FAR 47.104-4—Contract clauses.
Plain-English Summary
FAR 47.104-4 tells contracting officers when to include the clause at 52.247-1, Commercial Bill of Lading Notations, in solicitations and contracts. Its purpose is to make sure the Government can use the transportation rates authorized by 49 U.S.C. 10721 and 13712 when those rates apply, especially in contracts involving shipment of supplies or household goods. The section focuses on two main contract types: cost-reimbursement contracts, including those that may involve moving household goods, and fixed-price f.o.b. origin contracts above the simplified acquisition threshold. It also gives contracting officers discretion to use the clause in smaller acquisitions at or below the simplified acquisition threshold when delivery will be f.o.b. origin. In practice, this section matters because the clause helps ensure shipping documents contain the right notations so carriers can apply the correct statutory rates and the Government can avoid billing or reimbursement problems.
Key Rules
Insert clause for covered contracts
The contracting officer must include 52.247-1, Commercial Bill of Lading Notations, in solicitations and contracts when the contract will be a cost-reimbursement contract or a fixed-price f.o.b. origin contract above the simplified acquisition threshold. This is required to support use of the transportation rates authorized by law when those rates are available.
Applies to household goods moves
Cost-reimbursement contracts covered by this rule include those that may involve the movement of household goods. The clause is used to ensure the proper bill of lading notations are made for those shipments as well.
Discretionary use at SAT
For acquisitions at or below the simplified acquisition threshold, the contracting officer may insert the clause when delivery is expected to be f.o.b. origin. This is permissive, not mandatory, so the contracting officer must decide whether the clause is useful for the procurement.
Supports statutory transportation rates
The clause is intended to ensure application of the rates authorized by 49 U.S.C. 10721 and 13712, where those rates are authorized under the referenced FAR provisions. The practical effect is to align contract shipping terms and bill of lading documentation with the applicable transportation pricing rules.
Tie to delivery terms
The rule is driven by delivery terms, especially f.o.b. origin. When the Government takes title or responsibility at origin, the bill of lading notation becomes important for carrier billing and rate application.
Responsibilities
Contracting Officer
Determine whether the contract falls into a category requiring or allowing the clause, and insert 52.247-1 in the solicitation and contract when required. For acquisitions at or below the simplified acquisition threshold with contemplated f.o.b. origin delivery, decide whether to include the clause based on the needs of the procurement.
Agency
Ensure acquisition planning and transportation practices support proper use of statutory transportation rates and bill of lading documentation. Agencies should train personnel to recognize when the clause is required so shipping and payment issues do not arise later.
Contractor
Follow the contract’s shipping and delivery instructions and ensure any required bill of lading notations are made when shipments are arranged under the contract. Contractors should coordinate with the contracting officer or transportation personnel if the delivery terms or shipment method could affect rate application.
Practical Implications
This clause is a shipping-document control, not just a contract formality; if omitted when required, the Government may lose the ability to apply the intended transportation rates or may face billing disputes.
The biggest pitfall is overlooking the clause in cost-reimbursement contracts or fixed-price f.o.b. origin contracts above the simplified acquisition threshold, especially when the acquisition team is focused on price or performance rather than transportation.
For small purchases at or below the simplified acquisition threshold, the clause is optional, but it can still be useful when f.o.b. origin delivery is expected and the agency wants clean carrier documentation.
Contracting officers should check delivery terms early in acquisition planning, because the need for the clause depends on whether the contract will be f.o.b. origin and whether statutory transportation rates may apply.
Contractors should not assume the carrier will handle the notation correctly without direction; the contract clause is what ties the shipment paperwork to the applicable rate structure.
Official Regulatory Text
(a) In order to ensure the application of 49 U.S.C. 10721 and 13712 rates, where authorized (see 47.104 (b)), insert the clause at 52.247-1 , Commercial Bill of Lading Notations, in solicitations and contracts when the contracts will be- (1) Cost-reimbursement contracts, including those that may involve the movement of household goods (see 47.104-3 (b)); or (2) Fixed-price f.o.b. origin contracts (other than contracts at or below the simplified acquisition threshold) (see 47.104-2 (b) and 47.104-3 ). (b) The contracting officer may insert the clause at 52.247-1 , Commercial Bill of Lading Notations, in solicitations and contracts made at or below the simplified acquisition threshold when it is contemplated that the delivery terms will be f.o.b. origin.