FAR 52.247-17—Charges.
Plain-English Summary
FAR 52.247-17, Charges, is a transportation clause that limits what a contractor may bill the Government for transportation or transportation-related services. It addresses two pricing benchmarks: the contractor’s lowest rate available to the general public and any rates the contractor has otherwise tendered to the Government for the same type of service. The clause is intended to prevent the Government from paying more than the contractor’s best available public price or more than a better Government-specific rate the contractor has already offered. In practice, this means the contractor must monitor its published, marketed, or otherwise available rates and ensure contract charges do not exceed the most favorable applicable rate. The clause is inserted in solicitations and contracts when transportation or transportation-related services are being acquired, and it works as a straightforward price-protection provision rather than a detailed pricing formula. Its practical significance is that it gives the Government a contractual basis to challenge overcharges and requires contractors to align contract billing with their lowest applicable rates.
Key Rules
Cap at lowest public rate
Charges under the contract may not exceed the contractor’s lowest rate available to the general public. If the contractor offers a lower public price for the same service, that lower rate controls.
Cap at tendered Government rate
Charges also may not exceed rates the contractor has otherwise tendered to the Government for the same type of service. If the contractor has offered a better Government-specific rate elsewhere, the contract charge cannot be higher.
Applies to transportation services
The clause is prescribed for solicitations and contracts involving transportation or transportation-related services. It is a pricing safeguard tied to those service categories, not a general FAR pricing clause for all supplies and services.
Same type of service matters
The comparison is to the same type of service, so contractors and contracting officers must compare like services, not different service levels, routes, modes, or terms that are not truly equivalent.
Contractual billing limit
The clause creates an enforceable contract term limiting charges. If billed amounts exceed the applicable benchmark, the Government may treat the excess as improper under the contract.
Responsibilities
Contracting Officer
Include the clause when required by the prescription, and use it to ensure the contract price structure does not permit charges above the contractor’s lowest applicable public rate or better Government-tendered rate.
Contractor
Bill no more than the lowest rate available to the general public or any lower rate tendered to the Government for the same type of service, and maintain pricing practices that support compliance with the clause.
Agency
Use the clause in covered transportation procurements to protect the Government from paying above-market or discriminatory rates and to support review of billed charges when necessary.
Practical Implications
Contractors should compare contract billing rates against public rates and any Government-specific tenders before invoicing, because the clause can make a lower external rate controlling.
A common pitfall is assuming a contract rate is acceptable simply because it was negotiated; if the contractor later offers a lower public or Government rate for the same service, the lower rate may govern.
The phrase "same type of service" can create disputes if the contractor argues that differences in timing, routing, volume, mode, or service terms make the rates incomparable.
Contracting officers should verify that the clause is included in the right transportation-related acquisitions and should be alert to pricing structures that could allow charges above the clause’s ceiling.
For billing and audit purposes, contractors should retain evidence of public rate offerings and Government tenders so they can show how the charged rate was determined and defend it if questioned.
Official Regulatory Text
As prescribed in 47.207-6 (a)(2) , insert the following clause in solicitations and contracts for transportation or for transportation-related services: Charges (Apr 1984) In no event shall charges under this contract be in excess of charges based on the Contractor’s lowest rate available to the general public, or be in excess of charges based on rates otherwise tendered to the Government by the Contractor for the same type of service. (End of clause)