FAR 47.303-3—F.o.b. origin, freight allowed.
Plain-English Summary
FAR 47.303-3 explains the delivery term "f.o.b. origin, freight allowed" and how it works in federal contracts. This section covers where the contractor must deliver the goods, what counts as delivery at origin, how freight is handled and priced, what transportation points are acceptable, and when the contracting officer must use the required contract clause. It also ties the rule to published tariff rates or Government rate tenders and recognizes special delivery locations such as a carrier’s wharf, freight station, U.S. Postal Service facility, or a Government-designated point within the same city or commercial zone. In practice, this term means the Government pays the contract price less an agreed freight allowance, while the contractor’s delivery obligation is limited to getting the shipment to the proper origin point and placing it with the carrier or other specified destination. The section matters because it allocates transportation cost, defines when delivery is complete, and helps prevent disputes over freight deductions, delivery location, and responsibility for moving the goods to the carrier.
Key Rules
Origin delivery is required
Under f.o.b. origin, freight allowed, the contractor must deliver the supplies free of expense to the Government at the designated origin point. Delivery is complete when the goods are placed on the carrier or otherwise delivered to the specified origin location described in the contract.
Accepted delivery locations
Delivery may be made on board the indicated carrier or Government conveyance at the named origin point, to the carrier’s wharf or freight station, to a U.S. Postal Service facility, or, if the solicitation says so, to a Government-designated point in the same city or commercial zone as the origin point. The rule distinguishes line-haul transportation from local terminal services such as switching or drayage.
Freight allowance is deducted
The contract price must include an allowance for freight, and that allowance is deducted from the contract price. The deduction is based on applicable published tariff rates or Government rate tenders between the contract-specified points.
Commercial zone matters
If the solicitation authorizes delivery to a Government-designated point within the same city or commercial zone, the commercial zone definition is controlled by the Federal Motor Carrier Safety Administration regulations at 49 CFR part 372, subpart B. This affects where the contractor may properly deliver and still satisfy the delivery term.
Contractor duties mirror related rule
The contractor responsibilities under this delivery term are the same as those stated in FAR 47.303-1(b). In practice, that means the contractor must perform the origin delivery obligations associated with the applicable f.o.b. origin arrangement and comply with the transportation and delivery requirements in the contract.
Required clause must be used
When the delivery term is f.o.b. origin, freight allowed, the contracting officer must insert the clause at FAR 52.247-31, F.o.b. Origin, Freight Allowed, in both solicitations and contracts. This ensures the freight allowance and delivery responsibilities are clearly stated and enforceable.
Responsibilities
Contracting Officer
Must use the correct delivery term in the solicitation and contract, insert FAR 52.247-31 when the term is f.o.b. origin, freight allowed, and ensure the freight allowance is based on the proper tariff rates or Government rate tenders. The contracting officer must also make sure the contract identifies the origin point and any authorized Government-designated delivery point.
Contractor
Must deliver the goods at the designated origin point or other authorized location, place them with the carrier or specified conveyance as required, and comply with the delivery obligations associated with f.o.b. origin. The contractor must also understand that the contract price will be reduced by the freight allowance and should account for that in pricing and shipping arrangements.
Government/Agency
Must specify the delivery term and any special delivery location requirements in the solicitation and contract, and apply the freight allowance consistently with the contract terms and applicable transportation rates. The agency must also ensure the commercial zone or designated point is used only when authorized by the solicitation.
Carrier
Receives the shipment at the origin point, wharf, freight station, or other authorized location and performs the line-haul transportation service. The carrier’s role is relevant because the delivery obligation is tied to placement with the carrier rather than final destination delivery.
Practical Implications
This term shifts transportation cost treatment into the contract price through a freight deduction, so pricing and invoice review must account for the allowance correctly.
Disputes often arise over whether the contractor delivered to the proper origin point or whether a location counts as a carrier wharf, freight station, or authorized commercial-zone point.
The distinction between line-haul transportation and local terminal services matters; contractors should not assume drayage, switching, or other terminal handling is included unless the contract says so.
Contracting officers should verify that the solicitation and contract clearly identify the origin point and any special delivery point, because vague location language can create freight and delivery disputes.
Because the clause is mandatory for this delivery term, omitting FAR 52.247-31 can create compliance problems and weaken the Government’s ability to enforce the freight allowance and delivery obligations.
Official Regulatory Text
(a) Explanation of delivery term. "F.o.b. origin, freight allowed" means- (1) Free of expense to the Government delivered- (i) On board the indicated type or conveyance of the carrier (or of the Government, if specified) at a designated point in the city, county, and State from which the shipments will be made and from which line-haul transportation service (as distinguished from switching, local drayage, or other terminal service) will begin; (ii) To, and placed on, the carrier’s wharf (at shipside, within reach of the ship’s loading tackle, when the shipping point is within a port area having water transportation service) or the carrier’s freight station; (iii) To a U.S. Postal Service facility; or (iv) If stated in the solicitation, to any Government-designated point located within the same city or commercial zone as the f.o.b. origin point specified in the contract (the Federal Motor Carrier Safety Administration prescribes commercial zones at Subpart B of 49 CFR part 372 ); and (2) An allowance for freight, based on applicable published tariff rates (or Government rate tenders) between the points specified in the contract, is deducted from the contract price. (b) Contractor responsibilities. The contractor’s responsibilities are the same as those listed in 47.303-1 (b). (c) Contract clause. The contracting officer shall insert in solicitations and contracts the clause at 52.247-31 , F.o.b. Origin, Freight Allowed, when the delivery term is f.o.b. origin, freight allowed.