47.303-4 F.o.b. origin, freight prepaid
Source: FAR 47.303-4 on acquisition.gov
Contractors must deliver goods at the specified origin point and prepay all freight charges, providing proper documentation as required by the contract.
Overview
FAR 47.303-4 defines the delivery term "F.o.b. origin, freight prepaid" for government contracts. Under this term, the contractor is responsible for delivering goods free of expense to the Government at a specified origin point and prepaying all freight charges to the designated location. The regulation clarifies acceptable delivery points, such as the carrier's conveyance, wharf, freight station, U.S. Postal Service facility, or another Government-designated point within the same commercial zone. Contractors must prepare commercial bills of lading or other transportation receipts and ensure all freight charges are prepaid as specified in the contract. Contracting officers are required to include the clause at 52.247-32 in solicitations and contracts using this delivery term.
Key Rules
- Definition of F.o.b. Origin, Freight Prepaid
- Contractor delivers goods at the origin point and prepays transportation costs to the specified destination.
- Acceptable Delivery Points
- Delivery can be to a carrier's conveyance, wharf, freight station, USPS facility, or a Government-designated point within the commercial zone.
- Contractor Responsibilities
- Prepare commercial bills of lading or transportation receipts and prepay all freight charges as required.
- Required Contract Clause
- Clause 52.247-32 must be included in contracts with this delivery term.
Responsibilities
- Contracting Officers: Must include the correct clause and specify delivery points.
- Contractors: Must deliver goods as specified, prepay freight, and provide required documentation.
- Agencies: Ensure compliance with delivery and freight payment requirements.
Practical Implications
This section ensures the Government receives goods at the origin point without incurring initial freight costs, shifting the responsibility for freight payment and documentation to the contractor. Contractors must be diligent in understanding delivery points, preparing proper shipping documents, and prepaying freight to avoid compliance issues or payment delays.
(a) Explanation of delivery term."F.o.b. origin, freight prepaid" means-
(1) Free of expense to the Government delivered-
(i) 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 shipments will be made and from which line-haul transportation service (as distinguished from switching, local drayage, or other terminal service) will begin;
(ii) 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;
(iii) To a U.S. Postal Service facility; or
(iv) 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); and
(2) The cost of transportation, ultimately the Government’s obligation, is prepaid by the contractor to the point specified in the contract.
(b) Contractor responsibilities. The contractor’s responsibilities are the same as those listed in 47.303-1(b), except that the contractor shall prepare commercial bills of lading or other transportation receipts and shall prepay all freight charges to the extent specified in the contract.
(c) Contract clause. The contracting officer shall insert in solicitations and contracts the clause at 52.247-32, F.o.b. Origin, Freight Prepaid, when the delivery term is f.o.b. origin, freight prepaid.