52.247-46 Shipping Point(s) Used in Evaluation of F.o.b. Origin Offers
Source: FAR 52.247-46 on acquisition.gov
Contractors must clearly specify shipping points and quantities in f.o.b. origin offers to avoid unfavorable evaluation and potential liability for increased transportation costs.
Overview
FAR 52.247-46 outlines how the Government evaluates offers for f.o.b. (free on board) origin contracts when multiple shipping points are involved. This provision ensures that the Government can fairly and efficiently assess transportation costs in solicitations where contractors may ship from different locations. The regulation details what happens if offerors do not specify shipping points or quantities, and clarifies who bears the cost if the actual shipping point differs from the one used for evaluation.
Key Rules
- Multiple Shipping Points
- If an offeror lists more than one shipping point but does not specify quantities per point before bid opening, the Government will evaluate the offer based on the most cost-effective shipping point.
- No Shipping Point Indicated
- If no shipping point is specified before bid opening, the Government will use the plant where contract performance is indicated, or if none is listed, the contractor’s business address.
- Change in Shipping Point
- If the contractor ships from a different point than the one used for evaluation, the contractor pays any increased transportation costs, while any savings benefit the Government.
Responsibilities
- Contracting Officers: Must apply this provision in relevant f.o.b. origin solicitations and evaluate offers accordingly.
- Contractors: Must clearly indicate shipping points and quantities per point in their offers to avoid unfavorable evaluation or additional costs.
- Agencies: Ensure compliance with evaluation procedures and proper application of transportation cost rules.
Practical Implications
This clause exists to standardize the evaluation of transportation costs in f.o.b. origin contracts, preventing manipulation or ambiguity in shipping arrangements. Contractors risk higher costs or less favorable evaluations if they fail to specify shipping points or quantities. Common pitfalls include incomplete offer information and unexpected transportation cost liabilities.
As prescribed in 47.305-3 (b)(4)(ii), insert the following provision in f.o.b. origin solicitations when price evaluation for shipments from various shipping points is contemplated:
Shipping Point(s) Used in Evaluation of F.o.b. Origin Offers (Apr 1984)
(a) If more than one shipping point or plant is designated by the offeror and the offeror fails to indicate the quantity per shipping point or plant before bid opening, the Government will evaluate the offer on the basis of delivery of the entire quantity from the point or plant where cost of transportation is most favorable to the Government.
(b) If the offeror, before bid opening (or the closing date specified for receipt of offers) fails to indicate any shipping point or plant, the Government will evaluate the offer on the basis of delivery from the plant at which the contract will be performed, as indicated in the offer. If no plant is indicated in the offer, the offer will be evaluated on the basis of delivery from the Contractor’s business address indicated in the offer.
(c) If the offeror uses a shipping point other than that which has been used by the Government as a basis for the evaluation of offers, any increase of transportation costs shall be borne by the Contractor and any savings shall revert to the Government.
(End of clause)