FAR 52.247-16—Contractor Responsibility for Returning Undelivered Freight.
Plain-English Summary
FAR 52.247-16 addresses what happens when freight cannot be delivered and must be returned, focusing on transportation and transportation-related services where the contractor is responsible for the return movement. The clause distinguishes between two situations: undelivered freight caused by no fault of the contractor, and undelivered freight caused by the contractor’s fault. It requires the contractor to contact the shipper for disposition instructions, sets the pricing rule for return transportation when the shipper orders the goods back to origin, and requires the shipper to keep a record of returned goods so any later claim can be adjusted correctly. It also establishes that if the contractor is at fault, the contractor must return the shipment to origin at no charge to the Government and bear any excess redelivery costs under the Default clause. In practice, this clause protects the Government and the shipper from confusion and extra cost when delivery fails, while creating a clear allocation of responsibility based on fault. It is important because undelivered freight can generate storage, return, redelivery, and claims issues, and this clause gives contracting parties a simple framework for handling those costs and records.
Key Rules
Applies to returnable freight
This clause is used in solicitations and contracts for transportation or transportation-related services when the contractor is responsible for returning undelivered freight. It is not a general shipping clause; it specifically governs the handling of freight that cannot be delivered and must be returned.
No-fault undelivered freight
If the shipment cannot be delivered through no fault of the contractor, the contractor must contact the shipper for disposition instructions. The contractor is not automatically liable for the failure to deliver, but must follow the shipper’s direction on what to do next.
Return charges equal outbound charges
When the shipper orders the undelivered freight returned to origin, the charges for the return trip must be the same as the charges for the outbound trip. This prevents the return movement from being priced differently simply because delivery failed.
Recordkeeping for returned goods
The shipper must maintain a record of goods that could not be delivered and were returned. If those goods later become the basis of a claim against the contractor, the claim must be adjusted to reflect the return and the actual disposition of the shipment.
Contractor fault means no-cost return
If the shipment cannot be delivered because of the contractor’s fault, the contractor must return the shipment to origin at no charge to the Government. The contractor bears the cost consequences of its own failure to deliver.
Excess redelivery costs charged to contractor
Any redelivery charges that exceed what would have been incurred under the contract are the contractor’s responsibility when the failure is due to contractor fault. Those costs are handled under the Default clause, which preserves the Government’s right to recover excess costs.
Responsibilities
Contractor
When a shipment cannot be delivered, determine whether the failure was through contractor fault or not. If there is no contractor fault, contact the shipper for disposition instructions and follow the shipper’s direction. If the contractor is at fault, return the shipment to origin at no charge to the Government and pay any excess redelivery costs as required under the Default clause.
Shipper
Provide disposition instructions when the contractor reports an undelivered shipment. Maintain records of goods that were returned undelivered so that any later claim against the contractor can be properly adjusted based on the actual return and disposition of the freight.
Government
Ensure the clause is included when applicable and enforce the cost-allocation rules if the contractor is at fault. The Government may recover excess costs associated with redelivery under the Default clause when the contractor’s fault caused the failed delivery.
Contracting Officer
Insert the clause when required by FAR 47.207-5(f) and ensure the contract clearly addresses responsibility for returning undelivered freight. Use the clause to support administration of claims, cost recovery, and fault-based allocation of return and redelivery charges.
Practical Implications
This clause turns a failed delivery into a controlled process: identify fault, notify the shipper, document the shipment, and allocate costs correctly. Without it, parties can dispute who pays for return transportation, storage, and redelivery.
Contractors should document the reason a shipment could not be delivered, because fault drives who pays. Poor documentation can lead to disputes over whether the return was at Government expense or contractor expense.
Shippers need accurate records of returned freight to avoid overstating claims later. If the goods are returned and later become part of a claim, the claim must reflect that return and any resulting reduction in loss.
A common pitfall is assuming all return charges are treated the same. The clause makes a sharp distinction: no-fault failures follow shipper instructions and pricing rules, while contractor-fault failures shift costs to the contractor.
Contracting officers should make sure the clause is used only when the contractor is actually responsible for returning undelivered freight, and should coordinate it with the Default clause so excess redelivery costs are recoverable when appropriate.
Official Regulatory Text
As prescribed in 47.207-5 (f) , insert the following clause in solicitations and contracts for transportation or for transportation-related services when the contractor is responsible for returning undelivered freight: Contractor Responsibility for Returning Undelivered Freight (Apr 1984) (a) When, through no fault of the Contractor, a shipment cannot be delivered, the Contractor shall contact the shipper for disposition instructions. If the shipment is ordered returned to the origin point, the charges assessed for the return trip shall be the same as the charges assessed for the outbound trip. The shipper shall maintain a record of the goods that, through no fault of the Contractor, could not be delivered and are returned to the shipper. If, at a future date, the returned goods are determined to be related to a claim against the Contractor, the claim will be adjusted accordingly. (b) When, through the fault of the Contractor, a shipment cannot be delivered, the Contractor shall return the shipment to the origin point at no charge to the Government. Any charges incurred for redelivery, which are in excess of the charges that would have been incurred under this contract, shall be for the Contractor’s account in accordance with the Default clause of the contract. (End of clause)