FAR 47.303-6—F.o.b. destination.
Plain-English Summary
FAR 47.303-6 explains the meaning and operational consequences of the delivery term "f.o.b. destination" in federal supply contracts. It covers where delivery is considered complete, who bears transportation and related charges, how delivery works for different modes of transportation (including rail, motor carrier, piggyback, and less-than-carload shipments), how special handling applies to heavy or bulky freight under Item 568 of the National Motor Freight Classification, and when the Government is or is not responsible for delivery-related charges such as storage or demurrage. It also sets out the contractor’s duties for packing, marking, bills of lading, delivery condition, loss and damage risk before receipt by the consignee, delivery scheduling, carrier selection, and payment of charges to the destination point. Finally, it requires the contracting officer to include the prescribed contract clause at FAR 52.247-34 when the contract uses f.o.b. destination. In practice, this section allocates risk and cost to the contractor until the goods are actually delivered at the specified destination, so it is critical for pricing, logistics planning, claims handling, and dispute avoidance.
Key Rules
Delivery is at destination
Under f.o.b. destination, the contractor must deliver the supplies free of expense to the Government at the specified delivery point where the consignee’s facility is located. Delivery is not complete until the shipment reaches the destination point identified in the contract.
Government avoids pre-delivery charges
The Government is not liable for delivery, storage, demurrage, accessorial, or similar charges incurred before actual delivery or constructive placement, unless those charges result from an act or order of the Government acting in its contractual capacity. This makes the contractor responsible for most transportation-related costs up to delivery.
Mode-specific unloading rules apply
If rail is used, delivery is to the consignee’s specified unloading platform. If motor carrier, including piggyback, is used, delivery is to the truck tailgate at the unloading platform, except for heavy or bulky freight meeting Item 568 requirements, where the consignee performs unloading with driver assistance if requested.
Special rule for less-than-carload shipments
When the contractor uses rail carrier or a freight forwarder for less-than-carload shipments and transfer to truck is needed to complete delivery, the contractor must ensure the carrier provides tailgate delivery when required. The contractor remains responsible for arranging delivery that satisfies the destination requirement.
Contractor bears packing and shipping duties
The contractor must pack and mark the shipment according to contract specifications, or if none exist, according to carrier requirements. The contractor must also prepare and distribute commercial bills of lading, furnish a delivery schedule, designate the mode of carrier, and pay all charges to the specified destination.
Risk stays with contractor until receipt
The contractor is responsible for loss of or damage to the goods occurring before the consignee receives the shipment at the contractually specified delivery point. This means the contractor retains transit risk until delivery is completed at destination.
Required clause must be inserted
When the delivery term is f.o.b. destination, the contracting officer must include FAR 52.247-34, F.o.b. Destination, in the solicitation and contract. The clause implements the delivery term and should match the contract’s shipping and risk allocation.
Responsibilities
Contracting Officer
Use the f.o.b. destination term when appropriate and insert FAR 52.247-34, F.o.b. Destination, in the solicitation and contract. Ensure the contract clearly identifies the destination point and any delivery requirements that affect unloading, carrier selection, or special handling.
Contractor
Pack and mark the shipment properly, prepare and distribute commercial bills of lading, deliver the supplies in good order and condition to the specified destination, bear the risk of loss or damage before receipt by the consignee, provide a delivery schedule, select the mode of carrier, and pay all charges to the destination point.
Consignee
Receive the shipment at the designated destination point and, where applicable, unload rail or motor carrier shipments at the specified platform or tailgate. For heavy or bulky freight meeting Item 568 requirements, perform unloading with driver assistance if requested.
Carrier/Freight Forwarder
Transport the shipment to the required destination and, where applicable, provide tailgate delivery or other required delivery service. For less-than-carload shipments requiring transfer to truck, furnish the delivery service needed to complete destination delivery when arranged by the contractor.
Government
Accept delivery at the specified destination and pay only those charges for which it is contractually responsible. The Government generally does not pay pre-delivery storage, demurrage, accessorial, or similar charges unless caused by a Government act or order in its contractual capacity.
Practical Implications
Pricing must include all transportation and delivery costs to the destination, because the contractor—not the Government—normally pays those charges under f.o.b. destination.
The exact delivery point matters. If the contract does not clearly identify the consignee location, unloading platform, dock, or wharf, disputes can arise over whether delivery was complete.
Heavy or bulky freight can shift unloading responsibility to the consignee under Item 568, so contractors should confirm whether the shipment qualifies before planning labor and equipment.
Contractors should manage carrier instructions carefully, especially for rail, piggyback, and less-than-carload shipments, because failure to secure tailgate or transfer delivery can leave the contractor liable for extra charges or delayed acceptance.
Because risk stays with the contractor until receipt at destination, damage claims, insurance coverage, and packaging standards should be aligned with the delivery term and the actual transportation method used.
Official Regulatory Text
(a) Explanation of delivery term. "F.o.b. destination"- means- (1) Free of expense to the Government delivered, on board the carrier’s conveyance, at a specified delivery point where the consignee’s facility (plant, warehouse, store, lot, or other location to which shipment can be made) is located; and (2) Supplies shall be delivered to the destination consignee’s wharf (if destination is a port city and supplies are for export), warehouse unloading platform, or receiving dock, at the expense of the contractor. The Government shall not be liable for any delivery, storage, demurrage, accessorial, or other charges involved before the actual delivery (or "constructive placement" as defined in carrier tariffs) of the supplies to the destination, unless such charges are caused by an act or order of the Government acting in its contractual capacity. If rail carrier is used, supplies shall be delivered to the specified unloading platform of the consignee. If motor carrier (including "piggyback") is used, supplies shall be delivered to truck tailgate at the unloading platform of the consignee, except when the supplies delivered meet the requirements of Item568 of the National Motor Freight Classification for "heavy or bulky freight." When supplies meeting the requirements of the referenced Item568 are delivered, unloading (including movement to the tailgate) shall be performed by the consignee, with assistance from the truck driver, if requested. If the contractor uses rail carrier or freight forwarder for less than carload shipments, the contractor shall ensure that the carrier will furnish tailgate delivery when required, if transfer to truck is required to complete delivery to consignee. (b) Contractor responsibilities. The contractor shall- (1) (i) Pack and mark the shipment to comply with contract specifications; or (ii) In the absence of specifications, prepare the shipment in conformance with carrier requirements; (2) Prepare and distribute commercial bills of lading; (3) Deliver the shipment in good order and condition to the point of delivery specified in the contract; (4) Be responsible for any loss of and/or damage to the goods occurring before receipt of the shipment by the consignee at the delivery point specified in the contract; (5) Furnish a delivery schedule and designate the mode of delivering carrier; and (6) Pay and bear all charges to the specified point of delivery. (c) Contract clause. The contracting officer shall insert in solicitations and contracts the clause at 52.247-34 , F.o.b. Destination, when the delivery term is f.o.b. destination.