Overview
FAR 47.303 defines standard delivery terms and prescribes specific contract clauses that establish the point of delivery, responsibility for transportation costs, and the transfer of risk of loss from the contractor to the Government. It covers a wide range of logistics scenarios, including land-based "Free on Board" (F.o.b.) terms, maritime "Free Alongside Ship" (F.a.s.) terms, and international air and sea delivery.
Key Rules
- F.o.b. Origin: The contractor is responsible for packing, marking, and delivery to a carrier; the Government assumes the risk of loss and pays for transportation once the carrier takes possession.
- F.o.b. Destination: The contractor bears all transportation costs and risks of loss until the supplies are delivered to the specified government facility (e.g., the unloading platform or warehouse).
- International/Maritime Terms: Specific terms such as F.a.s. Vessel, F.o.b. Vessel, and C.i.f. (Cost, Insurance, Freight) dictate varying levels of contractor responsibility regarding port charges, export/import duties, and marine insurance.
- Small Package Shipments: Under FAR 47.303-17, contracting officers may authorize contractor-prepaid commercial bills of lading for domestic shipments under specific weight limits (150 lbs for air, 1,000 lbs for other modes) to leverage commercial efficiencies.
- Contractor Liability: Across all terms, the contractor remains liable for any damage resulting from improper packing, marking, or loading, even if the risk of loss has technically passed to the Government.
- Mandatory Clauses: Every delivery term defined in this section corresponds to a mandatory FAR clause (52.247-29 through 52.247-44) that must be inserted into the solicitation and contract.
Practical Implications
- Contractors must carefully review delivery terms during the bidding phase, as "F.o.b. Destination" requires the inclusion of freight and insurance costs in the contract price, whereas "F.o.b. Origin" does not.
- Accurate documentation—such as bills of lading and freight receipts—is critical for reimbursement of transportation charges and for resolving claims involving goods damaged in transit.