Transportation Transit Privilege Credits
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.