B-144265, OCT. 26, 1962

B-144265, OCT. 26, 1962

TO ALEX ZEEVE AND COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 19, 1962, REGARDING OUR SETTLEMENT OF SEPTEMBER 11, 1962, DISALLOWING YOUR CLAIM FOR REFUND OF $856.99 REPRESENTING THE PURCHASE PRICE FOR ITEM NO. 12UNDER DEFENSE SUPPLY AGENCY CONTRACT NO. 63066S-5347.

YOU STATE IN YOUR LETTER THAT SINCE YOU DID NOT RECEIVE A CONTRACTING OFFICER'S DECISION, AS PROVIDED BY PARAGRAPH 15 OF THE CONTRACT, YOU ASSUME THAT OUR SETTLEMENT OF SEPTEMBER 11, 1962, IS TO BE DEEMED AS SUCH A DECISION AND, THEREFORE, YOU ARE APPEALING THAT DECISION UNDER PARAGRAPH 15 "TO THE SECRETARY.' THE PROVISIONS OF THAT PARAGRAPH HAVE NO BEARING ON THE FUNCTIONS OF THIS OFFICE. OUR LETTER DATED SEPTEMBER 11, 1962, IS NOT A FINDING OF FACT UNDER THE CONTRACT BUT RATHER A SETTLEMENT ISSUED BY OUR OFFICE UNDER THE GENERAL AUTHORITY CONTAINED IN THE BUDGET AND ACCOUNTING ACT OF 1921 FOR THE GENERAL ACCOUNTING OFFICE TO SETTLE AND ADJUST ALL CLAIMS FOR AND AGAINST THE GOVERNMENT THAT ARE PRESENTED TO IT. HOWEVER, SINCE PARAGRAPH 15 PROVIDES FOR A FINDING OF FACT BY THE CONTRACTING OFFICER ON DISPUTED QUESTIONS OF FACT AND SINCE THE FACTS IN THIS CASE DO NOT SEEM TO BE IN DISPUTE, IT APPEARS THAT THE CONTRACTING OFFICER WAS NOT REQUIRED TO PREPARE A FINDING OF FACT UNDER PARAGRAPH 15 OF THE CONTRACT. THEREFORE, YOUR LETTER OF SEPTEMBER 19, 1962, IS BEING ACCEPTED AS A REQUEST FOR REVIEW OF OUR SETTLEMENT DATED SEPTEMBER 11, 1962.

IT APPEARS THAT IN RESPONSE TO INVITATION NO. B-105-62-63066, ISSUED ON APRIL 2, 1962, BY THE DEFENSE SURPLUS SALES OFFICE, NEWPORT, RHODE ISLAND, YOU SUBMITTED A BID OFFERING TO PURCHASE ITEM NO. 12, COVERING ONE ELECTRIC MOTOR-DRIVEN DRILL PRESS, 60-CYCLE, 220 V., A.C., 3-HP., ETC., FOR $856.99. YOUR BID HAVING BEEN THE HIGHEST BID RECEIVED FOR ITEM NO. 12 WAS ACCEPTED ON APRIL 30, 1962, BY THE SURPLUS SALES OFFICE THEREBY CONSUMMATING CONTRACT NO. 63033S-5347. BY LETTER DATED MAY 25, 1962, YOU ADVISED THE SURPLUS SALES OFFICE THAT THE DRILL PRESS WHICH WAS SHIPPED TO YOU WAS EITHER THE WRONG MACHINE OR THAT ITEM NO. 12 WAS GROSSLY MISDESCRIBED IN THE INVITATION. YOU CONTENDED, AMONG OTHERS, THAT THE MACHINE WAS DESCRIBED AS HAVING A 3-HP. MOTOR, A BASE WORKING SURFACE OF 40 INCHES BY 36 INCHES, A SPEED RANGE OF 75 TO 1,500 R.P.M., AND AN ACQUISITION COST OF $4,678, WHEREAS THE MACHINE DELIVERED TO YOU ACTUALLY ONLY HAD A 3/4-HP. MOTOR, A BASE WORKING SURFACE OF ONLY 22 INCHES BY 19 INCHES, SPEEDS RANGING FROM 575 TO 2,300 R.P.M., AND THAT YOU ESTIMATED AN ACQUISITION COST OF SOMEWHERE BETWEEN $800 AND $1,000. IN VIEW OF THESE CONDITIONS YOU REQUEST THAT IF THE DRILL PRESS SHIPPED TO YOU WAS THE ONE ADVERTISED FOR SALE UNDER ITEM NO. 12 THAT YOU BE PERMITTED TO RESCIND CONTRACT NO. 63066S-5347 WITH A REFUND OF THE FULL PURCHASE PRICE OF $856.99 UPON A RETURN OF THE MACHINE TO THE GOVERNMENT.

ON THE RECORD BEFORE US THERE CAN BE LITTLE, IF ANY, DOUBT THAT CERTAIN DETAILS OF THE DRILL PRESS COVERED BY ITEM NO. 12 WERE MISDESCRIBED IN INVITATION NO. B-105-62-63066. HOWEVER, THE PRINCIPAL QUESTION IN CASES OF THIS KIND IS WHETHER UNDER THESE CIRCUMSTANCES THE GOVERNMENT DID OR DID NOT WARRANT THE PROPERTY THAT WAS SOLD. IN THIS REGARD, YOUR ATTENTION IS AGAIN DIRECTED TO ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE INVITATION WHEREIN IT IS EXPRESSLY PROVIDED THAT THE GOVERNMENT MAKES NO WARRANTY, EXPRESSED OR IMPLIED, AS TO KIND, CHARACTER, ETC., OR AS TO THE DESCRIPTION OF ANY OF THE PROPERTY OFFERED FOR SALE. IT CONSISTENTLY HAS BEEN HELD BY THE COURTS AND OUR OFFICE THAT, IN THE ABSENCE OF BAD FAITH, SUCH AN EXPRESS DISCLAIMER OF WARRANTY, WHICH SPECIFICALLY REFERS TO THE KIND AND CHARACTER OF THE PROPERTY--- AND IS NOT LIMITED TO ITS CONDITION AS IMPLIED BY YOU--- VITIATES ANY AND ALL WARRANTIES WHICH OTHERWISE MIGHT ARISE OUT OF A SALES TRANSACTION. SEE LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; TRIED CORPORATION V. UNITED STATES, 63 CT.CL. 151; AND I. SHAPIRO AND COMPANY V. UNITED STATES, 66 CT.CL. 424. THERE IS NOTHING IN THE RECORD BEFORE US TO INDICATE BAD FAITH ON THE PART OF THE SALES CONTRACTING OFFICER IN CONNECTION WITH THE TRANSACTION. THE BASIC PRODUCT ADVERTISED FOR SALE UNDER ITEM NO. 12 WAS A DRILL PRESS AND THAT IS EXACTLY WHAT WAS DELIVERED TO YOU. THE FACT THAT A VARIANCE EXISTED BETWEEN SOME OF THE DESCRIPTIVE DETAILS OF THE DRILL PRESS SET FORTH IN THE INVITATION AND THE DRILL PRESS ACTUALLY DELIVERED TO YOU MAY BE ATTRIBUTED TO NOTHING MORE THAN AN HONEST ERROR WHICH IS COMPLETELY COVERED BY THE DISCLAIMER OF WARRANTY CLAUSE SET FORTH IN ARTICLE 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE INVITATION REFERRED TO ABOVE. DETAILED DESCRIPTIVE TERMS SET FORTH IN CONTRACTS OF SALE OF THIS KIND HAVE BEEN HELD TO BE MERELY EXPRESSIONS OF OPINION AS TO WHAT THE PROPERTY IS OR CONSISTS OF WITH NO WARRANTY ASSOCIATED WITH SUCH DESCRIPTIVE TERMS.

MOREOVER, ARTICLE 1 OF THE GENERAL SALE TERMS AND CONDITIONS NOT ONLY INVITED YOU, AS A BIDDER, TO INSPECT THE PROPERTY BEFORE SUBMITTING YOUR BID BUT EXPRESSLY URGED AND CAUTIONED YOU TO DO SO. THE ARTICLE ALSO INCLUDED A CONDITION WHICH PROVIDES THAT "IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR THE WITHDRAWAL OF A BID AFTER OPENING.' THEREFORE THERE IS APPLICABLE HERE THE RULE ESTABLISHED BY THE DECISIONS OF OUR OFFICE THAT WHERE A BIDDER FAILS TO MAKE AN INSPECTION UNDER SUCH A CONTRACT OF SALE--- WHETHER SUCH FAILURE WAS DUE TO THE BIDDER'S OPINION THAT INSPECTION WAS NOT NECESSARY OR WHETHER THE INSPECTION WAS IMPRACTICAL, IF NOT IMPOSSIBLE -- THE 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 BIDDER'S RESPONSIBILITIES IN THIS CONNECTION APPEAR TO BE CLEARLY SET FORTH IN PAXTON-MITCHELL COMPANY V. UNITED STATES, 172 F.SUPP. 463, WHEREIN IT WAS HELD THAT, NOTWITHSTANDING THE DIFFICULTIES ATTENDANT UPON AN INSPECTION, IT IS INCUMBENT UPON THE BIDDER TO MAKE THE KIND OF INSPECTION THAT IS EFFECTUAL. THERE CAN BE NO DOUBT THAT HAD AN INSPECTION OF THE DRILL PRESS BEEN MADE BEFORE SUBMITTING YOUR BID YOU WOULD HAVE READILY DETECTED THE DISCREPANCIES TO WHICH YOU NOW REFER.