52.247-31 F.o.b. Origin, Freight Allowed
Source: FAR 52.247-31 on acquisition.gov
Contractors must deliver goods to the specified origin point at no expense to the Government, properly prepare shipments, and handle all required documentation and liability until delivery to the carrier.
Overview
FAR 52.247-31, F.o.b. Origin, Freight Allowed, defines the responsibilities and procedures for contractors when goods are shipped f.o.b. (free on board) origin, with freight charges allowed (deducted from the contract price). This clause ensures that the Government receives goods at a specified origin point without incurring shipping expenses, while the contractor manages packing, marking, loading, and documentation. It also outlines specific requirements for shipments from Alaska and Hawaii, and details the contractor’s liability for loss or damage before delivery to the carrier or due to improper preparation.
Key Rules
- Definition of F.o.b. Origin, Freight Allowed
- Goods are delivered free of expense to the Government at a specified origin point, and a freight allowance is deducted from the contract price based on published tariffs or Government rate tenders.
- Contractor Shipping Responsibilities
- Contractors must pack, mark, load, and deliver goods to the carrier, order appropriate carrier equipment, and ensure proper documentation (bill of lading).
- Liability for Loss or Damage
- Contractors are responsible for loss or damage before delivery to the carrier or due to improper packing, marking, or loading.
- Special Provisions for Alaska and Hawaii
- Contractors in Alaska or Hawaii must deliver goods to specified ports or container yards at their own expense for shipments outside those states.
Responsibilities
- Contracting Officers: Ensure the clause is included in applicable contracts and verify contractor compliance.
- Contractors: Fulfill all shipping, documentation, and liability requirements as specified in the clause.
- Agencies: Provide necessary instructions for bills of lading and oversee compliance with shipping procedures.
Practical Implications
- This clause clarifies shipping cost responsibilities and ensures proper handling and documentation of Government shipments. Contractors must be diligent in preparing shipments and maintaining records to avoid liability and payment issues. Common pitfalls include improper packing, incomplete documentation, and misunderstanding the point of delivery or freight allowance calculations.
As prescribed in 47.303-3(c), insert the following clause:
F.o.b. Origin, Freight Allowed (Feb 2006)
(a) The term "f.o.b. origin, freight allowed," as used in this clause, means-
(1) Free of expense to the Government delivered-
(i) 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 shipments will be made and from which line-haul transportation service (as distinguished from switching, local drayage, or other terminal service) will begin;
(ii) 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;
(iii) To a U.S. Postal Service facility; or
(iv) 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; and
(2) An allowance for freight, based on applicable published tariff rates (or Government rate tenders) between the points specified in the contract, is deducted from the contract price.
(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)