Place of delivery-f.o.b. point
Contracting officers must select and document appropriate f.o.b. delivery terms based on supply origin and contract requirements, ensuring compliance with FAR 47.304 and proper justification for any deviations.
Overview
FAR 47.302 outlines the requirements for determining the place of delivery and the appropriate f.o.b. (free on board) point in government supply contracts. It directs contracting officers to follow specific policies and procedures for transportation based on whether supplies originate within or outside the Contiguous United States (CONUS), referencing FAR 47.304 for detailed guidance. The section emphasizes that delivery terms should generally align with those prescribed in FAR 47.304, and any deviations must be justified and documented in the contract file. It clarifies that the place of government quality assurance or acceptance does not dictate the delivery term, except when acceptance is at destination, which requires f.o.b. destination terms. The regulation also explains that f.o.b. terms and acceptance locations are independent decisions, and provides guidance on documentation needed for payment when title passes at origin.
Key Rules
- Transportation Policies by Source Location
- Use FAR 47.304-1, -2, and -3 for supplies from CONUS; use 47.304-4 for supplies from outside CONUS, unless specific circumstances require otherwise.
- Solicitation and Award Delivery Terms
- Contracts should generally use delivery terms as prescribed in FAR 47.304, with any exceptions documented and justified.
- Relationship of Acceptance and Delivery Terms
- Acceptance location does not automatically determine f.o.b. terms, except that acceptance at destination requires f.o.b. destination.
- Documentation for Payment
- When title passes at origin, payment requires evidence of shipment, such as a signed bill of lading or other proof.
Responsibilities
- Contracting Officers: Must select appropriate f.o.b. terms, document any deviations, and ensure contract files are properly justified and maintained.
- Contractors: Must comply with specified delivery terms and provide required shipping documentation for payment.
- Agencies: Oversee compliance with delivery term policies and ensure proper documentation is maintained.
Practical Implications
- This section ensures that delivery terms are selected based on logistical, security, and cost considerations, not just administrative convenience.
- Proper documentation and justification are critical for audit and payment purposes.
- Misalignment between acceptance and delivery terms can lead to payment delays or compliance issues.