52.247-29 F.o.b. Origin
Source: FAR 52.247-29 on acquisition.gov
FAR 52.247-29 requires contractors to deliver goods to the carrier at the origin point, properly prepared and documented, with the Government assuming risk and expense only after that point.
Overview
FAR 52.247-29, F.o.b. Origin, defines the responsibilities of contractors when goods are shipped "free on board" (f.o.b.) origin. Under this clause, the Government takes title and assumes risk of loss once goods are delivered to the carrier at the specified origin point. The contractor is responsible for packing, marking, loading, and delivering the shipment to the carrier in good order, as well as preparing and distributing the required shipping documentation. Special provisions apply for shipments originating in Alaska or Hawaii, and for containerized shipments from Hawaii. The clause ensures that contractors understand their obligations for preparing shipments and transferring risk to the Government at the designated point of origin.
Key Rules
- Definition of F.o.b. Origin
- Contractor delivers goods to a specified point (carrier, wharf, postal facility, or Government-designated location) free of expense to the Government, at which point the Government assumes risk and title.
- Contractor Responsibilities
- Contractors must pack, mark, and prepare shipments per contract or carrier requirements, order appropriate carrier equipment, deliver goods in good condition, and complete and distribute bills of lading or other receipts.
- Risk of Loss
- Contractor is liable for loss or damage before delivery to the carrier, or due to improper packing, marking, or loading.
- Special Provisions for Alaska and Hawaii
- For shipments from Alaska or Hawaii, contractors must deliver to the port of loading or container yard at their expense, with some shipments treated as f.o.b. destination.
Responsibilities
- Contracting Officers: Ensure the clause is included in applicable contracts and that contractors comply with shipping requirements.
- Contractors: Must properly prepare, document, and deliver shipments to the carrier, and bear responsibility for loss or damage until that point.
- Agencies: Provide necessary shipping documentation and instructions, and oversee compliance with shipping terms.
Practical Implications
- This clause clarifies the point at which risk and expense transfer from contractor to Government, impacting liability and insurance considerations.
- Contractors must be diligent in preparing shipments and documentation to avoid liability for loss or damage.
- Failure to comply with packing, marking, or documentation requirements can result in claims or delays.
As prescribed in 47.303-1(c), insert the following clause:
F.o.b. Origin (Feb 2006)
(a) The term "f.o.b. origin," as used in this clause, means free of expense to the Government delivered-
(1) On board the indicated type of conveyance of the carrier (or of the Government, if specified) at a designated point in the city, county, and State from which the shipment will be made and from which line-haul transportation service (as distinguished from switching, local drayage, or other terminal service) will begin;
(2) To, and placed on, the carrier’s wharf (at shipside, within reach of the ship’s loading tackle, when the shipping point is within a port area having water transportation service) or the carrier’s freight station;
(3) To a U.S. Postal Service facility; or
(4) If stated in the solicitation, to any Government designated point located within the same city or commercial zone as the f.o.b. origin point specified in the contract (the Federal Motor Carrier Safety Administration prescribes commercial zones at Subpart B of 49 CFR part 372).
(b) The Contractor shall-
(1)
(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment in conformance with carrier requirements to protect the goods and to ensure assessment of the lowest applicable transportation charge;
(2)
(i) Order specified carrier equipment when requested by the Government; or
(ii) If not specified, order appropriate carrier equipment not in excess of capacity to accommodate shipment;
(3) Deliver the shipment in good order and condition to the carrier, and load, stow, trim, block, and/or brace carload or truckload shipment (when loaded by the Contractor) on or in the carrier’s conveyance as required by carrier rules and regulations;
(4) Be responsible for any loss of and/or damage to the goods-
(i) Occurring before delivery to the carrier;
(ii) Resulting from improper packing and marking; or
(iii) Resulting from improper loading, stowing, trimming, blocking, and/or bracing of the shipment, if loaded by the Contractor on or in the carrier’s conveyance;
(5) Complete the Government bill of lading supplied by the ordering agency or, when a Government bill of lading is not supplied, prepare a commercial bill of lading or other transportation receipt. The bill of lading shall show-
(i) A description of the shipment in terms of the governing freight classification or tariff (or Government rate tender) under which lowest freight rates are applicable;
(ii) The seals affixed to the conveyance with their serial numbers or other identification;
(iii) Lengths and capacities of cars or trucks ordered and furnished;
(iv) Other pertinent information required to effect prompt delivery to the consignee, including name, delivery address, postal address and ZIP code of consignee, routing, etc.;
(v) Special instructions or annotations requested by the ordering agency for commercial bills of lading; e.g., "This shipment is the property of, and the freight charges paid to the carrier(s) will be reimbursed by, the Government";and
(vi) The signature of the carrier’s agent and the date the shipment is received by the carrier; and
(6) Distribute the copies of the bill of lading, or other transportation receipts, as directed by the ordering agency.
(c) These Contractor responsibilities are specified for performance at the plant or plants at which the supplies are to be finally inspected and accepted, unless the facilities for shipment by carrier’s equipment are not available at the Contractor’s plant, in which case the responsibilities shall be performed f.o.b. the point or points in the same or nearest city where the specified carrier’s facilities are available; subject, however, to the following qualifications:
(1) If the Contractor’s shipping plant is located in the State of Alaska or Hawaii, the Contractor shall deliver the supplies listed for shipment outside Alaska or Hawaii to the port of loading in Alaska or Hawaii, respectively, as specified in the contract, at Contractor’s expense, and to that extent the contract shall be "f.o.b. destination."
(2) Notwithstanding paragraph (c)(1) of this clause, if the Contractor’s shipping plant is located in the State of Hawaii, and the contract requires delivery to be made by container service, the Contractor shall deliver the supplies, at the Contractor’s expense, to the container yard in the same or nearest city where seavan container service is available.
(End of clause)