B-130742, MAR. 4, 1957

B-130742, MAR. 4, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 15, 1957, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH MR. GIUSEPPE MAZZETTI OF LIVORNO, ITALY, ALLEGES HE MADE IN HIS BID ON WHICH CONTRACT NO. DA-91-214 -USFA/S/574, WAS AWARDED.

BY INVITATION NO. S91-214-55-/S/12, THE PROPERTY DISPOSAL OFFICE, USFA SUPPORT COMMAND, CAMP DARBY, TEMBOLO-LIVORNO, ITALY, REQUESTED BIDS--- TO BE OPENED APRIL 28, 1955--- FOR THE PURCHASE FROM THE GOVERNMENT OF VARIOUS LOTS OF EXCESS CLOTHING, SHOES AND EQUIPMENT. PROSPECTIVE BIDDERS WERE ADVISED THAT THE PROPERTY LISTED THEREIN WAS FOR SALE ON A "WHERE IS, AS IS" BASIS, AND THAT IT WAS TO BE SOLD FOR EXPORT ONLY OUTSIDE THE REPUBLIC OF ITALY. A MIMEOGRAPHED LIST ATTACHED TO THE INVITATION LISTED THE QUANTITY OF ITEMS IN EACH LOST BUT NEITHER THE INVITATION NOR THE LIST DISCLOSED THE CONDITION OF THE VARIOUS ITEMS. IT IS REPORTED THAT IN VIEW OF THE LANGUAGE DIFFICULTIES AND TO FACILITATE BIDDING ON THE SURPLUS PROPERTY, PROSPECTIVE BIDDERS WERE SHOWN A SAMPLE OF THE ITEMS INCLUDED IN THE SALE WITH A TAG ATTACHED WHICH INDICATED THE NUMBER OF ITEMS OF THAT TYPE FOR SALE. THE RECORD INDICATES THAT AFTER INSPECTING THE SAMPLES, MR. MAZZETTI SUBMITTED A BID OFFERING TO PURCHASE, AMONG OTHERS, LOT NO. 1 FOR THE LOT PRICE OF 5.131.000 ITALIAN LIRE; LOT NO. 2 FOR THE LOT PRICE OF 343.000 LIRE; LOT NO. 5 FOR THE LOT PRICE OF 1.627.500 LIRE; AND LOT NO. 8 FOR THE LOT PRICE OF 563.000 LIRE.

IN A REPORT DATED FEBRUARY 13, 1956, FROM MAJOR WILLIAM L. TURNER, DEPOT OPERATIONS, SETAF SUPPORT COMMAND, IT WAS STATED---

"G. ON 5 MARCH 1955, MR. GIUSEPPE MAZZETTI WAS NOTIFIED THAT HIS BID HAD BEEN ACCEPTED FOR LOTS 1, 2, 5, AND 8, AND HE WAS TO MAKE NECESSARY ARRANGEMENTS TO REMOVE SAID PROPERTY FROM THE QUARTERMASTER SUPPLY SECTION.

"H. IN QUESTIONING MR. MAZZETTI IT WAS LEARNED THAT HE HAD CONTACTED A FIRM IN SWITZERLAND TO BUY SUBJECT EXCESS PROPERTY. HOWEVER, BEFORE MR. A. O. PARITEX OF ZURICH, SWITZERLAND WOULD MAKE A FIRM CONTRACT HE MADE A VISIT TO THE SETAF GENERAL DEPOT AND TO THE SUPPORT COMMAND PROPERTY DISPOSAL OFFICE, WITH MR. MAZZETTI, TO LOOK OVER THE EXCESS PROPERTY SOLD ON CONTRACT DA-91-214-DSFA/S/574. THIS VISIT WAS TO CONFIRM THE CONDITION OF SUPPLIES IN LOTS 1, 2, 5, AND 8. AT THE SUPPORT COMMAND PROPERTY DISPOSAL OFFICE THEY WERE SHOWN THE CROSS SECTION SAMPLE OF ITEMS IN LOTS 1, 2, 5, AND 8, WHICH WERE NEW OR COMBAT SERVICEABLE. SGT SMITH, OF THE SUPPORT COMMAND PROPERTY DISPOSAL OFFICE, ACCOMPANIED MR. MAZZETTI AND MR. PARITEX TO THE QUARTERMASTER SUPPLY SECTION TO LOOK OVER ITEMS IN LOTS 1, 2, 5, AND 8 STORED IN THE DEPOT, AN WERE SHOWN BOXES OF DIFFERENT ITEMS WHICH WERE NEW OR COMBAT SERVICEABLE. BASED ON THIS VISIT, AND FROM WHAT HE WAS SHOWN, MR. PARITEX SIGNED A CONTRACT WITH MR. MAZZETTI TO ACCEPT AND ARRANGE FOR THE SALE OF SUBJECT PROPERTY.'

IN A REPORT DATED DECEMBER 5, 1956, FROM MAJOR TOM HUFF, PROPERTY DISPOSAL OFFICER, SETAF SUPPORT COMMAND, IT WAS STATED---

"J. ON 26 JANUARY 1956, MR. MAZZETTI COMPLAINED TO LT COLONEL CAMPBELL, S -4 SUPPORT COMMAND, THAT UPON BEING OPENED BY SWISS CUSTOMS, THE LOTS WERE FOUND TO BE SHORT IN QUANTITY AND NOT ALL NEW OR COMBAT SERVICEABLE (CONDITION 1 AND 2); BUT THEY WERE FOUND TO INCLUDE USED, DIRTY, TORN AND MOTH EATEN SALVAGE-CONDITION ITEMS. MR. MAZZETTI STATED THAT HE HAD CONTRACTED TO SELL ALL ITEMS TO PARITEX OF ZURICH IN THE SAME NEW OR COMBAT SERVICEABLE CONDITION AS WERE THE SAMPLES SHOWN.

"K. MAJOR WILLIAM L. TURNER, CB, DEPOT OPERATIONS, IN HIS INVESTIGATION OF THIS MATTER DATED 13 FEBRUARY 1956 STATED THAT UPON BEING QUESTIONED, CAPTAIN HELLER AND SERGEANT SMITH STATED THAT ONLY CONDITION 1 AND 2 TYPE ITEMS (NEW OR COMBAT SERVICEABLE) WERE DISPLACED IN THE CROSS SECTION SAMPLES. SGT SMITH STATED THAT HE WAS WITH MR. MAZZETTI AND THE PARITEX REPRESENTATIVE WHEN THEY INSPECTED ITEMS IN LOTS 1, 2, 5, AND 8, STORED IN THE DEPOT, AND THAT ALL ITEMS INSPECTED WERE NEW AND COMBAT SERVICEABLE.

"L. FOLLOWING THE DISCOVERY OF THE ALLEGED DISCREPANCIES IN THIS CONTRACT, NEGOTIATIONS CULMINATED IN A CONFERENCE BETWEEN SETAF SUPPORT COMMAND PERSONNEL AND MR. MAZZETTI AND HIS ATTORNEY ON 13 JUNE 1956. THE MEMO FOR RECORD DATED 14 JUNE 1956 REPORTS THAT IT WAS CONCLUDED MR. MAZZETTI'S PROPER REMEDY WAS TO PROCESS A CLAIM AGAINST THE U.S. GOVERNMENT. THIS CLAIM TOOK THE FORM OF THE IMMEDIATE APPEAL.

"4. THE FOLLOWING COMMENTS ARE MADE ON ALLEGATIONS IN APPELLANT'S APPEAL:

"A. IN APPELLANT'S LETTER OF APPEAL DATED 17 AUGUST 1956, CONTENDS THAT ALTHOUGH HE UNDERSTOOD THAT SALE WAS NOT EXACTLY "BY SAMPLE," HE WAS SHOWN, AS AN ILLUSTRATION, A NEW PAIR OF TROUSERS AS A GENERIC SAMPLE. STATES HE REALIZED THAT PERHAPS THE LOT CONTAINED TROUSERS OF DIFFERENT SIZES, MATERIALS, OR COLORS, BUT HE DID NOT ANTICIPATE THE LOT WOULD INCLUDE USED, AND TORN TROUSERS. SINCE THIS WAS A SALE OF GOVERNMENT "SURPLUS PROPERTY" AS CONTRASTED WITH "SALVAGE PROPERTY," HE ASSUMED IT TO BE "NEW OR COMBAT SERVICEABLE.' FINALLY HE STATES THAT ALL CASES INSPECTED AT THE TIME OF THE SALE CONFORMED TO THE ORIGINAL SAMPLE SHOWN.

"B. INVESTIGATION HAS REVEALED THAT THE U.S. PERSONNEL INVOLVED IN THIS SALE WERE UNDER SUBSTANTIALLY THE SAME IMPRESSION AS TO THE CONDITION OF THE PROPERTY BEING SOLD, I.E.: THAT ALL ITEMS WERE EITHER NEW OR COMBAT SERVICEABLE. THE PERSONNEL IN THE PROPERTY DISPOSAL OFFICE WERE EVIDENTLY AS SURPRISED AS APPELLANT TO LEARN THAT THE LOT INCLUDED SALVAGE CONDITION PROPERTY.

"C. APPELLANT IS CORRECT IN STATING THAT HE WAS SHOWN SAMPLES OF ITEMS. SAMPLES WERE SELECTED FROM THE CASES IN STORAGE AND TAKEN TO THE PROPERTY DISPOSAL OFFICE WHERE TAGS INDICATING QUANTITY WERE ATTACHED TO EACH ITEM. THIS WAS DONE BY SETAF PERSONNEL TO FACILITATE BIDDING WITH THE LANGUAGE BARRIER BETWEEN THE VARIOUS BIDDERS AND THE GOVERNMENT. ALL SAMPLES DISPLAYED WERE NEW OR COMBAT SERVICEABLE.

"D. APPELLANT WAS AFFORDED OPPORTUNITIES TO INSPECT THE CASES IN STORAGE AT THE WAREHOUSE AT THE TIME OF BIDDING AND WHEN HE SUBSEQUENTLY RESOLD THE PROPERTY TO THE PARITEX FIRM OF SWITZERLAND. ON BOTH OCCASIONS ONLY NEW OR COMBAT SERVICEABLE ITEMS WERE FOUND. FROM THIS AND THE TAGGED SAMPLES SHOWN AT THE TIME OF BIDDING, APPELLANT CONTENDS THAT THE "AS IS" CLAUSE OF THE CONTRACT SHOULD BE INTERPRETED "AS THE SAMPLE SHOWN "IS," " AND "AS THE MATERIAL INSPECTED IS.'"

ALTHOUGH ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS PROVIDES, AMONG OTHER THINGS, THAT ,THIS IS NOT A SALE BY SAMPLE," IT APPEARS THAT BECAUSE OF LANGUAGE DIFFICULTIES THE GOVERNMENT REPRESENTATIVE WHO DISPLAYED THE SAMPLES DID SO UNDER CIRCUMSTANCES WHICH LED MR. MAZZETTI AND MR. PARITEX, WHO BOUGHT THE SURPLUS ITEMS FROM MR. MAZZETTI, TO BELIEVE THAT THE BULK OF THE LOTS OF SURPLUS PROPERTY BEING SOLD CONFORMED WITH THE SAMPLES WHICH WAS NOT THE CASE. IN VIEW OF ALL CIRCUMSTANCES, WE ARE OF THE OPINION THAT MR. MAZZETTI SHOULD NOT BE REQUIRED TO ACCEPT THE SALVAGE ITEMS AT HIS BID PRICE.

IN HIS REPORT OF FEBRUARY 13, 1956, MAJOR TURNER MAKES AN ALTERNATE RECOMMENDATION THAT MR. MAZZETTI BE REFUNDED THE SUM OF $2,017.89. ACCORDINGLY, IF IT BE CONSIDERED THAT THE SUM OF $2,017.89 IS FAIR AND REASONABLE, THIS OFFICE WILL INTERPOSE NO OBJECTION TO REFUND BEING MADE TO MR. GIUSEPPE MAZZETTI OF THAT SUM.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING THE REFUND.

THE PAPERS, WITH THE EXCEPTION OF THE REPORTS OF FEBRUARY 13 AND DECEMBER 5, 1956, FROM MAJOR TURNER AND MAJOR HUFF, ARE RETURNED.