Evaluation-F.o.b. Origin
FAR 52.247-47 requires that transportation costs from the contractor’s shipping point to the destination be added to the offer price for evaluation, ensuring a fair comparison of total costs.
Overview
FAR 52.247-47 outlines how the Government evaluates offers for contracts specifying F.o.b. (Free on Board) Origin delivery terms. The provision is used when the Government will take delivery at the contractor’s shipping point, and it details how transportation costs are factored into the evaluation of offers. The default assumption is that land transportation by regulated common carrier will be used within the contiguous United States, but the clause allows for modification if other transportation methods (such as air, pipeline, barge, or ocean tanker) are more appropriate. The Government adds the estimated transportation cost from the offeror’s shipping point to the destination to the offer price to determine the total evaluated cost. Tentative destinations may be used for evaluation, but the Government reserves the right to use different destinations or transportation methods at the time of shipment.
Key Rules
- Land Transportation Default
- The Government typically evaluates transportation costs using land methods by regulated common carriers within the contiguous U.S.
- Evaluation of Offers
- Only the specified transportation methods and routes are considered for cost evaluation purposes.
- Total Evaluated Cost
- Transportation costs are added to the offer price to determine the Government’s overall cost.
- Tentative Destinations
- Tentative destinations may be used for evaluation, but the Government may choose different destinations or transportation methods when shipping.
Responsibilities
- Contracting Officers: Must ensure transportation costs are properly evaluated and included in the total cost analysis; modify the provision if non-land transportation is appropriate.
- Contractors: Should provide accurate shipping point information and understand that transportation costs will be added to their offer for evaluation.
- Agencies: Must apply consistent evaluation methods and retain flexibility in actual shipment arrangements.
Practical Implications
- This clause ensures fair and consistent evaluation of offers by standardizing how transportation costs are considered.
- Contractors must be aware that their offer price will not be the sole factor; transportation costs from their shipping point to the destination are critical.
- Misunderstanding the evaluation method or failing to provide accurate shipping information can disadvantage an offeror.