52.247-65 F.o.b. Origin, Prepaid Freight-Small Package Shipments
Source: FAR 52.247-65 on acquisition.gov
Contractors must follow strict procedures for prepaid, f.o.b. origin small package shipments—including documentation, consolidation, and invoicing—to ensure reimbursement and compliance with government shipping requirements.
Overview
- FAR 52.247-65 establishes requirements for contractors making f.o.b. (free on board) origin, prepaid freight shipments of small packages to domestic destinations. It outlines procedures for shipping, documentation, consolidation, invoicing, and claims, ensuring proper handling and reimbursement of freight charges for government shipments.
Key Rules
- Authorization and Shipment Limits
- Shipments must be authorized by the Contracting Officer, be unclassified, and use prepaid commercial bills of lading. Individual shipment weights are limited to 150 pounds for air and 1,000 pounds for other carriers.
- Bill of Lading Notations
- Contractors must annotate commercial bills of lading as required by the contract's specific clause.
- Consolidation and Combination
- Contractors must consolidate prepaid shipments per transportation office procedures and may combine government and commercial shipments, with the government reimbursing its share. Shipments cannot be split to avoid certain transportation modes.
- Invoicing and Documentation
- Transportation charges must be billed separately, with supporting shipping documents attached to invoices unless otherwise specified.
- Claims Handling
- The government is responsible for processing loss and damage claims.
Responsibilities
- Contracting Officers: Authorize shipments and ensure compliance with shipment and documentation requirements.
- Contractors: Follow shipment, consolidation, documentation, and invoicing procedures; provide required documents; do not split shipments to avoid regulations.
- Agencies: Process loss and damage claims and oversee compliance.
Practical Implications
- This clause ensures efficient, cost-effective, and compliant shipment of small packages for government contracts. Contractors must pay close attention to shipment limits, documentation, and consolidation rules to avoid payment delays or compliance issues. Failure to follow procedures can result in non-reimbursement or contract disputes.
As prescribed in 47.303-17(f), insert the following clause:
F.o.b. Origin, Prepaid Freight-Small Package Shipments (Jan 1991)
(a) When authorized by the Contracting Officer, f.o.b. origin freight shipments which do not have a security classification shall move on prepaid commercial bills of lading or other shipping documents to domestic destinations, including air and water terminals. Weight of individual shipments shall be governed by carrier restrictions but shall not exceed 150 pounds by any form of commercial air or 1,000 pounds by other commercial carriers. The Government will reimburse the Contractor for reasonable freight charges.
(b) The Contractor shall annotate the commercial bill of lading as required by the clause of this contract entitled "Commercial Bill of Lading Notations."
(c) The Contractor shall consolidate prepaid shipments in accordance with procedures established by the cognizant transportation office. The Contractor is authorized to combine Government prepaid shipments with the Contractor’s commercial shipments for delivery to one or more consignees and the Government will reimburse its pro rata share of the total freight costs. The Contractor shall provide a copy of the commercial bill of lading promptly to each consignee. Quantities shall not be divided into mailable lots for the purpose of avoiding movement by other modes of transportation.
(d) Transportation charges will be billed as a separate item on the invoice for each shipment made. A copy of the pertinent bill of lading, shipment receipt, or freight bill shall accompany the invoice unless otherwise specified in the contract.
(e) Loss and damage claims will be processed by the Government.
(End of clause)