FAR 47.104-1—Government rate tender procedures.
Plain-English Summary
FAR 47.104-1 explains when Government rate tenders may be used for transportation shipments and how agencies may obtain additional or revised tender rates. It covers two core subjects: the applicability of published 49 U.S.C. 10721 and 13712 rates to shipments moving for the Government’s account, and the limited authority agencies have to negotiate new or revised rates with carriers. The section ties those rates to two billing methods: commercial bills of lading that are properly endorsed for Government reimbursement, and Government bills of lading. It also identifies situations where negotiating better rates may be appropriate, including expected volume movements, recurring shipments between specific points with potential savings, and transit arrangements that benefit the Government. In practice, this section matters because it gives agencies a lawful way to reduce transportation costs while also limiting who may negotiate and under what circumstances, helping prevent unauthorized rate commitments and billing errors.
Key Rules
Published tender rates apply to Government shipments
49 U.S.C. 10721 and 13712 rates are published in Government rate tenders and apply to shipments moving for the account of the Government. These rates are not general commercial rates; they are special tender rates available when the shipment meets the Government-account conditions in this section.
Commercial bills of lading must be endorsed
When a shipment moves on a commercial bill of lading, the document must be endorsed to show that total transportation charges are assignable to, and will be reimbursed by, the Government. The clause at 52.247-1 is the referenced mechanism for making that notation.
Government bills of lading are covered
The same published tender rates also apply when shipments move on Government bills of lading. This means the rate tender framework is available regardless of whether the Government uses a commercial bill of lading with the required endorsement or a Government bill of lading.
Agencies may negotiate additional or revised rates
Agencies are permitted to negotiate with carriers for additional or revised 49 U.S.C. 10721 and 13712 rates when appropriate. This is an optional authority, not a requirement, and it is intended to secure better transportation pricing in suitable circumstances.
Only authorized personnel may negotiate
Negotiations may be conducted only by personnel authorized under agency procedures. This limits who can bind the agency or discuss rate changes with carriers and helps ensure internal controls, consistency, and compliance with agency transportation policy.
Volume movements justify negotiation
One example of an appropriate negotiation situation is when volume movements are expected. Large or concentrated shipment volumes may support lower rates or special tender terms because carriers can realize efficiencies from the business.
Recurring shipments may justify negotiation
Negotiation may also be appropriate when shipments will recur between designated places and substantial transportation savings appear possible, even if the traffic is not a single large volume movement. The focus is on repeated lanes and the potential for measurable savings.
Transit arrangements may justify negotiation
If transit arrangements are feasible and advantageous to the Government, agencies may negotiate additional or revised rates. This recognizes that routing or transit features can create cost or service benefits that warrant special tender terms.
Responsibilities
Agency
Determine when shipments qualify for Government rate tender treatment, decide whether negotiating additional or revised rates is appropriate, and ensure agency procedures identify who is authorized to conduct those negotiations.
Authorized agency personnel
Conduct carrier negotiations only when authorized by agency procedures, and only in situations where additional or revised 49 U.S.C. 10721 and 13712 rates are appropriate under the section.
Contracting Officer / transportation official
Ensure the correct bill of lading form and endorsement are used, verify that transportation charges are properly assignable to and reimbursable by the Government when commercial bills of lading are used, and apply tender rates consistently with the shipment’s status.
Carrier
Honor applicable Government rate tender rates for qualifying shipments and participate in negotiations for additional or revised rates when approached by authorized agency personnel.
Contractor / shipper using commercial bill of lading
Use the required commercial bill of lading notation so the transportation charges are clearly assignable to and reimbursable by the Government when the shipment is moving for the Government’s account.
Practical Implications
This section is mainly about cost control and proper billing: if the shipment is for the Government’s account, the right tender rate and the right bill of lading notation can materially affect what gets paid.
A common pitfall is using a commercial bill of lading without the required endorsement, which can create reimbursement and audit problems even when the shipment otherwise qualifies.
Another risk is unauthorized rate discussions with carriers; only personnel authorized by agency procedures should negotiate, or the agency may create compliance and pricing issues.
Agencies should look for repeat lanes, expected volume, or transit opportunities because those are the situations most likely to produce savings through revised tenders.
In day-to-day practice, transportation staff should verify both the shipment basis and the documentation early, before movement, so the applicable tender rate can be used without later corrections or disputes.
Official Regulatory Text
(a) 49 U.S.C. 10721 and 13712 rates are published in Government rate tenders and apply to shipments moving for the account of the Government on- (1) Commercial bills of lading endorsed to show that total transportation charges are assignable to, and will be reimbursed by, the Government (see the clause at 52.247-1 , Commercial Bill of Lading Notations); and (2) Government bills of lading. (b) Agencies may negotiate with carriers for additional or revised 49 U.S.C. 10721 and 13712 rates in appropriate situations. Only personnel authorized in agency procedures may carry out these negotiations. The following are examples of situations in which negotiations for additional or revised 49 U.S.C. 10721 and 13712 rates may be appropriate: (1) Volume movements are expected. (2) Shipments will be made on a recurring basis between designated places, and substantial savings in transportation costs appear possible even though a volume movement is not involved. (3) Transit arrangements are feasible and advantageous to the Government.