FAR 47.303-14—C.i.f. destination.
Plain-English Summary
FAR 47.303-14 explains the delivery term "c.i.f. destination" for ocean shipments and tells contracting personnel and contractors how to use it in federal contracts. It covers the meaning of the term, the contractor’s shipping and insurance obligations, the requirement to provide the Government with an insurance policy or certificate, and the mandatory contract clause to use when this delivery term applies. In practical terms, this section allocates responsibility for transportation and marine insurance to the contractor while defining the point at which delivery is considered complete for purposes of the contract. It also ties the delivery term to the standard clause at 52.247-42 so the contract clearly states the parties’ obligations. This matters because c.i.f. terms affect pricing, risk allocation, documentation, and who handles claims if cargo is lost or damaged during ocean transit.
Key Rules
Meaning of c.i.f. destination
C.i.f. destination means the Government receives the goods free of expense at the specified destination, with the contractor paying the ocean transportation and marine insurance costs. Delivery is made on board the ocean vessel to the named destination under the contract term.
Contractor bears transport and insurance costs
The contractor must pay the cost of transportation and marine insurance, rather than passing those costs to the Government separately. This makes the contractor responsible for arranging and funding the shipment and insurance coverage required by the contract.
Insurance documentation required
In addition to the responsibilities listed for c.i.f. terms generally, the contractor must obtain and send the Government an insurance policy or certificate. The document must show the amount and extent of marine insurance coverage specified in the contract or otherwise agreed to by the contracting officer.
Use the prescribed clause
When the delivery term is c.i.f. destination, the contracting officer must include the clause at 52.247-42, C.i.f. (Cost, insurance, freight) Destination, in both solicitations and contracts. This ensures the delivery term and related obligations are formally incorporated into the procurement documents.
Reference to related c.i.f. duties
The contractor’s responsibilities are the same as those in 47.303-13(b), except for the added insurance-policy-or-certificate requirement. That means the contractor must also follow the other applicable c.i.f. shipment duties incorporated by reference from the related section.
Responsibilities
Contracting Officer
Use the c.i.f. destination term only when appropriate for the acquisition, and insert clause 52.247-42 in the solicitation and contract whenever that delivery term is used. The contracting officer must also specify or agree to the required marine insurance coverage amount and extent.
Contractor
Arrange and pay for ocean transportation and marine insurance to the named destination, deliver the goods on board the ocean vessel to that destination, and provide the Government with an insurance policy or certificate showing the required coverage. The contractor must also perform the other responsibilities applicable under 47.303-13(b).
Government
Receive the shipment free of expense at the destination and rely on the contractor-provided insurance documentation to confirm coverage. The Government also may agree with the contracting officer on the amount and extent of marine insurance coverage when the contract so provides.
Practical Implications
This term shifts shipping and marine insurance administration to the contractor, so pricing must include both freight and insurance costs.
The insurance certificate is not optional; missing or incomplete documentation can create compliance problems and delay acceptance or payment-related actions.
Because the clause is mandatory when c.i.f. destination is used, omitting 52.247-42 can create contract ambiguity and disputes over risk and responsibility.
Contracting officers should make sure the contract clearly states the destination point and the required insurance coverage so the contractor can procure the correct policy.
Contractors should verify that the marine insurance matches the contract requirements exactly, including coverage amount and extent, to avoid uncovered losses during ocean transit.
Official Regulatory Text
(a) Explanation of delivery term. "C.i.f. (Cost, insurance, freight) destination" means free of expense to the Government delivered on board the ocean vessel to the specified point of destination, with the cost of transportation and marine insurance paid by the contractor. (b) Contractor responsibilities. The contractor’s responsibilities are the same as those listed in 47.303-13 (b), except that, in addition, the contractor shall obtain and dispatch to the Government an insurance policy or certificate providing the amount and extent of marine insurance coverage specified in the contract or agreed upon by the Government contracting officer. (c) Contract clause. The contracting officer shall insert in solicitations and contracts the clause at 52.247-42 , C.i.f. (Cost, insurance, freight) Destination, when the delivery term is c.i.f. destination.