FAR 47.306—Transportation factors in the evaluation of offers.
Plain-English Summary
FAR 47.306 tells contracting officers to factor transportation-related considerations into source selection when those considerations can affect the Government’s actual cost or performance. The section covers transportation and transportation-related costs, including freight, delivery, handling, and other logistics costs that may be incurred after award, as well as the offerors’ shipping and receiving facilities. In practice, this means the Government should not evaluate offers only on the quoted price or technical merits of the product or service itself; it must also look at how the offeror’s location, distribution network, loading/unloading capability, and receiving/shipping infrastructure may affect total delivered cost and the ability to meet delivery requirements. The purpose is to support best-value decisions by capturing the full cost of getting supplies where they need to go and by reducing the risk of delays, damage, or avoidable transportation expense. This section is especially important in procurements for supplies, bulk items, or any requirement where delivery logistics materially affect price, schedule, or performance.
Key Rules
Consider transportation costs
Contracting officers must evaluate transportation and transportation-related costs when assessing offers. These costs can include freight, delivery, handling, and other logistics expenses that affect the Government’s total cost of acquisition.
Review shipping facilities
The evaluation must also consider the offeror’s shipping facilities. The Government may look at whether the offeror has the capability, location, and infrastructure to ship efficiently and meet delivery needs.
Review receiving facilities
Contracting officers must consider the offeror’s receiving facilities as part of the evaluation. This helps determine whether the offeror can properly accept, process, and move incoming materials in a way that supports timely and economical performance.
Use logistics in evaluation
Transportation factors are part of the offer evaluation, not an afterthought after award. They should be incorporated into the evaluation approach whenever they are relevant to the procurement and may affect the Government’s overall cost or performance risk.
Responsibilities
Contracting Officer
Must consider transportation and transportation-related costs, along with the offerors’ shipping and receiving facilities, when evaluating offers. The contracting officer should ensure these factors are included in the evaluation plan and applied consistently to all offerors.
Offeror
Should present information about shipping and receiving capabilities, locations, and logistics arrangements when those factors may affect evaluation. The offeror should be prepared to show how its facilities and transportation approach support delivery and cost efficiency.
Agency
Should structure the acquisition and evaluation criteria so transportation factors are considered where relevant. The agency should ensure the solicitation and source selection process allow the Government to assess logistics-related cost and performance impacts.
Practical Implications
This section helps the Government evaluate total delivered cost, not just unit price. A lower-priced offer can become more expensive once freight, handling, or delivery inefficiencies are included.
Offerors with better-located or better-equipped facilities may have an advantage if transportation costs are significant. Contractors should understand that logistics capability can be a meaningful evaluation factor.
A common pitfall is ignoring transportation costs until after award, which can lead to underestimated acquisition costs and delivery problems. Contracting officers should build these considerations into the evaluation from the start.
Another risk is inconsistent treatment of offerors’ facilities. If shipping and receiving capabilities are evaluated, the criteria should be applied uniformly and tied to the solicitation.
This rule is most important when delivery logistics materially affect the Government’s outcome, such as for bulky supplies, recurring shipments, or requirements with tight delivery schedules.
Official Regulatory Text
When evaluating offers, contracting officers shall consider transportation and transportation-related costs as well as the offerors’ shipping and receiving facilities.