Overview
This section outlines the statutory authority and procedures under the Interstate Commerce Act that allow common carriers to offer the U.S. Government transportation services for free or at rates lower than standard commercial tariffs. These "Government rate tenders" apply to various contract types, provided the financial benefit of the reduced rate accrues entirely to the Government.
Key Rules
- Statutory Authority: Under 49 U.S.C. 10721 and 13712, carriers (rail, motor, water, freight forwarders) may offer reduced rates for transporting Government property or personnel.
- Applicability by Contract Type:
- Fixed-Price F.o.b. Destination: Reduced rates do not apply.
- Fixed-Price F.o.b. Origin: Rates apply if the contractor prepays freight and is reimbursed by the Government as a separate invoice item.
- Cost-Reimbursement: Rates apply if the Government directly pays or fully reimburses the transportation costs, including relocated contractor employee household goods.
- Documentation Requirements: To secure these rates, shipments must use a Government Bill of Lading (GBL) or a Commercial Bill of Lading (CBL) containing the specific endorsement found in the clause at FAR 52.247-1.
- Mandatory Clause: FAR 52.247-1, Commercial Bill of Lading Notations, must be inserted in all cost-reimbursement and fixed-price f.o.b. origin solicitations/contracts (above the simplified acquisition threshold).
- Negotiation: Authorized agency personnel may negotiate further rate reductions for volume movements, recurring shipments, or advantageous transit arrangements.
- Administrative Support: Contracting Officers must provide contractors with the contact information of a designated transportation officer to help identify available rate tenders.
Practical Implications
- Cost Savings: By utilizing these tenders, the Government leverages its status to avoid paying full commercial tariffs, which can significantly reduce total program costs in logistics-heavy contracts.
- Contractor Compliance: Contractors under f.o.b. origin or cost-type contracts are obligated to use carriers offering these reduced rates and must properly endorse shipping documents to ensure the Government receives the discount.
- Inter-Agency Coordination: Success relies on active coordination between the Contracting Officer, the contractor, and the agency’s transportation office to identify applicable tenders and ensure correct billing notations.