FAR 47.507—Contract clauses.
Plain-English Summary
FAR 47.507 tells contracting officers when to include the ocean shipping preference clause at 52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels, and when to use one of its alternates. It covers solicitations and contracts that may involve ocean transportation of supplies subject to the Cargo Preference Act of 1954, including situations where the law or agency procedures require exclusive use of privately owned U.S.-flag commercial vessels. It also addresses a special alternate for certain commercial products shipped in direct support of U.S. military contingency operations, exercises, or forces deployed for United Nations or NATO humanitarian or peacekeeping operations, while excluding ocean transportation services and construction contracts from that alternate. Finally, it allows agencies, under their procedures, to add other appropriate vessel-related clauses. In practice, this section ensures cargo preference requirements are built into the contract at the outset so shipping arrangements, pricing, and compliance obligations are clear before performance begins.
Key Rules
Use the base clause
Insert 52.247-64 in solicitations and contracts that may involve ocean transportation of supplies subject to the Cargo Preference Act of 1954. The clause is the standard mechanism for notifying offerors and contractors of U.S.-flag vessel preference requirements.
Use Alternate I for exclusive U.S.-flag carriage
If a statute requires, or agency procedures determine, that supplies must be transported exclusively in privately owned U.S.-flag commercial vessels, use the clause with Alternate I. This makes the exclusive U.S.-flag requirement explicit in the contract.
Use Alternate II for certain military support shipments
Except for contracts or agreements for ocean transportation services and construction contracts, use Alternate II when any supplies to be transported are commercial products shipped in direct support of U.S. military contingency operations, exercises, or forces deployed for UN or NATO humanitarian or peacekeeping operations.
Exclude inapplicable contract types
Alternate II does not apply to contracts or agreements for ocean transportation services or to construction contracts. Contracting officers must check the contract type before selecting the alternate.
Follow agency procedures for extra clauses
The contracting officer may add other appropriate clauses concerning the vessels to be used, but only under agency procedures. Any added clause must be consistent with applicable law and agency policy.
Responsibilities
Contracting Officer
Determine whether the solicitation or contract may involve ocean transportation of supplies subject to cargo preference rules, select the correct version of 52.247-64, and include any additional vessel-related clauses allowed by agency procedures.
Contracting Officer
Apply Alternate I when exclusive use of privately owned U.S.-flag commercial vessels is required by statute or agency determination, and apply Alternate II when the shipment qualifies for the military support exception described in the rule.
Agency
Establish procedures for when exclusive U.S.-flag carriage is required and for when additional vessel-related clauses may be used, so contracting officers apply the clause consistently.
Contractor/Offeror
Review the clause and any alternate in the solicitation or contract, price and plan performance accordingly, and ensure ocean transportation arrangements comply with the stated vessel requirements.
Practical Implications
This section is mainly a clause-selection rule, but it has major cost and logistics effects because vessel preference can change shipping availability, transit time, and price.
A common pitfall is using the base clause when an alternate is required, or vice versa; that can create compliance problems and contract administration disputes.
Contracting officers should verify whether the supplies are subject to the Cargo Preference Act and whether the shipment falls into the special military-support category before award.
Contractors should not assume ocean freight can be arranged later without regard to the clause; vessel requirements may limit carrier options and affect subcontracting and shipping schedules.
When agency procedures allow extra vessel clauses, those clauses should be reviewed carefully to avoid conflicts with the FAR clause or with statutory cargo preference requirements.
Official Regulatory Text
(a) (1) Insert the clause at 52.247-64 , Preference for Privately Owned U.S.-Flag Commercial Vessels, in solicitations and contracts that may involve ocean transportation of supplies subject to the Cargo Preference Act of1954. (For application of the Cargo Preference Act of1954, see 47.502 (a)(3), 47.503 (a), and 47.504 .) (2) If an applicable statute requires, or if it has been determined under agency procedures, that the supplies to be furnished under the contracts must be transported exclusively in privately owned U.S.-flag commercial vessels (see 47.502 (a)(1) and 47.503 (b)), use the clause with its AlternateI. (3) Except for contracts or agreements for ocean transportation services or construction contracts, use the clause with its Alternate II if any of the supplies to be transported are commercial products that are shipped in direct support of U.S. military- (i) Contingency operations; (ii) Exercises; or (iii) Forces deployed in connection with United Nations or North Atlantic Treaty Organization humanitarian or peacekeeping operations. (b) The contracting officer may insert in solicitations and contracts, under agency procedures, additional appropriate clauses concerning the vessels to be used.