47.304-1
General
Contracting officers must carefully determine and specify f.o.b. terms in solicitations to ensure the most cost-effective and advantageous delivery arrangements for the government.
Overview
FAR 47.304-1 outlines the general requirements and considerations for determining Free on Board (f.o.b.) terms in government contracts. The section guides contracting officers on how to select between f.o.b. origin and f.o.b. destination, based on overall cost, government interests, and logistical factors. It mandates that solicitations clearly specify the required f.o.b. terms and provides criteria for when each term is most appropriate, including special considerations for security, unknown destinations, and certain types of supplies. The regulation emphasizes the importance of evaluating freight rates, traffic management benefits, and administrative costs when making these determinations.
Key Rules
- Determining f.o.b. Terms
- Contracting officers must base f.o.b. terms on overall cost and specific criteria in FAR 47.304.
- Solicitation Requirements
- Solicitations must state whether offers should be f.o.b. origin, f.o.b. destination, or allow offerors to choose.
- Evaluation of Delivery Points
- The most advantageous delivery point (origin or destination) must be considered, factoring in freight rates and logistical benefits.
- Special Circumstances
- F.o.b. origin is required when destinations are unknown or for classified shipments needing commercial transport; f.o.b. destination is required when acceptance is at destination or for certain bulk, perishable, or administratively burdensome shipments.
Responsibilities
- Contracting Officers: Must analyze costs, specify f.o.b. terms in solicitations, and justify their choices based on government advantage and regulatory criteria.
- Contractors: Must comply with the specified f.o.b. terms in their offers and performance.
- Agencies: Ensure oversight and compliance with f.o.b. determination procedures and documentation.
Practical Implications
- This section ensures that delivery terms are selected to minimize government costs and maximize logistical efficiency. It impacts how solicitations are structured and how contractors prepare their offers. Common pitfalls include failing to specify f.o.b. terms or not properly evaluating the cost and logistical implications, which can lead to increased costs or administrative burdens.