FAR 47.305-3—F.o.b. origin solicitations.
Plain-English Summary
FAR 47.305-3 tells contracting officers what must be included in solicitations that will or may result in f.o.b. origin contracts. It cross-references the standard delivery-term clauses in FAR 47.303 and then requires the solicitation to address delivery in carload or truckload lots, the offeror’s shipping-point information, private siding or nearest public siding details, quantities shipped from each point, special treatment for f.o.b. origin, contractor’s facility and freight allowed pricing, rejection of offers on other than the required basis when only f.o.b. origin offers are desired, the transportation methods used for evaluation, and when to use the evaluation provision at 52.247-47. It also allows use of the differential clause at 52.247-33 when contractors may otherwise build in a contingency for unfavorable Government routing, and it identifies the kinds of situations that can justify such differentials, such as wheeled vehicles, special shipment methods, port-city water shipments, and rail shipments requiring delivery to a public siding or terminal. In practice, this section is about making sure the solicitation gives offerors enough information to price transportation correctly and gives the Government enough information to evaluate offers on a fair, comparable basis. It also helps transportation officers and contracting officers avoid hidden freight costs, unrealistic pricing assumptions, and disputes over what transportation charges are included in the offered price.
Key Rules
Refer to standard clauses
When preparing f.o.b. origin solicitations, the contracting officer must consult FAR 47.303 for the prescribed f.o.b. origin clauses relating to standard delivery terms. This ensures the solicitation uses the correct clause structure and delivery language.
Address delivery lot terms
The solicitation must include requirements and clauses covering delivery in carload or truckload lots f.o.b. carrier’s equipment, wharf, or freight station. This matters because the delivery point and shipment size can materially affect transportation responsibility and price.
Collect shipping-point data
Offerors must be required to provide the actual shipping point address, whether the point has a private railroad siding, the rail carrier serving it, or the nearest public siding and carrier if no private siding exists. The Government uses this information to route shipments and minimize overall transportation cost.
State quantities by shipping point
The solicitation must require the quantity of supplies to be shipped from each shipping point. If price evaluation will consider multiple shipping points, the contracting officer must insert the provision at 52.247-46, Shipping Point(s) Used in Evaluation of F.o.b. Origin Offers.
Define special delivery bases
For f.o.b. origin, contractor’s facility, the solicitation must state any charges needed to move the shipment to the point where the line-haul rate applies if the facility is not on that rate. For f.o.b. origin, freight allowed, it must clearly state the basis for allowing transportation charges, including the origin and destination points covered.
Reject nonconforming bases when needed
If only f.o.b. origin offers are desired, the solicitation must say that offers on any other basis will be rejected as nonresponsive. This protects the Government from having to evaluate offers that do not match the required delivery basis.
Explain evaluation transportation methods
The solicitation must identify the transportation methods that will be used to evaluate offers; the Government normally uses land transportation by regulated common carriers between points in the 48 contiguous States and the District of Columbia. When prices are evaluated on an f.o.b. origin basis, the contracting officer must insert 52.247-47, Evaluation-F.o.b. Origin.
Allow differentials when justified
If offerors are likely to add a contingency for unfavorable Government routing, the contracting officer may permit a reimbursable differential under 52.247-33, F.o.b. Origin, with Differentials. This is intended to address real extra costs caused by Government-specified routing or delivery requirements rather than hidden padding in the base price.
Use differentials for specific cost drivers
The section identifies examples where a differential may be appropriate: wheeled vehicles, special shipment methods such as towaway, driveaway, tri-level vehicle, or rail car, port-city shipments requiring wharf delivery for water routing, and rail shipments where the contractor must use a public siding or freight terminal and perform loading, bracing, and dunnage work.
Responsibilities
Contracting Officer
Prepare the solicitation in accordance with FAR 47.303 and include all required delivery-term clauses, shipping-point information requirements, evaluation provisions, and any special instructions for f.o.b. origin pricing. The contracting officer must also decide whether to allow reimbursable differentials and must clearly state the transportation basis used for evaluation.
Offeror/Contractor
Provide accurate shipping-point information, including addresses, siding status, rail carrier information, and quantities from each shipping point. If the solicitation allows differentials, the offeror must price them consistently with the stated basis and not submit offers on a prohibited delivery basis when only f.o.b. origin offers are requested.
Transportation Officer
Use the shipping-point and siding information to issue routing instructions that achieve the required service at the lowest possible overall cost. The transportation officer relies on the solicitation data to select the most economical and workable mode and route.
Agency/Buying Activity
Ensure solicitations are structured so transportation costs can be evaluated fairly and so delivery terms are clear to industry. The agency should support the contracting officer in identifying when special routing, freight allowance, or differential treatment is needed.
Practical Implications
This section is mainly about preventing hidden freight costs from distorting price competition. If the solicitation does not clearly state the shipping point, transportation basis, and evaluation method, offerors may price differently and the Government may not be comparing apples to apples.
Contracting officers should be careful to distinguish between the base f.o.b. origin price and any transportation-related charges or differentials. A common pitfall is failing to specify whether the Government will evaluate from one shipping point or multiple points, which can lead to disputes or evaluation errors.
Offerors need to give precise shipping-point data. Incomplete or inaccurate siding, carrier, or location information can cause routing problems, incorrect evaluations, or later performance issues when the Government issues shipment instructions.
When only f.o.b. origin offers are acceptable, the solicitation must say so plainly. If that language is missing, the Government may have to deal with offers on other delivery bases that it did not intend to consider.
The differential clause should be used selectively, not automatically. It is meant for situations where Government routing or shipment requirements create real extra cost; if overused, it can complicate pricing and make evaluations harder to administer.
Official Regulatory Text
When preparing f.o.b. origin solicitations, the contracting officer shall refer to 47.303 , where f.o.b. origin clauses relating to standard delivery terms are prescribed. Supply solicitations that will or may result in f.o.b. origin contracts shall also contain requirements, information, provisions, and clauses concerning the following items: (a) Delivery in carload or truckload lots f.o.b. carrier’s equipment, wharf, or freight station. (b) The requirement that the offeror furnish the following information with the offer: (1) Location of the offeror’s actual shipping point(s) (street address, city, State, and ZIP code) from which supplies will be delivered to the Government. (2) Whether the offeror’s shipping point has a private railroad siding, and the name of the rail carrier serving it. (3) When the offeror’s shipping point does not have a private siding, the names and addresses of the nearest public rail siding and of the carrier serving it. (This will enable transportation officers, when issuing routing instructions, to select the mode of transportation that will provide the required service at the lowest possible overall cost.) (4) (i) The quantity of supplies to be shipped from each shipping point. (ii) The contracting officer shall insert in f.o.b. origin solicitations the provision at 52.247-46 , Shipping Point(s) Used in Evaluation of F.o.b. Origin Offers, when price evaluation for shipments from various shipping points is contemplated. (c) When delivery is "f.o.b. origin, contractor’s facility," and the designated facility is not covered by the line-haul transportation rate, the charges required to deliver the shipment to the point where the line-haul rate is applicable. (d) When delivery is "f.o.b. origin, freight allowed," the basis on which transportation charges will be allowed, including the origin and destination from and to which transportation charges will be allowed. (e) If f.o.b. origin offers only are desired, a statement that offers submitted on any other basis will be rejected as nonresponsive. (f) (1) The methods of transportation used in evaluating offers. The Government normally uses land transportation by regulated common carriers between points in the 48 contiguous United States and the District of Columbia. (2) The contracting officer shall insert the provision at 52.247-47 , Evaluation-F.o.b. Origin, in solicitations that require prices f.o.b. origin for the purpose of establishing the basis on which offers will be evaluated. (g) (1) When it is believed that prospective contractors are likely to include in f.o.b. origin offers a contingency to compensate for what may be an unfavorable routing condition by the Government at the time of shipment, the contracting officer may permit prospective contractors to state in offers a reimbursable differential that represents the cost of bringing the supplies to any f.o.b. origin place of delivery specified by the Government at the time of shipment (see the clause at 52.247-33 , F.o.b. Origin, with Differentials). (2) Following are situations that might impose on the contractor a substantial cost above "at plant" or "commercial shipping point" prices because of Government-required routings: (i) The loading nature of the supplies; e.g., wheeled vehicles. (ii) The different methods of shipment specified by the Government; e.g., towaway, driveaway, tri-level vehicle, or rail car, that may increase the contractor’s cost in varying amounts for bringing the supplies to, or loading and bracing the supplies at, the specified place of delivery. (iii) The contractor’s f.o.b. origin shipping point is a port city served by United States inland, coastwise, or intercoastal water transportation, and the contractor would incur additional costs to make delivery f.o.b. a wharf in that city to accommodate water routing specified by the Government. (iv) The contractor’s plant does not have a private rail siding and in order to ship by Government-specified rail routing, the contractor would be required to deliver the supplies to a public siding or freight terminal and to load, brace, and install dunnage in rail cars.