FAR 47.104—Government rate tenders under sections 10721 and 13712 of the Interstate Commerce Act (49 U.S.C. 10721 and 13712).
Plain-English Summary
FAR 47.104 explains when and how certain common carriers may offer Government rate tenders to transport persons or property for the United States at no charge or at a reduced rate under 49 U.S.C. 10721 and 13712. It identifies the types of carriers covered—motor carriers, water carriers, freight forwarders, and rail carriers subject to Surface Transportation Board jurisdiction—and clarifies that the reduced-rate authority is implemented through a Government rate tender rather than an ordinary commercial contract rate. The section also points readers to related civilian and DoD transportation guidance in the Federal Management Regulation and the Defense Transportation Regulation, which are the practical operating references for many shipments. Most importantly, it limits and defines where reduced rates are authorized: rail transportation, household goods movements, and certain water carrier movements in noncontiguous domestic trade. In practice, this section matters because it tells agencies and carriers when statutory reduced-rate transportation is legally available and how to identify the correct commercial benchmark rate against which the Government discount is measured.
Key Rules
Statutory tender authority
Common carriers subject to Surface Transportation Board jurisdiction may offer to transport Government traffic without charge or at a rate reduced from the applicable commercial rate. The reduced rate must be offered through a Government rate tender, not simply by informal pricing.
Covered carrier types
The section applies to motor carriers, water carriers, freight forwarders, and rail carriers that fall under Surface Transportation Board jurisdiction. If a carrier is outside that jurisdiction, this authority does not apply.
Rail carrier benchmark
For rail carrier tenders, the reduced rate is measured against a rate regulated by the Surface Transportation Board. In other words, the Government discount is taken from the regulated rail rate, not from an unregulated or negotiated market price.
Household goods benchmark
For household goods movements, the reduced rate is measured against a rate contained in a published tariff subject to Surface Transportation Board regulation. The published tariff is the reference point for determining whether the Government rate is reduced.
Water carrier noncontiguous trade
For movement by or with a water carrier in noncontiguous domestic trade, the reduced rate must be taken from a rate contained in a published tariff required to be filed with the Surface Transportation Board. This ties the Government rate to a filed tariff rather than an informal or private rate.
Related agency guidance
Civilian agencies should look to the Federal Management Regulation, and DoD users should look to the Defense Transportation Regulation, for operational procedures and additional requirements. FAR 47.104 establishes the legal authority, while those sources provide implementation details.
Responsibilities
Contracting Officers / Transportation Officials
Determine whether the shipment qualifies for a Government rate tender under the statute and whether the carrier and movement type fall within the authorized categories. Use the correct benchmark rate source, ensure the tender is consistent with applicable transportation regulations, and coordinate with the agency transportation guidance that applies to the shipment.
Common Carriers
Offer Government rate tenders only when authorized by statute and only for the covered transportation modes and movement types. When submitting a tender, base the reduced rate on the correct commercial or regulated tariff rate and comply with Surface Transportation Board jurisdictional requirements.
Civilian Agencies
Follow the Federal Management Regulation for procedures, approvals, and administrative handling of Government rate tenders. Ensure transportation actions align with the statutory authority and agency-specific implementation rules.
Department of Defense
Apply the Defense Transportation Regulation for DoD shipments involving Government rate tenders. Use DoD procedures to determine when the tender is appropriate and how the rate should be evaluated and documented.
Surface Transportation Board-regulated carriers
Maintain rates, tariffs, and filings as required by the applicable transportation regime so the Government can identify the proper reduced-rate baseline. Ensure any Government tender reflects the legally relevant regulated or published tariff rate.
Practical Implications
This section is mainly about legal authority and rate basis, not general freight procurement strategy. The key day-to-day task is confirming that the shipment and carrier fit one of the narrow statutory categories before relying on a Government rate tender.
A common pitfall is using the wrong benchmark rate. The applicable commercial rate is defined differently depending on whether the movement is rail, household goods, or water carrier noncontiguous domestic trade, so users must identify the correct tariff or regulated rate source.
Another risk is assuming all carriers or all shipments qualify. The authority is limited to carriers subject to Surface Transportation Board jurisdiction and to the specific movement types listed in the rule.
Agencies should not treat FAR 47.104 as a complete operating manual. It points to FMR and DoD transportation regulations for the actual procedures, documentation, and internal controls that govern implementation.
For contractors and carriers, the practical takeaway is that Government rate tenders must be grounded in the statutory framework and supported by the proper published or regulated rate reference; otherwise, the tender may be invalid or challenged.
Official Regulatory Text
(a) This section explains statutory authority for common carriers subject to the jurisdiction of the Surface Transportation Board (motor carrier, water carrier, freight forwarder, rail carrier) to offer to transport persons or property for the account of the United States without charge or at "a rate reduced from the applicable commercial rate." Reduced rates are offered in a Government rate tender. Additional information for civilian agencies is available in the Federal Management Regulation (41 CFR parts 102-117 and 102-118) and for DoD in the Defense Transportation Regulation (DoD 4500.9-R). (b) Reduced rates offered in a Government rate tender are authorized for transportation provided by a rail carrier, for the movement of household goods, and for movement by or with a water carrier in noncontiguous domestic trade. (1) For Government rate tenders submitted by a rail carrier, a rate reduced from the applicable commercial rate is a rate reduced from a rate regulated by the Surface Transportation Board. (2) For Government rate tenders submitted for the movement of household goods, "a rate reduced from the applicable commercial rate" is a rate reduced from a rate contained in a published tariff subject to regulation by the Surface Transportation Board. (3) For Government rate tenders submitted for movement by or with a water carrier in noncontiguous domestic trade, "a rate reduced from the applicable commercial rate" is a rate reduced from a rate contained in a published tariff required to be filed with the Surface Transportation Board.