B-169518, JUL. 21, 1970

B-169518, JUL. 21, 1970

CONTRACTS -- MISTAKES -- SURPLUS SALES -- MISDESCRIPTION DECISION DENYING SAM LAVENTHAL COMPANY RELIEF ON ACCOUNT OF MISDESCRIPTION OF SURPLUS PROPERTY SOLD AT BATON ROUGE, LA. DISPOSAL CENTER. PURCHASER WHO, AFTER AWARD OF SURPLUS BATTERIES SOLD ON LOT BASIS UNDER "AS IS" "WHERE IS" SALE, ALLEGES MISDESCRIPTION BECAUSE CERTAIN ITEMS WERE MISSING MAY NOT BE GRANTED RELIEF SINCE CONTRACTING OFFICER RELIED ON BEST AVAILABLE INFORMATION, BIDDERS WERE CAUTIONED TO INSPECT AND IN ABSENCE OF BAD FAITH THE EXPRESS DISCLAIMER OF WARRANTY VITIATES ANY WARRANTIES THAT MIGHT BE IMPLIED.

TO MR. KUNZIG:

THIS IS IN REFERENCE TO THE LETTER OF MAY 18, 1970, WITH ATTACHMENTS, FROM YOUR GENERAL COUNSEL FURNISHING OUR OFFICE WITH A REPORT ON THE REQUEST FOR RELIEF FROM THE SAM LAVENTHAL COMPANY (LAVENTHAL) UNDER CONTRACT NO. GS-07-DPS)-00467, WITH THE PROPERTY MANAGEMENT AND DISPOSAL CENTER, GENERAL SERVICES ADMINISTRATION (GSA), BATON ROUGE, LOUISIANA. THE BASIS FOR THE REQUEST IS THAT CERTAIN PROPERTY OFFERED FOR SALE WAS NOT ACCURATELY DESCRIBED IN THE PURCHASE DESCRIPTION.

ON SEPTEMBER 2, 1969, THE PROPERTY MANAGEMENT AND DISPOSAL SERVICE, GSA, BATON ROUGE, ISSUED SALE NO. 7 DPS-70-24, AND ITEM NO. 5, THE ITEM AT ISSUE, WAS DESCRIBED AS FOLLOWS:

"ITEM 5 LOCATED AT GSA PROPERTY MANAGEMENT & DISPOSAL CENTER,

2695 N. SHERWOOD FOREST DRIVE, BATON ROUGE, LOUISIANA 70814. FOR

INSPECTION ARRANGE WITH *** .

(THESE BATTERIES HAVE BEEN DISMANTLED FOR TESTING) SILVER PLATED

BATTERIES INCLUDING:

60C 40052 - 19 EA. EP-MAP-4182-9 - 10 EA.

EP-MAP-4182-7 - 6 EA. EP-MAP-4205 - 6 EA.

60C 40072 - 4 EA. EP-MAP-4240 - 6 EA.

ESTIMATED RECOVERY 125,000 GRAMS (NAS-4016-688) SCRAP 1 LOT"

THE ABOVE PROPERTY WAS REPORTED TO GSA'S FORT WORTH REGIONAL OFFICE FOR SALES ACTION BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA), NEW ORLEANS, LOUISIANA. THE REPORTING DOCUMENT FROM NASA DESCRIBED THE PROPERTY AS HAVING EXCEEDED ITS USEFUL LIFE BUT AS HAVING VALUABLE SILVER WHICH COULD BE USED BY AN OUTSIDE SOURCE.

BIDS WERE OPENED ON SEPTEMBER 18, 1969, AND THE BIDS RANGED FROM A HIGH BID OF $6,257.89 DOWN TO $75.55. LAVENTHAL WAS THE HIGH BIDDER ON ITEM NO. 5 AND THE SECOND HIGH BID WAS $5,172.12. AWARD WAS MADE TO LAVENTHAL ON SEPTEMBER 19, 1969.

BY LETTER DATED OCTOBER 3, 1969, LAVENTHAL ADVISED THAT CERTAIN OF THE UNITS UNDER ITEM NO. 5 WERE MISSING. ON OCTOBER 10, 1969, THE CONTRACTING OFFICER REQUESTED INFORMATION FROM THE CUSTODIAN OF THE PROPERTY AT BATON ROUGE, LOUISIANA, AS TO WHETHER THERE WAS ANY PROPERTY MISSING AFTER THE DATE OF INSPECTION. BY LETTER DATED OCTOBER 13, 1969, THE CUSTODIAN OF THE PROPERTY ADVISED THAT NO PROPERTY WAS MISSING AFTER THE DATE OF INSPECTION AND THAT ALL OF THE PROPERTY ORIGINALLY DELIVERED TO THE HOLDING ACTIVITY AS ITEM NO. 5 WAS STILL AVAILABLE FOR DELIVERY.

ON OCTOBER 24, 1969, THE CONTRACTING OFFICER ADVISED LAVENTHAL THAT NO PROPERTY WAS MISSING AFTER THE DATE OF INSPECTION; THAT UNDER THE GENERAL SALE TERMS AND CONDITIONS (SF-114C), THE BEST AVAILABLE INFORMATION WAS USED TO DESCRIBE THE PROPERTY AND THAT THEREFORE THE CONTRACTING OFFICER COULD NOT GIVE RELIEF UNDER THE CONTRACT.

BY LETTERS DATED NOVEMBER 6, 1969, NOVEMBER 24, 1969, AND FEBRUARY 16, 1970, COUNSEL FOR LAVENTHAL SOUGHT CANCELLATION OF THE CONTRACT OR REDUCTION OF THE SALES PRICE.

ON JANUARY 28, 1970, THE CONTRACTING OFFICER ISSUED A DEFAULT NOTICE TO THE CLAIMANT GIVING THE CLAIMANT UNTIL FEBRUARY 12, 1970, TO PAY AND TAKE DELIVERY OF THE PROPERTY. BY LETTER DATED FEBRUARY 24, 1970, THE CONTRACTING OFFICER ADVISED LAVENTHAL THAT HIS CONTRACT WAS IN DEFAULT AND A DEMAND WAS MADE FOR $1,251.58 AS LIQUIDATED DAMAGES UNDER THE CONTRACT.

THE SALES LETTER SPECIFICALLY ADVISED OFFERORS THAT THE PROPERTY WAS BEING OFFERED FOR SALE ON AN "AS IS" AND "WHERE IS" BASIS AND THAT THERE WOULD BE COMPETITIVE BIDS FOR THE PROPERTY. IT WAS FURTHER STATED THAT THE SALE WAS SUBJECT TO THE "GENERAL SALE TERMS AND CONDITIONS" (STANDARD FORM 114C).

THE "GENERAL SALE TERMS AND CONDITIONS" (STANDARD FORM 114-C), PROVIDED THAT THE PROPERTY WAS SOLD ON AN "AS IS" AND "WHERE IS" BASIS AND THAT THE DESCRIPTION WAS BASED ON THE BEST AVAILABLE INFORMATION. BIDDERS WERE "INVITED", "URGED" AND "CAUTIONED" TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING A BID. IT WAS FURTHER PROVIDED THAT NO ADJUSTMENT WOULD BE MADE WHERE PROPERTY WAS SOLD ON A "PRICE FOR THE LOT" BASIS.

GSA'S REPORT STATES THAT THE CONTRACTING OFFICER RELIED UPON NASA'S REPORTING DOCUMENT IN PREPARING THE DESCRIPTION WHICH WAS INSERTED IN THE SALES LETTER. THE CONTRACTING OFFICER HAS REPORTED THAT THE BATTERIES DESCRIBED IN ITEM NO. 5 WERE DISMANTLED AND IN SCRAP CONDITION AND THAT IT WAS DIFFICULT FOR THE PROPERTY CUSTODIAN AT BATON ROUGE TO ASCERTAIN THE SPECIFIC NUMBER OF BATTERIES RECEIVED FROM NASA. WE ARE ADVISED THAT THIS IS THE REASON FOR ADVERTISING THE PROPERTY FOR SALE ON A "LOT" BASIS.

THE DESCRIPTION OF ITEM NO. 5 IN THE SALES LETTER APPARENTLY WAS BASED ON THE BEST AVAILABLE INFORMATION FURNISHED TO GSA BY NASA. THE SALES LETTER CAUTIONED THE BIDDER TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING A BID. BY STATING THAT THE SALE WAS ON AN "AS IS" AND "WHERE IS" BASIS, BIDDERS WERE ADVISED THAT THERE WAS NO WARRANTY AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE OR DESCRIPTION. UNDER SUCH PROCEDURES IT HAS CONSISTENTLY BEEN HELD BY THE COURTS AND OUR OFFICE THAT, IN THE ABSENCE OF BAD FAITH SUCH EXPRESS DISCLAIMER OF WARRANTY VITIATES ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT BE IMPLIED FROM A SALES TRANSACTION. SEE LIPSHITZ & COHEN V UNITED STATES, 269 U. S. 90 (1925); MAGUIRE AND COMPANY V UNITED STATES, 273 U. S. 67 (1927); B- 160014, OCTOBER 27, 1966 AND B-166611, MAY 15, 1969.

FOR THE ABOVE REASONS WE FIND THERE IS NO BASIS FOR GRANTING RELIEF UNDER THE FACTS OF LAVENTHAL'S CLAIM.