Overview
FAR 47.302 establishes the foundational policies for determining transportation delivery terms (f.o.b. points) for government supplies, outlining when standard procedures apply and how delivery terms relate to the place of inspection and acceptance.
Key Rules
- Default Procedures: Transportation for supplies within the Contiguous United States (CONUS) must follow 47.304-1 through -3, while supplies from outside CONUS follow 47.304-4, unless specific factors (e.g., security, cost, or safety) dictate an exception.
- Documentation Requirement: Contracting officers must provide a written justification in the contract file if the solicitation or award deviates from the standard delivery terms prescribed in 47.304.
- Acceptance vs. Delivery Point:
- The location of quality assurance and acceptance does not generally dictate the f.o.b. point.
- Mandatory Link: If acceptance is at destination, the delivery term must be f.o.b. destination.
- Independence: F.o.b. destination does not require acceptance at destination, and origin acceptance does not require an f.o.b. origin term.
- Title Transfer and Payment: If the government accepts supplies at origin but requires f.o.b. destination delivery, the contractor can be paid upon shipment once they provide a signed commercial bill of lading or other evidence of shipment.
Practical Implications
- Cash Flow Optimization: Contractors can benefit from "acceptance at origin/f.o.b. destination" arrangements, as it allows them to receive payment upon shipping the goods rather than waiting for the items to arrive and be processed at a government facility.
- Risk Management: By decoupling the place of acceptance from the f.o.b. point, the government can perform technical inspections at the manufacturer's facility while still ensuring the contractor remains responsible for the costs and risks of transit until the goods reach the final destination.