52.247-33
F.o.b. Origin, with Differentials
FAR 52.247-33 allows contractors to include and be reimbursed for transportation cost differentials on f.o.b. origin shipments, provided they follow strict preparation, documentation, and liability requirements.
Overview
FAR 52.247-33, "F.o.b. Origin, with Differentials," establishes the requirements for shipments made on an f.o.b. (free on board) origin basis, allowing for price differentials based on transportation mode, vehicle type, or delivery location. This clause defines the contractor’s responsibilities for preparing, marking, and delivering goods to the carrier at the origin point, and specifies how transportation cost differentials may be included and reimbursed. It also outlines the documentation and liability requirements for contractors, as well as the Government’s options regarding transportation arrangements and reimbursement of differentials.
Key Rules
- Definition of F.o.b. Origin, with Differentials
- Goods are delivered free of expense to the Government at a specified origin point, with possible price adjustments (differentials) for transportation options.
- Contractor Responsibilities
- Contractors must pack, mark, and deliver goods to the carrier, order appropriate carrier equipment, and ensure proper loading and documentation.
- Liability
- Contractors are liable for loss or damage before delivery to the carrier or due to improper packing, marking, or loading.
- Documentation
- Contractors must complete and distribute bills of lading or transportation receipts with detailed shipment information.
- Differentials and Reimbursement
- Contractors may propose price differentials for various transportation options, which are reimbursed if specified by the Government at shipment time. The Government may also opt to handle transportation itself, in which case no differential is reimbursed.
Responsibilities
- Contracting Officers: Ensure the clause is included in applicable contracts and evaluate offers considering differentials.
- Contractors: Prepare, document, and deliver shipments per requirements; propose and invoice for differentials as applicable; maintain liability until carrier receipt.
- Agencies: Provide bills of lading, specify transportation requirements, and direct distribution of shipping documents.
Practical Implications
- This clause clarifies cost allocation and risk for f.o.b. origin shipments, allowing contractors to account for variable transportation costs. It impacts offer evaluation, invoicing, and liability management. Common pitfalls include improper documentation, failure to propose differentials, or misunderstanding liability periods.