F.o.b. vessel, port of shipment
F.o.b. vessel, port of shipment requires contractors to deliver goods fully loaded on board an ocean vessel at the specified port, bearing all costs and risks until that point.
Overview
FAR 47.303-9 defines the responsibilities and requirements for contracts specifying delivery terms as "F.o.b. vessel, port of shipment." Under this term, the contractor must deliver goods free of expense to the Government, loaded, stowed, and trimmed on board an ocean vessel at the specified port. The regulation outlines detailed contractor obligations for packaging, marking, delivery, documentation, and liability for goods prior to loading. It also mandates the use of a specific contract clause (52.247-37) when this delivery term is used.
Key Rules
- Definition of F.o.b. Vessel, Port of Shipment
- Delivery is complete when goods are loaded, stowed, and trimmed on board the vessel at the specified port, with no expense to the Government.
- Contractor Responsibilities
- Contractors must pack and mark shipments per contract or carrier requirements, deliver goods on board in good order, pay all loading charges, provide clean shipping documents, and bear risk of loss until loading.
- Documentation and Assistance
- Contractors must provide a clean ship’s receipt or on-board bill of lading and assist with export/import documentation at the Government’s request and expense.
- Contract Clause Requirement
- The contracting officer must include clause 52.247-37 in contracts using this delivery term.
Responsibilities
- Contracting Officers: Must include the specified clause in applicable contracts.
- Contractors: Must ensure proper packaging, timely delivery, payment of loading charges, provision of required documents, and risk management up to loading.
- Agencies: Oversee compliance and may request assistance with export/import documentation.
Practical Implications
This section clarifies the point at which risk and cost transfer from contractor to Government for ocean shipments, ensuring clear allocation of responsibilities. Contractors must be diligent in packaging, documentation, and timing to avoid liability for loss or damage before loading. Failure to comply can result in disputes, delays, or additional costs.