Overview
FAR Subpart 47.1 establishes the foundational policies and procedures for the transportation of supplies by government agencies. It prioritizes the use of commercial carriers and efficient transportation management while outlining the specific requirements for documentation (bills of lading), insurance, audits, and the utilization of discounted "Government rate tenders."
Key Rules
- Documentation Standards: Domestic shipments should generally use Commercial Bills of Lading (CBLs), while Government Bills of Lading (GBLs) are reserved for international or noncontiguous domestic shipments.
- Carrier Preference: Commercial carriers are the preferred method of transport. Government-owned or leased vehicles may only be used if they are available, result in substantial savings, and comply with applicable statutes.
- Non-Discrimination: Agencies are prohibited from giving preferential treatment to any specific mode of transportation or carrier, except where small business programs (FAR Part 19) or specific maritime/air statutes apply.
- Government Self-Insurance: As a general rule, the Government "self-insures." It retains the risk of loss and does not purchase commercial insurance or pay for carrier insurance unless specific "special circumstances" are documented and authorized.
- Rate Tenders (49 U.S.C. 10721 and 13712): Common carriers may offer the Government rates lower than standard commercial tariffs. These reduced rates apply to shipments where the Government pays the freight directly or reimburses a contractor (typically F.O.B. origin or cost-reimbursement contracts).
- Statutory Compliance: All transportation must comply with the Fly America Act (U.S.-flag air carriers) and the Cargo Preference Act (U.S.-flag vessels).
Responsibilities
- Contracting Officers (CO):
- Authorize shipments and select appropriate delivery terms.
- Obtain traffic management advice during solicitation and award.
- Ensure mandatory clauses (e.g., 52.247-1, 52.247-67) are included in contracts.
- Document the contract file if special insurance is required.
- Contract Administration Office (CAO):
- Ensure contractors use the most efficient and economical transportation methods.
- Provide transportation management expertise and instructions to contractors.
- Transportation/Traffic Management Officers:
- Advise COs on transportation factors.
- Negotiate for reduced "rate tenders" when volume or recurring movements are expected.
- Assist contractors in identifying carriers offering reduced rates.
- Contractors:
- Follow CAO instructions regarding shipping documents.
- Endorse CBLs with specific notations to ensure the Government receives discounted rates.
- Submit required transportation documents for audit in cost-reimbursement scenarios.
Practical Implications
- Cost Savings via Endorsements: In F.O.B. Origin contracts, even if the contractor handles the shipping, the CO must ensure the contract includes clause 52.247-1. This ensures that the shipment is "for the account of the Government," allowing the use of significantly discounted Government rate tenders that are not available to the general public.
- Audit Readiness: For Cost-Reimbursement contracts, contractors must be prepared to provide original freight bills and invoices for GSA postpayment audits. Failure to maintain these records can lead to questioned costs during the audit of the contractor’s vouchers.
- Risk Management: Because the Government usually doesn’t pay for insurance, contractors should not automatically include insurance costs in their freight quotes. If a contractor buys insurance without specific CO authorization, that cost may be deemed unallowable.
- Small Business Set-Asides: Transportation is not just a secondary service; it is a category subject to small business goals. Agencies must actively seek small business concerns when contracting specifically for transportation services.