47.305-13
Transit arrangements
FAR 47.305-13 ensures the Government maximizes transportation cost savings by leveraging transit arrangements and credits, requiring specific contract clauses and careful management of shipping and invoicing procedures.
Overview
FAR 47.305-13 addresses the use of transit arrangements and transit credits in government transportation contracts. Transit arrangements allow shipments to stop at intermediate points for storage or processing, often resulting in cost savings through single through rates rather than multiple charges. The regulation outlines when and how contracting officers should consider and incorporate these arrangements and credits into solicitations and contracts, particularly for large shipments where such benefits are likely. It also specifies the use of certain FAR clauses and the responsibilities of both contracting officers and contractors regarding documentation and invoicing.
Key Rules
- Transit Arrangements
- Allow for intermediate stops in shipments, with cost savings via through rates and additional transit charges instead of separate rates.
- Solicitation Restrictions
- Solicitations using transit arrangements must be limited to f.o.b. origin offers, as f.o.b. destination offers cannot accommodate variable transit pricing.
- Traffic Management Analysis
- Traffic management personnel must analyze and advise on the benefits of transit arrangements, ensuring sufficient shipment quantities for carload/truckload movements.
- Required Clauses
- FAR 52.247-56 must be included in solicitations when transit arrangements may benefit the Government.
- Transit Credits
- Contracting officers must use contractors’ earned transit credits in evaluations, and contracts must specify prepaid commercial bills of lading and reimbursement procedures.
- Invoicing Requirements
- Contractors must itemize transportation and transit charges on invoices, with reimbursement capped at the quoted offer amount.
- Additional Clauses for Transit Credits
- FAR 52.247-57 must be included when transit credits are likely to reduce costs.
Responsibilities
- Contracting Officers: Evaluate and incorporate transit arrangements/credits, include required clauses, ensure proper contract terms, and verify invoicing compliance.
- Contractors: Ship on prepaid commercial bills of lading, itemize charges on invoices, and comply with contract terms regarding transit arrangements and credits.
- Agencies: Provide traffic management analysis and oversight to ensure cost-effective transportation solutions.
Practical Implications
- This section exists to help the Government leverage commercial transportation practices for cost savings and efficiency.
- It impacts daily contracting by requiring careful analysis of shipping methods, contract clauses, and invoicing.
- Common pitfalls include failing to include required clauses, improper invoicing, or not fully utilizing available transit credits.