47.104-3 Cost-reimbursement contracts
Source: FAR 47.104-3 on acquisition.gov
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.
(a) http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title49-section10721&num=0&edition=prelim" target="_blank">49 U.S.C. 10721 and http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title49-section13712&num=0&edition=prelim" target="_blank">13712 rates may be applied to shipments other than those made by the Government if the total benefit accrues to the Government, i.e., the Government shall pay the charges or directly and completely reimburse the party that initially bears the freight charges. Therefore, http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title49-section10721&num=0&edition=prelim" target="_blank">49 U.S.C. 10721 and http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title49-section13712&num=0&edition=prelim" target="_blank">13712 rates may be used for shipments moving on commercial bills of lading in cost reimbursement contracts under which the transportation costs are direct and allowable costs under the cost principles of part 31.
(b) http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title49-section10721&num=0&edition=prelim" target="_blank">49 U.S.C. 10721 and http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title49-section13712&num=0&edition=prelim" target="_blank">13712 rates may be applied to the movement of household goods and personal effects of contractor employees who are relocated for the convenience and at the direction of the Government and whose total transportation costs are reimbursed by the Government.
(c) The clause at 52.247-1, Commercial Bill of Lading Notations, will ensure that the Government receives the benefit of lower http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title49-section10721&num=0&edition=prelim" target="_blank">49 U.S.C. 10721 and http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title49-section13712&num=0&edition=prelim" target="_blank">13712 rates in cost-reimbursement contracts as described in paragraphs (a) and (b) of this section.
(d) Contracting officers shall-
(1) Include in contracts a statement requiring the contractor to use carriers that offer acceptable service at reduced rates if available; and
(2) Ensure that contractors receive the name and location of the transportation officer designated to furnish support and guidance when using Government rate tenders.
(e) The transportation office shall-
(1) Advise and assist contracting officers and contractors; and
(2) Make available to contractors the names of carriers that provide service under http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title49-section10721&num=0&edition=prelim" target="_blank">49 U.S.C. 10721 and http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title49-section13712&num=0&edition=prelim" target="_blank">13712 rates, cite applicable rate tenders, and advise contractors of the statement that must be shown on the carrier’s commercial bill of lading (see the clause at 52.247-1, Commercial Bill of Lading Notations).