Shipping Point(s) Used in Evaluation of F.o.b. Origin Offers
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.