FAR 52.247-34—F.o.b. Destination.
Plain-English Summary
FAR 52.247-34, F.o.b. Destination, sets the default delivery and risk-of-loss rules when the contract requires delivery to a named destination rather than shipment from the contractor’s plant or warehouse. This clause defines what “f.o.b. destination” means, including delivery to the consignee’s facility, wharf, warehouse unloading platform, or receiving dock, and it distinguishes between rail, motor carrier, piggyback, and less-than-carload freight situations. It also allocates who pays transportation and related charges, when the Government is and is not liable for delivery, storage, demurrage, or accessorial charges, and when constructive placement counts as delivery under carrier tariffs. The clause further assigns the contractor duties for packing, marking, preparing and distributing bills of lading, selecting and scheduling the carrier, and ensuring delivery in good order and condition. In practice, this clause places the transportation burden and most pre-delivery risk on the contractor until the shipment is actually received at the contractually specified destination, so it is critical for pricing, logistics planning, claims handling, and acceptance/delivery disputes.
Key Rules
Destination delivery standard
Under f.o.b. destination, delivery is complete only when the supplies are delivered free of expense to the Government at the specified destination point. The clause identifies acceptable destination points such as the consignee’s plant, warehouse, store, lot, wharf, unloading platform, or receiving dock.
Government not liable pre-delivery
The Government is not responsible for delivery, storage, demurrage, accessorial, or similar charges incurred before actual delivery or constructive placement, unless those charges result from an act or order of the Government acting in its contractual capacity. This means the contractor generally bears transportation-related costs and delays until delivery is completed.
Mode-specific unloading rules
If rail is used, delivery is to the consignee’s specified unloading platform. If motor carrier or piggyback is used, delivery is to the truck tailgate at the unloading platform, except for heavy or bulky freight meeting Item 568 of the National Motor Freight Classification, where the consignee performs unloading with driver assistance if requested.
Less-than-carload transfer duty
When the contractor uses rail carrier or a freight forwarder for less-than-carload shipments and a transfer to truck is needed to complete delivery, the contractor must ensure the carrier provides tailgate delivery when required. This prevents the contractor from shifting the final delivery burden to the Government or consignee.
Packing and marking obligation
The contractor must pack and mark shipments to comply with contract specifications. If the contract does not specify packing or marking requirements, the contractor must prepare the shipment in accordance with carrier requirements.
Bills of lading and shipping administration
The contractor must prepare and distribute commercial bills of lading, furnish a delivery schedule, and designate the mode of delivering carrier. These duties ensure the shipment is properly documented and routed to meet the contract’s delivery terms.
Risk of loss before receipt
The contractor is responsible for any loss of or damage to the goods occurring before the consignee receives the shipment at the specified delivery point. This makes the contractor’s risk extend through transit until delivery is completed under the clause.
Contractor pays transportation charges
The contractor must pay and bear all charges to the specified point of delivery. This includes the cost of moving the goods to the destination and any related charges that are part of getting the shipment delivered under the contract.
Responsibilities
Contractor
Pack and mark shipments to contract or carrier requirements; prepare and distribute commercial bills of lading; deliver the shipment in good order and condition to the specified destination; bear the risk of loss or damage before consignee receipt; furnish a delivery schedule; designate the delivering carrier and mode of transport; and pay all charges to the destination point.
Consignee
Receive delivery at the specified destination point and, for heavy or bulky freight meeting Item 568 requirements, perform unloading including movement to the tailgate, with assistance from the truck driver if requested.
Government
Accept delivery at the designated destination and pay only those delivery-related charges for which it is contractually liable; avoid incurring pre-delivery charges unless caused by an act or order of the Government acting in its contractual capacity.
Carrier
Transport the shipment to the specified destination and, where applicable, provide delivery to the unloading platform or tailgate as required by the mode of transport and shipment characteristics.
Practical Implications
This clause shifts transit risk to the contractor, so contractors should insure shipments appropriately and build freight, handling, and delay exposure into pricing.
Delivery disputes often turn on whether the shipment actually reached the named destination or only reached a carrier terminal; constructive placement may matter if carrier tariffs treat it as delivery.
Heavy or bulky freight under Item 568 can change unloading responsibilities, so both parties should verify freight classification before shipment.
Contractors should confirm the correct carrier, route, and delivery point in advance, because errors in bills of lading or carrier instructions can create delay, demurrage, or damage claims.
Government personnel should be careful not to direct carrier actions in a way that could create unintended Government liability for charges before delivery.
Official Regulatory Text
As prescribed in 47.303-6 (c) , insert the following clause: F.o.b. Destination (Jan 1991) (a) The term "f.o.b. destination," as used in this clause, means- (1) Free of expense to the Government, on board the carrier’s conveyance, at a specified delivery point where the consignee’s facility (plant, warehouse, store, lot, or other location to which shipment can be made) is located; and (2) Supplies shall be delivered to the destination consignee’s wharf (if destination is a port city and supplies are for export), warehouse unloading platform, or receiving dock, at the expense of the Contractor. The Government shall not be liable for any delivery, storage, demurrage, accessorial, or other charges involved before the actual delivery (or "constructive placement" as defined in carrier tariffs) of the supplies to the destination, unless such charges are caused by an act or order of the Government acting in its contractual capacity. If rail carrier is used, supplies shall be delivered to the specified unloading platform of the consignee. If motor carrier (including "piggyback") is used, supplies shall be delivered to truck tailgate at the unloading platform of the consignee, except when the supplies delivered meet the requirements of Item568 of the National Motor Freight Classification for "heavy or bulky freight." When supplies meeting the requirements of the referenced Item568 are delivered, unloading (including movement to the tailgate) shall be performed by the consignee, with assistance from the truck driver, if requested. If the contractor uses rail carrier or freight forwarded for less than carload shipments, the contractor shall ensure that the carrier will furnish tailgate delivery, when required, if transfer to truck is required to complete delivery to consignee. (b) The Contractor shall- (1) (i) Pack and mark the shipment to comply with contract specifications; or (ii) In the absence of specifications, prepare the shipment in conformance with carrier requirements; (2) Prepare and distribute commercial bills of lading; (3) Deliver the shipment in good order and condition to the point of delivery specified in the contract; (4) Be responsible for any loss of and/or damage to the goods occurring before receipt of the shipment by the consignee at the delivery point specified in the contract; (5) Furnish a delivery schedule and designate the mode of delivering carrier; and (6) Pay and bear all charges to the specified point of delivery. (End of clause)