Cost-reimbursement contracts
FAR 47.104-3 ensures the Government receives reduced transportation rates in cost-reimbursement contracts by requiring contractors to use eligible carriers and proper documentation.
Overview
FAR 47.104-3 addresses the use of special Government transportation rates (49 U.S.C. 10721 and 13712) in cost-reimbursement contracts. It allows these reduced rates to be applied to shipments not directly made by the Government, provided the Government ultimately pays or reimburses all transportation costs. This includes shipments on commercial bills of lading and the movement of contractor employees’ household goods when relocated for Government purposes. The regulation mandates the use of the clause at 52.247-1 to ensure the Government receives the benefit of these rates. Contracting officers must require contractors to use carriers offering reduced rates and provide them with transportation officer contacts. Transportation offices are responsible for supporting both contracting officers and contractors, including sharing carrier information and rate tenders.
Key Rules
- Application of Government Rates
- Government rates (49 U.S.C. 10721 and 13712) can be used for shipments under cost-reimbursement contracts if the Government pays or reimburses all transportation costs.
- Employee Relocation
- These rates also apply to moving contractor employees’ household goods when relocation is for Government convenience and fully reimbursed.
- Required Clause
- Contracts must include FAR 52.247-1 to ensure proper bill of lading notations and rate application.
- Contractor Requirements
- Contractors must use carriers offering reduced rates and receive transportation officer support.
- Transportation Office Duties
- Transportation offices must advise, assist, and provide relevant carrier and rate information to contractors.
Responsibilities
- Contracting Officers: Ensure contract clauses are included, require use of reduced-rate carriers, and provide transportation officer contacts.
- Contractors: Use eligible carriers, comply with bill of lading requirements, and coordinate with transportation officers.
- Agencies/Transportation Offices: Advise, assist, and provide carrier/rate information and guidance.
Practical Implications
This section ensures the Government maximizes cost savings on transportation in cost-reimbursement contracts by leveraging special statutory rates. Contractors must be diligent in using eligible carriers and following documentation requirements. Failure to comply may result in lost savings or contract issues.