FAR 47.305-2—Solicitations f.o.b. origin and f.o.b. destination-lowest overall cost.
Plain-English Summary
FAR 47.305-2 tells contracting officers how to structure solicitations when the Government may receive offers on either f.o.b. origin, f.o.b. destination, or both bases, and how those offers must be evaluated. Its core purpose is to ensure that transportation terms are handled consistently and that the Government compares offers on the basis of the lowest overall cost, not just the quoted product price. In practice, this section matters whenever shipping responsibility, freight charges, and delivery point affect the total cost to the Government. It also requires use of the solicitation provision at 52.247-45, F.o.b. Origin and/or F.o.b. Destination Evaluation, when both bases are solicited, so offerors know how their proposals will be evaluated. The section helps prevent distorted price comparisons and reduces the risk that the Government selects an apparently lower unit price that becomes more expensive after transportation costs are added. For contractors, it signals that shipping terms can materially affect competitiveness; for contracting officers, it requires careful solicitation drafting and evaluation planning.
Key Rules
State acceptable FOB bases
When appropriate, solicitations must say that offers may be submitted on an f.o.b. origin basis, an f.o.b. destination basis, or both. This gives offerors clear notice of the delivery terms the Government will consider.
Evaluate on total Government cost
Offers must be evaluated on the basis of the lowest overall cost to the Government. That means the contracting officer must consider transportation-related costs, not just the offered product price.
Use the evaluation provision
If the solicitation allows both f.o.b. origin and f.o.b. destination offers, the contracting officer must include the provision at 52.247-45, F.o.b. Origin and/or F.o.b. Destination Evaluation. The provision tells offerors how the Government will compare the different delivery terms.
Apply when appropriate
The rule is not automatic in every procurement; it applies when the solicitation is structured to permit one or both FOB bases. The contracting officer must determine whether the acquisition calls for this type of transportation-term competition.
Responsibilities
Contracting Officer
Decide whether the solicitation should allow f.o.b. origin, f.o.b. destination, or both; state that offers will be evaluated on lowest overall cost to the Government; and insert provision 52.247-45 when both bases are solicited.
Offerors/Contractors
Submit offers using the FOB basis permitted by the solicitation and understand that the Government will evaluate the total cost, including transportation effects, rather than price alone.
Agency/Buying Activity
Ensure solicitation templates and acquisition planning support proper transportation-term evaluation so that offers are compared consistently and in a way that reflects the Government’s true cost.
Practical Implications
This section prevents misleading price comparisons by forcing the Government to look at delivered cost, not just the quoted item price.
A common pitfall is forgetting to include the 52.247-45 provision when both FOB bases are allowed, which can create evaluation ambiguity or protest risk.
Contracting officers should make sure the solicitation clearly explains how freight or transportation differences will be treated in the evaluation.
Contractors should pay close attention to shipping terms because a lower unit price may not win if transportation makes the overall cost higher.
This rule is especially important for items with significant shipping costs, multiple destinations, or different carrier arrangements that can materially change total cost.
Official Regulatory Text
(a) Solicitations, when appropriate, shall specify that offers may be f.o.b. origin, f.o.b. destination, or both; and that they will be evaluated on the basis of the lowest overall cost to the Government. (b) When offers are solicited on the basis of both f.o.b. origin and f.o.b. destination, the contracting officer shall insert in solicitations the provision at 52.247-45 , F.o.b. Origin and/or F.o.b. Destination Evaluation.