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE, OR DESCRIPTION, A DISCLAIMER OF WARRANTY CLAUSE INTENDED TO PROTECT THE GOVERNMENT FROM DISSATISFIED BUYERS BY SHIFTING THE RISK OF LOSS TO THE BUYER, AND THE CLAIMANT HAVING INSPECTED THE PROPERTY AFTER BEING WARNED THAT FOREIGN EXCESS PROPERTY MAY RETAIN ARTICLES OF AN EXPLOSIVE NATURE FOR WHICH THE GOVERNMENT ASSUMES NO LIABILITY, AND THE GOVERNMENT HAVING BASED THE PROPERTY DESCRIPTION ON THE BEST AVAILABLE INFORMATION, WITHOUT EXTENDING AN EXPRESS WARRANTY TO THE PURCHASER, THE CLAIM FOR EXPENSES MAY NOT BE REIMBURSED.

TO TATTANELLI AND D-ALESIO, MAY 11, 1966:

REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 22, 1966, TAKING EXCEPTION TO THE ACTION OF OUR CLAIMS DIVISION IN DENYING YOUR CLAIM FOR 243,950 LIRE ($390.32), TO COVER DEMURRAGE AND RELATED COSTS INCURRED AND PAID BY YOUR SHIPPING AGENT, PIERUCCI AND RICCIONI, AS A RESULT OF THE STOPPAGE IN TRANSIT BY ITALIAN CUSTOMS OFFICIALS AND POLICE OF A SHIPMENT CONTAINING EXPLOSIVE PROPELLANT TEMPERATURE INDICATORS.

INVITATION FOR BIDS NO. 91-600-S-65-20 WAS ISSUED ON NOVEMBER 16, 1964, BY THE UNITED STATES ARMY FOREIGN EXCESS SALES OFFICE, PARIS, FRANCE, AND SOLICITED BIDS FOR MISCELLANEOUS SURPLUS EQUIPMENT. ITEMS 72, 73, AND 78 ARE DESCRIBED IN THE IFB AS "MISCELLANEOUS PARTS FOR CABLE SYSTEMS," "MISCELLANEOUS ELECTRICAL SUPPLIES," AND "MISCELLANEOUS ELECTRICAL EQUIPMENT," RESPECTIVELY. SOMEHOW, THIRTY TWO OR THIRTY-THREE 90-MM CHARGED SHELLS CONTAINING PROPELLANT TEMPERATURE INDICATORS BECAME COMMINGLED WITH ITEM 72 FOR WHICH CLAIMANT WAS THE HIGH BIDDER. THESE ITEMS WERE SUBSEQUENTLY SHIPPED TO LIVORNO WHERE, DURING UNLOADING OPERATIONS, THE EXPLOSIVE ITEMS WERE DETECTED BY ITALIAN CUSTOMS OFFICIALS AND POLICE AND WERE IMPOUNDED FOR 4 DAYS (MARCH 20 THROUGH MARCH 24, 1965) RESULTING IN DEMURRAGE COSTS AND RELATED EXPENSES IN THE AMOUNT CLAIMED. SPECIFICALLY, TATTANELLI AND D-ALESIO CLAIM THEY SHOULD BE REIMBURSED THESE EXPENSES BY THE UNITED STATES GOVERNMENT INASMUCH AS UNITED STATES ARMY PERSONNEL WERE RESPONSIBLE FOR THE ERRONEOUS DESCRIPTION AND SHIPMENT OF THESE SHELLS. WE DO NOT AGREE THAT THE UNITED STATES IS RESPONSIBLE FOR THESE COSTS.

THERE IS NO QUESTION THAT THESE ITEMS WERE MISDESCRIBED AS "THERMOMETER, POWDER TEMPERATURE," SINCE THEY ALSO INCLUDED THE SHELLS AND POWDER. HOWEVER, PARAGRAPH TWO OF THE GENERAL SERVICES ADMINISTRATION FORM 114-C, GENERAL SALE TERMS AND CONDITIONS, STATES AS FOLLOWS:

UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THE INVITATION, ALL PROPERTY LISTED THEREIN IS OFFERED FOR SALE "AS IS" AND "WHERE IS.' * * * 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 RESCISSION OF THE SALE WILL BE CONSIDERED. THIS IS NOT A SALE BY SAMPLE.

THIS CLAUSE IS INSERTED INTO SALE CONTRACTS LIKE THE ONE UNDER CONSIDERATION FOR THE PROTECTION OF THE GOVERNMENT. WHEN THE GOVERNMENT SELLS SURPLUS GOODS IT IS DISPOSING OF A VAST ASSORTMENT OF MISCELLANEOUS ARTICLES AT THE LEAST POSSIBLE LOSS. SURPLUS SALES ARE GENERALLY PROCESSED ON A LARGE SCALE BY PERSONNEL WHO SELDOM HAVE ANY EXPERTISE IN THE PARTICULAR ITEMS WHICH COME TO THEM FOR DISPOSITION. BUYERS AT SUCH SALES ARE WELL AWARE OF THE POSSIBILITY THEY MAY PURCHASE PROPERTY WHICH TURNS OUT TO BE OF LITTLE VALUE OR, CONVERSELY, THEY MAY MAKE A VERY GOOD BARGAIN. THE GOVERNMENT, ACCORDINGLY, PROTECTS ITSELF FROM POSSIBLY DISSATISFIED BUYERS BY SHIFTING THE RISK OF LOSS FROM ITSELF TO THE BUYER BY USE OF THE ABOVE CLAUSE. SEE DADOURIAN EXPORT CORPORATION V. UNITED STATES, 291 F.2D 178 (1961). THE CASES GENERALLY HOLD THAT WHERE THERE IS A MISDESCRIPTION OF PROPERTY AS A RESULT OF A GOVERNMENT ERROR, BUT WHERE THE IFB CONTAINS A DISCLAIMER OF WARRANTY SUCH AS THE ONE ABOVE AND WHERE THE PROSPECTIVE PURCHASER IS URGED TO AND DOES INSPECT THE PROPERTY BEFORE SUBMITTING A BID, THEN THE RISK OF LOSS SHIFTS TO THE PURCHASER. SEE DADOURIAN EXPORT (SUPRA), AMERICAN SANITARY RAG CO. V. UNITED STATES, 142 CT.CL. 293, AND TRIAD CORPORATION V. UNITED STATES, 63 CT.CL. 151. IN THE INSTANT CASE THE CLAIMANT WAS URGED THROUGHOUT THE INVITATION TO INSPECT THE PROPERTY BEFORE SUBMITTING A BID. THE RECORD DISCLOSES THE CLAIMANT DID VISIT THE PROPERTY AT TOUL (M AND M), FRANCE, AND PRESUMABLY HE INSPECTED IT TO HIS SATISFACTION. WHILE THERE IS NOTHING IN THE RECORD TO AFFIRMATIVELY INDICATE THAT THE SHELLS WERE COMMINGLED WITH ITEM 72 AT THE TIME OF CLAIMANT'S INSPECTION, WE ASSUME THIS TO BE THE CASE INASMUCH AS CLAIMANT DOES NOT CONTEST THE POINT.

A DISCLAIMER OF WARRANTY CLAUSE, OF COURSE, IS NOT UNLIMITED IN EFFECT, I.E., IT CANNOT REPUDIATE EXPRESS WARRANTIES NOR CAN IT OVERCOME BAD FAITH ON THE PART OF THE SELLER. HERE THERE WERE NO EXPRESS WARRANTIES IN THE IFB AND, SINCE THERE IS NO REASON TO DOUBT THE DESCRIPTION WAS BASED ON THE BEST INFORMATION AVAILABLE TO THE CONTRACTING OFFICER, THERE WAS NO BAD FAITH ON THE PART OF THE GOVERNMENT.

FURTHERMORE, THE IFB CONTAINED SPECIAL CONDITIONS, ARTICLE L OF WHICH STATES AS FOLLOWS:

PURCHASERS OF FOREIGN EXCESS PROPERTY ARE WARNED THAT ARTICLES OF AN EXPLOSIVE NATURE MAY REMAIN IN THE PROPERTY NOTWITHSTANDING THE CARE EXERCISED BY THE GOVERNMENT TO REMOVE THE EXPLOSIVE ARTICLES. THE GOVERNMENT ASSUMES NO LIABILITY FOR FAILURE TO EXCLUDE ANY SUCH ARTICLES AND THE PURCHASER AGREES THAT THE GOVERNMENT SHALL HAVE NO LIABILITY IN CONNECTION THEREWITH. THIS APPLIES ESPECIALLY TO METAL SCRAP.

WHILE THIS WAS NOT A SALE OF METAL SCRAP, STILL THE BUYER WAS AGAIN WARNED THAT THERE MIGHT BE DISCREPANCIES BETWEEN THE DESCRIPTION OF THE PROPERTY AND THE ACTUAL PROPERTY. ARTICLE "L," LIKE PARAGRAPH TWO NOTED ABOVE, IS FOR THE PROTECTION OF THE GOVERNMENT IN INSTANCES SUCH AS THE ONE CLAIMANT PRESENTS.

IN VIEW OF THE FACTS AND CIRCUMSTANCES INVOLVED, WE MUST SUSTAIN THE DENIAL OF YOUR CLAIM.