52.247-57 Transportation Transit Privilege Credits
Source: FAR 52.247-57 on acquisition.gov
FAR 52.247-57 enables contractors to use transit privilege credits to reduce government transportation costs, but requires clear documentation and adherence to quoted rates for reimbursement.
Overview
FAR 52.247-57, Transportation Transit Privilege Credits, provides guidance for including transit privilege credits in solicitations and contracts when supplies may benefit from such credits, potentially reducing government transportation costs. The clause allows offerors who have established transit privileges with regulated common carriers to propose using these credits for shipping supplies to government destinations. The offeror pays all transportation charges upfront and is reimbursed by the government, but only up to the amount quoted. The government assumes risk for the shipment after carrier acceptance, unless otherwise directed. Offerors must specify the rate per hundredweight (CWT) for full carload or truckload shipments, factoring in transit credits, and these rates are used for bid evaluation unless a lower rate is available at bid opening.
Key Rules
- Offeror Use of Transit Privileges
- Offerors with transit privileges may propose to use these credits for government shipments, potentially lowering costs.
- Commercial Bills of Lading and Reimbursement
- Shipments move under commercial bills of lading, with the offeror paying charges and the government reimbursing up to the quoted amount.
- Government Assumes Risk
- After carrier acceptance, the government assumes risk for the shipment unless government bills of lading are used.
- Quoted Freight Rates
- Offerors must quote transportation costs per CWT, including transit credits, for evaluation purposes.
- Bid Evaluation
- The quoted rate is used for bid evaluation unless a lower rate is available at bid opening.
Responsibilities
- Contracting Officers: Must include this clause when appropriate and evaluate bids using the quoted rates.
- Contractors: Must propose and document applicable transit credits and rates, pay transportation charges, and seek reimbursement as specified.
- Agencies: Oversee compliance and ensure proper application of transit credits and reimbursement.
Practical Implications
- This clause incentivizes offerors to use transit credits, reducing government transportation costs.
- Contractors must carefully calculate and document rates and credits to ensure proper reimbursement.
- Common pitfalls include failing to properly document transit credits or misunderstanding reimbursement limits.
As prescribed in 47.305-13(b)(4), insert the following clause in solicitations and contracts when supplies are of such a nature, or when it is the custom of the trade, that offerors may have potential transit credits available and the Government may reduce transportation costs through the use of transit credits:
Transportation Transit Privilege Credits (Apr 1984)
(a) If the offeror has established with regulated common carriers transit privileges that can be applied to the supplies when shipped from the original source, the offeror is invited to propose to use these credits for shipping the supplies to the designated Government destinations. The offeror will ship these supplies under commercial bills of lading, paying all remaining transportation charges connected with the shipment, subject to reimbursement by the Government in an amount equal to the remaining charges but not exceeding the amount quoted by the offeror.
(b) After loading on the carrier’s equipment and acceptance by the carrier, these shipments under paid commercial bills of lading will move for the account of and at the risk of the Government (unless, pursuant to the Changes clause, the office administering the contract directs use of Government bills of lading).
(c) The amount quoted below by the offeror represents the transportation costs in cents per 100 pounds (freight rate) for full carload/truckload shipments of the supplies from offeror’s original source, via offeror’s transit plant or point, to the Government destination(s) including the carrier’s transit privilege charge, less the applicable transit credit (i.e., the amount (rate) initially paid to the carrier for shipment from original source to offeror’s transit plant or point).
(d) The rate per CWT quoted will be used by the Government to evaluate the offered f.o.b. origin price unless a lower rate is applicable on the date of bid opening (or closing date specified for receipt of offers). To have the offer evaluated on this basis, the offeror must insert below the remaining transportation charges that the offeror agrees to pay, including any transit charges, subject to reimbursement by the Government, as explained in this clause, to destinations listed in the Schedule as follows:
Rate Per CWT in Cents: ________________ To Destination: _______________________
(End of clause)