FAR 52.247-42—C.i.f. Destination.
Plain-English Summary
FAR 52.247-42 sets the rules for contracts using the delivery term "c.i.f. destination" (cost, insurance, and freight to destination) for ocean shipments. It explains what that term means in federal contracting: the contractor must deliver the shipment free of expense to the Government on board the ocean vessel at the specified destination, while paying the transportation and marine insurance costs. The clause also assigns the contractor responsibility for packing and marking, preparing the shipment for ocean transport, delivering the goods in good order and condition, paying all charges to destination including export taxes and export-related fees, and providing clean on-board ocean bills of lading. It further makes the contractor liable for loss or damage before delivery and requires the contractor, when requested and at Government expense, to furnish origin/shipping documents needed for importation. Finally, it requires the contractor to obtain and send the Government proof of marine insurance coverage in the amount and scope required by the contract or agreed to by the contracting officer. In practice, this clause is important because it allocates shipping risk, documentation duties, and cost responsibility in a way that affects pricing, logistics, claims handling, and import/export compliance.
Key Rules
Meaning of c.i.f. destination
The clause defines c.i.f. destination as delivery free of expense to the Government on board the ocean vessel at the specified destination, with transportation and marine insurance paid by the contractor. This is the baseline allocation of cost and risk for the shipment.
Proper packing and marking
The contractor must pack and mark the shipment to meet contract specifications. If the contract does not specify packing and marking requirements, the contractor must prepare the shipment in accordance with carrier requirements for ocean transportation.
Delivery and charges to destination
The contractor must deliver the shipment in good order and condition and pay all applicable charges to the destination named in the contract. This includes transportation costs and any export taxes or other fees or charges imposed because of exportation.
Clean on-board bills of lading
The contractor must obtain and promptly send the Government clean on-board ocean bills of lading to the specified destination. This document requirement is central to proving shipment and supporting payment, title, and claims administration.
Risk of loss before delivery
The contractor is responsible for any loss of or damage to the goods occurring before delivery. This means the contractor bears the shipping risk until the contractual delivery point is reached.
Import and origin documents
At the Government’s request and expense, the contractor must provide certificates of origin, consular invoices, or other documents issued in the country of origin or shipment that may be required for importation into the destination country. The Government pays for these documents when requested under the clause.
Marine insurance evidence
The contractor must obtain and send the Government an insurance policy or certificate showing the marine insurance coverage amount and extent required by the contract or agreed to by the contracting officer. This ensures the Government can verify that required coverage is in place.
Responsibilities
Contractor
Pack and mark the shipment properly; prepare the shipment for ocean transport if no specifications exist; deliver the shipment in good order and condition; pay transportation costs, export taxes, and export-related fees; obtain and send clean on-board ocean bills of lading; bear loss or damage before delivery; obtain and provide the required marine insurance policy or certificate; and, when requested, furnish origin or import documents.
Government Contracting Officer
Specify or agree to the required marine insurance coverage amount and extent; request origin, consular, or other import documents when needed; and pay the expense for those documents when the clause places that cost on the Government.
Government
Receive the shipment at the destination under the c.i.f. destination terms; request and pay for required origin/import documents when needed; and use the shipping and insurance documents for importation, receipt, and contract administration.
Practical Implications
This clause shifts substantial logistics responsibility to the contractor, so contractors must price freight, insurance, export charges, and documentation costs into the offer.
Clean on-board bills of lading matter because they are often needed to prove shipment and support payment; delays or discrepancies can slow administration and create disputes.
The contractor bears pre-delivery loss or damage risk, so cargo insurance, packaging quality, carrier selection, and shipment tracking are critical.
Import documentation can become a hidden cost or schedule issue if the destination country requires certificates of origin, consular invoices, or similar papers.
Contracting officers should make sure the contract clearly states the destination point and insurance requirements, because ambiguity can lead to claims, rejected documents, or delivery disputes.
Official Regulatory Text
As prescribed in 47.303-14 (c) , insert the following clause in solicitations and contracts when the delivery term is c.i.f. destination: C.i.f. Destination (Apr 1984) (a) The term "c.i.f. destination," as used in this clause, means free of expense to the Government delivered on board the ocean vessel to the specified point of destination, with the cost of transportation and marine insurance paid by the Contractor. (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 for ocean transportation in conformance with carrier requirements; (2) (i) Deliver the shipment in good order and condition; and (ii) Pay and bear all applicable charges to the point of destination specified in the contract, including transportation costs and export taxes or other fees or charges levied because of exportation; (3) Obtain and dispatch promptly to the Government clean on-board ocean bills of lading to the specified point of destination; (4) Be responsible for any loss of and/or damage to the goods occurring before delivery; (5) At the Government’s request and expense, provide certificates of origin, consular invoices, or any other documents issued in the country of origin or of shipment, or both, that may be required for importation into the country of destination; and (6) Obtain and dispatch to the Government an insurance policy or certificate providing the amount and extent of marine insurance coverage specified in the contract or agreed upon by the Government Contracting Officer. (End of clause)