FAR 52.247-48—F.o.b. Destination-Evidence of Shipment.
Plain-English Summary
FAR 52.247-48, F.o.b. Destination-Evidence of Shipment, addresses what a contractor must do when a contract is priced on an f.o.b. destination basis and the Government wants proof that shipment occurred before payment is made. The clause covers three main topics: when the contractor may submit an invoice, what shipment evidence must be retained, what specific documents count as acceptable evidence depending on the mode of transportation, and how long those records must be kept. It also clarifies that the contractor does not have to attach shipment evidence to the invoice itself, even though the records must be available for Government review later. In practice, the clause is designed to reduce payment risk for the Government by tying invoicing to actual shipment and by preserving documentation that can verify the contractor shipped the supplies to the contract destination. For contractors, the clause creates a recordkeeping and timing requirement that must be built into billing and shipping procedures, especially where common carrier, parcel post, or other delivery methods are used.
Key Rules
Invoice only after shipment
If the contract is f.o.b. destination, the contractor may not submit an invoice for payment until the supplies covered by that invoice have been shipped to the destination. This means billing must wait until shipment has occurred, even though delivery may not yet be complete.
Keep shipment evidence
The contractor must retain evidence of shipment documentation and make it available to the Government for review as necessary. The retention period is 3 years after final payment under the contract.
Common carrier proof
When shipment is made by common carrier, acceptable evidence is a signed copy of the commercial bill of lading for the supplies covered by the invoice. The bill of lading must indicate the carrier’s intent to ship the supplies to the destination specified in the contract.
Parcel post proof
When shipment is made by parcel post, the contractor must keep a copy of the certificate of mailing. This serves as the required evidence that the items were mailed for shipment to the contract destination.
Other delivery methods
When transportation is by a method other than common carrier or parcel post, the contractor must keep a copy of the delivery document showing receipt at the destination specified in the contract. The document must demonstrate that the supplies reached the contract destination.
No attachment to invoice required
The contractor is not required to submit shipment evidence with the invoice. The documentation must be retained and produced if the Government later requests it, but it does not have to accompany the payment request.
Responsibilities
Contractor
Delay invoicing until the covered supplies have been shipped to the destination on an f.o.b. destination contract. Maintain the required shipment evidence for 3 years after final payment, and provide it to the Government for review when requested. Use the correct document type based on the transportation method.
Government / Contracting Officer
Administer the contract consistent with the clause, including reviewing shipment evidence as necessary to verify that invoicing and shipment requirements were met. Ensure the clause is used when prescribed and that payment controls align with f.o.b. destination requirements.
Practical Implications
This clause affects billing timing: contractors cannot invoice early just because the goods are ready; shipment must already have occurred.
Recordkeeping is critical because the Government may ask for proof long after shipment, and the contractor must keep the documents for 3 years after final payment.
The acceptable evidence depends on the shipping method, so contractors should match their shipping paperwork to the clause’s specific document requirements.
Although the evidence does not have to be sent with the invoice, contractors should still have it organized and readily retrievable to avoid payment disputes or audit issues.
A common pitfall is using the wrong document or incomplete paperwork, such as a bill of lading that does not show the carrier’s intent to ship to the contract destination.
Official Regulatory Text
As prescribed in 47.305-4 (c) , insert the following clause: F.o.b. Destination-Evidence of Shipment (Feb 1999) (a) If this contract is awarded on a free on board (f.o.b.) destination basis, the Contractor- (1) Shall not submit an invoice for payment until the supplies covered by the invoice have been shipped to the destination; and (2) Shall retain, and make available to the Government for review as necessary, the following evidence of shipment documentation for a period of 3 years after final payment under the contract: (i) If transportation is accomplished by common carrier, a signed copy of the commercial bill of lading for the supplies covered by the Contractor’s invoice, indicating the carrier’s intent to ship the supplies to the destination specified in the contract. (ii) If transportation is accomplished by parcel post, a copy of the certificate of mailing. (iii) If transportation is accomplished by other than common carrier or parcel post, a copy of the delivery document showing receipt at the destination specified in the contract. (b) The Contractor is not required to submit evidence of shipment documentation with its invoice. (End of clause)