Shipments from CONUS for overseas delivery
Always use f.o.b. origin for overseas shipments from CONUS unless a well-documented exception is justified, ensuring the lowest total shipping cost for the government.
Overview
FAR 47.304-3 addresses the requirements and best practices for government acquisitions involving shipments from the Continental United States (CONUS) to overseas destinations. The regulation emphasizes the use of f.o.b. (free on board) origin terms to leverage lower domestic freight rates and provide flexibility in selecting export ports and ocean carriers, ultimately reducing overall shipping costs for the government. It also outlines the need for proper justification and documentation if other delivery terms are used, and highlights the importance of evaluating total landed costs and utilizing agency export licensing privileges. Contracting officers are required to consult with transportation officers to ensure compliance and cost-effectiveness.
Key Rules
- Preference for f.o.b. Origin
- Supplies shipped from CONUS to overseas destinations should be acquired on an f.o.b. origin basis unless valid reasons exist to do otherwise.
- Documentation of Exceptions
- Any deviation from f.o.b. origin must be justified and documented in the contract file.
- Cost Evaluation
- Contracting officers must evaluate total landed costs, including inland, terminal, and ocean shipping costs, to determine the lowest overall cost.
- Consultation with Transportation Officer
- Contracting officers must seek advice from transportation officers, especially regarding export licensing privileges.
Responsibilities
- Contracting Officers: Ensure f.o.b. origin is used for overseas shipments from CONUS, document exceptions, evaluate total costs, and consult transportation officers.
- Contractors: Comply with specified delivery terms and provide necessary shipping information.
- Agencies: Oversee compliance, maintain documentation, and utilize export licensing privileges where applicable.
Practical Implications
- This section ensures cost-effective and flexible shipping for overseas government acquisitions.
- It impacts daily contracting by requiring careful selection of shipping terms and thorough cost analysis.
- Common pitfalls include failing to document exceptions or neglecting to consult transportation officers, which can lead to compliance issues or higher costs.