47.303-1 F.o.b. origin
Source: FAR 47.303-1 on acquisition.gov
F.o.b. origin requires contractors to deliver goods to a specified point at the origin, bearing all costs and risks up to that point, and to comply with strict packing, loading, and documentation requirements.
Overview
FAR 47.303-1 defines the responsibilities and procedures for shipments designated as "F.o.b. origin" (Free on Board origin) in government contracts. Under this term, the contractor is responsible for delivering goods to a specified point (such as a carrier, wharf, or postal facility) at the origin location, free of expense to the Government up to that point. The section details contractor obligations for packing, marking, ordering carrier equipment, loading, liability for loss or damage, and documentation. It also mandates the use of the clause at 52.247-29 in contracts using this delivery term.
Key Rules
- Definition of F.o.b. Origin
- Contractor delivers goods to a specified point at origin (carrier, wharf, postal facility, or designated Government point) without cost to the Government up to that point.
- Contractor Responsibilities
- Contractor must pack, mark, and prepare shipments per contract or carrier requirements, order appropriate carrier equipment, deliver goods in good order, and load shipments as required.
- Contractor is liable for loss or damage before delivery to the carrier or due to improper packing, marking, or loading.
- Contractor must complete and distribute bills of lading or other transportation receipts with required information.
- Contract Clause Requirement
- Contracting officers must include clause 52.247-29 in solicitations and contracts specifying f.o.b. origin delivery.
Responsibilities
- Contracting Officers: Ensure the correct clause is included in contracts and solicitations.
- Contractors: Fulfill all delivery, packing, loading, documentation, and liability requirements up to the f.o.b. origin point.
- Agencies: Provide necessary instructions and oversight for documentation and delivery points.
Practical Implications
- This section clarifies where contractor responsibility ends and Government responsibility begins for transportation costs and risks.
- Proper compliance ensures smooth shipment, minimizes disputes over loss/damage, and supports accurate billing and delivery records.
- Common pitfalls include incomplete documentation, improper packing, or misunderstanding the delivery point, leading to liability or payment issues.
(a) Explanation of delivery term."F.o.b. origin" means free of expense to the Government delivered-
(1) On board the indicated type of conveyance of the carrier (or of the Government, if specified) at a designated point in the city, county, and State from which the shipment will be made and from which line-haul transportation service (as distinguished from switching, local drayage, or other terminal service) will begin;
(2) To, and placed on, the carrier’s wharf (at shipside, within reach of the ship’s loading tackle, when the shipping point is within a port area having water transportation service) or the carrier’s freight station;
(3) To a U.S. Postal Service facility; or
(4) If stated in the solicitation, to any Government-designated point located within the same city or commercial zone as the f.o.b. origin point specified in the contract (the Federal Motor Carrier Safety Administration prescribes commercial zones at Subpart B of 49 CFR part 372).
(b) Contractor responsibilities. The contractor shall-
(1)
(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment in conformance with carrier requirements to protect the goods and to ensure assessment of the lowest applicable transportation charge;
(2)
(i) Order specified carrier equipment requested by the Government; or
(ii) If not specified, order appropriate carrier equipment not in excess of capacity to accommodate shipment;
(3) Deliver the shipment in good order and condition to the carrier, and load, stow, trim, block, and/or brace carload or truckload shipment (when loaded by the contractor) on or in the carrier’s conveyance as required by carrier rules and regulations;
(4) Be responsible for any loss of and/or damage to the goods-
(i) Occurring before delivery to the carrier;
(ii) Resulting from improper packing and marking; or
(iii) Resulting from improper loading, stowing, trimming, blocking, and/or bracing of the shipment, if loaded by the contractor on or in the carrier’s conveyance;
(5) Complete the Government bill of lading supplied by the ordering agency or, when a Government bill of lading is not supplied, prepare a commercial bill of lading or other transportation receipt. The bill of lading shall show-
(i) A description of the shipment in terms of the governing freight classification or tariff (or Government rate tender) under which lowest freight rates are applicable;
(ii) The seals affixed to the conveyance with their serial numbers or other identification;
(iii) Lengths and capacities of cars or trucks ordered and furnished;
(iv) Other pertinent information required to effect prompt delivery to the consignee, including name, delivery address, postal address and ZIP code of consignee, routing, etc.;
(v) Special instructions or annotations requested by the ordering agency for commercial bills of lading; e.g., "This shipment is the property of, and the freight charges paid to the carrier(s) will be reimbursed by, the Government" ; and
(vi) The signature of the carrier’s agent and the date the shipment is received by the carrier; and
(6) Distribute the copies of the bill of lading, or other transportation receipts, as directed by the ordering agency.
(c) Contract clause. The contracting officer shall insert in solicitations and contracts the clause at 52.247-29, F.o.b. Origin, when the delivery term is f.o.b. origin.