F.o.b. origin, with differentials
F.o.b. origin, with differentials allows contractors to adjust pricing for transportation or delivery variations, and requires clear contract clauses to manage routing contingencies.
Overview
FAR 47.303-5 defines the delivery term "F.o.b. origin, with differentials" for government contracts. This term means that the contractor delivers goods free of expense to the Government at a specified point of origin, such as on board a carrier, at a wharf, freight station, U.S. Postal Service facility, or another designated point within the same city or commercial zone. The regulation allows for price differentials based on transportation mode, vehicle type, or delivery location, as indicated in the contractor’s offer. Contractors must fulfill the same responsibilities as outlined in FAR 47.303-1(b), which generally include proper packaging, marking, and loading. Contracting officers are required to include clause 52.247-33 in solicitations and contracts when it is likely that offerors will include contingencies for unfavorable routing conditions in their pricing.
Key Rules
- Definition of F.o.b. Origin, with Differentials
- Specifies delivery points and allows for price adjustments based on transportation or delivery factors.
- Contractor Responsibilities
- Contractors must meet the same obligations as under standard f.o.b. origin terms (see 47.303-1(b)).
- Contract Clause Requirement
- Clause 52.247-33 must be included when routing contingencies are anticipated in offers.
Responsibilities
- Contracting Officers: Must include the appropriate clause in solicitations/contracts and ensure delivery terms are clear.
- Contractors: Must deliver goods as specified, account for any differentials in their offers, and comply with standard f.o.b. origin responsibilities.
- Agencies: Oversee compliance with delivery and pricing terms.
Practical Implications
- This section clarifies how delivery and pricing adjustments are handled for f.o.b. origin shipments with potential routing or delivery variations.
- Contractors must carefully calculate and document any differentials in their offers.
- Failure to comply with delivery or pricing requirements can result in disputes or contract modifications.