F.o.b. Origin, Freight Prepaid
Contractors must deliver goods to the specified origin point, prepay all freight charges, and assume liability for loss or damage until delivery to the carrier, ensuring proper documentation and compliance with all shipping requirements.
Overview
FAR 52.247-32, F.o.b. Origin, Freight Prepaid, defines the responsibilities of contractors when goods are shipped free on board (f.o.b.) origin with freight prepaid. Under this clause, the contractor must deliver goods to a specified point (such as a carrier's conveyance, wharf, freight station, or postal facility) at no expense to the Government, with transportation costs prepaid by the contractor. The clause details requirements for packing, marking, loading, and documentation, as well as liability for loss or damage prior to delivery to the carrier. Special provisions apply for shipments originating in Alaska or Hawaii, and for container service from Hawaii. The contractor is also responsible for preparing and distributing bills of lading and prepaying all freight charges as specified in the contract.
Key Rules
- Definition of F.o.b. Origin, Freight Prepaid
- Contractor delivers goods to a specified point at origin, with transportation costs prepaid to the contract-specified point.
- Contractor Shipping Responsibilities
- Includes packing, marking, ordering carrier equipment, loading, and ensuring goods are delivered in good order to the carrier.
- Liability for Loss or Damage
- Contractor is liable for loss or damage before delivery to the carrier, or due to improper packing, marking, or loading.
- Documentation
- Contractor must prepare and distribute bills of lading or transportation receipts with required information.
- Special Provisions for Alaska and Hawaii
- Additional delivery requirements and expense responsibilities for shipments from these states, especially for container service from Hawaii.
Responsibilities
- Contracting Officers: Ensure the clause is included when required and verify contractor compliance.
- Contractors: Must fulfill all shipping, documentation, and liability obligations as specified.
- Agencies: Provide instructions for bill of lading distribution and any special shipping requirements.
Practical Implications
- This clause clarifies shipping cost responsibilities and risk of loss, ensuring the Government receives goods at the specified point without incurring initial freight costs. Contractors must be diligent in packing, documentation, and compliance with carrier requirements. Common pitfalls include improper documentation, failure to prepay freight, or misunderstanding liability for loss or damage.