52.247-37 F.o.b. Vessel, Port of Shipment
Source: FAR 52.247-37 on acquisition.gov
Contractors must deliver goods loaded on board an ocean vessel at the specified port, bearing all costs and risks up to that point, and provide proper documentation to the Government.
Overview
- FAR 52.247-37 establishes the requirements for shipments delivered under the term "f.o.b. vessel, port of shipment." This clause defines the contractor's responsibilities for preparing, delivering, and documenting goods loaded onto an ocean vessel at a specified port, free of expense to the Government up to that point.
Key Rules
- Definition of F.o.b. Vessel, Port of Shipment
- The contractor must deliver goods loaded, stowed, and trimmed on board the ocean vessel at the specified port, with all expenses up to that point borne by the contractor.
- Packing and Marking
- Shipments must be packed and marked per contract specifications, or, if absent, per carrier requirements to ensure protection and lowest transportation charges.
- Delivery and Charges
- The contractor is responsible for delivering the shipment on board the vessel in good order and paying all charges incurred in doing so.
- Documentation
- A clean ship’s receipt or on-board ocean bill of lading must be provided to the Government.
- Risk of Loss
- The contractor bears the risk of loss or damage until the goods are delivered on board the vessel.
- Assistance with Export/Import Documents
- Upon Government request and at its expense, the contractor must assist in obtaining export or import documents.
Responsibilities
- Contracting Officers: Ensure the clause is included in applicable contracts and verify contractor compliance.
- Contractors: Prepare, deliver, and document shipments as specified, bearing all costs and risks up to vessel loading.
- Agencies: May request assistance with export/import documentation and must cover related expenses.
Practical Implications
- This clause clarifies the point at which risk and cost transfer from contractor to Government for ocean shipments. Contractors must be diligent in preparing shipments and providing required documentation. Failure to comply can result in delays, additional costs, or liability for loss/damage prior to vessel loading.
As prescribed in 47.303-9(c), insert the following clause in solicitations and contracts when the delivery term is f.o.b. vessel, port of shipment:
F.o.b. Vessel, Port of Shipment (Apr 1984)
(a) The term "f.o.b. vessel, port of shipment," as used in this clause, means free of expense to the Government loaded, stowed, and trimmed on board the ocean vessel at the specified port of shipment.
(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 for ocean transportation in conformance with carrier requirements to protect the goods and to ensure assessment of the lowest applicable transportation charge;
(2)
(i) Deliver the shipment on board the ocean vessel in good order and condition on the date or within the period fixed; and
(ii) Pay and bear all charges incurred in placing the shipment actually on board;
(3) Provide a clean ship’s receipt or on-board ocean bill of lading;
(4) Be responsible for any loss of and/or damage to the goods occurring before delivery of the shipment on board the ocean vessel; and
(5) At the Government’s request and expense, assist in obtaining the documents required for-
(i) Exportation; or
(ii) Importation at destination.
(End of clause)